The recent settlement between Tesla and former employee Owen Diaz has brought an end to a high-profile lawsuit that shed light on the carmaker’s treatment of Black workers. The terms of the settlement were not disclosed, but it marks a resolution to a contentious legal battle that has been closely watched.
Last year, a federal court jury awarded Mr. Diaz $3.2 million after he presented evidence of repeated harassment by supervisors at Tesla’s factory in Fremont, Calif. The harassment included being addressed with a racial slur more than 30 times and a supervisor drawing a racist caricature near his work station. The jury found that Tesla did little to discipline the supervisors or address pervasive racism at the factory.
Mr. Diaz appealed the initial award, arguing that $3.2 million was insufficient compensation for the psychological damage he suffered, including loss of sleep, depression, and damaged relations with his family. The second trial focused solely on the amount of damages Mr. Diaz should receive.
In a decision last year, Judge William H. Orrick of U.S. District Court criticized Tesla’s conduct as “reprehensible and repeated,” but ultimately ruled that $3.2 million was adequate compensation. Mr. Diaz’s appeal of that ruling was pending when the settlement was reached.
Tesla has denied the allegations of failing to respond to the harassment, stating that the company had clear policies against racially discriminatory behavior. The settlement brings an end to a legal battle that has raised important questions about workplace discrimination and the responsibility of employers to address such issues.
