Tesla Racism Lawsuit Lowered from $137 million to $15 million

Tesla Inc (TSLA.O) to pay $15 million to settle a racism discrimination lawsuit brought by a Black former contract employee, down from a $137 million jury award.

The former elevator operator, who actually worked for a staffing agency under contract with Tesla, alleged that he endured a hostile environment. He worked at Tesla for nine months at its Fremont, California factory between 2015 and 2016.

Specifically, plaintiff Owen Diaz, claims fellow employees at the electric car company used racist slurs in both English and Spanish when speaking to him. Also, they reportedly etched swastikas and other racist slurs such as the “N-word” on bathroom walls at the plant. He alleged in the lawsuit that a “co-worker spread feces on the cart he drove around the factory.” Additionally, a supervisor allegedly drew a racist caricature near his workstation. A co-worker allegedly told Diaz to “go back to Africa.” The abuse was reported to the man’s supervisors, but little or nothing was done to stop it.

The Tesla racism lawsuit, filed in 2017, is Diaz v Tesla Inc et al, U.S. District Court, Northern District of California.

Jury Awards $137 Million in October 2021

The jury found Tesla permitted a hostile work environment to endure at its Fremont factory. Also, it failed to stop racism reported by Diaz. In his 43-page decision, the judge confirmed the jury’s findings that Diaz suffered “profound” emotional harm. The decision also states that Tesla made “often inadequate” disciplinary steps. However, on Wednesday, U.S. District Judge William Orrick in San Francisco, reduced a $137 million jury award made in October. The judge reduced the award to $15 million or $1.5 million in compensatory damages and 13.5 million in punitive damages.

The award would have been one of the largest for a single plaintiff in a workplace discrimination case. Indeed, the jury’s massive $6.9 million in compensatory damages with $130 million in punitive damages was “unconstitutionally large,” and “excessive,” the judge said. Typically, punitive damages in U.S. Supreme Court cases are under 10 times that of compensatory damages.

Compensatory damages cover actual losses by a plaintiff. However, punitive damages are meant to punish a defendant as well as deter future violations.

Attorneys for Diaz plan to appeal the lowered damages award. They have 30 days to accept the award or seek a new trial.

Tesla Faces More Claims Involving Harassment

Tesla, headed by billionaire Elon Musk, is also facing similar claims made in other lawsuits against the electric car maker. Black workers at the Fremont plant filed a lawsuit with California’s Department of Fair Employment and Housing in February. The claim states they endured constant harassment, but Tesla chose to ignore such complaints. Tesla argues the racism lawsuit is misguided. Indeed, the company claims it took steps to punish and prevent racist conduct.

California Employment Law Attorney

James Johnson - California Employment Law

Employees should never have to endure a hostile workplace or discrimination in the workplace. In fact, the State of California labor laws protect vulnerable employees. These laws ensure workers are paid minimum wage, overtime, receive uninterrupted meal breaks and therefore not be mistreated by management. It doesn’t matter whether it’s sexual assault, harassment, discrimination, lost overtime wages, garnishing of tips or any other Labor Code violation.

If you have suffered harassment, racism, discrimination or other abuses by a supervisor or co-worker, we urge you to speak to a qualified employment law attorney about your rights. You may contact Johnson Attorneys Group to request a free consultation at 855-918-2240.