A Federal District Judge ordered Tesla to pay a former black elevator operator $ 137 million in damages for his claim that the electric car maker ignored the racial epithets and graffiti that created an environment of hostile work.
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The jury awarded the plaintiff $ 6.9 million for emotional distress and $ 130 million in punitive damages, according to a lawyer for the plaintiff. Punitive damages are intended to punish the company for egregious conduct and to deter the company, as well as other employers, from engaging in similar conduct in the future. Experts say the price is unusually high for an individual lawsuit (rather than a class action suit with many plaintiffs). Tesla’s market value is around $ 783 billion, making it the world’s most valuable automaker and may explain why punitive damages were so high. Tesla did not say whether he would appeal the verdict and damages.
Worker claims ‘everyday racist epithets’
The complainant, who was hired to work through a recruitment agency in 2015 and 2016, claimed he was forced to resign because he was subjected to “daily racist epithets”, including the “N-word”, along with swastika designs and other racist graffiti at a Tesla factory in the San Francisco Bay Area. The complainant said the supervisors did not curb the behavior. “Tesla’s progressive image was only a facade for his regressive and demeaning treatment of African-American employees,” the plaintiff said in his lawsuit. Tesla did not comment on the verdict but previously denied being aware of suspected racist behavior at the Bay Area plant, which has around 10,000 workers.
Tesla HR manager responds
Valerie Capers Workman, Tesla’s vice president of personnel, said in a letter to employees that she “was at the Tesla defense table every day during the trial because [she] wanted to hear firsthand what [the plaintiff] happened to him. “She added,” While we firmly believe these facts do not justify the jury’s verdict in San Francisco, we recognize that in 2015 and 2016 we weren’t 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 a level playing field; and a comprehensive employee handbook so employees know what protections they have and how to report issues.
Claims under section 1981
The plaintiff in this case filed his racial harassment complaint under 42 USC 1981, which was originally part of the Civil Rights Act of 1866 and is commonly known as the Section 1981 complaint. Section 1981 claims differ from claims filed under Title VII of the Civil Rights Act 1964 in several respects. Section 1981 only covers allegations of intentional discrimination based on race, while Title VII covers more categories of discrimination, as well as “disparate impact” allegations based on neutral policy with discriminatory effect. Significantly, Title VII limits compensatory and punitive damages to $ 300,000 for large employers, while section 1981 does not impose a ceiling on damages.
(The Washington Post) and (The National Law Review)
Advancing racial equity in the workplace
Black employees are most at risk of being prejudiced, followed by Latin American and Asian American employees. However, even employees who do not directly experience prejudice experience a negative impact by observing that others are 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 prejudice in the workplace costs American businesses $ 54.1 billion in increased absenteeism, $ 58.7 billion in lost productivity and $ 171.9 billion in revenue each year, according to research from SHRM. HR has a central role to play in restructuring workplaces to truly advance racial equity and inclusion.