Judge in Tesla case refuses to slash $3 million for Black worker over ‘awful’ racism in Fremont

A federal court judge cited “awful, pervasive racism” at Tesla’s electric car factory in Fremont as he shot down the company’s bid to halve a $3 million punitive-damages jury award to Black former worker Owen Diaz.

“Tesla’s actions were grievously reprehensible. Diaz was subjected to a grossly racist workplace, with racist conduct perpetuated not only by coworkers or subordinates but also — and perhaps especially—by supervisors,” Judge William Orrick wrote in a ruling this week.

Tesla sought to cut Diaz’s punitive damages award to $1,575,000, arguing that Orrick had erred in approving the $3 million.

Orrick wrote that the $3 million was “appropriate in light of the endemic racism at the Tesla factory and Tesla’s repeated failure to rectify it.”

Diaz sued the pioneering car maker headed by CEO Elon Musk in 2017 in U.S. District Court in San Francisco. A jury awarded him $137 million in damages in 2021. Orrick granted Tesla’s request to cut that award, and slashed it to $15 million. At the same time, the judge told Diaz he could accept the lower amount or agree to Tesla’s proposal for a new trial. Diaz took the new trial, which started in March and led to a $3.2 million award, including $3 million for punitive damages.

The judge’s ruling Wednesday put a renewed spotlight on long-running claims of rampant anti-Black racism at the Fremont plant where all four Tesla models are produced. Tesla is fighting numerous lawsuits by current and former workers and the California and federal governments, alleging Black workers faced egregious racism that Tesla failed to stop.

Tesla did not respond to requests for comment on the Diaz ruling. The company said in a 2022 blog post that it “strongly opposes all forms of discrimination and harassment” and claimed it “has always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others in different ways.”

Orrick wrote in his decision Wednesday that two of Diaz’s supervisors each addressed him dozens of times with a racist slur, and that Diaz had testified that one of them did so while threatening to attack him. A Black manager testified that he interviewed Diaz and the supervisor who allegedly threatened him, but did not interview an eyewitness “because he was told by his boss to stop the investigation before it was complete,” Orrick wrote. A Tesla human-resources representative testified that Tesla HR was never told of the incident. Diaz and the supervisor were both given verbal warnings, and the supervisor “still works at Tesla,” Orrick wrote.