Jury Orders Tesla to Pay Ex-Employee $3.2M for Racial Bias

Tesla Inc. (NASDAQ: TSLA) has been ordered to pay $3.2 million in a legal suit in response to claims that it permitted race-related discrimination to happen at its U.S. main assembly facility without preventing it. A Black former employee of Tesla’s Fremont factory, Owen Diaz, has been awarded $175,000 for psychological anguish and $3 million in exemplary damages by a San Francisco-based federal court in California.

According to Diaz, upon reporting, Tesla did not respond to the persistent harassment that included racist remarks and offensive caricatures he experienced while working as an elevator operator in Tesla’s factory in 2015 through 2016. The verdict represents a considerable reduction from the sum of $7 million for emotional anguish damages and $130 million for exemplary damages a jury initially awarded Diaz in 2021, which was considered the highest fine for job discrimination in America’s history to be imposed by a jury.

The amount was eventually reduced by William Orrick to $15 million, citing a legal ruling by the Supreme Court that says punitive compensations typically shouldn’t total more than 10 times as much as other forms of damages. Nonetheless, Orrick upheld the jury’s finding that Tesla was responsible for damages, labeling the evidence of the case as “disturbing evidence.”

Diaz, however, elected to have his compensatory damages in the lawsuit reevaluated through a fresh trial. In his testimony, Diaz explained how the bigotry he encountered harmed his psychological health and had a negative impact on his son, a Tesla employee.

On Friday, Diaz’ attorney, Bernard Alexander, requested the jury court to pay his client a sum of $160 million as compensation so as to send a strong message to major corporations such as Tesla that discriminatory habits at workplaces are unacceptable. According to California law, companies must handle improper behavior in their workplaces, such as discrimination against gender and race, among other classified groups, by taking appropriate action.

Although Tesla has consistently maintained its innocence with regard to the numerous accusations it has received claiming a hostile working atmosphere, Diaz’s instance is only one of many complaints. An ex-employee filed a lawsuit against Tesla for uncontrollable sexual misconduct. In a California-based state supreme court in June 2022, 15 current and ex-employees filed a case of class-action as well, alleging they routinely experienced racial discrimination. They claimed that it appeared that Tesla’s operational practice standards contained clear, open and unrepentant discrimination based on race.

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