Tesla has been ordered to pay nearly $3.2 million to Owen Diaz, a former Tesla employee who accused the company of failing to address racial harassment directed at him in 2017, following a retrial over the amount that the former elevator operator should receive.
Diaz won the case in 2021, after a jury found that Tesla had broken the law by failing to address the racial abuse being directed towards Diaz. At the time, the jury awarded Diaz $137 million, mostly in punitive damages.
“The jury heard that the Tesla factory was saturated with racism. Mr Diaz faced frequent racial abuse, including the N-word and other slurs,” U.S. District Judge William Orrick wrote in 2022. “His supervisors, and Tesla’s broader management structure, did little or nothing to respond. And supervisors even joined in on the abuse, one going so far as to threaten Mr Diaz and draw a racist caricature near his workstation.”
Read: Tesla Hit By New Trial Over $137 Million Settlement To Racially Abused Ex-Employee
While Orrick agreed with the jury’s verdict that Tesla had breached the law, he believed that the damages awarded were excessive. As a result, he reduced the amount that the company was required to pay to $15 million. Diaz was given the choice to accept or decline this reduced payout, and he opted to challenge the sum in a new trial that has since concluded. Following this second trial, Diaz was awarded $175,000 in damages for emotional distress, as well as $3 million in punitive damages. It is still possible that the case could continue.
According to Ryan Saba, a Los Angeles employment lawyer who was not involved in the case and who spoke to Reuters, the new amount is surprisingly low, considering the egregious conduct for which Tesla was found liable. Since punitive damages are traditionally capped to nine times more than the emotional damages, he expects that both sides will appeal this latest decision.
Indeed, Diaz’s legal team was already unhappy enough with the case to call for a mistrial, a motion that was denied by Orrick. They claimed that Tesla’s lawyers had violated the judge’s ban on introducing new evidence, something the automaker’s CEO complained about on Twitter.
In addition to this case, Tesla is currently embroiled in several others over its handling of racial discrimination. It faces legal action from a California civil rights agency, multiple cases from individual employees, and a pending class action suit.
