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A federal judge on Wednesday said Tesla Inc. was liable to a black elevator operator who said the electric-car company ignored racial abuse at the factory where it worked but left a nearly $137 million jury award on 15 million dollars reduced.
US District Judge William Orrick in San Francisco ruled after a jury found last October that Tesla exposed Owen Diaz to a hostile environment at Tesla’s Fremont, California, factory by allowing and refraining from expressing the racism he was exposed to was exposed to stop.
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Diaz, who worked at the plant for nine months in 2015 and 2016, said other employees used racial slurs when speaking to him and scrawled swastikas and slurs including the “N-word” on bathroom walls. He also said a supervisor drew a racist cartoon near his place of work.
Parked vehicles at the Tesla plant in Fremont, California (AP Photo/Ben Margot)
In a 43-page decision, Orrick said the evidence supported the jury’s finding that Tesla was responsible for the “profound” emotional damage Diaz suffered and the company’s “often inadequate” disciplinary measures.
But the judge reduced Diaz’s compensatory damages from the “inflated” $6.9 million the jury awarded to $1.5 million and lowered the punitive damages from the jury’s “unconstitutionally high” $130 million award $13.5 million.
Bernard Alexander, a lawyer for Diaz, said in an interview that his client plans to appeal the reduced damages.
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“We are pleased that the court upheld the jury’s finding that Tesla’s behavior was absolutely reprehensible,” Alexander said.
“The $15 million price tag is significant, but it doesn’t come close to reflecting the damage done to Mr. Diaz or the reprehensibility of Tesla’s behavior,” he added.
Tesla and his attorneys did not immediately respond to requests for comment. The company had attempted to limit the compensatory and punitive damages to $300,000 each.
Tesla CEO Elon Musk ((AP Photo/Jae C. Hong, file) / AP Newsroom)
Led by billionaire Elon Musk, Tesla faces similar lawsuits in other court cases.
In one such case, the California Department of Equal Employment and Housing claimed in February that black workers at the Fremont plant were constantly being harassed but their complaints were being ignored.
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Tesla previously called this lawsuit misguided and said it had policies in place to prevent and punish racist behavior.
Compensatory damages are intended to cover actual losses, while punitive damages are intended to punish and deter violations.
| ticker | security | Last | To change | To change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 1,022.37 | +35.42 | +3.59% |
Following US Supreme Court precedent, punitive damages should typically be less than 10 times the damages awarded.
Legal experts had called Diaz’s original price tag of $137 million one of the largest for a single plaintiff alleging workplace discrimination.
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The case is Diaz v. Tesla Inc et al, US District Court, Northern District of California, No. 17-06748.
(Reporting by Jonathan Stempel and Daniel Wiessner in New York; Editing by Christian Schmollinger and Kenneth Maxwell)