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Di-az v. Tesla, Inc.

United States District Court, N.D. California

December 30, 2019

DEMETRIC DI-AZ, et al., Plaintiffs,
TESLA, INC., et al., Defendants.

          ORDER ON MOTIONS FOR SUMMARY JUDGMENT RE: DKT. NOS. 85, 91, 92, 116, 117, 118, 119, 120, 124, 125, 131, 135


         The facts of this racial discrimination and harassment case are as complex and overlapping as the employment structure the defendants have fabricated. According to plaintiffs (and father and son) Owen Diaz and Demetric Di-az, the Tesla, Inc. factory in Fremont, California-where they worked in 2015 and 2016-was a hotbed of racial hostility where they frequently heard the n-word from supervisors and fellow employees. Owen Diaz brings harassment and discrimination claims against Tesla, CitiStaff Solutions, Inc. (his temporary staffing agency), and nextSource, Inc. (the liaison between Tesla and CitiStaff); Demetric Di-az brings claims only against Tesla.[1]

         Before me are the defendants' motions for summary judgment. Material facts are in dispute whether plaintiffs faced severe and pervasive racial harassment in the workplace and whether Tesla, its staffing agency, and the on-scene liaison are joint employers. Owen Diaz did not rebut defendants' evidence that he failed to return to work as promised after a leave, so his other employment-related discrimination claims fail. For the reasons set forth below, I will grant the motions in part and deny them in part. This case will proceed to trial.


         A. Relationships between the Defendants

         Before describing the environment at the Tesla factory that a jury could conclude was hostile in violation of 42 U.S.C. section 1981, it is necessary to discuss the employment structure Tesla created. I will start with defendant CitiStaff, which admits to being Owen Diaz's employer. It is a temporary staffing agency that provides contractors to clients for temporary work throughout California, including through a partnership with nextSource. Ledesma Decl. ¶ 2; McGinn Depo. 22:13-15. The application individuals fill out to become CitiStaff employees includes CitiStaff policies, from sexual harassment to job abandonment. De Leon Depo 40:2-15. New employees receive an Employee Handbook containing an anti-harassment policy that “sets forth examples of prohibited conduct including, but not limited to, the use of derogatory comments, statements, or innuendo in the workplace and requires employees to report conduct believed to violate this policy.” Ledesma Decl. ¶ 3. Monica De Leon is the CitiStaff representative for Northern California. She handles onboarding and processes applications to ensure that candidates have “read and signed all [CitiStaff's] policies.” De Leon Depo. 166:7-14. CitiStaff did not have an employee on-site at the Tesla factory during Diaz's time there; instead, he and other contractors were told to contact their staffing supervisor with any problems at work. Ledesma Decl. ¶ 2. De Leon tells contractors that if they have questions or concerns they can also call or email her. See De Leon Depo. 163:24-164:8.[2]

         Defendant nextSource is a service provider that functions as a liaison between staffing agencies such as CitiStaff and nextSource's clients, including defendant Tesla. Jackson Depo. 16:1-8. When Tesla informs nextSource of its need for a particular service, nextSource contacts its suppliers to request individuals with the skills required to meet that need. Id. at 18:4-13; McGinn Depo. 20:2-12, 20:22-25 (noting that agencies recruit and onboard individual workers). Once an individual is placed at the Tesla factory, Tesla gives them an orientation, directs their day-to-day activities, and determines their rate of pay. See Diaz Depo. 81:24-82:10; McGinn Depo. 20:19-22. NextSource facilitates “information flow”: it communicates Tesla's needs or wishes to suppliers, and it provides a technology platform where contract workers enter their timesheets for Tesla's approval. McGinn Depo. 19:20-20:1, 24:4-23. Once timesheets have been approved, nextSource prepares a consolidated bill for Tesla. Id. at 131:14-132:4. Tesla pays nextSource, nextSource pays the staffing agencies, and the staffing agencies pay individual contractors. Id.

