Jury Says Tesla Must Pay Worker $3.2 Million Over Racist Treatment

A federal jury in San Francisco ordered Tesla on Monday to pay about $3.2 million to a Black man who had accused the carmaker of ignoring racial abuse he faced while working at its California factory.

The award was far less than the $137 million that a different jury awarded two years ago, mostly in punitive damages. The judge in that trial later reduced the figure to $15 million, prompting the plaintiff, Owen Diaz, to challenge the amount in a new trial.

But rather than more money, he will come away with less. After a five-day trial, the jury awarded $3 million in punitive damages, and $175,000 in past and future noneconomic damages.

Mr. Diaz said he had been subjected to repeated racist offenses while working as a contractor at Tesla’s factory in Fremont, near San Francisco, in 2015 and 2016. While there, he said, a supervisor and other colleagues frequently used racial slurs, including in reference to him. Employees also wrote racial epithets, and drew symbols and caricatures, around the factory, he said.

Mr. Diaz said that the offenses had taken an emotional toll on him and that he had brought them to the company’s attention, but that Tesla had done little to address them. He said he had tolerated the hostilities until his son began working at the factory and faced similar treatment.

“The prevalence of the use of the N-word inside of Tesla’s workplace is an indication that they did not care about how their African American employees felt,” Bernard Alexander, one of Mr. Diaz’s lawyers, said in a closing argument in the latest trial. “It was a complete affront to every African American inside the workplace.”

Tesla’s lawyers suggested that Mr. Diaz had overstated the impact and extent of the racial harassment he had faced, encouraging the jury to minimize the damage award.

But the company’s liability for having subjected Mr. Diaz to a hostile work environment and having failed to prevent racial harassment was not on trial. That had already been “conclusively determined,” Judge William H. Orrick said in instructions provided to jurors. Instead, the jury’s responsibility was to determine how much Mr. Diaz was owed.

Judge Orrick also presided over the original trial.

After the 2021 trial, Tesla’s head of human resources said the company had fired two contractors and suspended another in response to Mr. Diaz’s complaints. The executive acknowledged that the company was “not perfect” in 2015 and 2016, but said that it had since come a long way.