Tesla to pay $137 million to worker following constant racial harassment

A federal court jury recently awarded Owen Diaz, a Black former Tesla employee, $137 million for repeatedly suffering racist slurs at the hands of his supervisors and co-workers during his time with the company. Diaz worked as a contracted elevator and forklift operator for nearly 10 months from 2015-2016 at an auto plant in California. Tesla unsuccessfully argued that Mr. Diaz was not an employee. The jury found Mr. Diaz a joint employee of Tesla and its contractor.

The jury further found Mr. Diaz was entitled to be free from a racially hostile workplace and awarded him $6.9 million to compensate him for significant emotional distress caused by the racial abuse.

The jury also awarded $130 million to punish Tesla for seemingly allowing, and even condoning, a racist culture. At trial, Tesla denied knowledge of racist attacks against Mr. Diaz, and claimed all incidents he reported were properly investigated and resolved. However, other Black Tesla employees echoed Mr. Diaz’s experience, suggesting a pattern of racism at the vehicle manufacturer.

Since the Diaz verdict, Tesla requires employees and contractors to resolve disputes through mandatory arbitration, possibly to keep similar stories from the public eye. Tesla also stated that it did not believe Mr. Diaz’s verdict was justified but admitted Tesla “was not perfect” in 2015-2016. Many, including its shareholders, criticized Tesla’s response as trivializing racism in its workplace.

Canadian employers and the duty to provide a safe work environment

Canadian employers have a legal duty arising from workplace health and safety laws to ensure their workers are not subjected to, nor participate in, workplace harassment or violence, racial or otherwise. Sometimes, this duty extends to an organizations’ supervisors and workers themselves.

Employees should know that this duty applies whether the harassment happened once or continuously, regardless of if you’ve only worked for your employer a short time, or even as a contractor, like Mr. Diaz.

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Is my employer creating a safe work environment?

If you relate to Mr. Diaz’s experience, ask yourself these questions to consider whether your employer has failed this duty:

1. Does my employer have an anti-bullying, harassment, and violence policy that all employees know about and understand?
2. Is the policy properly, consistently, and fairly implemented?
3. Does the policy outline procedures for:
   • reporting workplace bullying, harassment, and violence; and
   • investigating and responding to reported incidents?

For employers, the above is a starting point in meeting your legal obligations to workers, but also to avoid condoning a workplace culture of harassment and bullying, racial or otherwise, that goes unchecked. These policies should be adopted as a manifestation of your company’s core values – not merely for compliance.

The jury’s award to Mr. Diaz, while exceptional, reflects a social reckoning for businesses. Damages for emotional distress, as well as punitive damages, are available in Canada too. While costly, with conscious consumerism and shareholder activism on the rise perhaps more damaging to employers is the cost in the court of public opinion.

Contact an Employment Lawyer

If you are an employee who has suffered workplace harassment or bullying, our experienced employment lawyers at Samfiru Tumarkin LLP in Ontario, Alberta, and British Columbia can help you get the advice you need and the compensation you deserve through employment standards and human rights avenues.

Employees who face an intolerable work environment may be able to resign from their job, and obtain a full severance package through a constructive dismissal claim. Before you consider this option, talk to our team immediately to explore your rights.

Equally, if you are an employer trying to understand these issues better, or developing and implementing a policy of your own, we are happy to assist.