November 28, 2021

Volume XI, Number 332

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San Francisco Jury Hits Tesla with $137 Million Race Harassment Verdict

On Monday afternoon, a San Francisco federal court jury awarded $137 million to a Black former elevator operator who worked at Tesla’s Fremont facility for approximately one year before quitting his employment in 2016. After just four hours of deliberation, the jury awarded Owen Diaz $6.9 million in emotional distress damages and $130 million in punitive damages. Diaz testified at trial that Tesla employees frequently used the “n-word” and that they had drawn swastikas and nooses as well as racially disparaging images in the workplace. Tesla’s attorney noted in her closing argument that Diaz’s testimony was not supported by the evidence and “simply doesn’t make sense” since Diaz had encouraged both his son and daughter to become employees of the company.

This eye-popping verdict comes at an interesting time for Tesla, as the company’s stockholders are scheduled to vote on Thursday, October 7, on a stockholder proposal that the company prepare and publicly release a report on “the impact of the use of mandatory arbitration on Tesla’s employees and workplace culture. The report should evaluate the impact of Tesla’s current use of arbitration on the prevalence of harassment and discrimination in its workplace and on employees’ ability to seek redress.” The stockholders presumably will reflect on the fact that Melvin Berry (another Black former employee of Tesla who made similar allegations of racial harassment) won a $1 million award from an arbitrator less than two months ago. Diaz and Berry were represented by the same lawyer. These two seemingly similar cases — one tried before a jury and the other heard by an arbitrator — well illustrate why plaintiffs love juries and employers tend to prefer arbitration.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 278
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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
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