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Tesla Must Pay Black Employee $3.2 Million in Racial Bias Lawsuit

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By Richard Dahl | Last updated on

A federal jury has ordered Tesla to pay about $3.2 million to a Black former employee for ignoring his accusations of racial abuse.

Although the jury awarded plaintiff Owen Diaz a seven-figure verdict, his decision to go to trial proved costly. Two years ago, a different jury awarded him $137 million, mostly in punitive damages. The judge in that trial, William H. Orrick, later ruled that the award was excessive, and reduced the payout to $15 million. Diaz chose to challenge that amount in a new trial—but instead of getting more money, he ended up forfeiting another $11.8 million.

Diaz had worked for Tesla as an elevator operator in the company's plant in Fremont, California. There, he had repeatedly complained to managers that he had been subjected to racist slurs and encountered racist images and epithets on workplace walls.

One of Diaz's lawyers urged jurors to award Diaz $160 million in damages, in part to send a message to Tesla and other companies that they must be serious about preventing racial discrimination in their workplaces. Tesla's lawyer, however, claimed that Diaz was a problematic employee and that his claims of emotional distress were exaggerated.

The most recent case involving Diaz was a retrial of the one in 2021, and Judge Orrick once again presided. In his instructions to jurors, Orrick said their task was not to determine whether Tesla was liable for failing to prevent a hostile work environment; the company's liability had been "conclusively determined" at the first trial. Instead, he told the jury, its responsibility was to determine how much money Diaz should receive. The one-week trial concluded with the jury verdict on April 3.

Tesla is also facing other lawsuits that allege racial discrimination. Among them is a lawsuit filed by 15 current and former Black workers, a case from the state Department of Fair Employment and Housing, and several lawsuits involving individual workers.

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