Ex-Tesla employee has two weeks to collect $15M over racism

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A black former Tesla employee who won a racial discrimination lawsuit against Elon Musk’s electric car maker has two weeks to claim his $15 million settlement, according to court papers.

A jury in San Francisco federal court last October ordered Tesla to pay Owen Diaz a total of $137 million in compensatory and punitive damages.

Diaz, who operated an elevator at Tesla’s Fremont, Calif., factory during his nine-month stint at the company beginning in late 2015, claimed that his colleagues at the firm called him the N-word and other racial slurs. 

He claimed that other employees and a supervisor drew racist caricatures and swastikas.

But in April, US District Judge William Orrick reduced the sum to $15 million.

In a new court filing from Tuesday, Orrick said that the original nine-figure verdict was excessive and that allowing the judgment to go to appeal “would further delay resolution of a case that is already five years old.”

The court filing was cited by TechCrunch.

“Tesla’s progressive image was a façade papering over its regressive, demeaning treatment of African-American employees,” Diaz’s original lawsuit said.

In court, Diaz testified that he suffered “sleepless nights” and weight loss as he lost his appetite. 

Owen Diaz, a former contractor who was hired through a staffing agency and worked at Tesla's Fremont plant in 2015 and 2016, faced a racist and hostile work environment, a jury ruled.
Owen Diaz faced a racist and hostile work environment at Tesla, a jury ruled.
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“Some days I would just sit on my stairs and cry,” he told the jury.

It’s a rare instance in which Tesla — the world’s most valuable carmaker — has had to publicly defend itself in court against a former worker.

The company has a reputation for using mandatory arbitration to resolve employee disputes behind closed doors.

Private arbitration often lets companies avoid costly damages or commit to major corrective action. Tesla rarely takes a big hit in arbitration, though it did pay a $1 million award last May in a case brought by another ex-contractor that was similar to Diaz’s.

The company has faced pressure from shareholder activists to limit its use of arbitration and be more transparent about diversity and other matters.

One shareholder activist fund, Nia Impact Capital, has voiced concern that the use of mandatory arbitration can enable and hide sexual harassment and racist discrimination.

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