Tesla ex-employee has court win amount reduced by 98%

But jury finds company failed to prevent severe racial harassment at Fremont factory

BY Chris Sweeney 04 Apr 2023

A federal jury in San Francisco has found that Tesla failed to prevent severe racial harassment at its flagship assembly plant in California. As a result, the company will pay approximately $3.2m to a Black former employee, Owen Diaz, who worked as a lift operator at its Fremont factory from 2015 to 2016. The jury's findings revealed that Diaz was subjected to a racially hostile work environment.

Although Diaz was initially awarded $137m in damages in 2021, the judge later ruled that the amount was excessive, and the payment was subsequently reduced to $15m. However, Diaz rejected this sum and opted for a new trial on damages. The $3.2m payout represents just 2% of the initial award.

Diaz accused the company of not taking appropriate action against racism in the workplace. He stated that a supervisor and other employees at the factory frequently used racial slurs, drew swastikas, and left racist graffiti and drawings around the plant. Diaz testified that although he had initially encouraged his son to work at Tesla, he now regrets it deeply because his son was exposed to a hostile work environment towards people of color.

During the trial, Diaz gave emotional testimony, tearfully recounting various incidents that occurred during the nine months he worked at the Fremont factory. He claimed that the job caused him anxiety and strained his relationship with his son.

Diaz's lawyer, Bernard Alexander, requested that the jurors award nearly $160m in damages, sending a message to Tesla and other large companies that they will be held accountable for not addressing discrimination. In response, Tesla's lawyer, Alex Spiro, argued that Diaz was a confrontational worker who exaggerated his emotional distress claims. Spiro also pointed out that Diaz's lawyers failed to present any concrete evidence of serious, long-term damage caused by Tesla.

Tesla CEO Elon Musk reacted to the decision on Twitter, stating, "If we had been allowed to introduce new evidence, the verdict would've been zero imo. The jury did the best they could with the information they had. I respect the decision."

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.
— Elon Musk (@elonmusk) April 3, 2023

Tesla has faced numerous legal challenges in recent years, including more than 200 lawsuits from current or former contractors and employees in the United States since 2018, according to Plainsite, a legal records database. However, this figure does not include disputes that have gone straight to arbitration. Challenges involving allegations of racism include:

Last week, a lawsuit was filed by a former service manager named John Goode, who is Black. Goode's lawsuit, which was filed in Northern California, alleges that a white manager in Georgia made repeated racist remarks in his presence, displayed racial bias towards him and another Black colleague, and ultimately had him fired on false pretenses in retaliation for objecting to this treatment.
A group of fifteen Black former or current employees filed a lawsuit in 2022 claiming that they were subjected to racial abuse and harassment. The workers alleged that they experienced offensive racist comments and behavior by colleagues, managers, and human resources employees on a regular basis, mainly at Tesla's Fremont, California, factory. The lawsuit filed in a California state court accused the automaker's "standard operating procedures" of including "blatant, open, and unmitigated race discrimination. The plaintiffs claimed the company failed to take appropriate action to address the alleged discrimination, even after they reported it to their superiors. The filing also described one plaintiff, Teri Mitchell, who was regularly harassed by co-workers and managers, who used racial slurs and made statements such as "It is rare for Blacks to work here. I don't know how long you will be able to stay here."
In 2020, a group of Black workers filed a lawsuit alleging that they were subjected to racial slurs, threats, and other forms of discrimination while working at the company's Fremont, California factory. The lawsuit, which was filed on behalf of more than 100 current and former employees, also accused Tesla of failing to address complaints about racism and discrimination.

Other big US racial discrimination payouts

Marquita Bradshaw v. Smith & Nephew Inc. (2013): Bradshaw was awarded $1.42 million by a federal jury for racial discrimination at work, including being subjected to racial slurs.
Smith v. Merck & Co. (1995): A federal jury awarded Smith $2.4 million for being subjected to racial slurs and discriminatory treatment while working at Merck & Co.
In re FedEx Ground Package System, Inc. Employment Practices Litigation (2014): FedEx paid $3 million to settle a class-action lawsuit alleging that the company discriminated against Black and Latino employees.
Johnson v. Xerox Corp. (2000): A federal jury awarded Johnson $1 million for being subjected to racial slurs and discriminatory treatment while working at Xerox Corp.