         Wayne Jackson was nextSource's program manager during the time period in question, meaning that he acted as a liaison between Tesla and the contractors at the Tesla factory. Jackson Depo. 15:18-25, 22:2-4, McGinn Depo. 42:19-43:7. When there was an issue with a contracted employee, Jackson alerted the relevant agency along with Tesla.[3] See Jackson Depo. 19:12-24 (noting that “usually one of the first things [he] did” was to alert the agency), 19:25-20:18 (noting that he would alert Tesla's HR department), 40:10-13, 68:23-69:13; see also McGinn Depo. 43: 2-7 (indicating that Jackson would “communicate to the -- either party to the client side or to the supplier side, based on the facts”).[4] He might gather facts at Tesla's request and communicate those facts to the staffing agency so that it could investigate. See McGinn Depo. 43:3-7; Jackson Depo. 19:12-24, 24:14-24. Jackson was the highest-level nextSource employee at the Tesla factory when the plaintiffs worked there. McGinn Depo. 43:19-22.

         While working at Tesla, contractors are expected to comply with its safety rules and anti-harassment and discrimination policies.[5] Quintero Depo. 19:10-25; Heisen Depo. 70:1-9, 72:5-18. When an incident occurs at a Tesla factory, policy requires supervisors to inform their managers and HR. Heisen Depo. 78:1-10, 79:7-15; Marconi Depo. 52:3-6, 118:4-21 (noting that she would expect Quintero to inform her about racist comments). Upon learning of an incident, Tesla HR would inquire about the contractor's comfort level and then connect the contractor to the HR representative in the relevant agency. Marconi Depo. 58:3-9. Tesla relied on agencies to conduct investigations involving their employees, but Tesla's HR department communicated and collaborated with the relevant agency to ensure that the issue was resolved. Heisen Depo. 112:8-18, 170:9-15; Marconi Depo. 59:8-21 (noting that her preference “would not be to interview someone else's employee, especially not without them present”), 87:20-25 (noting that she would expect the agency to keep her informed on the findings of an investigation). Tesla generally trusted the thoroughness of an agency's investigation process. See Marconi Depo. 59:1-5 (“-- if West Valley investigated it and came back and said there wasn't actually an issue, I'm going to believe that West Valley did their investigation thoroughly and if there was something to address, addressed it.”).

         Tesla has authority to exclude contract employees from the property and to end the contract with an individual. Heisen Depo. 170:16-22; De Leon Depo. 118:10-20; see De Leon Depo. 110:6-111:19 (testifying, “let's just say in the case the client tells us that a contractor has violated a harassment policy or any policy, more than likely the client is going to end the person's assignment”). De Leon did not have the authority to end a CitiStaff employee's assignment; instead, she would have to follow up with HR. De Leon Depo. 160:11-16. Only the agency could actually terminate an individual worker. Jackson Depo. 40:17-23 (noting that he could recommend termination, but the final decision rested with the agency). NextSource and Tesla were permitted to issue warnings to CitiStaff employees and give them performance evaluations. De Leon Depo. 65:8-66:1.

         Various Tesla employees worked with and supervised contract workers during the time period in question. In his role as contract services supervisor, Edward Romero escalated concerns or complaints to the right people. Romero Depo. 88:3:11. Within Tesla, that meant manager Victor Quintero or someone from Human Resources. Id. at 88:16-19. Where issues involved contract workers, Quintero informed their representative or account manager for them to handle it. Id. at 88:17-22.

         B. Plaintiffs' Employment and Assignments

         Diaz was recruited and hired on June 2, 2015. On that day, he signed CitiStaff's sexual harassment policy and abandonment/walk-off policy.[6] Diaz Depo. 95:6-21, Ex. 33. He was immediately assigned to work at Tesla's Fremont, California factory, and he began working as an elevator operator. Diaz Depo. 90:6-11. In that role he loaded heavy material from one floor onto the elevator and then unloaded it onto another floor as part of the construction of cars. Id. at 90:14-21; Romero Depo. 68:15-69:8. Tesla provided elevator operators with safety equipment. Quintero Depo. 21:16-25. All individuals who worked in the Tesla factory had to take safety orientation class. Quintero Depo. 19:22-25. Diaz's first supervisor was Tom Kawasaki, who promoted him; later he reported to Edward Romero. Diaz Depo. 81:5-6, 18-20; see Kawasaki Depo. 63:5-18.

         On June 24, 2015 Diaz became team lead, meaning that he assumed more responsibility and worked with other departments more often. Romero Depo. 76:7-23. Leads were expected to move product efficiently and responsibly and to have “good communication, a spirit of cooperation, an ability to resolve issues that came along that might impede the movement of materials.” Id. at 78:5-11.

