Tesla’s claim of no tolerance for racism faces rare public trial
A former Tesla Inc. worker who alleges racism was rampant on the assembly line has already achieved a rare feat: forcing the electric car maker to fight it in open court.
But when Owen Diaz takes his case to a jury starting Friday in San Francisco, he runs into a company that hardly ever loses disputes at work.
Out of nearly 90 employment-related arbitration complaints filed against Tesla from 2016 to March this year, the company prevailed in 11 cases decided by a private judge after closed hearings, according to data compiled by JAMS, the arbitration service provider who handles the company’s disputes. Tesla lost only one arbitration – a very similar case to Diaz’s that ended in May with a million dollar award to the ex-employee. Most of the other cases were either settled or were dropped, withdrawn or dismissed without a hearing.
Diaz was exempted from the company’s mandatory arbitration policy and was able to pursue his case in federal court because he came to Tesla as an entrepreneur through a recruitment agency. The lawsuit will pit Diaz’s claims that he was repeatedly called the ‘N word’ and other epithets against Tesla’s defense that she never intended to embarrass and hurt him or disregard the rights and safety of African-American workers placed by the recruiting agency. Tesla did not respond to a request for comment before the trial.
Several days of testimony from colleagues, supervisors and human resources staff will highlight years of complaints from black workers that officials at the Tesla plant in Fremont, Calif., Have turned a blind eye to the common use of racist insults to the assembly and took a long time to clean up the graffiti with swastikas and other symbols of hatred scrawled in common areas. Around 10,000 people work at the factory, which Tesla acquired in 2010.
The case could also embolden activist shareholders who have pushed Tesla’s board of directors, so far unsuccessfully, to adopt more transparency about its use of arbitration to resolve complaints of sexual harassment and racial discrimination. . The board urges investors to reject such a proposal at a shareholder meeting scheduled for Oct. 7, even as other major Silicon Valley companies, from Alphabet Inc. to Uber Technologies Inc., have waived recourse to compulsory arbitration.
“For Tesla, having to stand up for yourself in the public eye is very important,” said Hilary Hammell, Oakland, Calif., Employment discrimination lawyer at Levy Vinick Burrell Hyams LLP. “The fact that arbitration agreements are so common in employment really undermines the right to a jury trial, especially when it comes to our civil rights.”