Tesla liable to former black worker who alleged bias, but payment should be reduced: judge

A federal judge ruled on Wednesday that Tesla Inc. was liable to a black elevator operator who said the electric car company ignored racial abuse at the plant where he worked, but slashed a jury award by nearly from $137 million to $15 million.

U.S. District Judge William Orrick in San Francisco ruled after jurors last October found Tesla subjected Owen Diaz to a hostile environment at Tesla’s factory in Fremont, Calif., by allowing and failing to to stop the racism he was facing.

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Diaz, who worked at the plant for nine months in 2015 and 2016, said other employees used racial slurs when talking to him, and scribbled swastikas and slurs, including the “N-word on the bathroom walls. He also said a supervisor drew a racist cartoon near his workstation.

Vehicles are seen parked at the Tesla factory in Fremont, California. (AP Photo/Ben Margot)

In a 43-page decision, Orrick said the evidence amply supported the jury’s conclusion that Tesla was responsible for the “profound” emotional harm suffered by Diaz and the “often inadequate” disciplinary action taken by the company.

But the judge reduced Diaz’s compensatory damages to $1.5 million from the “excessive” $6.9 million the jury awarded, and reduced the punitive damages to $13.5 million. compared to the “unconstitutionally large” jury award of $130 million.

Bernard Alexander, an attorney for Diaz, said in an interview that his client plans to appeal the damages reduction.

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“We are delighted that the court has upheld the jury’s finding that Tesla’s conduct was absolutely wrongful,” Alexander said.

“The $15 million award is substantial but does not come close to reflecting the harm done to Mr. Diaz, or the wrongfulness of Tesla’s conduct,” he added.

Tesla and its attorneys did not immediately respond to requests for comment. The company had sought to limit compensatory and punitive damages to $300,000 each.

Elon Musk

Elon Musk, CEO of Tesla ((AP Photo/Jae C. Hong, File)/AP Newsroom)

Led by billionaire Elon Musk, Tesla faces similar claims in other lawsuits.

In one such case, the California Department of Fair Employment and Housing alleged in February that black workers at the Fremont plant were constantly harassed but had their complaints ignored.

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Tesla previously called the lawsuit misguided and said it has adopted policies to prevent and punish racist behavior.

Compensatory damages are intended to cover actual losses, while punitive damages are intended to punish and deter violations.

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According to US Supreme Court precedent, punitive damages should generally be less than 10 times compensatory damages.

Legal experts had called Diaz’s initial $137 million award 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)

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