Large? Excessive? Yes. Insane? No. The system isn't just about compensation. The amount needs to be high enough to actually influence the wrongdoer, to dissuade repeat behavior. Maybe this jury thought this the smallest number that would cause Tesla to make actual changes to its workplace.
I do chuckle at how much money from each subsequent tesla sale will be going to pay down this lawsuit. 127mil / 500k = 254$ per car for a year. Given the price of a new Tesla that doesn't actually seem very big, and will certainly be reduced on appeal.
It is insane. There's a huge line between justice and grift, and I mainly blame lawyers for the latter. If every claim of hostile workplaces resulted in similar settlements, every company would be bankrupt within a few years. A company can have a strict zero tolerance policy, but they can't police every action of every employee while on the clock. Such settlements would likely incentivize companies to put cameras and microphones everywhere, including bathrooms, which would also result in "emotion distress".
Forced arbitration isn't just either, but the court system hasn't left much room for alternative with such overreaching punishments.
A bunch of you here are clearly concerned about the financial impact of the fine on Tesla’s bottom line, but maybe you should consider they could’ve gotten the house straight instead.
> A bunch of you here are clearly concerned about the financial impact of the fine on Tesla’s bottom line, but maybe you should consider they could’ve gotten the house straight instead.
Well, shareholders who voiced concerns regarding systemic racism in Tesla sought to actually fix the problem by looking into the arbitration process and making it clear they do not tolerate racism.
I'm afraid some of the comments in this thread are directly advocating against any need for Tesla to address systemic racism, and instead are deeply invested in blaming the victim.
For $137 million, I could probably organise a conspiracy with my manager and a couple of co-workers to fake a hostile, racist work environment.
Probably only need 10 people. Say they're paid $300k each. This would be about break even (assuming a 40 year worklife, slightly short) for a lifetime's wages.
If you try doing that in a company that has any sense, you'll be stopped right in your tracks. If it's allowed, then even if conspiring you just made a huge point.
Why? I mean, the last time I recall someone faking a crime like that was Jussie Smollett and he only got hit with a $130k fine or thereabouts.
Which is a big deal, but hardly <<super>> serious jail time. The risk-reward here looks like it might be a bit skewed. $137 million is not a normal amount of money. It only looks like $130k if you ignore the logarithmic nature of the Hindu-Arabic number system.
Fraud. Conspiracy. Embezzlement. If you plan anything via email or other electronic means, likely federal charges. And if you get paid, all sorts of possible charges related to the handling of proceeds of crime. Smollett didn't have a massive corporation pressuring the local DAs.
For me, Tesla's bottom line is irrelevant. While Tesla was indeed liable for the events, 137M is way too much for what happened to the victim. Its really that simple
The impact to Tesla's bottom line is precisely the point.
$130 million dollars of the award is punitive damages. They aren't supposed to compensate the victim. They are supposed to punish Tesla and force them to follow the law in the future.
The penalty needs to be large enough that it significantly hurts Tesla.
I'm not going to discuss what the price tag for the harm caused should've been, I don't think that's reasonably or fairly quantifiable.
That said, the ratio between the punitive damages and the direct compensation to the victim clearly intends send a message to other companies. Unfortunately, the ones that are able to pay these fines - which they are, effectively - won't ever be persuaded to change their ways, and will continue to seek other legal avenues to shield themselves from their responsibilities.
The bit where their only recourse to a company facing a meaningful punishment for allowing a hostile work environment is to institute an incredibly invasive level of snooping?
The point of my comment was the warn against such an outcome. I thought that was obvious. If the alternative is bankruptcy, large companies will do just about anything to survive it.
Right but you went straight to pervasive surveillance which is not the only option here. For example Tesla could start enforcing their existing zero tolerance policy. They didn’t get here because there was no way to know about the issue! It comes across more like a threat than a warning.
No, they really couldn't. Even actual social justice activism communities that literally see their goal as advocating for minorities and fighting racism can't seem to just get the house straight to the point they eliminate this kind of thing entirely.
A bunch of folks are concerned about their ability to build healthy companies under conditions of such hostility from the legal system.
... so same problem, different layer of abstraction.
Doesn't change the fact that running a company creates a duty of care.
It's hard to build safe cars if your workers worry that they're going to get shouted down with something that belongs in the 1920s.
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I really would be keen for a deeper understanding of what went wrong in Tesla's sociotechnical systems that led to someone in such a position of leadership responding exercising power with such little attention to their word choice.
Not, by any measure, the same problem, since a company has no intrinsic right to exist. In fact, if the legal system needs to be hostile against a company so human rights are upheld, that company's very existence should be put in question.
