Wednesday’s $137 million payment to Owen Diaz, a Black employee at Teslas Fremont facility in California, was reduced to $15 million by a federal judge. Diaz suffered racial abuses during his tenure. The Original verdictThe decision was appealed by the electric vehiclemaker. Although William Orrick, United States District Judge, found Diaz still liable, he reduced the total jury award to less that a ninth of the original amount.
Diaz was harassed by his coworkers, including a supervisor. He left the company in less than one year. Diaz testified that he experienced sleeplessness and weight loss after he lost his appetite. Bloomberg. From ReutersReport from yesterday
Diaz, who worked in the plant for nine months between 2015 and 2016, stated that other employees used racial slurs when they spoke to him. He also said that others had written swastikas, slurs, including the N-word, on the walls of the bathrooms. He also claimed that a supervisor had drawn a racist caricature at his workstation.
Tesla loses very few workplace arbitration casesBloomberg noted that it had lost big in the case that made it to court. $6.9 Million for emotional distress and $130 million in punitive damage. Judge Orrick observed an indifference to Diazs complaints Wednesday. From The Wall Street Journal:
Judge Orrick stated that the evidence supports a finding regarding Diaz’s recklessness or indifference towards his safety and health. He also wrote that it supports a finding about Tesla’s intention to create an employment structure that would allow it to take advantage Diazs (and other laborers) while avoiding any of the obligations and responsibility that employers owe employees.
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Orrick is not. AlsoThe $6.9 million Diazs distress compensation was deemed excessive and the $130,000,000 for punitive purposes unconstitutionally high. Experts predicted Tesla You may end up paying half the original amountDespite its appeal the company did well. Much moreBetter than that. Yet, it is still not satisfied. The Wall Street Journal provides this information:
Tesla, which claims it doesn’t believe the verdict was justified, asked for a new trial and for the total damages to be reduced from $600,000. Tesla’s request for a new trial was denied by the judge, subject to Mr. Diaz accepting the reduced damages.
Tesla is not doing a great job on this one. According to the law, compensatory damages are meant to compensate the injured party in case of loss or injury. Cornell Law School. Punitive damages can be awarded to punish wrongdoers. Legal precedent suggests that punitive damage should not exceed 10 times the compensatory amount. However, punitive damages should be awarded. Alsobe significant enough that it deters further negligence. Tesla has a market capitalization of More than $1 trillion.
Diazs revised award orders the carmaker now to pay $1.5m in compensatory damages (compared the original $6.9m) and $13.5m in punitive damages ($compared to $130m). Diaz’ lawyer stated that he intends to appeal the reduced amount.
