Tesla Under Close Legal Watch After Racial Bias Claims Arise
Creators: name: Zelicof, Rachel
Publisher: name: American University
Year: 2023
Subjects: classificationCode: 48
subject: Law and legal studies

description: Tesla’s Workplace Discrimination: Earlier this week, a former Black general manager for Tesla, John Goode filed suit against Tesla. He claims that after he confronted his White supervisor about racist comments, he was fired on baseless grounds. This is not the only racial bias claim that Tesla is facing; a former Black elevator operator, Owen Diaz, is suing Tesla for racial harassment in the workplace. Additionally, Tesla faces a class-action lawsuit from a group of Black employees alleging widespread racial discrimination at Tesla’s Fremont Plant in California. [1] All of these former Tesla employees are seeking damages for “emotional distress and punitive damages” upwards of millions of dollars. [1]
Interestingly, Tesla has yet to claim responsibility for its employees’ actions in the workplace. Tesla continually denies any allegations of racial discrimination at their worksites. Attorneys for the company argued that Tesla doesn’t stand for this type of behavior in their workplace. [2] However, nothing is being done to discipline employees responsible for racial harassment nor does Tesla seem to care about how this will affect other employees of color.
Legal Precedents: In 2021, Owen Diaz (former elevator operator for Tesla in California) sued Tesla for severe racial harassment. Diaz’s attorneys say that he was “repeatedly called the N-word over sixty times and no immediate action was taken to end this workplace discrimination” [3]. The court awarded punitive damages to Diaz in the amount of $137 million. [2] However, Diaz was denied an additional $15 million award because Judge Orrick did not see evidence of a sustained and concrete injury. The court ultimately held that Tesla was responsible for racial bias discrimination and workplace harassment against Diaz.
Implications: This case prompts a unique discussion surrounding corporate conduct and responsibility. Is it necessary for Tesla to publicly disclose its employees’ misconduct, in these cases, racial harassment and discrimination? Also, is Tesla being transparent with the public by continuously denying to acknowledge racial bias claims? This is a multifaceted question and there doesn’t seem to be one concrete answer. It is highly important to evaluate the positions of all stakeholders in this situation. For example, it is necessary to think about how public acknowledgement of racial discrimination in Tesla’s workplace would impact not only Tesla itself, but also the victim of the harassment. If Tesla takes its accountability into public view this may bring a feeling of relief to victims and their families.
Last month, the Department of Justice (DOJ) announced that it will incentivize companies to be more transparent about reporting employee misconduct. [4] It seems as if this policy proposal has hit rock bottom considering Tesla refuses to publicly take responsibility for workplace misconduct. Even if Tesla publicly acknowledges its employees’ misconduct how would the ramifications change in this situation? Would Tesla be held less accountable by the court based on incentives derived from the DOJ’s policy proposal? In this context it is imperative to consider the actions of people in positions of power such as higher up managers and supervisors within Tesla. It is probable that these supervisors might do just about anything to put this case behind them and receive less harsher punishment.