People have a right to form groups and freely interact with others to the extent that they chose - that's a right not a privilege.
The absurdity of the arguments in this threat are revealing - HN is normally viscerally against any kind of authoritarian appeal, hacking on cops for arresting actual criminals ... but for this one ... they're supporting coercive and completely disproportionate actions by the state?
Because someone was called some names and meant to feel bad about themselves?
You can see how quickly the hand of angry populist authoritarianism comes out, like a bad religious movement, whenever it triggers some group's sensitivities.
> Because someone was called some names and meant to feel bad about themselves.
First: If you are in a leadership position, you have a duty of care to the way you practice leadership. And yes, a lot leadership consists of the language you use.
Second: Someone feeling bad isn’t the problem here. The problem is choosing words which set company cultural norms to be hostile to employees based on unchangeable characteristics of their birth unrelated to the purpose of the group.
Third: People do have a right to form groups and a wide range of norms they have a right to set within those groups. That right is constrained by certain responsibilities —- one of which is to be less racist!
No, not really. Just because you managed to put together a business model and get an investor to trust you with some cash that does not mean you have a greenlight from society to act as racist and as sexist as you desire. Everyone around you still has the right to be treated with respect and not be subjected to any sort of abuse, specially those that are actively working to validate your business and make you rich.
In fact, allowing for a racist/sexist work environment to fester is an incredibly stupid move, as you're hindering productivity and limiting your access to skilled employees.
The rhetorical scare tactic of implying that somehow people who oppose this ridiculous ruling somehow think that 'racism should be ok' - is not an argument.
"They didn't put in the accessibility ramp - stop capitalism now!"
So once again - hyperbole - this time with a strawman thrown in for good measure.
Nobody is remotely suggesting someone shouldn't be able to go to work and not be called racial slurs.
The issue is a) to what degree this is systematic and a part of company function and b) proportionality.
The ruling is unreasonable and stupid, it's driven by greed, ideology and a 'law by litigation' approach to everything, which doesn't bode well for anyone.
> The issue is a) to what degree this is systematic and a part of company function and b) proportionality.
The federal court already concluded that the racism problem at Tesla was widespread and systematic, and was aided by the company's internal arbitration process which was bad enough that a Tesla shareholder voiced concerns it "enabled harassment and other problems".
The proportionality was obviously well justified, given that the bulk of it corresponded to punitive damages. The whole point of punitive damages is to punish the defendant, which is a company with an estimated market value of 800 billion dollars.
If there was any doubt regarding how well justified was the decision, you can simply look at how the ruling motivated Tesla's shareholders to address its racism and harassment problem right in their shareholder's meeting. This has been a long lasting problem at Tesla which has been festering for years, with multiple similar complaints handled (and muffled) internally, but it took this court ruling to finally get the company to address it.
Nearly every company is authoritarian inherently. It's a small group of people or even one person leveraging capital to exploit the labour of a much larger group of people for profit with zero democratic process.
I'm not disagreeing that the state should be given limited to zero say on the assembly of people but companies should not be framed as the counterweight against authoritarianism but another manifestation of it.
Well, part of the problem is with people like you who think that this can be boiled down to "word choice," as if those words didn't come from an entire package of racist sentiment that finally managed to become public.
>> incentivize companies to put cameras and microphones everywhere, including bathrooms
No. This incentivizes companies to take complains seriously. Tesla isn't being punished because an employee did something. Employees always do things. Tesla is being punished for allowing the behavior to continue for an extended period of time. They don't need to install cameras to detect/prevent every occurrence. They need to institute a functional system that detects and handles repeat offenders. That might be as simple as a means for complaints to be lodged, investigated and acted upon. And when they find people acting like this, yes they do need to actually fire them.
And then inevitably get sued for $137M by some of the people they fired or some of the people whose complaints weren't responded to satisfactorily because whatever system they come up with, will occasionally fail.
Punishments that are disproportionate to the offense are never a good policy. Ask any people who were on the receiving end of those throughout history. Just because it's a company being punished, does not change anything fundamentally. It's still an insane punishment for a single offense.
It's telling that almost nobody would choose non-hostile working conditions over being paid off more than they will earn in a lifetime even as a senior employee. When litigation is so significantly more desirable than the supposedly desirable outcome of non-hostile work environment, you have a much bigger problem than what you'd started with.
>> Punishments that are disproportionate to the offense
This is a civil matter, not criminal. The punishment is proportional to both the crime and the size of the defendant. A bug company will always require a greater level of punishment in order to induce change.
If you think that, fine them and burn 90% of the money instead of giving it to the plaintiff, to remove perverse incentives for employees to excessively litigate. Or whatever other method accomplishes the same goal. You can't just choose to be blind to half the incentives in this transaction.
