Good Policy Practice | A Costly Legal Lesson

Last week saw a prime example for business to adopt a good policy practice in business.  Tesla’s mission is “accelerating the world’s transition to sustainable energy with electric cars, solar and integrated renewable energy solutions”. Telsa was ordered to pay $137million in a racial discrimination case. This is not to discuss the rights or wrongs of the verdict or the facts of the case. It is to highlight the importance of having a good policy practice within the business.

Highlights of the case

Firstly, let’s briefly go over the main facts of the case before dissecting the points of significance.  


  • A contractor working at the Tesla factory was subjected to a period of racial abuse.
  • Other contractors identified to be carrying out the acts were dealt with by their employers (not Tesla)
  • Tesla’s employees came into direct contact, at the very least when they had to clean the graffiti from the walls.
  • These incidents took place over some time, about a year.
CAS Ltd, The Ethical Strategist, Cas Johnson - reintroducing mutual loyalty and ethical practices in business so the owners can step away and enjoy the life they desire

The verdict breakdown

The judgement was made up of $6.9million to compensate for emotional stress and suffering. Whereas $130million (a landmark judgement in American history for a single plaintiff in a racial discrimination case) is described as punitive damages.

Usually, in civil matters, the award is to compensate the person for the harm done. Punitive damages can be applied where the court feels the defendant has acted in a way that should give careful consideration to doing again. An additional punishment, a sort of deterrent for unacceptable behaviour or omission.

Following English law, this can be applied by the court:

  • permissible by statute;
  • to punish oppressive or unconstitutional acts by government servants; or
  • to “prove tort does not pay”; where the defendant has deliberately calculated that the profits to be made by turning a blind eye will exceed the potential damages.
Having a good policy practice will be key to building a successful business CAS Ltd, The Ethical Strategist, Cas Johnson - reintroducing mutual loyalty and ethical practices in business so the owners can step away and enjoy the life they desire

Your rules in your policies

As a business owner or a part of the leadership team, you will want to ensure that your rules are incorporated into the business.  Your chosen internal community should adopt the policies much like any law abiding citizen. Keep in mind,  you must follow any relevant employment law and regulations. 

The Tesla case is a reminder that your practices may not only affect your internal community.  Therefore implementing a good policy practice should be a priority. When your business liaises with stakeholders, suppliers and indeed contractors, they should adhere to the rules of your house. Note from the information above, neither the complainant nor the referred to “harassers” were direct employees of the company.

An authentic business is not only setting to change the landscape with its service or product. It is also in the way they conduct business and handles control within their space. When reading the articles, my first thought was where were the policies and procedures of the company.

Growing the right culture for your business with a good policy practice

Every organisation has its own culture; individuals will be attracted to the perceived company culture along with its values. “Birds of a feather, flock together”, people want to be in the company of others who are of a similar understanding and working toward a similar common cause. Where there is a difference, it will be for the individuals or businesses to make a decision. To decide what they hold dear and to put space between what is not directly aligned with their mission and values.

As a business, you want to ensure you remain in control, of whatever situation happens in your community.  Even where that involves not being directly connected with your business.  It is important to show (both internally and externally) what it is you stand for, especially when there are laws and regulations in place.

A perceived lack of action may not only result in a hefty settlement, but it may also divert attention from the overall objective of doing good in the world. Raising a question mark over its stance on how people are treated in its presence.

What is a blog without an example! Say you are hosting a birthday party for your child and two of the guests get into a minor spate (one child taunts another child for having red hair). Do you turn a blind eye because your child is not involved?

Both children are in your care (regardless of the parents being present or not) you want to ensure that all guests understand that it is not behaviour that is tolerated or permitted in your household.

CAS Ltd, The Ethical Strategist, having a good policy practice is the equivalent to having a safe routine.

Your house, your routine

Even if such actions are acceptable elsewhere, this is your domain. You have the right to ensure everyone feels safe. Those who decide to attend the party know the terms and are willing to abided by them so they can enjoy the company, entertainment and food.

When simplified in this way, was the action taken by Tesla sufficiently acceptable (as the host of the party where the harassment happened repeatedly) to leave the correcting to the absent parents to resolve?

In the statement of Tesla’ Vice President of People, Valerie Capers Workman acknowledged the company’s actions were far from perfect. Over the past five years, changes have been implemented to better handle such situations.

The introduction of good policy practice was introduced with HR policies, investigative procedures, the removal of the “Anti Handbook” and ensuring that all employees have access to the resources.

A Good Policy Practice will Minimise the Risk of Negativity

Whilst it is felt that the verdict was out of proportion with the facts of the case, there are several points to consider to ponder:

  • Ignorance of the law is no excuse. It is not worth taking the risk of non-compliance and suffer the wrath of the courts (peers and all) when you get it completely wrong. Burying your head in the sand will do you no favours.   
  • It is not a case of cherry-picking what is appealing to you as the owner. You have to deal with it all. Having a trusted team to make use of their expertise can help to avoid similar situations.
  • I have used this case as an example to highlight the importance of having policies and the risk of not doing so. Recently, a London estate agency that refused flexitime to an employee (a new mother with childcare issues) was splashed all over the headlines. Although not ordered to pay anywhere near to the Tesla case, the complainant was awarded £180k. It may be your business with your rules, but you must be aware of the regulations in place for the good of everyone.  Ensuring that you have implemented a good policy practice should prevent you from making any spur of the moment decisions which my have a less desirable impact on your business. 
  • Having policies without monitoring and ensuring compliance is like having nothing in place. Tesla had a handbook but perhaps failing to educate and creating a supportive environment prevented them from identifying and/or managing similar situations.  
  • By building a safe community for all to feel welcome is essential to maintaining that control mentioned earlier. It is not simply about flexing muscles and enjoying the sound of being called the boss. The role comes with great responsibilities.
  • Beware of being tarnished by association. The reputation of your business should not be questioned, especially in matters that can be so easily avoided. Sure, you will always have your loyal followers but you do not want to alienate potential partners, clientele or team members. 
  • Finally, this is your culture. Stay within the confines of legal and law-abiding and build an internal community willing to adopt your good policy practice. Surrounding yourself with like-minded individuals driven to help you to succeed on your path of greatness.

As the Ethical Strategist, I encourage all organisations, to encapsulate their rules, values and mission into their policies.  By having a good policy practice will ensure your intentions will be shared with the internal community.  They will become ambassadors for the business they believe in. It is through this supportive environment and having a sense of belonging, that they will represent the best of your business.

However, without humanity, what would be the point in taking steps to make a better world? It is pointless saving a world if we have not protected the people and creatures in it. In pursuit of “la dolce vita” we must monitor and evaluate we are making positive steps for change. Knowing that sometimes checks and tweaks are necessary to stay on track.

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