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Tesla Ordered to Pay $137M to Former Black Employee Over Racist Abuse

Tesla CEO Elon Musk talks to media as he arrives to visit the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin. - Tesla builds a compound at the site in Gruenheide in Brandenburg for its first European "Gigafactory" near Berlin. (Photo by Odd ANDERSEN / AFP) (Photo by ODD ANDERSEN/AFP via Getty Images)

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.”


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