April 4, 2023

Black Former Tesla Worker Racism Payout Slashed From $15M To $3.2M

Owen Diaz, a Black former worker at Tesla’s Fremont factory, has seen his payout in a racial bias lawsuit against Tesla reduced from $15 million to $3.2 million.

Yesterday, after a week-long trial, a federal jury found that Tesla failed to prevent severe racial harassment at its flagship assembly plant in Fremont, California. Tesla has been ordered to pay Owen Diaz $175,000 in damages for emotional distress and $3 million in punitive damages.

From $137M to $15M

In the past year alone, Tesla has faced at least ten lawsuits from different workers alleging the workplace embraced a culture that encouraged racial discrimination and sexual harassment. 

Diaz first sued Tesla in 2017, after managers failed to address the racial discrimination he faced while working at the company’s Fremont factory. He reported that workers, including a supervisor, frequently called him racial slurs, and workers would draw swastikas and racist caricatures on walls.

Diaz told the New York Times that he reached a breaking point when he saw similar racist behaviors directed at his son, who, with his help, had secured his first-ever job at the company.

Despite Tesla denying any mistreatment of Black workers, Diaz was awarded $136.9 million in damages – thought to be largest verdict in an individual race discrimination in an employment case.

However, the award was slashed to $15 million after US District Judge William Orrick decided that the jury verdict on punitive damages was too high. Diaz refused to accept the reduced amount, leading to last week’s trial.

From $15M to $3M

As Tesla had already been deemed liable for discrimination, last week’s trial was designed to determine an appropriate payout. The move was a huge risk for Diaz.

“It is always very difficult to retry a lawsuit and attain similar results as before,” Ryan Saba, a civil litigation and trial attorney and partner at Rosen Saba, told TechCrunch. He explained that less evidence was presented at trial, in part due to Orrick’s ban on introducing new evidence to the case.

“In the first case, the jury was armed with lots of evidence of the alleged misconduct that Tesla did toward Mr. Diaz. In the second case, that inflammatory evidence was not presented to the jury. And so the muted verdict was likely because the jury didn’t get to hear as much as the liability of it in the first year.”

Read: Tesla Countersues US Civil Rights Agency After Racism Lawsuit

On Friday, Diaz’s lawyers attempted a motion for mistrial, claiming that Tesla’s team violated Orrick’s ban on introducing new evidence when they questioned Diaz and other witnesses about incidents where Diaz allegedly made racist or sexual comments.

Orrick denied the motion, saying that Diaz’s lawyers didn’t show that the questioning had prejudiced the jury.

On Monday, the new payout was revealed to be $3.2 million.

What’s next?

Saba told TechCrunch that he expects to see cross-appeals from both Diaz’s lawyers and Tesla. Diaz’s lawyers will ask for a new trial on the same grounds as their motion for a mistrial.

Tesla is expected to bring a post-trial motion to reduce the punitive damages, as $3 million is considered “a pretty excessive amount compared to $175,000.” Saba said that punitive damages are usually around four times the amount awarded for emotional damages.

Featured image credit: The New York Times

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Samara Linton

Community Manager at POCIT | Co-editor of The Colour of Madness: Mental Health and Race in Technicolour (2022), and co-author of Diane Abbott: The Authorised Biography (2020)