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Black former Tesla worker racial prejudice compensation cut from $15M to $3.2M

Image Credits: Mason Trinca

Owen Diaz, a Black former Tesla Fremont elevator operator, received $3.2 million in a racial prejudice claim instead of $15 million.

During a week-long trial, a San Francisco federal jury convicted Tesla again of failing to prevent extreme racial harassment at its flagship assembly facility. As a result, the EV maker must pay Diaz, a manufacturing elevator operator, $175,000 in emotional distress damages and $3 million in punitive penalties to punish wrongdoing and discourage future incidents.

Diaz sued Tesla in 2017 after regularly complaining to supervisors about employees calling him racial slurs and putting swastikas and racist caricatures on walls and workplaces. In 2021, another jury awarded Diaz $137 million. Tesla appealed, forcing a retrial. Judge William Orrick lowered the jury award to $15 million in June 2022, stating it was excessive. Diaz and his attorneys disputed the $15 million, which comprised $1.5 million in compensatory damages and $13.5 million in punitive penalties, calling it unreasonable and unlikely to discourage Tesla from future misconduct.

Diaz’s risk of retrying failed. However, Monday’s jury judgment devastated Diaz and civil rights advocates who want to boost punitive penalties for discriminatory firms.

“It is usually exceedingly difficult to rerun a lawsuit and get identical results,” said Rosen Saba partner Ryan Saba. Tesla’s alleged wrongdoing with Mr. Diaz was well documented in the first lawsuit. In the second instance, the jury was not seen such inflammatory evidence. The jury probably didn’t hear much about its responsibility in the first year, so the subdued verdict seemed expected.

Last week’s trial wasn’t meant to assess Tesla’s liability. Tesla failed to prevent Fremont plant racial harassment in previous trials. Due to Orrick’s limitation on new evidence, the subsequent trial to establish an acceptable award had less evidence.

Diaz’s lawyer, Bernard Alexander, asked jurors Friday to give him about $160 million in damages, telling Tesla and other big firms that they won’t get away with discrimination. Diaz tearfully recounted workplace happenings last week. The suit stated the job worried him and harmed his connection with his factory-working son.

Tesla’s lawyer, Alex Spiro, told the jury Diaz was a belligerent worker who exaggerated emotional discomfort. Spiro said Diaz’s attorneys failed to show Tesla’s long-term damage. He also claimed Diaz never wrote supervisors. Diaz stated that he had often complained to lawyers and human resources authorities.

Tesla did not respond but has denied wrongdoing. The California Civil Rights Department is one of several cases against the firm for condoning racial and sexual harassment.

Diaz’s attorneys filed a plea for a mistrial Friday, arguing that Tesla’s team violated Orrick’s rule on introducing new evidence by questioning Diaz and other witnesses about alleged racist or sexual statements. However, However, Diaz’s attorneys didn’t prove the questioning swayed the jury. Therefore Orrick denied the request.

This case is not over for either side. Saba anticipates cross-appeals. Diaz’s attorneys would likely want a new trial on the same grounds as their mistrial motion.

Because $3 million is “a rather disproportionate number compared to $175,000,” he anticipates Tesla file a post-trial request to lessen punitive penalties. Saba highlighted that punitive damages are often 4x emotional damages.

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