Jury Awards Former Tesla Worker $137 Million in Race Bias Suit

[Editor's note: This award has been reduced to $3.2 million.]

A federal district judge ordered Tesla to pay a Black former elevator operator $137 million in damages on his claim that the electric carmaker ignored racial epithets and graffiti that created a hostile work environment.

We've rounded up resources and articles from SHRM Online and other trusted outlets on the news.

Rare Verdict

The jury awarded $6.9 million to the plaintiff for emotional distress and $130 million in punitive damages, according to an attorney for the plaintiff. Punitive damages are meant to punish the company for egregious conduct and to deter it, as well as other employers, from engaging in similar conduct in the future. Experts say the award is unusually high for an individual lawsuit (rather than a class action with many plaintiffs). Tesla's market value is about $783 billion, which makes it the most valuable automaker in the world and may explain why the punitive damage award was so high. Tesla has not said whether it will appeal the verdict and damage award.

(Bloomberg)

Worker Claims 'Daily Racist Epithets'

The plaintiff, who was contracted to work through a staffing agency in 2015 and 2016, claimed that he was forced to quit because he was subjected to "daily racist epithets," including the N-word, as well as swastika drawings and other racist graffiti at a Tesla plant in the San Francisco Bay Area. The plaintiff said supervisors did not curb the behavior. "Tesla's progressive image was a façade papering over its regressive, demeaning treatment of African-American employees," the plaintiff claimed in his lawsuit. Tesla did not comment on the verdict but has previously denied knowing about alleged racist conduct at the Bay Area plant, which has about 10,000 workers.

(Associated Press)

Tesla's HR Leader Responds

Valerie Capers Workman, Tesla's vice president of people, said in a letter to employees that she "was at the defense table for Tesla every day during the trial because [she] wanted to hear firsthand what [the plaintiff] said happened to him." She added, "While we strongly believe that these facts don't justify the verdict reached by the jury in San Francisco, we do recognize that in 2015 and 2016 we were not perfect. We're still not perfect." Workman noted that Tesla has since added an employee relations team to investigate complaints; a diversity, equity and inclusion team to help ensure employees have equal opportunities; and a comprehensive employee handbook so employees know what protections they have and how to report issues.

(Tesla)

Section 1981 Claims

The plaintiff in this case brought his racial harassment claim under 42 U.S.C. 1981, which was originally part of the Civil Rights Act of 1866 and is generally known as a Section 1981 claim. Section 1981 claims differ from claims brought under Title VII of the Civil Rights Act of 1964 in several ways. Section 1981 only covers claims of intentional discrimination based on race, whereas Title VII covers more categories of discrimination, as well as disparate impact claims based on a neutral policy with a discriminatory effect. Significantly, Title VII limits compensatory and punitive damages to $300,000 for large employers, whereas Section 1981 doesn't have a cap on damages.

(The Washington Post) and (The National Law Review)

Advancing Racial Equity in the Workplace

Black employees are most at risk for experiencing bias, followed by Latino and Asian-American employees. However, even employees who don't directly experience bias are negatively impacted by observing others being treated unfairly. Research from the Society for Human Resource Management (SHRM) found that racial inequity is often perpetrated by supervisors, managers and senior leaders. Racial bias in the workplace is annually costing U.S. businesses $54.1 billion in increased absenteeism, $58.7 billion in lost productivity and $171.9 billion in turnover, according to SHRM's research. HR has a pivotal role to play in restructuring workplaces to truly advance racial equity and inclusion.

(SHRM Online)