A federal judge dropped the price of a jury’s $US137 million (around $190 million) penalty on electric car giant Tesla to just $US15 million ($21 million) over a widespread pattern of racist mistreatment of a Black worker at its northern California plant.
Judge William Orrick announced the drop in damages yesterday, citing what he said was the legal limit on allowed damages, but the judge still stood by the jury’s decision. Orrick noted in his 43-page decision that there was ample evidence of racist harassment at the Fremont, California Factory and that managers did little to punish or stop the flow of racism toward the employee.
The original case was brought against Tesla by Owen Diaz, a Black man who had worked at the plant as an elevator operator for nine months in 2015 through 2016. During the trial, Diaz said he had been repeatedly called racial slurs by coworkers and supervisors. His coworkers also drew racist caricatures and racist symbols like swastikas around the plant, and managers did little to stop the abuse.
Tesla contested the allegations, saying at the time that the sort of language described was said in a “friendly manner,” sometimes by some coworkers of colour, and that the company fired two contractors and suspended another.
Both the jury and judge, however, did not see it that way.
Orrick said in his decision that the original $US6.9 ($10) million in compensatory damages was “excessive” and that $US130 million ($180 million) punitive damages was “unconstitutionally large.” The judge did reject Tesla’s argument that the damages were only worth $US300,000 ($416,460), saying that the harassment Diaz faced was not just run of the mill, short-lived banter.
Larry Organ, Diaz’ attorney, told Bloomberg that while he understands that the judge in this case gave the highest degree of damages he was constitutionally allowed to, his office is still looking into an appeal to get more of the original amount given by the jury.
Tesla is facing other discrimination lawsuits, including one filed in February from the California Department of Fair Employment and Housing that alleges the company discriminated against its workers of colour, “segregating them to the lowest levels of the workforce across the state, including the contracted workforce.” Tesla has denied these claims.
The electric car manufacturer has had a tumultuous week. A good deal of that disruption is thanks to its CEO Elon Musk, who just today proposed buying Twitter wholesale, promising to remake the site in his image.
The discord has been reflected in Tesla’s stock, which has dipped repeatedly over the past week. This may also be due to ongoing international supply shortages, as well as big announcements by Honda and GM of them venturing into electric vehicles, looking to disrupt Tesla’s stranglehold on the EV market.