Not a Model for the Future

A 2017 racial discrimination lawsuit between Tesla and a former employee, Owen Diaz, resulted in a substantial payout to Diaz (recently reduced to $15 million). The same Tesla plant at which Diaz worked was sued again earlier this year by California’s Department of Fair Employment and Housing, again regarding racism and harassment. Tesla subsequently responded via company blog post, calling the State of California suit “misguided.” The startling allegations that have emerged, in conjunction with Diaz’s award, suggest that Tesla may have significant exposure.

Business Takeaway: The allegations in this lawsuit suggest systematic and pervasive racism and harassment; however, most businesses encounter more subtle or vague forms of these and other issues. For instance, a number of past racism and harassment cases (e.g., the NFL’s Richie Incognito and Jonathan Martin “locker room culture” story) may have been egregious in a factual sense but less clear-cut on the law. Contact us at if you have questions regarding your anti-harassment and reporting policies and procedures.