Tesla has reportedly convinced a judge to slash the $137 million award it was supposed to pay its former employee as part of a historic racial abuse lawsuit. The payment has now been reduced to $15 million.

Tesla Slashes Payment

In 2021, a court ruled against Tesla in a case from former employee Owen Diaz. Diaz worked at the automaker's Fremont factory from June 2015 to May 2016 as a contract worker hired by a staffing company. What he described in his lawsuit is labeled as racial abuse.

The jury awarded $6.9 million in damages for causing emotional distress and $130 million in punitive damages, according to Electrek.

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Diaz claimed in his lawsuit that he worked in an environment where daily racist epithets were common, and he claims that the automaker did not do enough to stop it.

Tesla defended itself against Diaz's claims and said that the $137 million award was not fair. Now, the automaker was able to reverse the award back down to $15 million.

According to Silicon Valley Business Journal, US District Judge William Orrick ruled in a 43-page decision that the $137 million awarded to Tesla's former employee Owen Diaz, would be reduced to $15 million.

The district judge called parts of the former amount as excessive and unconstitutionally large.

The former amount is not what the automaker was aiming for, since its lawyers were pushing to limit compensatory and punitive damage to $300,000 for each lawsuit.

However, that might be the best that Tesla can get as Diaz's lawyers are currently planning to appeal the new judgment that reduced the award to $15 million.

Diaz is not the only former Tesla employee who filed a lawsuit against the automaker for racial abuse.

In early 2022, Tesla released a blog post titled "The DFEH's Misguided Lawsuit" in which it warned that the state agency was going to file a lawsuit alleging harassment and racial discrimination in the company.

In the blog post, Tesla argued that the lawsuit was based on alleged misconduct by the company's production associates at the Fremont factory that happened between 2015 and 2019.

The automaker also argued that the Department of Fair Employment and Housing DFEH did not try to solve the issue without a lawsuit and that in each of the cases, they did not find Tesla at fault.

However, a couple of days after the post was made, the full lawsuit went public and it showed that the allegations were much more serious.

Tesla is expected to be embroiled in the DFEH lawsuit for months, if not years. 

California Steps In

According to The Guardian, the people of color who worked at Tesla's California plant experienced harassment, bullying by their supervisor, and finding racist graffiti on factory walls.

The complaints prompted California's Department of Fair Employment and Housing or DFEH to step in. The DFEH said that the people of color who worked in the factory experienced racism for years and that Tesla did nothing about it.

The alleged behavior in the California plant was left unchecked for years, and the DFEH now wants to fix that.

In 2021, Tesla faced sexual harassment lawsuits from six more women.

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Written by Sophie Webster