         C. Owen Diaz's Experiences of Racism at the Factory

         According to Diaz, he frequently experienced racism at the Tesla factory. He testified that two supervisors and around eight to ten employees called him the n-word. Diaz Depo. 55:4-17. He estimated that the two supervisors, one of whom was Ramon Martinez, used the n-word more than 60 times. Id. at 55:18-56:11. For example, Martinez once said, “I hate you n ------ s, ” and he twice said, “Go back to Africa.” Id. at 63:15-22, 68:7-10. Diaz also saw graffiti, including the n-word, inside about four bathrooms. Id. at 48:2-11, 50:15-17. The following incidents also occurred at the factory.

         1. July 31, 2015

         On July 31, 2015 Diaz and that fellow elevator operator Judy Timbreza got into an argument and appeared as though they were about to fight. Kawasaki Depo. 42:16-22. Tesla supervisor Tamotsu Kawasaki separated the two and then asked Diaz, Timbreza, and witnesses what had happened.[7] Kawasaki Depo. 42:16-22, 81:16-23. Diaz reported that Timbreza called him racial slurs, including the n-word.[8] Kawasaki Depo. 42:13-18, 81:24-82:4. Witnesses confirmed that Timbreza had used racial slurs toward Diaz. Id. at 81:24-82:4. After confirming that Timbreza was the aggressor and that he had behaved inappropriately, Kawasaki sent Timbreza home. Id. at 45:2-15, 82:1-4. That same day, Kawasaki sent Romero and Quintero an email about the incident. Kawasaki Depo. 37:17-24, 47:22-48:1. Soon after that, Romero came to speak to Kawasaki about the incident. Kawasaki shared all the information he had gathered and then passed responsibility for next steps to Romero. See Id. at 47:22-48:10; Romero Depo. 152:4-21.

         Romero determined that a verbal warning was appropriate because (according to Romero) witnesses were not able to confirm what Timbreza had said. Romero Depo. 156:5-21. Several agreed that Timbreza had a “tendency to kid around excessively.” See id.; Organ Decl. Ex. E (contemporaneous email from Romero to Quintero). The warning explained to Timbreza “his need to treat his fellow team members with dignity and respect.” Romero Depo. 162:11-23 (quoting an email). The Tesla supervisors agreed that if he engaged in similar conduct, he would be terminated. Id. at 162:19-21. Diaz did not see Timbreza again after that.[9] Diaz Depo. 232:10-15.

         2. October 17, 2015

         On October 17, 2015, Diaz reported to Romero that he had a negative incident with Ramon Martinez, his supervisor at Tesla who was hired by Chartwell, a different staffing agency.[10] Diaz Depo. 132:16-24; Organ Decl. Ex. K (email from Diaz to Jackson); see also Kawasaki Depo. 65:10-25 (indicating that he had received an email because he was off on the day in question). Martinez got in Diaz's face with his fists balled up. See Romero Depo. 107:5-17. Jackson of nextSource interviewed both Diaz and Martinez about the incident. Jackson Depo. See 65:2-25, 67:2-17. It was his practice to take notes to document interviews and then send them to the relevant agencies.[11] Id. at 67:2-17. Jackson could not recall exactly what actions he took in this case, but he might have spoken with Chartwell or CitiStaff. Id. at 62:1-13.

         Tesla HR learned about the incident on October 20. Marconi Depo. 109:1-12. Because in Tesla's view, the incident involved “all nextSource employees, ” it expected nextSource to conduct the investigation. See Id. at 109:10-18, 110:1-6.

         3. November 5, 2015

         On November 5, 2015, Diaz got into a verbal dispute with Rothaj Foster, another African American CitiStaff employee assigned to work at Tesla. Diaz Depo. 141:17-19; De Leon Depo. 67:17-22. During that dispute Foster, who was being aggressive, said he was going to shoot Diaz and threatened Diaz's car. Id. at 141:20-21; De Leon Depo. 139:1-5. Diaz reported the incident to Romero. Diaz Depo. 141:22-23. After Romero had corroborated the incident, he called security and had Foster removed from the Tesla premises to prevent any more problems between him and Diaz. Romero Depo. 199:2-6, 200:14-22; see also Marconi Depo. 116:13-25 (noting that the correct procedure was followed in response to this incident).

