Electric car manufacturer Tesla is once again in the courtroom this week, defending itself against allegations of racial discrimination and harassment from a former Black employee. The trial, which began with jury selection on Monday, will see the plaintiff, Owen Diaz, and Tesla appear in the US District Court in San Francisco.
Diaz is seeking compensatory and punitive damages from Tesla, alleging that his colleagues at the company’s Fremont factory repeatedly subjected him to racist slurs, drawings of swastikas and racist caricatures, and created a generally hostile work environment during the nine months he worked there as an elevator operator in 2015 and 2016. Diaz claims that Tesla management did nothing to stop the abuse.
This new trial comes after Diaz and his lawyers rejected a $15 million payout last June, which had been reduced from a jury-awarded $137 million. The judge in that case, William Orrick, reduced the compensatory damages to $1.5 million and punitive damages to $13.5 million, stating that the original award was excessive. Diaz’s lawyers argued that the payout was unjust and would not deter future misconduct by Tesla.
Diaz is taking a gamble by going back to court, as there is a risk that the damages awarded could be even lower than $15 million. Helen Rella, head of the employment law department at law firm Wilk Auslander, has suggested that the most likely outcome is for Diaz to receive an award somewhere between $15 million and $137 million.
Tesla has consistently denied any wrongdoing, and the company could not be reached for comment as it disbanded its press office in 2020.
The retrial of Diaz’s case comes as Tesla is also battling a separate racial bias lawsuit filed by California’s Civil Rights Department (CRD). The CRD sued Tesla in February 2022 after receiving allegations that the Fremont factory is a racially segregated workplace where Black workers suffer from harassment, unequal pay, and a hostile work environment. Earlier this month, a judge ruled that the CRD must provide Tesla with details of the investigation it conducted prior to filing suit against the automaker. Tesla may be able to have certain claims dismissed if it can prove that the investigation was not thorough enough.
