Jury says Tesla must pay worker $3.2 million for racist treatment

A federal jury in San Francisco on Monday ordered Tesla to pay about $3.2 million to a black man who accused the automaker of ignoring racial abuse he faced while working at its California factory.

The award was well below the $137 million another jury awarded two years ago, mostly in punitive damages. The judge in that trial later reduced the figure to $15 million, prompting plaintiff Owen Diaz to challenge the amount in a new trial.

But rather than more money, he will walk away with less. After a five-day trial, the jury awarded $3 million in punitive damages and $175,000 in past and future non-economic damages.

Mr. Diaz said he was the victim of repeated racist offenses while working as a contractor at Tesla’s factory in Fremont, near San Francisco, in 2015 and 2016. He said a supervisor and other co-workers frequently used racial slurs, especially in reference to him. Employees also wrote racial epithets and drew symbols and cartoons around the plant, he said.

Diaz said the violations had an emotional impact on him and he brought them to the company’s attention, but Tesla did little to address them. He said he tolerated the hostilities until his son started working at the factory and faced similar treatment.

“The prevalence of the use of the N-word inside the Tesla workplace is an indication that they didn’t care how their African-American employees felt,” said Bernard Alexander, one of the attorneys for Mr. Diaz, in closing argument in the latest trial. “It was a complete affront to all African Americans in the workplace.”

Tesla’s attorneys have suggested Mr. Diaz overstated the impact and extent of the racial harassment he faced, encouraging the jury to play down damages.

But the company’s liability for subjecting Mr. Diaz to a hostile work environment and failing to prevent racial harassment was not judged. That had already been “conclusively determined,” Judge William H. Orrick said in instructions to jurors. Instead, the jury’s responsibility was to determine how much Mr. Diaz was owed.

Judge Orrick also presided over the original trial.

After the 2021 lawsuit, Tesla’s human resources manager said the company fired two contractors and suspended another in response to Mr. Diaz’s complaints. The executive acknowledged the company was “not perfect” in 2015 and 2016, but said it has come a long way since then.