A federal jury in California awarded $137 million to a former employee of Tesla in October 2021. The jury found Tesla responsible for creating a hostile work environment. It awarded the employee $6.9million in compensatory damages and $130 million in punitive damage. Current law is the basis of this award. We expected that this award would be reduced by the judge or through a subsequent appeal to the Ninth Circuit Court of Appeals. Tesla moved for judgment that it was not liable. It also made separate motions for a fresh trial and to reduce damages.
On April 13, 2022, Judge William Orrick of the United States District Court for the Northern District of California denied Tesla’s motions for judgment as a matter of law and for a new trial. Judge Orrick, as expected, partially granted Tesla’s motion for a reduction of damages.
Judge Orrick reduced the compensatory damages to $1.5million, and the punitive damages award down to $13.5million. This reduced the total award from $137million to $15million. The Federal Rules of Civil Procedure that govern the case allow the employee to either accept the reduction or choose to proceed with a fresh trial solely on the matter of damages. Judge Orrick gave the employee a 30-day period to accept or refuse the remittitur.
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