Tesla ordered to pay worker $3M-plus over racist treatment

Ex-employee was offered $15M by judge in 2021, but asked for a new trial instead

Tesla is being ordered to pay a former employee at least $3 million to settle a racial discrimination lawsuit at its assembly plant in Fremont, California – just a fifth of the amount the judge offered him in 2021.

Owen Diaz, a Black former contract employee at the Fremont plant, was awarded [PDF] $3 million (£2.4 million) in punitive damages and an additional $175,000 (£140,000) in non-economic damages due to the hostile work environment he dealt with at the plant while employed there from 2015 to 2016.

As jury instructions [PDF] for the trial indicated, Diaz was subjected to unwelcome jokes, slurs, and insults of a racial nature that Tesla failed to act upon. Those issues weren't even in question in this particular trial, which was the second litigation of the case.

"It has been conclusively determined that Tesla is liable to Mr Diaz," US District Court for the Northern District of California Judge William H Orrick wrote in his instructions to jurors. "It is your job to determine the amount of the damages award."

A jury before Orrick returned a $137 million (£110 million) settlement in Diaz's favor in 2021. Orrick ruled the settlement excessive, reducing it to $15 million (£12 million), but instead of accepting that deal in 2021, Diaz opted for a second trial. 

Tesla didn't directly accept responsibility for Diaz's treatment, but Valerie Capers Workman, Tesla's then-VP of People, did say in a 2021 blog post that "we do recognize that in 2015 and 2016 we were not perfect. We're still not perfect." 

"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," Capers Workman said. 

Responding to this latest decision, Tesla owner Elon Musk said on his personal social media platform that, had Tesla been allowed to introduce new evidence as part of the second trial, "the verdict would've been zero [in my opinion]."

The "jury did the best they could with the information they had. I respect the decision," Musk added.

It's Fremont, not Fairmont

Tesla has been hit with a number of racial discrimination cases out of its Fremont factory, the company's original facility, not to mention the labor law violations.

Along with Diaz's case, Tesla has been sued by other Black ex-employees including DeWitt Lambert, who in 2017 filed a case alleging he had been threatened with physical harm and called racist names, and that, as in the case of Diaz, Tesla didn't take action when informed. 

Separately, a group of 15 Black current or former Tesla employees sued the company last June, alleging they were called racist names by both co-workers and managers.

Tesla has attempted to force several lawsuits brought by Black workers from Fremont into arbitration, but in January a California appeals court ruled the company couldn't force a case into arbitration if employees' cases hinged on allegations that occurred prior to their signing of an arbitration clause. ®