Insights from Tesla’s Settlement with Black Worker in Racial Discrimination Lawsuit

Tesla, Inc. has faced several lawsuits from workers alleging discriminatory treatment. In recent developments, the electric carmaker settled a significant racial discrimination case with a Black former employee. The lawsuit was filed in San Francisco federal court.

Owen Diaz was employed as an elevator operator at Tesla in 2015. Diaz’s case garnered attention as it alleged a hostile work environment at Tesla’s factory in Fremont, California. His lawsuit described racial epithets, graffiti in the restroom, and pervasive discriminatory conduct toward Diaz and other Black employees.

Diaz’s 2023 testimony detailed multiple instances of racial harassment from colleagues, which not only created a hostile work environment but also compromised his sense of safety and well-being in the workplace. Coworkers even told him to “go back to Africa.”

Legal proceedings ensued, resulting in substantial verdicts after the jury was convinced that Diaz had suffered severe racial discrimination and harassment at Tesla. The employer had also failed to take any action to end the misconduct. Diaz was initially awarded $137 million, which included punitive damages. However, the figure was later reduced to $3.2 million after a retrial.

Despite years of litigation, questions remain about Tesla’s effectiveness in addressing discriminatory behavior within its workforce. The same law firm that represented Diaz is handling a proposed class action lawsuit that involves current and former Tesla workers. It accuses the company of failing to stop the harassment and racial discrimination of Black employees. Diaz is not involved in that case.

The Equal Employment Opportunity Commission (EEOC) also sued Tesla in late 2023, claiming that the company is violating federal labor laws “by tolerating widespread and ongoing racial harassment of its Black employees.” Furthermore, workers have faced open hostility and retaliation for speaking up about the harassment. Tesla allegedly retaliated against employees by subjecting them to negative employment actions like terminations, transfers, and changed job duties.

Labor laws require employers to promptly investigate discrimination and harassment complaints and take steps to stop the unlawful behavior. When an employer fails to address workplace misconduct, employees often feel emboldened to continue engaging in wrongdoing. There have been calls for Tesla CEO Elon Musk to issue a statement that makes clear that discrimination and harassment are not tolerated at the company’s facilities.

According to the EEOC, racial discrimination has been ongoing at Tesla since at least 2015. Black employees at the automaker’s Fremont plant have faced racial epithets, including the use of the N-word, graffiti, nooses, pervasive stereotyping, and racial abuse. 

The EEOC’s San Francisco District Office filed the lawsuit in the U.S. District Court for the Northern District of California after investigating Tesla’s employment practices. The agency is seeking compensatory damages, including back pay for the affected employees, as well as punitive damages to urge Tesla to change its workplace policies.

Racial discrimination occurs when a worker or job seeker faces hostility based on race-related characteristics like hair texture, skin color, or facial features. This discrimination manifests in various ways, such as racial slurs and derogatory comments. Workers may experience unfair treatment like termination, limited advancement opportunities, or less pay compared to their colleagues due to their race.

The law does not shield employees from casual remarks, teasing, or occasional incidents. However, workers may have grounds for a racial discrimination claim if the work environment becomes hostile and they endure severe or frequent harassment based on their race.

At McCormack Law Firm, we recognize the deep sense of distress that discriminatory treatment can cause. No worker should have to endure racial discrimination, harassment, or retaliation on the job. Unfortunately, discrimination remains a problem in workplaces across San Francisco and beyond. While our law firm is not involved with the Tesla lawsuits, we have extensive experience helping workers resolve workplace disputes that involve all forms of discrimination.

Standing up to employers, particularly large corporations, requires courage, determination, and deep knowledge of California labor laws. Our San Francisco employment attorneys are ready to help you. Contact McCormack Law Firm today for a free initial consultation.