Tesla faces new race bias trial from employee who had $137 million
verdict cut
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[March 27, 2023] By
Daniel Wiessner
(Reuters) - A trial kicks off in San Francisco federal court on Monday
to determine how much money Tesla Inc must pay to a Black elevator
operator who a jury determined was subjected to severe racial harassment
while working at the electric auto maker's flagship assembly plant.
The trial is scheduled to last five days. Last year, a judge slashed the
$137 million verdict that the jury awarded in 2021 to plaintiff Owen
Diaz, one of the largest ever in a U.S. workplace discrimination case.
Diaz's lawyers rejected the lower payout and opted for a new trial on
damages.
After the 2021 trial, U.S. District Judge William Orrick agreed with a
jury that Tesla was liable for race discrimination but cut the verdict
to $15 million. Orrick is also presiding over this week's trial, and has
barred both sides from presenting new evidence or calling new witnesses.
As at the last trial, Diaz and several employees and managers at the
Fremont, California plant are expected to testify.
In his 2017 lawsuit, Diaz accused Tesla of failing to act when he
complained to managers that employees at the factory frequently used
racist slurs and scrawled swastikas, racist caricatures and epithets on
walls and workstations.
Diaz sued Tesla for causing him emotional distress under a California
law prohibiting employers from failing to prevent hostile work
environments based on race and other protected traits.
The jury in 2021 awarded Diaz nearly $7 million in compensatory damages
for emotional distress, and $130 million in punitive damages, designed
to punish unlawful conduct and deter it in the future.
Orrick last year reduced the compensatory damages to $1.5 million and
the punitive damages to $13.5 million. He said that sum acknowledged the
pervasive harassment Diaz faced while reflecting that he had worked at
the factory for only nine months and had not alleged any physical injury
or illness.
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Motorists drive past Tesla's primary
vehicle factory in Fremont, California, U.S. May 12, 2020.
REUTERS/Stephen Lam/File Photo
Employment discrimination cases rarely yield verdicts of more than
$1 million, let alone nine-figure sums. The U.S. Supreme Court has
said punitive damages typically should be no more than 10 times
compensatory damages.
Lawrence Organ, a lawyer for Diaz, said he hoped the new jury would
return a larger verdict than the $15 million award offered by Orrick
and convince the judge higher damages are warranted.
"Tesla is focused on trying to get that number to zero," Organ said,
"but that's a very cynical view to have a Black man racially
harassed and suggest that is not worth a lot of money."
Tesla has said it does not tolerate discrimination, and its lawyers
did not respond to requests for comment. The company had urged
Orrick to reduce the original jury award to no more than $600,000.
Tesla also faces claims of tolerating widespread race bias at the
Fremont plant in a class action in California state court and a
separate lawsuit by the state's civil rights watchdog making similar
allegations. Both cases are still in early stages.
The outcome of Diaz's trial will not directly affect those lawsuits
or other court cases, but could encourage workers to file new
lawsuits against the company as it battles mounting challenges to
its dominance of the electric car market.
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia
Garamfalvi and David Gregorio)
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