The auto manufacturer Tesla recently got hit with a $137 million judgement after a former worker successfully claimed that he had suffered racial discrimination at the company.
Specifically, the man said that he was harassed on account of his race while he served as an elevator operator at Tesla. He was not an employee of Tesla but contracted to work there temporarily.
The California jury hearing the case agreed with the man and awarded him almost $7 million for his emotional distress. The jury also assessed $130 million in punitive damages.
While Tesla had not explicitly said it would appeal, it did release a communication which appeared to criticize the jury for its verdict.
Punitive damages are subject to limits in California
Most experts agree that the overall judgement will be cut significantly as the case continues to make its way through the judicial system. However, many also pointed out that the final result will still be a substantial payout to the worker.
The reason is that while exemplary damages, which are also called punitive damages, are broadly available in California, there are some legal limits to them. There is no strict cap, but, speaking generally, these damages do have to be in proportion to the circumstances.
Still, the verdict sends a strong message that big corporations like Tesla need to take their obligations to stop discrimination more seriously.
The fact that the alleged victim is a contracted worker, as is the case with someone placed through a staffing agency, is no excuse for discrimination. Employers still have to take steps to prevent a hostile work environment and must review discrimination complaints thoroughly and objectively.
It is easy for contracted workers in the Los Angeles area to get overlooked, but they should remember that they do have legal options if the suffer discrimination at one of their assignments.