Tesla ordered to pay ex-worker $3.2m in racial case

Electric carmaker Tesla has been ordered to pay almost $3.2m to a black former worker after he won a racial harassment lawsuit. Owen Diaz, a lift operator from 2015 to 2016 at its Fremont factory, was subjected to a racially hostile work environment, a federal jury found. However, the payment has been slashed by 98% from the $137m that he was originally awarded in 2021.

The original lawsuit filed by Mr Diaz alleged that African-American workers “encountered a scene straight from the Jim Crow era” at the firm’s plant in Fremont, California. He claimed that black workers regularly faced racist slurs on the factory floor and racist graffiti in bathrooms. The lawsuit also said that employees would refer to areas where black or African-American staff worked with racist historical names, such as “the plantation”. It alleged that one worker heard racial slurs “as often as 50-100 times a day”.

In 2021, a federal court in San Francisco found that Tesla did not take reasonable steps to tackle the abuse, despite complaints to supervisors. The jury awarded Mr Diaz $137m in damages. At the time, Tesla disputed the verdict but said it recognised it was “not perfect”.

However, in April 2022, a US federal judge cut Mr Diaz’s award to $15m and said the compensation decided by jurors was “extremely high”. Last week, Mr Diaz was awarded $3m in punitive damages and $175,000 in damages for emotional distress.

Bernard Alexander, a lawyer for Mr Diaz, said that “Mr Diaz’s outlook on the world has been permanently changed. That is what happens when you take away a person’s safety.” Mr Alexander had called on jurors to award his client nearly $160m in damages.

Tesla CEO Elon Musk responded to the verdict on Twitter, saying: “If we had been allowed to introduce new evidence, the verdict would’ve been zero imo. Jury did the best they could with the information they had. I respect the decision.” However, Mr Musk did not provide details of what new evidence Tesla would have presented. Tesla’s lawyer Alex Spiro declined to comment.

In his defense, Mr Spiro argued that Mr Diaz’s lawyers had failed to show that any serious, long-lasting damage had been caused by Tesla. “They’re just throwing numbers up on the screen like this is some kind of game show,” he said.

This verdict highlights the importance of companies taking steps to prevent racial discrimination in the workplace. It also underscores the significance of providing employees with a safe and respectful work environment, regardless of their race, gender, or any other protected characteristic. As this case demonstrates, failure to do so can lead to significant legal and financial consequences for companies.