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‘Unjust’: A Judge Knocked Down a Black Former Tesla Employee’s Discrimination Lawsuit from $137M to $15M, Then Gave Him Two Weeks to Accept. He Rejected the Settlement.

A Black former Tesla worker has rejected a multi-million dollar settlement in a racial abuse case against the company. In the lawsuit filed in 2017, Owen Diaz accused several colleagues and a supervisor of calling him racial slurs and drawing swastikas for him to find. The plaintiff also accused Tesla of creating a hostile work environment for nine months between 2015 and 2016. At the time, he worked as an elevator operator at the company’s headquarters in Fremont, California.

Owen Diaz (Photo credit: Owen Diaz )

Diaz was expected to accept the $15 million award after being given a two-week deadline. He ultimately declined the offer in San Francisco’s federal court Tuesday, June 21. According to Tech Crunch, his lawyers described the amount as “unjust,” believing it would not affect future allegations against Tesla.

In a statement, they said, “In rejecting the court’s excessive reduction by asking for a new trial, Mr. Diaz is again asking a jury of his peers to evaluate what Tesla did to him and to provide just compensation for the torrent of racist slurs that was directed at him.”

U.S. District Judge William Orrick is responsible for lowering Diaz’s settlement from $137 million to $15 million in April. He claimed the price was “excessive” and denied Tesla’s motion for a new trial, under the condition that Diaz accept the lower award. Some believe Diaz may potentially face an even lower settlement in a new trial.  

“While the damages awarded in this case were extraordinary, judicial reductions of awards are not uncommon, both at the post-verdict stage and during the appellate process,” Helen Rella, head of the employment law department at law firm Wilk Auslander, told the outlet. 

She believes the best outcome would be to negotiate a payout and solution that leaves both parties satisfied. But that may be hard for the electric car company, which is facing a barrage of lawsuits over workplace discrimination.

In 2021, several women employees filed a suit claiming Tesla fostered a culture of sexual harassment. They shared reports of catcalling, physical contact and other unwanted advances while working at the same plant in Freemont. According to Reuters, the company was sued last week by Tesla shareholder Soloman Chau. In the suit, Chau accuses chief executive Elon Musk and 11 board members of fostering a “toxic workplace culture grounded in racist and sexist abuse.” There were also other allegations claiming that “Tesla’s toxic workplace culture has caused financial harm and irreparable damage to the company’s reputation.”

In efforts to deal with such lawsuits, Tesla has publicly denied any wrongdoing by reiterating that its company policies were made to prevent and address workplace misconduct.

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