Tesla Racism Lawsuit Damages Drop From $137 Million To Just $3 Million After New Trial

A San Francisco federal jury on Monday ordered Tesla (Nasdaq: TSLA) to pay a former employee over $3 million for racial discrimination.

Owen Diaz was an elevator operator at the carmaker’s factory in Fremont, California. He said that during his time at the company, he and his other Black co-workers endured a racially hostile environment that included being regularly subjected to racial slurs, including the N-word. He also recounted seeing racist graffiti in the restrooms and finding a racist cartoon in his workspace.

Diaz will receive $3 million in punitive damages and $175,000 in non-economic damages. This amount is only a fraction of the $137 million in damages that the jury awarded him in October 2021, when they found that Diaz suffered civil rights violations at Tesla and that the company failed to take action to address and prevent the harassment.

But both Tesla and Diaz opted to seek a retrial after US District Judge William Orrick, who found the original sum excessive, offered $15 million in damages instead.

For the new trial, Diaz’s lawyers asked the jury to consider punitive damages amounting to $150 million, as well as $6.3 million in past non-economic damages, and another $2 million in future non-economic damages.

After the original 2021 verdict was released, Valerie Capers Workman, then Tesla’s Vice President, People, wrote a blog post addressed to Tesla employees and said: 

“While we strongly believe that these facts don’t justify the verdict reached by the jury in San Francisco, we do recognize that in 2015 and 2016 we were not perfect. We’re still not perfect. But we have come a long way from 5 years ago. We continue to grow and improve in how we address employee concerns. Occasionally, we’ll get it wrong, and when that happens we should be held accountable.”

California Department of Fair Employment and Housing sued Tesla in February, alleging discrimination against Black employees, and that the carmaker ran its Bay Area flagship factory as a “racially segregated workplace.” 

Legal records show that since 2018, the American electric carmaker has been on the receiving end of over 200 lawsuits brought by current and former contractors and employees, excluding cases that have gone directly to arbitration.

Information for this briefing was found via Bloomberg, CNBC, New York Post, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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