Ex-Tesla employee called racial slur wins rare US$1-million award

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Tesla has paid more than US$1 million to a Black former employee who won a ruling that the company failed to stop his supervisors from calling him the “N-word” at the electric-car maker’s northern California plant.

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The rare discrimination award by an arbitrator to Melvin Berry, which followed a closed-door proceeding, caps years of complaints from Black workers that Tesla turned a blind eye to the commonplace use of racial slurs on the assembly line and was slow to clean up graffiti with swastikas and other hate symbols scrawled in common areas.

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It ends a years-long and emotionally grueling fight launched by Berry, who was hired by the company as a materials handler in 2015 and quit less than 18 months later.

Arbitration typically keeps disputes between employees and companies secret, but court filings reveal that the arbitrator found Berry’s allegations more credible than Tesla’s denials, though she called it a “difficult” case after hearing from witnesses on both sides. Berry claimed that when he confronted a supervisor for calling him the “N-word” he was forced to work longer hours and push a heavier cart.

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“I hope the world knows that an arbitrator found Tesla treats its employees like this,” Berry, 47, told Bloomberg News in a phone interview early August. He said he’s now taking time off to focus on his mental health as he still hasn’t “gotten over the healing process.”

“Case law is clear that one instance of a supervisor directing the N-word at a subordinate is sufficient to constitute severe harassment,” arbitrator Elaine Rushing said in her May 12 ruling, which hasn’t been previously reported. Rushing, a former judge in Sonoma County Superior Court for almost two decades, said she found Tesla liable for harassment because it was perpetrated by Berry’s supervisors.

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Tesla has vehemently denied the allegations in Berry’s case and others like it, saying in a 2017 statement that the company “is absolutely against any form of discrimination, harassment, or unfair treatment of any kind.” Tesla didn’t respond to a request for comment. Danielle Ochs, a lawyer who represented the company in Berry’s arbitration, also didn’t respond.

Three-quarters of the US$1.02 million award is for Berry’s attorneys’ fees and legal costs. Rushing also directed Tesla to pay the ex-employee US$266,278.50 in damages, including $100,000 to compensate for emotional distress.

In its defense, Tesla said there’s no written evidence, even in Berry’s medical records, that he had complained to co-workers or human resources about his supervisors addressing him with the “N-word.” Berry left the job voluntarily and only deserves $148 for his economic losses, Tesla argued, according to the arbitrator’s ruling.

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The company said Berry agreed that his emotional suffering was “garden variety,” what an ordinary person would experience in the same circumstances, while arguing that he’s barred under workers’ compensation law for collecting any damages for it.

After his supervisors turned against him, Berry alleged, he suffered from sleepless nights, panic attacks, depression and anxiety, prompting him to seek help from a psychologist for the first time, according to the ruling. He broke down during the arbitration proceeding as he recalled how he “became quiet and cried a lot” and “questioned his sanity,” Rushing wrote.

Other lawsuits and complaints to California authorities echo Berry’s allegations. In late 2017, a Black worker, Marcus Vaughn, tagged the plant as a “hotbed of racist behavior” in a suit. Tesla responded with a lengthy blog post titled “Hotbed of Misinformation,” saying the company had investigated the alleged incidents and fired three people as a result.

An ex-Tesla employee who worked at the Fremont factory for about two years said in a sworn declaration in the Vaughn case that he had heard the “N-word” used at least 100 times by co-workers and that Black and White employees alike referred to the factory as “the plantation” or “slaveship.”