- Judge previously warned that verdict wasn’t legally grounded
- Company has faced multiple cases over racial abuse at factory
A federal judge cut to $15 million a staggering $137 million damages award in a racial discrimination case against Tesla Inc. over abusive conduct toward a contract worker at its northern California factory.
U.S. District Judge William Orrick reduced the jury verdict in an order issued Wednesday.
The October award to Owen Diaz after a seven-day trial in San Francisco is believed to be one of the largest in U.S. history for an individual plaintiff in a racial discrimination case. Diaz, a former elevator operator at the electric-car maker’s plant in Fremont, California, sued the company in 2017.
At a January hearing on Tesla’s request for a new trial, Orrick said he was “troubled” that the $6.9 million jurors awarded as emotional distress damages “may be untethered to the distress to which Mr. Diaz and his witnesses testified.” Moreover, punitive damages of almost 20 times that amount are “extremely high,” Orrick said.
Tesla has faced a number of high-profile suits over its treatment of Black employees and subcontracted workers at the Fremont factory. Its head of human resources, who had defended company amid controversies, Valerie Capers Workman, left for a new job in January.
Diaz’s case marks a rare instance in which Tesla, which typically uses mandatory arbitration to resolve employee disputes, had to defend itself in a public trial. The world’s most-valuable automaker almost never loses workplace arbitrations, though it was hit with a $1 million award in May in a case brought by a former employee that was similar to Diaz’s.
The case is Diaz v. Tesla Inc., 17-cv-06748, U.S. District Court, Northern District of California (San Francisco).