Judge cuts the payout in a Black former Tesla contractor's racial discrimination suit

A federal judge has slashed a Black former contract worker's payout to $15 million — from $137 million — in a racial discrimination lawsuit against Tesla.

Owen Diaz, who worked as a contract elevator operator at the automaker's factory in Fremont, Calif., sued the company in 2017, alleging that he was subjected to racial discrimination.

After a federal jury in San Francisco ordered Tesla to pay Diaz $137 million last year, Tesla challenged the verdict.

On Wednesday, Judge William Orrick cut the award to $15 million.

"That's the maximum," Larry Organ, Diaz' lawyer and founder of the California Civil Rights Law Group, told NPR. "It wasn't because [the judge] found anything wrong with what Mr. Diaz said or that Mr. Diaz wasn't injured or anything like that. It's just based on a comparison."

Diaz testified that employees called him the N-word among other racial slurs. A Tesla supervisor called him the N-word "more than 30 times," Diaz testified, according to court documents obtained by NPR.

California's Department of Fair Employment and Housing is also suing Tesla over alleged racism and harassment of Black employees in the same factory.

"The evidence was disturbing. The jury heard that the Tesla factory was saturated with racism," Orrick wrote in his order.

Hearing the word once can be "devastating," Orrick writes, and Diaz and other employees heard it "repeatedly and frequently" in the factory.

Despite Diaz' complaints, his employers did little to put a stop to it, the judge wrote. The emotional effects on Diaz were profound, Orrick added.

"All of this leads me to conclude that this is not, as Tesla attempts to frame it, a case of 'garden variety' emotional distress that was 'fortunately mild and short-lived,' " the judge wrote.

Tesla said the facts in the case didn't justify the verdict

In a message to employees last year that was shared on the company blog, a Tesla executive outlined what the jury heard and said the company believes "these facts don't justify the verdict."

" ... We do recognize that in 2015 and 2016 we were not perfect," then-Vice President of People Valerie Capers Workman wrote. "We're still not perfect."

Workman added, "we will continue to remind everyone who enters the Tesla workplace that any discriminatory slurs – no matter the intent or who is using them – will not be tolerated."

Organ, who represented Diaz, said it is gratifying to see the judge recognize the gravity of the racism that his client experienced at Tesla.

"Mr. Diaz showed great courage in standing up to a corporation like Tesla, which was fighting tooth and nail to beat him," Organ told NPR. "Mr. Diaz's accomplishment should not be forgotten just based on a reduction in the verdict on legal principles."

Starting Wednesday, Diaz has 30 days to file a notice whether he accepts or rejects the amended judgements, according to court documents.

Tesla did not immediately respond to request for comment.

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