United States District Court, N.D. California
ORDER ON MOTIONS FOR SUMMARY JUDGMENT RE: DKT. NOS.
85, 91, 92, 116, 117, 118, 119, 120, 124, 125, 131,
WILLIAM H. ORRICK UNITED STATES DISTRICT JUDGE.
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
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
Relationships between the Defendants
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.
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
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. 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”). 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.
working at Tesla, contractors are expected to comply with its
safety rules and anti-harassment and discrimination
policies. 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.”).
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.
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.
Plaintiffs' Employment and Assignments
was recruited and hired on June 2, 2015. On that day, he
signed CitiStaff's sexual harassment policy and
abandonment/walk-off policy. 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.
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.
Owen Diaz's Experiences of Racism at the Factory
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.
July 31, 2015
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. Kawasaki Depo. 42:16-22,
81:16-23. Diaz reported that Timbreza called him racial
slurs, including the n-word. 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.
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. Diaz Depo. 232:10-15.
October 17, 2015
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. 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. 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.
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
November 5, 2015
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).
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. 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. De Leon Depo. 140:18-23. Foster's
assignment with Tesla was terminated, and Diaz had no further
interactions with him.
January 22, 2016
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
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.
forwarded his email to CitiStaff on the evening of January 22
because he “didn't want the situation to be covered
up.” 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.
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.
Demetric Di-az's Experiences of Racism at the
Di-az was an employee of West Valley Staffing Group during
the time that he worked at Tesla. 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.
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.
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 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.
Plaintiffs' Assignments End
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.
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.
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.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.
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.
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