A former Tesla factory worker who rejected a $15 million payout in a racial discrimination lawsuit has been awarded just $3.2 million after a new damages trial. A federal jury verdict reached yesterday gave plaintiff Owen Diaz $3 million in punitive damages and $175,000 in compensatory damages.

After the first trial, in October 2021, a jury in US District Court for the Northern District of California ruled that Tesla should pay $137 million to Diaz. In April 2022, US District Judge William Orrick reduced the award to $15 million, saying that was the highest amount supported by the evidence and law.

Diaz rejected the judge’s $15 million award and sought a new trial on damages only. The judge’s final instructions to the eight-person jury said, “It has been conclusively determined that Tesla is liable to Mr. Diaz for: (1) creating a hostile work environment based on race in violation of federal law, (2) failing to prevent racial harassment in violation of federal law, and (3) negligently retaining and supervising one or more of Mr. Diaz’s supervisors in violation of California state law.”

When Orrick decided that Tesla should pay $15 million last year, he wrote that the “evidence was disturbing. The jury heard that the Tesla factory was saturated with racism. Diaz faced frequent racial abuse, including the n-word and other slurs. Other employees harassed him. His supervisors and Tesla’s broader management structure did little or nothing to respond. And supervisors even joined in on the abuse, one going so far as to threaten Diaz and draw a racist caricature near his workstation.”

Musk: “Jury did the best they could”

Diaz, who is Black, operated a freight elevator and worked at Tesla’s Fremont, California, factory for nine months starting in June 2015. His legal team reportedly asked the jury last week to award $8 million in compensatory damages and $150 million in punitive damages.

After yesterday’s $3.2 million verdict, Diaz’s attorney Larry Organ said, “I don’t think that the truth drove the decisions here. I think it was a show whereby Mr. Diaz was attacked and his credibility was questioned,” according to a Wall Street Journal article.

Tesla CEO Elon Musk weighed in on Twitter, writing, “If we had been allowed to introduce new evidence, the verdict would’ve been zero imo. Jury did the best they could with the information they had. I respect the decision.”

Tesla last week objected to the jury being instructed that Diaz is entitled to punitive damages, arguing that the evidence didn’t prove Tesla acted purposely or with reckless disregard. “The record fails to provide legally sufficient evidence that Tesla purposely or recklessly disregarded Mr. Diaz’s complaints of racially hostile conduct by other workers,” Tesla wrote. “To the contrary, the undisputed evidence shows that Tesla supervisors responded to all of Mr. Diaz’s documented complaints of such conduct with investigations and then serious disciplinary action against the perpetrator.”

Plaintiff: Tesla misled jury

Also last week, Diaz’s lawyers filed a motion for a mistrial, alleging that during the re-trial, “Tesla repeatedly referenced and sought to introduce improper and highly prejudicial evidence in a blatant attempt to mislead and prejudice the jury regarding plaintiff Owen Diaz’s character, his mental state, and the status of this litigation.”

Tesla “asked improper questions that, without any factual basis, accuse Mr. Diaz of being a serial racial and sexual harasser,” made “entirely gratuitous and highly prejudicial references to Mr. Diaz’s previous settlement with two staffing companies in this litigation,” and “sought to elicit barred testimony about Diaz’s son’s criminal convictions,” Diaz’s side argued.

“Tesla twice attempted to elicit testimony from Mr. Diaz regarding his prior criminal convictions in violation of the Court’s April 2, 2020 order precluding Tesla from introducing such evidence at trial,” the motion said. In another incident, Tesla “displayed an exhibit not admitted to the jury so it could baselessly accuse Mr. Diaz of forging a doctor’s note,” the motion said.

The plaintiff’s lawyers’ “objections were not always sustained or were not sustained until after Tesla’s callous disregard for the Court’s rules had its desired effect on the jury,” the motion said.

Tesla also sued by California state agency

Tesla is separately facing a lawsuit filed by the California Department of Fair Employment and Housing (DFEH), which alleged that the Fremont-based “factory was racially segregated.”

“Defendants discriminated against Black and/or African-American workers by segregating them to undesirable work areas and/or locations, assigning them to more physically demanding jobs, lower level roles, or contract positions with lower pay and more limited growth opportunities, and affording them fewer advancement and other professional opportunities than their non-Black counterparts because of race in violation of Government Code section 12940, subdivision (a),” the state agency alleged in Alameda County Superior Court.

The state agency’s lawsuit also said that Black workers at Tesla “were routinely subjected to offensive racial harassing conduct so severe and/or pervasive that it created a hostile work environment.” Similar allegations were made in a lawsuit filed in July 2022 by 15 factory workers. Both cases are still pending.

https://arstechnica.com/?p=1928985