Former Tesla Employee Loses Bid for Third Trial in Discrimination Lawsuit
October 4, 2023
A former Black factory worker for Tesla has been denied a third trial in his race discrimination lawsuit against the electric carmaker. The California federal judge rejected his claims that Tesla’s lawyers had engaged in misconduct and tainted his trial.
U.S. District Judge William Orrick upheld a $3.2 million verdict that a jury awarded to plaintiff Owen Diaz in April, denying his motion for a new trial. The judge also rejected Tesla’s bid to cut the award in half.
The decision spares Tesla from another lengthy trial but brings renewed attention to the case, which is one of several alleging racial harassment at Tesla’s flagship Fremont, California assembly plant. The most recent lawsuit was filed by the U.S. Equal Employment Opportunity Commission (EEOC) last week.
In his ruling, Orrick stated that the verdict was justified “in light of the endemic racism at the Tesla factory and Tesla’s repeated failure to rectify it.”
Diaz, a former elevator operator, claimed that he was subjected to daily racist slurs and graffiti and that Tesla ignored his complaints.
Diaz’s lawyers argued that Tesla’s legal team asked improper questions, baselessly accused a witness of lying, and made misleading statements to the jury during the trial. However, Orrick stated that any misconduct by Tesla’s lawyers did not significantly influence the jury’s decision.
Diaz was initially awarded $137 million by a different jury in 2021, but Orrick ruled that the verdict was excessive. The judge then ordered a second trial to determine damages after Diaz declined a lower settlement offer of $15 million.
Tesla has not responded to a request for comment.
Lawrence Organ, Diaz’s lawyer, stated that they are considering an appeal and expect Tesla to file an appeal to lower the award.
Organ also highlighted that the $3.2 million award is substantial for a race discrimination case and showcases the severity of the alleged harassment.
Despite losing the bid for a new trial, Diaz’s lawyer sees the decision as a victory for civil rights since large monetary awards in these cases are typically not upheld.
During the second trial, the judge prohibited both parties from presenting new evidence or testimony. However, Diaz claimed that Tesla’s lawyers violated this directive by questioning him and other witnesses about alleged altercations that were not mentioned in the first trial, which Diaz denies.
Tesla has stated that it does not tolerate discrimination and takes worker complaints seriously. The company has denied wrongdoing in other lawsuits alleging racial or sexual harassment at its Fremont plant and other facilities.
Last week, Tesla was sued by the EEOC, alleging that Black factory workers have routinely faced racist slurs, graffiti, and retaliation for complaining about the harassment since 2015.
Tesla faces lawsuits under federal and state laws. The federal law caps damages at $300,000 per worker, while California law has no caps.
Diaz sued Tesla under a federal law prohibiting race discrimination in contracts, including employment contracts, which also does not impose a damages cap.
Reporting by Daniel Wiessner in Albany, New York, Editing by Lisa Shumaker, Alexia Garamfalvi, Diane Craft, and David Gregorio.
Dan Wiessner reports on labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].