A Tesla factory worker in California in early October won a $137 million race discrimination verdict. The plaintiff was employed by a temporary staffing agency at the Tesla factory, and he claimed that he was regularly subjected to racially offensive terms and graffiti, including the "N" word, derogatory images of African-Americans and swastikas, which he claimed led to sleepless nights and weight loss. He also claimed the company ignored his complaints.

The jury verdict includes $6.9 million for emotional distress and $130 million in punitive damages. Tesla argued that it never intended to disregard Plaintiff's rights and those of workers placed by the staffing agency at the plant and that all the incidents reported by the Plaintiff were investigated and resolved.

The outcome shows the danger in these type cases. To show a legal violation, harassment of this nature must be deemed to be "severe" or "pervasive" enough for a lawsuit to have enough merit to be allowed to be submitted to a jury. Cases have differed as to whether racially charged language or graffiti is sufficient to meet that standard. For example, the U.S. Supreme Court in May left in place a lower court ruling that threw out a worker's case because his allegations of racist graffiti, offensive verbal abuse, and swastikas did not satisfy the severe or pervasive standard.

Apparently, the jury disbelieved many of the employer's defenses that the incidences in question simply did not happen. A member of the jury stated afterwards that some jurists considered that Tesla used contract employees as a way to mitigate their own responsibility for the culture within the factory. This juror expected Tesla to take at least the most basic preventive measures and precautions which he deemed they had neglected to protect employees within the factory.

Many refer to verdicts like this as coming from a "runaway jury." It is because of cases like this that many employers have instituted individual employment agreements containing either jury trial waivers or mandatory arbitration provisions, so that legal claims go to an arbitrator rather than to a court. Employers desiring information on these approaches should contact Wimberly & Lawson.

This is part of our November 2021 Newsletter.

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