$137M Verdict Against Tesla Ruled 'extremely high' by Judge

The verdict against Tesla, according to which it must pay its former black worker $137 million, was not fully accepted by the judge. The judge made it clear that this amount is “extremely high,” hinting that the amount is likely to be reduced.

Tesla has been ordered to pay almost $137 million in damages for failing to stop a Black former worker Owen Diaz at its plant from being abused. However, U.S. District Judge William Orrick on Wednesday said he was “troubled” that the $6.9 million jurors awarded as emotional distress damages “may be untethered to the distress to which Mr. Diaz and his witnesses testified.” Moreover, punitive damages of almost 20 times that amount are “extremely high,” Orrick said at a hearing on Tesla’s request for a new trial, according to BNN Bloomberg.

The decision, which came in October and was awarded to Diaz by a San Francisco federal court jury, is considered one of the largest in U.S. history for an individual plaintiff in a racial discrimination case. It therefore legitimately raises suspicions that the jury may have been based on passion or prejudice, rather than relying on constitutional evidence. Orrick said he was inclined to dismiss Tesla's request for a new trial, provided Diaz agreed to a reduction in damages. He said he would issue a written decision, but did not specify a timeframe.

Tesla's attorney, Kathleen Sullivan, has argued that compensatory damages should be as little as $300,000 and punitive damages should be less than four times, based on similar cases. Tesla could have done more, but it did take some steps to discipline employees that Diaz complained about. “Some effort to remediate makes it less reprehensible,” she said.

In late 2015 and early 2016, Diaz, who was a contract employee and actually worked for Citistaff and nextSource, worked for Tesla. He claimed Black workers regularly faced racist slurs on the factory floor and racist graffiti in bathrooms at Tesla's factory in Fremont. In addition to Diaz, three other witnesses testified in court that they regularly heard racially motivated insults (including the n-word). While they all agreed that the use of the n-word was inappropriate in the workplace, they also agreed that most of the time they believed the language was being used “friendly” and usually by African American colleagues. They also told the jury about the racist graffiti in the bathrooms that had been removed by the company's cleaners.

There was no witness statement or other evidence that anyone had ever heard the n-word used in relation to Diaz. Diaz filed written complaints to his non-Tesla executives, which has been documented. However, it is worth noting that he did not make any complaints about the n-word until after he was not hired full-time by Tesla, and after he hired an attorney.

During his tenure at Tesla, Diaz complained of the harassment three times, and the company stepped in and made sure the recruiting agencies responded in a timely manner. As a result, two contractors were fired and one was suspended from work. Diaz himself testified that he was “very satisfied” with the results of one of the investigations, and he agreed that there was a follow-up on each of his complaints. Also, at the time he was complaining about the harassment, he recommended that his two children also work for Tesla, which should have been a good example of Diaz being happy with his job at the company.

© 2022, Eva Fox | Tesmanian. All rights reserved.

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