         Diaz did not report the interaction to CitiStaff; instead, CitiStaff learned about it from Jackson of nextSource. De Leon Depo. 163:1-5; see also Id. at 163:7-10 (“Q: And why did thy report to you; do you know? A: Since [Diaz] was a CitiStaff contractor, that is why they reported to me as well.”). When De Leon learned about it, she followed up with both Diaz and Foster by phone to understand what had happened.[12] See Id. at 122:8-123:4. When De Leon spoke with Diaz, he indicated that he was comfortable going back to work in the same position. De Leon Depo. 139:13-24. When De Leon spoke with Foster, he admitted to raising his voice but denied making any threats.[13] De Leon Depo. 140:18-23. Foster's assignment with Tesla was terminated, and Diaz had no further interactions with him.[14]

         4. January 22, 2016

         On January 22, 2016, Diaz emailed Romero in the morning about an incident that had occurred the previous evening. Organ Decl. Ex. O (email from Diaz). He wrote that as he was working, he saw a drawing on the cardboard bale he was about to move: “It was a picture of a cartoon depicting a black face person with a bone in his hair with the caption under it saying booo.” Id. The image resembled racist cartoons from the 1920s and 1930s, and Diaz understood “Booo” to mean “Jigaboo.” Diaz Depo. 146:6-10, 20-25. He wrote that his “stomach dropped.” He called the recycling team lead and sent him a text of the picture. Diaz wrote that Martinez's behavior was not new and “because nothing has been done, it seem[ed] that his behavior [was] getting worse.” He attached a picture of the image to the email.

         Martinez admitted to drawing the picture but said that he was “just playing.” See Romero Depo. 109:16-24, 114:20-115:1. He told Diaz, “You people can't take a joke.” Diaz Depo. 155:6-7. Quintero of Tesla instructed Romero of Tesla to meet with Martinez and Diaz. Quintero Depo. 49:19-22. Chartwell, Martinez's staffing agency, investigated Diaz's complaint and interviewed both Martinez and Diaz within a few days of the incident. V. Martinez Decl. ¶¶ 4-7. It placed Martinez on “Corrective Action” from January 26, 2016 to December 31, 2016 and gave him a three-day suspension and a permanent warning. Id. ¶ 8; see Quintero Depo. 64:18-65:5 (indicating that the suspension was Jackson's decision but that he agreed); Jackson Depo. 33:5-10, 88:14-17.

         Diaz forwarded his email to CitiStaff on the evening of January 22 because he “didn't want the situation to be covered up.”[15] Diaz Depo. 161:11-162:4. De Leon “immediately took it up to HR” and informed her supervisors about it. De Leon Depo. 133:6-17. She then spoke with Diaz and asked him whether he was going to return to Tesla or whether he wanted to be moved to a different department. Id. at 133:21-134:7. Although Diaz was “upset and a little aggravated, ” he said he would stay at Tesla in the same department. Id. De Leon told Diaz that HR would deal with the issue. Id. She also gave Chartwell consent to speak with Diaz. Id. at 134:5-7. The HR representative told De Leon that what she had done was good and that HR would handle the rest. Id. at 136:15-23.

         After learning about the January 25 incident, CitiStaff human resources manager Ludivina Ledesma told De Leon that he would investigate it. Ledesma Decl. ¶ 5. After De Leon told her that Chartwell had already investigated and disciplined the alleged harasser, Ledesma concluded that she “did not need to further investigate this complaint against a non-CitiStaff employee.” Id. According to Ledesma, prior to January 22, 2016, CitiStaff was unaware of the issues Diaz had experienced with Martinez or of any problems at the Tesla factory. Id. ¶ 6.

         D. Demetric Di-az's Experiences of Racism at the Factory

         Demetric Di-az was an employee of West Valley Staffing Group during the time that he worked at Tesla.[16] After his training, Di-az began in the day shift and then transitioned to the night shift a few weeks later. Di-az Depo. 101:4-18.

