A federal judge on Wednesday slashed a jury’s award of $137 million in damages in a racial discrimination case against Tesla Inc. to $15 million, while calling the evidence against the electric-vehicle maker “disturbing.”
U.S. District Judge William Orrick reduced the amount awarded in a October 2021 verdict, calling the $130 million in punitive damages “unconstitutionally large.” He also reduced the amount in compensatory damages from $6.9 million to $1.5 million.
A California jury in October found Tesla guilty of ignoring racial discrimination against a Black worker at the company’s Fremont, Calif., auto plant. The worker, Owen Diaz, claimed that between 2015 and 2016 he was subject to a hostile work environment and racist abuse, including “the N-word and other slurs,” and that his supervisors did nothing to stop the abuse.
“This is not, as Tesla attempts to frame it, a case of ‘garden variety’ emotional distress,” he wrote.
At the time, the $137 million verdict was one of the largest-ever verdicts in an individual discrimination case.
Tesla, which dissolved its media relations team last year, did not reply to a request for comment Wednesday evening.
Tesla is also being sued by the state of California over allegations of “systematic racial discrimination and harassment” at its Fremont plant. In February, the California Department of Fair Employment and Housing filed suit, claiming Black workers there are “subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion creating a hostile work environment.”
In a February blog post, Tesla said that lawsuit was “misguided” and “strains credibility,” saying the agency had never before raised concern about such practices at the facility.