New Trial Will Determine Damages in Tesla Racism Case

Facts

• On Monday, a new trial to determine how much Tesla must pay Owen Diaz — a Black former Tesla employee who a jury determined was subjected to racial harassment — began in San Francisco federal court.¹
• Previously, a jury in October 2021 awarded Diaz an unprecedented $137M in damages. The jury found Diaz was subjected to racist taunts and graffiti while working at the company's auto plant in Fremont, Calif, and the company did not intervene.²
• A federal judge then lowered Diaz’s total award from $137M ($130M for punitive damages and $7M for emotional distress) to $15M. Diaz rejected the payout and opted for a new trial.³
• Diaz’s suit fell under a California law prohibiting employers from failing to prevent hostile work environments based on race and other protected traits.⁴
• Tesla also faces claims of tolerating widespread racial bias at the Fremont plant in a California state court class-action lawsuit, and a separate lawsuit by the state's civil rights watchdog group. Both cases are still in their early stages, but the outcome of Diaz’s trial will not directly affect the other court cases.⁴

Sources: ¹Insurance journal, ²Bloomberg, ³Reuters (a) and ⁴Reuters (b).

Narratives

• Narrative A, as provided by Al Jazeera. There’s actually little evidence that what Diaz claims happened to him occurred. He certainly shouldn't be able to claim millions of dollars in damages under the circumstances. The full context is needed in order to fully evaluate this case.
• Narrative B, as provided by Insurance journal. Whether Diaz was abused has already been determined by both a jury and a judge. Now the only thing left to determine is how much he should be paid in damages. Tesla’s attempt to diminish the award as low as it can go shows the company doesn’t value its employees, even when they face severe racial harassment in the workplace.

Predictions