Tesla offers to pay tiny fraction of $137m awarded in racism case

Tesla says compensation should be reduced to $600,000

Aerial image taken of Tesla Fremont, California plant on May 12, 2020 (Getty Images)

Tesla is challenging a federal court verdict ordering it to pay about $137m (£101.5m) to a Black former employee who says he was the subject of racist behaviour from bosses at the company’s California factory.

The Elon Musk-founded company has claimed that the sum is “staggering” and called for a judge to step in and reconsider the decision. The company has said that the compensation should be reduced to $600,000 (around £445,000) – half for emotional distress damages and the rest in punitive damages.

The sum Tesla has offered to pay is a tiny fraction compared to the $130m in punitive damages that the jury decided on in a court case in October, Bloomberg reported.

Owen Diaz, who was a contracted elevator operator at the company, had said during the case hearing on 4 October that his former bosses at the California factory did not take action against his complaints of racism at the workplace.

“[I] had supervisors telling me, ‘N*****, hurry up and push the button’, ‘N*****, push these batteries out of the elevator’. And they were also telling me, ‘N*****s aren’t shit’,” Mr Diaz said in October.

His coworkers left racist caricatures around the workplace, scratched a racial slur in a bathroom stall, and told him to “go back to Africa”, he noted.

The San Francisco court had ruled that Tesla would have to pay $6.9m in compensatory damages and the remaining $130m as punitive damages.

This is believed to be one of the largest payouts ordered by a jury in US history for an individual plaintiff in a racial discrimination case.

Tesla said in a court filing that while the jury believed the company “could and should have done more to root out alleged racism at the factory”, the award “simply cannot stand”.

“It is an award without precedent in US anti-discrimination law,” the company said in a filing dated 16 November. “It dwarfs awards in similar — and even in the most egregious — cases. And it bears no relationship to the actual evidence at trial.”

The $130m awarded in punitive damages was meant to nudge Tesla executives to “take the most basic preventative measures and precautions they neglected to take as a large corporation to protect any employee within their factory”, a juror in the case said.