Tesla settles discrimination lawsuit with former factory worker


Tesla and a former employee have agreed to settle a closely watched lawsuit that has shone a harsh light on the carmaker's treatment of Black workers.

Attorneys for Tesla and Owen Diaz, who works at the company's factory in Fremont, California, did not disclose terms of the settlement in a legal filing Friday. Mr. Diaz's lawyer, Lawrence A. “The parties have reached an amicable resolution of their disputes,” Organ said in an email. He said he could not comment further.

Last year, a jury in federal court in San Francisco awarded Mr. Diaz $3.2 million after he presented evidence that he faced repeated harassment by supervisors at Tesla's factory, including for 30 days. Also included being addressed with racial insults more often. According to testimony in the case, a supervisor drew a racist caricature near his work station.

The jury found that Tesla did nothing to discipline supervisors or address widespread racism at the factory.

Mr. Diaz appealed, saying that $3.2 million was inadequate compensation for the psychological damage he suffered, including sleep deprivation, depression and impaired relationships with his wife and son. Mr. Diaz's lawyers also argued that the award was not enough to punish Tesla for failing to stop the harassment.

This was the second trial in the case. First, in 2021, jurors awarded Mr. Diaz $137 million, but a judge ruled that the amount was excessive. The second lawsuit last year dealt solely with the amount Mr. Diaz should receive in damages.

In a ruling last year, U.S. District Court Judge William H. Orrick said, “Tesla's conduct was reprehensible and repeated, and during Diaz's time at the company it failed to take responsibility or change its ways.” But he ruled that $3.2 million was adequate compensation. Mr. Diaz's appeal of that decision was pending when he and Tesla agreed to settle.

In court filings, Tesla lawyers denied that the company had failed to respond to the harassment. “Tesla had clear official policies prohibiting racial discriminatory harassment and did not condone, condone, permit, or tolerate such conduct,” Tesla lawyers wrote last year. He did not respond to a request for comment Friday.


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