Tesla Inc. lost a case against a Black former elevator operator and must pay an unprecedented $137 million in damages for having turned a blind eye to racial taunts and offensive graffiti the man endured at the electric carmaker’s auto plant in Fremont, California.

Owen Diaz, a former contract worker who was hired in 2015 via a staffing agency, was subjected to a racially hostile work environment, a federal jury in San Francisco decided Monday. {snip}

“I believe that’s the largest verdict in an individual race discrimination in employment case,” said David Oppenheimer, a clinical professor of law at Berkeley Law. {snip}

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The trial could embolden shareholder activists who have pushed Tesla’s board, so far without success, to adopt more transparency about its diversity goals and use of arbitration to resolve complaints regarding sexual harassment and racial discrimination. Tesla’s annual meeting is scheduled for Oct. 7.

In court, Tesla argued that it never intended to disregard the rights and safety of African-American workers placed by the staffing agency at the plant and that all incidents reported by Diaz were investigated and resolved.

In her closing arguments to the jury, Tesla attorney Tracey Kennedy said “Mr. Diaz’s story simply doesn’t make sense” in light of his encouragement to his son and daughter to take up jobs at the company. She also said Diaz’s claims weren’t supported by the evidence.

Bernard Alexander III, a lawyer for Diaz, told jurors that “as opposed to a zero-tolerance policy, Tesla had a zero-responsibility policy.”

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The “n-word” was “pervasive and virtually everywhere,” Alexander said. He finished his closing remarks by citing some phrases from “The Hill We Climb,” a poem by Amanda Gorman, the 23-year-old poet who moved the nation at the inauguration of President Joe Biden in January. “Being American” is about stepping into the past and “how we repair it,” Alexander said.

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The jury’s award included $6.9 million for emotional distress and $130 million in punitive damages, according to Diaz’s other attorney, Larry Organ. {snip}

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