         Diaz reported to Javier Caballero during the night shift. Id. at 102:4-20. Caballero harassed him and used the n-word on the daily basis. Id. at 119:18-21. A few days after Di-az joined the night shift, the team was a little behind for their meal break and Caballero said, “All you n ----- s need to hurry the fuck up.” Id. at 170-20-171:3. Another day when Demetric's father Owen was in his department for lunch, Caballero said, “All you fucking n ----- s - I can't stand you mother fuckers.” Id. at 159:9-160:4. It was directed to his team of six, three of whom were African American. Id. at 160:19-161:8. Di-az also saw offensive graffiti in the bathrooms at the Tesla factory. The graffiti had messages like “fuck you, n ----- ” and “you n ----- s don't belong here.” Id. at 154:4-6. Di-az stopped using that bathroom. Id. at 154:17-18.

         Di-az complained of his treatment on a few occasions. He told Caballero how the language made him feel, and Caballero essentially said, “You're a temp, and if you don't like it, you can get fired.” Id. at 161:18-22, 186:19-22; see also Id. at 170:11-16 (noting that a member of Di-az's team said there was nothing to do because Caballero was their supervisor). Di-az then reported the statement to Caballero's supervisor, who did nothing, and finally to someone with Tesla HR. Id. at 162:2-10, 163:5-8. Di-az also reported issues[17] to an individual from West Valley who was onsite at Tesla. Di-az Depo. 74:7-75:1, 75:18-21. That person said that he would investigate, but nothing came of Di-az's complaint. Id. at 75:19-24. Di-az did not report the graffiti he saw in the bathroom. Id. at 154:10-18.

         E. Plaintiffs' Assignments End

         1. Owen Diaz

         There are mixed reports of Diaz's work performance while at Tesla. Kawasaki never experienced any issues with him as an elevator operator or as a lead. Kawasaki Depo. 63:5-18 (noting that he would not have recommended Diaz for the lead position if he was unprepared). He never heard complaints about Diaz's conduct. Id. at 63:19-25. According to Jackson of nextSource, however, “Owen was known as the kind of difficult elevator operator at the plant, ” and there were “a lot” of complaints related to him. Jackson Depo. 110:2-13, 112:2-4, 112:22-113:1 (noting that the problem was Diaz's “attitude” and that he was “very abrasive” toward coworkers). Jackson testified that Tesla's safety inspector approached Diaz because he was not wearing his safety vest or the required steel-toed shoes. Jackson Depo. 108:5-10, 109:1-11. Diaz became confrontational with the safety person. Id. at 109:13-25. Romero also observed that Diaz struggled to get along with some people. Romero Depo. 81:17-24, 84:5-18. Some people did not like the way Diaz spoke to them, and one individual felt Diaz gossiped about him behind his back. See Id. at 82:13-84:18. Other departments also complained about “him not being cooperative, him not communicating, shutting down.” Id. at 98:5-16.

         In March 2016, Diaz received approval to be away from work from March 4 to March 11 because his mother had died. De Leon Depo. 150:12-25; Diaz Depo. 178:7-25. He failed to return to work when he was expected back on March 12. See Diaz Depo. 178:7-25. On March 18, 2016, Jackson from nextSource emailed De Leon of CitiSource to let it know Tesla had ended Diaz's assignment. De Leon Depo. 148:18-22, 149:20-24.

         When De Leon called Diaz to tell him the news, he was “mad, upset” and “cussing” because he wanted to continue working at Tesla, in part because he was making good money.[18]Id. at 149:3-11, 153:15-20. She told him not to return to the Tesla factory. Id. at 149:12-16. De Leon has since offered Diaz other positions where he could earn $16 per hour, but he has declined them. Id. at 157:11-25. Diaz remains a registered temporary employee with CitiStaff. Ledesma Decl. ¶ 7.

         2. Demetric Di-az

         In October 2015, two months after he began working at Tesla, Di-az reported the factory and learned that his contract had ended and his badge would no longer work. Di-az Depo. 144:12-17. He did not receive an explanation. Id. at 145:1-6. Di-az believes he was fired because of his complaints about the racist treatment he experienced. Id. at 190:3-13. After his threats, Caballero “made sure [Di-az] got fired.” Id.

         Although Di-az was initially told that he was eligible for another work assignment, his staffing representative stopped returning his calls. Id. at 145:12-23. His experience at Tesla made Di-az feel as if he lost himself. Id. at 201:13-23. He felt dehumanized and like less than a man. Id. He began eating less and stopped wanting to be around his peers and family. Id. at 202:12-203:21.

         LEGAL ...

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