A jury’s award of $137 million to a contingent worker against Tesla Inc. in a racial discrimination lawsuit was reduced to $15 million in an order issued April 13 in federal court.
The plaintiff in the lawsuit, Owen Diaz, had worked through staffing firms at Tesla’s auto factory in Fremont, California, from June 2015 to May 2016. During that time, Diaz, who is Black, experienced several series incidents of racism, according to court records.
“The evidence was disturbing. The jury heard that the Tesla factory was saturated with racism,” US District Judge William Orrick wrote in his decision to reduce the jury’s award of damages in the case. “Diaz faced frequent racial abuse, including the N-word and other slurs. Other employees harassed him. His supervisors and Tesla’s broader management structure did little or nothing to respond. And supervisors even joined in on the abuse, one going so far as to threaten Diaz and draw a racist caricature near his workstation.”
In October 2021, a jury awarded Owen Diaz $6.9 million in compensatory damages and $130 million in punitive damages for a total of nearly $137 million.
In his decision, Orrick wrote the compensatory damages were excessive and lowered them to $1.5 million. However, that is above the $300,000 that Tesla had sought. Orrick also noted the jury had ample grounds to find that Diaz was severely harmed, but its award of future damages was out of proportion to the evidence.
The judge also lowered the punitive damages to $13.5 million, citing constitutional limitations for them of nine times the amount of compensatory damages.
The lawsuit was filed in October 2017. The case number is 3:17-cv-0674-WHO.