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Tesla must pay $137 million to a Black employee who sued for racial discrimination.
A San Francisco federal court has awarded former Tesla worker, Owen Diaz, about $137 million after he endured racist abuse working as an elevator operator.
CNBC writes, “the case was only able to move forward because Diaz had not signed one of Tesla’s mandatory arbitration agreements which the company uses to force employees to resolve disputes without a public trial.”
Diaz was awarded more than attorneys asked for their client, $130 million in punitive damages and $6.9 million for emotional distress, per the report.
Here’s more from CNBC:
Diaz, a former contract worker who was hired at Elon Musk’s electric vehicle company through a staffing agency in 2015, faced a hostile work environment in which, he told the court, colleagues used epithets to denigrate him and other Black workers, told him to “go back to Africa” and left racist graffiti in the restrooms and a racist drawing in his workspace.
Tesla uses mandatory arbitration to compel employees to resolve disputes behind closed doors rather than in a public trial.
Like other companies that use mandatory arbitration, Tesla rarely faces significant damages or takes deep corrective actions after arbitrators settle a dispute. However, Tesla was required to pay $1 million — as the result of an arbitration agreement — to another former worker, Melvin Berry, who also endured a racist, hostile workplace at Tesla.
“We were able to put the jury in the shoes of our client,” Diaz’s attorneys, J. Bernard Alexander told CNBC. “When Tesla came to court and tried to say they were zero tolerance and they were fulfilling their duty? The jury was just offended by that because it was actually zero responsibility.”
Nia Impact Capital, a women-led impact investing firm, condemns Tesla’s mandatory arbitration policy, stating: “The use of mandatory arbitration provisions limits employees’ remedies for wrongdoing, precludes employees from suing in court when discrimination and harassment occur, and can keep underlying facts, misconduct or case outcomes secret and thereby prevent employees from learning about and acting on shared concerns.”
The company has asked Tesla’s board to study the effects of mandatory arbitration agreements on the company, per the report.
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