9th February 2023

SAN FRANCISCO— Tesla Inc. TSLA 0.81% subjected a Black former employee to a racially hostile work surroundings and did not take affordable steps to forestall him from being racially harassed, a federal jury discovered Monday.

The eight-person jury awarded greater than $130 million in damages to Owen Diaz, who labored as an elevator operator at Tesla’s Fremont, Calif., manufacturing unit in 2015 and 2016.

He was often referred to as racial epithets at work, the place he noticed racist photographs and language written within the lavatory and elsewhere, mentioned Bernard Alexander, one in every of his attorneys, throughout the trial. The manufacturing unit, situated within the San Francisco Bay Space, was Tesla’s lone auto meeting plant on the time, using roughly 10,000 individuals.

Mr. Diaz, 53, held his head in his arms after the jury’s verdict was learn. He referred to as the choice a weight off his shoulders. The trial lasted simply over per week.

“It shines a light-weight on what’s occurring inside Tesla’s manufacturing unit,” he mentioned. “Elon Musk, you’ve been placed on discover. Clear that manufacturing unit up.”

Tracey Kennedy, an lawyer for Tesla, mentioned in her closing argument that there was no proof {that a} Tesla worker harassed Mr. Diaz and that the corporate shouldn’t be held accountable for the remedy Mr. Diaz alleged. Many employees at Tesla’s manufacturing unit are contractors employed by means of staffing companies.

Tesla’s vice chairman of individuals, Valerie Capers Workman, mentioned in an e-mail to staff Monday that when Mr. Diaz complained about harassment, the corporate ensured its staffing companies took motion.

“Whereas we strongly consider that these info don’t justify the decision reached by the jury in San Francisco, we do acknowledge that in 2015 and 2016 we weren’t excellent,” she mentioned within the be aware, which was republished on Tesla’s weblog.

Tesla Chief Government Elon Musk didn’t instantly reply to a request for touch upon the decision or any plans to attraction.

The trial centered on three claims: that Tesla subjected Mr. Diaz to a racially hostile work surroundings; that the corporate failed to forestall him from being racially harassed; and that it was negligent in its supervision or retention of an worker, inflicting hurt to Mr. Diaz.

Tesla denied in a court docket submitting that it was conscious of the alleged discriminatory and harassing habits and didn’t take motion to guard Black staff. Ms. Kennedy urged the jury to search out in Tesla’s favor on every of the claims.

The jury, after roughly 4 hours of deliberation, present in favor of Mr. Diaz on all claims and ordered Tesla to pay Mr. Diaz $6.9 million in compensatory damages and $130 million in punitive damages.

It’s the second time in current months that the electric-vehicle maker has been discovered liable in a case involving claims of race-based harassment or discrimination.

One other Black former Tesla employee, Melvin Berry, received a $1 million judgment in Could after an arbitrator discovered that he was referred to as racial slurs by his supervisors and subjected to different racial conduct within the Fremont manufacturing unit. Tesla was obligated to analyze and cease the racial discrimination and failed to take action, the arbitrator mentioned in her order.

Tesla mentioned that any actions the corporate took weren’t racially based mostly, in keeping with the order.

Mr. Diaz, who was employed by a staffing company, didn’t signal an arbitration settlement, permitting his case to proceed to trial. His attorneys mentioned they believed this to be the primary case involving alleged harassment or discrimination at Tesla to achieve trial.

Tesla is dealing with related claims in California state court docket, the place former Tesla meeting employee Marcus Vaughn sued, alleging that Tesla created an intimidating, hostile and offensive work surroundings for Black employees. He and different plaintiffs are in search of class certification.

Tesla has denied the claims, court docket information present. In a weblog submit after Mr. Vaughn filed his lawsuit in 2017, Tesla mentioned, “it isn’t humanly potential to cease all unhealthy conduct, however we’ll do our greatest to make it as near zero as potential.”

An investor proposal up for consideration at Tesla’s annual shareholder assembly Thursday calls on the board to supervise preparation of a report about how the corporate’s use of obligatory arbitration impacts staff and company tradition. Tesla’s board has urged traders to vote in opposition to the proposal. An identical measure failed final yr.

Write to Rebecca Elliott at rebecca.elliott@wsj.com

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