Tesla logo
(Igor Golovniov/SOPA Images/Shutterstock)

Tesla Hit With $137-Million Racial Discrimination Lawsuit, Largest-Ever in US History

Elon Musk may be breaking all kinds of barriers in outer space, but here on Earth, the company he runs is breaking its own records — and they aren’t the good kind. A federal jury in San Francisco has found Musk’s company Tesla guilty of racial discrimination against a former Black contractor and must now pay a record $137-million penalty in the case.

NPR’s Joe Hernandez reported that “Owen Diaz, who worked as a contract elevator operator at Tesla’s factory in Fremont, California, from 2015 to 2016, said in his lawsuit that he and others were called the N-word by Tesla employees; that he was told to ‘go back to Africa’; and that employees drew racist and derogatory pictures that were left around the factory.”

According to Hernandez, “the suit said Diaz was excited to go to work for Tesla, but that instead of a ‘modern workplace,’ he found a ‘scene straight from the Jim Crow era.’”

Court records show that Diaz had repeatedly complained about the discriminatory treatment he received while working at the company to Tesla itself and the contracting company, Citistaff, that employed him. Yet, nothing was ever done to stop the crude and racist behavior.

In an interview with NPR, Larry Organ, one of Diaz’s attorneys, said, “I’m gratified that the jury saw the truth and that they sent a message to Tesla to clean up its workplace.”

And quite a message it was, too. The jury in the case awarded Diaz $130 million in punitive damages and $6.9 million in emotional damages. 

Organ told NPR that he believes the award is the largest-ever in a racial harassment case involving a single plaintiff in U.S. history.

“Owen and I both hope that this sends a message to corporate America to look at your workplace and, if there are problems there, take proactive measures to protect employees against racist conduct,” Organ said. “It is happening, and we need to do something about it.”

In a company statement following the trial’s conclusion, Tesla Vice President of People Valerie Capers Workman confirmed that trial witnesses frequently heard people using the N-word on the factory floor. Still, she attempted to clarify its use, saying the word was typically used in a “friendly” manner. She also claimed that after Tesla heard complaints from Diaz, the company followed up on his complaints and ultimately encouraged the firing of two contractors and the suspension of another.

“While we strongly believe that these facts don’t justify the verdict reached by the jury in San Francisco, we do recognize that in 2015 and 2016,” she said. “We were not perfect. We’re still not perfect. But we have come a long way from five years ago. The Tesla of 2015 and 2016 [when Diaz was working with the company] is not the same as the Tesla of today.”

Related: For more recent diversity and inclusion news, click here.

Latest News

Creating Pay Equity and Equal Treatment for Employees

Even though the disparity in pay has been a high-profile issue for decades, it remains a concern for businesses across every industry. HR professionals and business leaders continue to search for ways to create pay equity between genders and those of different ethnic and racial backgrounds. Some may face mandates…

5 Biggest News Stories of the Week: August 11

As the saying goes, the news never stops — but there’s a lot of it out there, and all of it doesn’t always pertain to our readers. In this weekly news roundup, we’ll cover the top news stories that matter most to our diversity focused audience. 1. Eli Lilly Plans…

The Importance of Business-Community Partnerships

Businesses increasingly play a key role in building stronger communities. It’s something that people in the past few years have come to expect. It’s created not only a way to improve local communities, but also boost an organization’s employee morale, loyalty and brand reputation. One of the main ways businesses…

CDO Series: Humana’s Carolyn Tandy

Following the murder of George Floyd, the role of Chief Diversity Officers has become more important as companies started to be more intentional with their diversity, equity and inclusion efforts, which has made the last few years tumultuous for many CDOs. In the first interview of a series of articles…