A former black employee of Tesla saw his racial prejudice settlement reduced from $15 million to $3.2 million

The award in the racial bias lawsuit filed by Owen Diaz, a former Black elevator operator at Tesla’s Fremont facility, has been reduced from $15 million to $3.2 million.

During a weeklong trial in San Francisco, a federal jury on Monday decided that Tesla had failed to prevent extreme racial harassment at its flagship assembly factory. Diaz, who worked as an elevator operator at the plant, was awarded $175,000 in compensatory damages for emotional distress and $3 million in punitive damages to penalize the EV manufacturer for its wrongdoing and deter similar incidents in the future.

After regularly complaining to supervisors about employees using racial insults and sketching swastikas and racist caricatures on walls and in break rooms, Diaz filed his first lawsuit against Tesla in 2017. Diaz received $137 million from a different jury in 2021. Tesla filed an appeal, which resulted in a new trial. U.S. district judge William Orrick deemed the $15 billion jury judgement excessive and lowered it to $15 million in June 2022. Diaz and his attorneys argued that the total amount of $15 million (consisting of $1.5 million in compensatory damages and $13.5 million in punitive damages) was unfair and would not discourage future misconduct by Tesla, thus they declined to accept the settlement.

Diaz took a risk by retrying the case, and he lost. Diaz, and civil rights groups who want to boost punitive penalties for firms shown to condone discrimination, were dealt a devastating blow by the jury’s ruling on Monday.

Partner at Rosen Saba and expert in civil litigation and trials, Ryan Saba. “It is always very tough to rerun a matter and get comparable results as before.” A large amount of evidence of Tesla’s alleged wrongdoing toward Mr. Diaz was presented to the jury in the first case. In the second case, the prosecution did not present the jury with that kind of inciting testimony. The jury probably didn’t hear as much about the liability of it in the first year, and that’s why they gave such a subdued judgement.

In other words, the purpose of the trial that took place last week was not to establish Tesla’s liability. Tesla has been found guilty of failing to prevent racial harassment in the workplace before. Due in part to Orrick’s prohibition on bringing new evidence to the case, the amount of evidence produced at trial decreased during the new trial, whose purpose was to determine a suitable compensation.

Diaz’s attorney Bernard Alexander urged the jury to pay his client about $160 million in damages on Friday, sending a message to Tesla and other huge firms that they will not get off with a slap on the wrist if they fail to confront prejudice. In his testimony last week, Diaz wept as he described multiple incidences that occurred during his nine months of employment at the facility. The plaintiff claimed that his anxiety and his connection with his son, who also worked at the factory, were both directly attributable to his employment there.

Diaz, according to Tesla’s attorney Alex Spiro, was a combative worker who fabricated her mental suffering. Spiro claimed that Diaz’s attorneys had not shown that Tesla had caused any permanent harm. However, he said that Diaz did not submit any formal complaints to higher-ups in writing. Diaz said that he had expressed his distress to attorneys and human resources personnel on multiple occasions.

Tesla did not respond to requests for comment, but the company has previously denied any misconduct. Other similar complaints have been filed against the corporation for its alleged tolerance of racial and sexual harassment at its facilities.

A resolution to this matter is still a long way off
Diaz’s attorneys tried a mistrial move on Friday, arguing that Tesla’s team introduced new evidence by questioning Diaz and other witnesses about events in which Diaz allegedly made racial or sexual statements. Orrick stated that there was insufficient evidence presented by Diaz’s attorneys to warrant a change in the status of the request.

That doesn’t signify the end of the road for either party in this case. Saba has stated that he anticipates counter appealing in this case. The legal team representing Diaz is anticipated to file a motion for a new trial on the same grounds they used to call for a mistrial during the trial.

Since $3 million is “a rather disproportionate number compared to $175,000,” he believes Tesla will file a move after the trial to have the punitive damages reduced. According to Saba, the amount of punitive damages is often four times the amount of emotional losses.

“We have a long way to go in this case.”