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Lawsuits & Litigation

Federal Judge Reduces Damages in Tesla Discrimination Lawsuit

— April 14, 2022

An attorney for former Tesla contractor Owen Diaz said the award was slashed from $137 million to $15 million because the court couldn’t legally allow the larger amount.

A federal judge has reduced a Black former contract worker’s $137 million payout to $15 million after reviewing the man’s racial discrimination claim against Tesla.

According to National Public Radio, the lawsuit was filed by Owen Diaz.

Diaz, who worked as a contract elevator operator in Tesla’s Fremont, California, plant, filed a lawsuit against the company in 2017.

As has reported before, Diaz says that he—and other Black workers—were subjected to extensive racial discrimination in the Fremont facility, including racial slurs and threatening displays.

While a federal jury in San Francisco ordered Tesla to pay $137 in damages, Judge William Orrick has since reduced the award to $15 million.

California Civil Rights Law Group founder and attorney Larry Organ told National Public Radio that Diaz’s award was reduced for legal reasons—not because Diaz’s claims lacked merit.

“That’s the maximum [award],” Organ told N.P.R. “It wasn’t because [the judge] found anything wrong with what Mr. Diaz said, or that Mr. Diaz wasn’t injured or anything like that.”

“It’s just based on a comparison,” Organ said.

2017 Tesla Model X
2017 Tesla Model X; image courtesy of Vauxford via Wikimedia Commons,

In his review of the lawsuit, Judge William Orrick observed that Diaz’s complaint was backed by fact and detailed highly disturbing allegations of routine racial discrimination.

“The evidence was disturbing,” Orrick wrote. “The jury heard that the Tesla factory was saturated with racism.”

Tesla had pushed back against Diaz’s claim, saying that the contractor had only suffered low-grade emotional distress and should not be entitled to any damages.

Addressing Diaz’s allegation that he was called the “n-word,” Orrick said simply hearing the word once could be “devastating”—but that Diaz, and other Black employees, heard it “repeatedly and frequently” in the Fremont factory.

While Diaz had informed Tesla of his complaints, neither his company nor Tesla did anything to stop it.

“All of this leads me to conclude that this is not, as Tesla attempts to frame it, a case of ‘garden variety’ emotional distress that was ‘fortunately mild and short-lived,’” Orrick wrote.

However, Tesla has long since maintained that it did little wrong.

N.P.R. notes that, in a message to employees shared on a company blog last year, former Vice President of People Valerie Capers Workman said that Tesla has made great strides since the time Diaz worked in Fremont.

“[…] We do recognize that in 2015 and 2016 we were not perfect,” Workman wrote. “We’re still not perfect.”

“We will continue to remind everyone who enters the Tesla workplace that any discriminatory slurs—no matter the intent or who is using them-will not be tolerated.”

Nonetheless, Workman and her associates said that “these facts don’t justify the verdict.”

Organ, though, says he is pleased to see that the judge recognized the gravity of what Diaz and his colleagues endured.

“Mr. Diaz showed great courage in standing up to a corporation like Tesla, which was fighting tooth and nail to beat him,” Organ told N.P.R. “Mr. Diaz’s accomplishment should not be forgotten just based on a reduction in the verdict on legal principles.”


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