The multi-million dollar award is significantly less than previously awarded in the case filed by a former employee.
Electric vehicle maker Tesla has been ordered to pay $3.2 million in a lawsuit alleging the company allowed racial harassment to go unchecked at its main assembly plant in the United States.
On Monday, a federal jury in San Francisco, California, awarded $175,000 for emotional distress and $3 million in punitive damages to Owen Diaz, a black employee who formerly worked at the Tesla factory in Fremont.
Diaz has claimed that Tesla did not respond when he reported being continuously harassed in his role as an elevator operator from 2015 to 2016.
That harassment reportedly included racial slurs, offensive caricatures and swastikas etched on toilet walls.
Monday’s decision, however, is a significant drop from what a jury initially awarded Diaz in 2021. In one of the largest workplace discrimination sentences in U.S. history, that jury sought $7 million in emotional distress and $130 million in punitive damages. .
U.S. District Judge William Orrick later reduced that amount to $15 million, saying it was the “highest award supported by the evidence.” He cited Supreme Court precedent, which states that punitive damages generally should not exceed 10 times the amount of other compensatory damages.
However, Orrick affirmed the jury’s conclusion that Tesla was liable for damages, calling the evidence presented in the case “troubling”.
But Diaz instead opted for a new trial to reassess the damages in his case. He testified before the jury last week, explaining how the racism he experienced affected his mental health and led to problems with his son, who also worked for Tesla.
His lawyer, Bernard Alexander, on Friday called on the jury to award him $160 million in damages to make it clear to large companies like Tesla that racist behavior should not be tolerated.
California law requires employers to take “reasonable steps” to address unlawful conduct in the workplace, including harassment based on race, gender, and other protected categories.
“Mr. Diaz’s view of the world has changed permanently,” Alexander told the jury.
“That’s what happens when you take someone’s safety away.”
Tesla lawyers, meanwhile, characterized Diaz as confrontational and over the top. They also denounced Diaz’s push for higher damages.
“They’re just throwing numbers on the screen like this is some kind of game show,” Tesla attorney Alex Spiro told the jury.
Diaz’s legal team pushed for a mistrial on Friday after Tesla’s lawyers questioned witnesses about racist and sexual remarks Diaz allegedly made. But Judge Orrick rejected the motion, denying that the questions would prejudice the jury.
After Monday’s decision, Diaz could still order a new trial or appeal to the judge to reconsider the jury’s decision.
Diaz’s case is just one of many complaints against Tesla about a hostile work environment, though Tesla has not denied any of these complaints.
A former employee sued the company for “rampant sexual harassment”. Last June, 15 current and former employees also filed a class action lawsuit in a California state court, claiming they were regularly subjected to racist treatment.
They said Tesla’s “standard operating procedures” appeared to contain “blatant, open and outright racial discrimination.”
And in February, several employees at a plant in Buffalo, New York, filed a complaint with the National Labor Relations Board accusing Tesla of unfair labor practices. They said they were unfairly fired after launching unionization efforts at the plant.