Owen Diaz can put up with a lot. As a Black man in America, racial insults are practically part of everyday life. But Diaz says what he experienced as an employee at Tesla surpassed everything.

In 2015 and 2016, the 53-year old worked in a Tesla production facility in Fremont, California. There he operated elevators and watched that car parts and metal made it onto the right assembly line. Instead of a pleasant and professional work atmosphere, however, he was regularly subjected to such unacceptable conditions that he finally felt driven to quit. Derogatory comments and hate messages became part of his daily life at the production facility, Diaz said.

Now, nearly five years later, Diaz is facing his former employer in court. He is suing Tesla for racism and discrimination. The factories were a "hotbed of racist behavior," according to the indictment, which will be heard in a California court on Wednesday. Black employees at Tesla, it says, are subjected to constant and serious harassment.

Nazis and the KKK

The automaker run by Elon Musk, for its part, denies the allegations. In Diaz's case, Tesla said it had no knowledge of any possible misconduct. The company reiterated that it objects to any form of discrimination, harassment or unfair treatment and that every allegation of such is taken seriously and investigated. "We will never be able to stop every single person in the factory from engaging in inappropriate conduct, but we will continue to do everything that we can to encourage the right behavior and to take action whenever something bad happens."

For Diaz, it's not nearly enough. He wants compensation for the mental suffering he endured. "You hear, 'Hey, boy, come here, N-----.' or 'Go back to Africa,'" Diaz told The New York Times in 2018. "You ask yourself at some point, 'Where is my line?'"

There were also reports of racist graffiti and drawings visible around the factory. On the walls of the toilet rooms, for example, swastikas were said to be prominently visible, along with the initials "KKK"#," the abbreviation for the Ku Klux Klan, a white supremacist hate group in the United States. Diaz's own shift supervisor once painted a figure meant to represent a person from Africa: a cartoon with thick lips and a bone in his hair, with the word "Boooo" written underneath. That was when Diaz decided enough was enough.

Only temporary workers can sue

Diaz is far from the only one accusing Tesla of fostering an unacceptable work environment in its factories. Between 2018 and March 2021 alone, 120 people have attempted to sue Tesla for discrimination. Nine of those lawsuits were shot down due to insufficient evidence. But all other complainants were granted permission to sue. A total of 104 affidavits comprise the 500-page claim filed in March.

The number of unreported cases is likely to be much higher. The reason for this is so-called arbitration agreements, which Tesla employees must sign when they start their jobs, agreeing not to pull the company into court in the event of disputes. But some, including Diaz, were temporary workers, hired through staffing agencies, and thus did not have to sign such clauses. Everyone else has, at most, the option of settling disputes out of court through arbitration, which prevents class-action lawsuits.

Above all: Save money

Far from an isolated case, such practices are widespread among fast-growing companies, which often have little regard for the needs of their employees, experts say.

"Firms in Silicon Valley combine sophisticated technology with systems of labor relations that are retrograde and often out of the 19th century," says labor historian Nelson Lichtenstein, who conducts research at the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. In this way, companies like Tesla try to avoid legal, moral and social responsibility for their workers, in part to save money. "But even more important is their ability to fire at will and/or enforce high levels of exploitative production," Lichtenstein says.

Business groups claim that arbitration is faster and more efficient for all parties involved. But worker representatives argue these procedures are nontransparent and that they are often to the disadvantage of workers.

"My personal view is that Tesla does not focus on investigating and preventing these claims," Larry Organ, Diaz's attorney, told the online magazine Protocol. "They are really focused on making cars, and less focused about their employees' conduct in the workplace, based on the discovery that we've done in five different cases."

Tesla's aggressive tactics prove successful

Organ has represented former Tesla employees against the carmaker in the past. In the vast majority of cases, the company has a strong initial reaction to the accusations, firmly denying it at first but later going for a full-frontal attack.

In a 2017 blog post, Tesla said Organ "has a long track record of extorting money for meritless claims and using the threat of media attacks and expensive trial costs to get companies to settle."

"At Tesla, we would rather pay 10 times the settlement demand in legal fees and fight to the ends of the Earth than give in to extortion and allow this abuse of the legal system."

Tesla's aggressive tactics have proven extraordinarily successful thus far. Of nearly 90 labor arbitration claims filed between 2016 and the beginning of 2021, the company has lost only one. It was a case very similar to Diaz's. Nearly two months ago, a US court ruled that Melvin Berry, a 47-year-old former employee, was subjected for years to racial insults from his superiors. Tesla must now pay a million-dollar fine. The majority of the money will go towards court costs and legal fees, but $250,000 (€214,000) will go directly to Melvin Berry, of which $100,000 will be compensation for emotional distress.

 This article has been translated from German.