Elon Musk is paving the way for luxurious electric cars and leisurely space travel, but even his companies are behind the times when it comes to addressing hostile work environments.
Liability and a Loophole
Tesla is consistently a Fortune 100 company leading innovation in the electric car industry. According to its mission statement, the business is determined to “accelerate the world’s transition to sustainable energy.” It may come as a surprise to some then that the company also has a reputation for fostering a hostile work environment.
Over the last few years, a handful of former Tesla employees have pursued legal remedies against the tech company for race discrimination. Most disputes have been resolved behind closed doors as the company ensures all incoming employees agree to an arbitration clause.
More recently, however, the tech giant was sued by an independent contractor. The worker therefore wasn’t precluded by an arbitration agreement and was allowed to pursue his legal claim before a jury. The court ordered the tech company to pay an astounding $130 million in punitive damages in addition to $6.9 million in compensatory damages for failing to address and remediate a hostile work environment that allowed race discrimination to endure.
Throwing Caution to the Company Culture
In Texas, you may be held responsible for the actions (or inactions) of your managers and supervisors. In September, a new statelaw went into effect that now holds managers and employers liable for promoting or neglecting to remediate sexual harassment claims.
In Tesla’s case, managers and supervisors failed to address the abuse allegations reported by the factory worker. Other employees drew swastikas and scratched a racial epithet and other offensive drawings in a bathroom stall. A supervisor and other colleagues repeatedly referred to the worker by using racial slurs. He decided to file a claim only after his son started working at the Tesla factory as well and experienced the same demeaning and demoralizing abuse.
The More Things Change, the More They Stay the Same
For being one of the most forward-thinking companies in the world, Tesla reminds us that race discrimination and other toxic company traits are still pervasive across almost all (if not all) industries. We’ve also seen a number of downfalls over the last few years involving show hosts, Hollywood producers, executive officers, and politicians for sexual harassment.
Today, most would say its common sense not to name-call or grope your employees. So, why are such problems persisting among small and large employers alike? It comes down to best practices.
You should cover your bases and implement policies addressing harassment, discrimination, and retaliation claims. In addition, require and encourage managers and supervisors to participate in trainings on how to address the issues should they ever witness workplace incidents or an employee comes forward with a claim.
If an employee comes to you with experiences similar to what the Tesla worker endured, it’s in everyone’s best interest to investigate and solve the issue as soon as possible. Doing so will ensure employees feel safe and able to do the job you hired them to do and, if nothing else, could save you $130 million in punitive damages.
Jacob M. Monty is an attorney with Monty & Ramirez LLP in Houston, Texas. You can reach him at jmonty@montyramirezlaw.com.
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