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- Tesla was told to pay $1 million to a Black former employee in a racial-discrimination case.
- Melvin Berry said his supervisors at Tesla's Fremont, California, factory called him the N-word.
- Tesla denied the allegations.
- See more stories on Insider's business page.
Tesla was told to pay more than $1 million to a Black former employee who said two supervisors at its Fremont factory in northern California called him the N-word, Bloomberg first reported.
The case was settled by arbitration rather than in court, meaning it was largely confidential. But available filings show that Melvin Berry, who started working at Tesla as a materials handler in 2015, claimed he was forced to work longer hours and push a heavier cart after he confronted a supervisor about the slur.
Tesla denied the allegations at the time. Tesla said that there was no written evidence that Berry had complained to his co-workers or human resources about his supervisors using the N-word, per the arbitrator's May 12 ruling. The company said that Berry left the job voluntarily and that his economic losses amounted to $148 at most, per the ruling.
Elaine Rushing, the arbitrator in the case, said that it was a "difficult" case to rule on, but that she believed both of Berry's supervisors used the slur. She said that their behavior altered the conditions of his employment and "created a racially hostile work environment."
She found Tesla liable for harassment because it came from Berry's supervisors and the company didn't take action against their behavior. "Every time he reported discriminatory conduct he was ignored," she wrote.
She also found that "racial symbols such as swastikas were not always promptly removed" from the workplace, per the filings.
Tesla was told to pay $1.02 million. Most of this went towards Berry's attorneys' fees and legal costs, but Tesla was also told to pay Berry $266,278.50 in damages, including $100,000 to compensate for emotional distress.
Berry said that he suffered from sleepless nights, migraines, panic attacks, depression, and anxiety as a result of his supervisors' behavior, causing him to seek help from a psychologist, per the ruling. Berry also said that he "became quiet and cried a lot" and "questioned his sanity," per the ruling.
He left his job just 17 months after he started.
Tesla argued, in its defense, that Berry had agreed his emotional suffering was "garden variety," meaning that an ordinary person would experience similar suffering in a similar situation. His claims for emotional distress damages were barred by workers compensation exclusivity, Tesla argued.
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Lawrence Organ, Berry's lawyer, told Bloomberg that Berry wouldn't be taking any further legal action.
Tesla didn't respond to Insider's request for comment. In a blog post from November 2017 written in response to a lawsuit about alleged racism at its Fremont factory, the company said it is "absolutely against any form of discrimination, harassment, or unfair treatment of any kind."
Other Black employees have said they faced racial slurs while working at Tesla, including one employee at the company's Fremont factory who said that he was called the N-word "approximately 100 times" and that he saw KKK signs and swastika graffitied in bathroom stalls.
This was one of 103 sworn testimonies, obtained by Protocol, that formed part of a 2017 lawsuit filed by former Black workers at Tesla's Fremont plant.