Technology

Tesla Ordered to Compensate Former Employee $137 Million Due to Racism

Tesla Ordered to Compensate Former Employee $137 Million Due to Racism

Tesla has lost a case brought by a former African American elevator operator, which now requires the company to pay him $137 million for disregarding the racial slurs and offensive writings he was subjected to at the electric car manufacturer's factory in Northern California, according to the man's attorney. Owen Diaz, a former contracted employee who was hired in 2015 through a staffing agency, experienced a racially hostile work environment, as determined by a jury in San Francisco on Monday, as confirmed by Diaz's lawyer, Lawrence Organ. The ruling was not immediately verified in the electronic court records, according to Bloomberg.

Diaz's case is rare in that Tesla, which typically uses mandatory arbitration to resolve employee disputes, had to defend itself in a public trial. The company rarely loses arbitration in labor-related cases, though it faced a setback of $1 million in May in a lawsuit from another former employee that was similar to Diaz's case.

The trial's outcome could encourage activist shareholders seeking to push Tesla's board of directors, who have so far been unsuccessful, to adopt greater transparency regarding its arbitration practices for addressing complaints related to sexual harassment and racial discrimination. The board is urging investors to vote against such a proposal at a shareholder meeting on October 7, even as other major Silicon Valley companies, from Alphabet to Uber, have moved away from mandatory arbitration.

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