> If every claim of hostile workplaces resulted in similar settlements, every company would be bankrupt within a few years.
If every claim of hostile workplace involved a high up person yelling at black people to go back to Africa maybe a whole bunch of companies deserve to get hit with fines that actually encourage them to stop enabling that stuff, or go bankrupt and be replaced by companies that don’t tolerate their leadership doing that stuff.
The settlement does not follow a mere claim, here you have a court that inflicted punitive damage to Tesla after a trial.
Also most business are not racist nor hostile to the extent Tesla is described by the victims, otherwise they would indeed be shut down.
Your cameras and microphones argument makes no sense. Racist graffitis in the restroom does not require big brother level of surveillance for the company to start an internal investigation.
Also mandatory arbitration agreements is obviously used to avoid both dealing with toxic behavior inside the company and public backlash.
No, it's not insane. Emotional abuse isn't a one time thing, by several employees. It's a systemic problem because of particular employees with abusive tendencies, and/or toxic company rules. In either case, there is no need for such surveillance to see such abuse from miles away. I'm 100% everyone knew about this ongoing abuse. There would be no need whatsoever for any of the suggestions you mentioned to have prevented this from happening.
A day in court is ALWAYS preferable to forced arbitration, especially in civil cases between cash-rich entities and individuals. We have an appeals system for a reason.
Don't make a hostile work environment or fuck around and find out?
Theres literally a pending class action against Tesla for this. They have a systemic problem that they're going to have to address or keep getting fined. 137 million is pennies for the company anyway.
Some might find this hard to believe but it's really easy not to be racist. It really really is.
> The amount needs to be high enough to actually influence the wrongdoer
Totally agree, from the article:
> faced a hostile work environment in which, he told the court, colleagues used epithets to denigrate him and other Black workers, told him to “go back to Africa” and left racist graffiti in the restrooms and a racist drawing in his workspace.
Yes, maybe this amount of money will convince companies like Tesla to actually do something. Hit them where it hurts, and 127 million per one worker should hurt.
As a non-American, this does strike me as odd. Probably Mr. Diaz wasn't the only person who has experience abuse and racist harassment yet he is the only one getting a sky-high payday. What about everyone else who probably has to put up with the same abuse?
Why is the amount not split into a smaller, proportionate, compensation payment to the worker, and a larger, deterrent fine payment to a regulator/government?
That always sounds like a good idea but isn't really practical. It makes government a party to every lawsuit, matters that are supposed to be between two parties. The court is supposed to be the neutral arbitrator. Having the government raking in money from the civil judgements creates perverse incentives.
I think the award is problematic due to a simple and ancient human trait: envy.
Consider. While the intent may be punitive damages to dissuade the bad actor from bad actions in the future, the effect is often instead resentment by many towards the awardee. This then perpetuates a cycle of suspicion, hostility, and potentially harms minorities rather than helping them, as this cycle inevitably anneals into right-wing politics. On a small scale, this might be an employer deciding to avoid hiring minorities in order to avoid the risk of a huge settlement. On a large scale, a country could go to war over reparations that they felt were unjust.
I think there’s a happy medium. Let the awardee have an award equivalent to their actual harm - and the punitive damages all go to charity, or to a governmental or quango fund to combat the issues that have caused the fund to grow.
This inhibits selfish motivations and the perceptions of them, and would still perform the same function in terms of punishment.
And at 100 million plus, frivolous lawsuits really start look enticing. Maybe it really starts to makes sense to try even if the case is not very strong or even doesn't exist.
And this puts burden on both companies and legal system in general. Which I don't think is very desired.
I'm not a lawyer, but it seems to me that crime/misdemeanor deterrence is a duty of the criminal law, while civil law is only about righting the wrongs of specific people/legal entities. In any case, I'd LOVE to go through whatever the guy came through in exchange for just $1m (a completely life-changing amount of money for me), let alone $137m... These verdicts ARE insane.
There is more than on reason folks do mandatory arbitration agreements - I'm not entirely sure this is the main one. Mandatory arbitration keeps such things out of the public record and often silences the accuser.
I don't know the applicable US law, but there might be a difference between mandatory arbitration and civil law suits on one hand, and criminal law on the other.
It couldn't be that you sign something with a company, and that contract also means police can't do shit about shit.
I guess racism is part of criminal law? And besides, it is really easy to not be racist.
I do chuckle at how much money from each subsequent tesla sale will be going to pay down this lawsuit. 127mil / 500k = 254$ per car for a year. Given the price of a new Tesla that doesn't actually seem very big, and will certainly be reduced on appeal.