Tesla Resolves Racist Discrimination Lawsuit with Black Employee Victorious in Two Trials

Electric vehicle manufacturer Tesla has settled a racially discriminatory lawsuit involving Owen Diaz, a Black elevator operator who previously worked at its Fremont, California factory in 2015. The lawsuit resulted in a federal jury awarding $3.2 million in damages to Diaz.

Lawrence Organ, an attorney from the California Civil Rights Law Group who represented Diaz, confirmed the settlement, stating, “The parties have reached an amicable resolution of their disputes. The terms of the settlement are confidential and we will not have additional comment.”

Organ, who also represents current and former Tesla employees in another lawsuit, Marcus Vaughn v. Tesla Inc., highlighting ongoing racial discrimination and harassment, emphasized Diaz’s courage in confronting a corporation as prominent as Tesla.

He noted, “Civil rights laws only work if people are willing to take those kinds of risks. Even though the litigation chapter of his life is over, there’s still a lot of work to do for Tesla.”

Regarding Tesla CEO Elon Musk’s response to the issue, Organ expressed disappointment, saying, “When I started this case, I suggested that the conduct would stop if Elon Musk would make a statement and a commitment to his employees that this is not tolerated.”

“We haven’t heard that after seven years of litigation, a nine-figure verdict then a seven-figure verdict. Why isn’t he stopping this conduct? That’s what doesn’t make sense to me. Tesla is supposed to be the factory of the future. But this conduct is from the Jim Crow past,” he added.

In addition to the lawsuit settled with Diaz, the U.S. Equal Employment Opportunity Commission (EEOC) has sued Tesla, alleging the automaker violated federal law by permitting widespread racial harassment of its Black employees and retaliating against those who opposed the harassment.

Tesla has refuted the EEOC’s claims, asserting that they present “a false narrative that ignores Tesla’s track record of equal employment opportunity.”

The Case Of Diaz

In 2023, Diaz testified in a San Francisco federal court, as previously reported by CNBC, detailing the pervasive racism he faced from his colleagues at Tesla.

He recounted instances where racist slurs were regularly used against him and other Black workers, creating an environment that made him feel physically unsafe. Colleagues told him to “go back to Africa” and defaced restrooms with racist graffiti.

Tesla Resolves Racist Discrimination Lawsuit with Black Employee Victorious in Two Trials
Diaz had to endure racism at Tesla and won a $3.2 million settlement after trials for facing a hostile work environment. (Credits: CNN)

Later, Diaz disclosed that his workspace was marred with a racist drawing depicting Inki the Caveman, a character from a 1950s cartoon known for its derogatory portrayal of a Black boy with exaggerated features.

During the trials, Diaz revealed that he had encouraged his son to join Tesla, only to regret it later when his son also experienced the hostile racial environment.

In the initial trial, the jury awarded Diaz a substantial verdict of $137 million, which included punitive damages, after he and his legal team successfully argued that he had endured severe racial discrimination and that the company had failed to adequately address and prevent such violations of civil rights.

Following a reduction of the awarded amount to $15 million by Judge William H. Orrick, Diaz and Tesla pursued a retrial to determine damages. In the subsequent trial, Diaz once again emerged victorious, securing a $3.2 million verdict.

Elon Musk’s Speech On X

The settlement with Diaz coincides with mounting criticism directed at Tesla CEO Elon Musk for his approach to hate speech on X, formerly known as Twitter, a platform he owns and oversees as Chief Technology Officer.

Tesla Resolves Racist Discrimination Lawsuit with Black Employee Victorious in Two Trials
Tesla is silent amid scrutiny over Musk’s handling of hate speech, and lack of traditional PR response. (Credits: Tesla)

Recent reports by NBC News highlighted Musk’s dissemination of unverified claims of cannibalism in Haiti on X, along with posts disparaging Haitian migrants by insinuating they are likely cannibals.

Moreover, progressive news outlet MotherJones shed light on Musk’s engagement with prominent proponents of race science on his platform, where he has been accused of propagating misinformation about the intelligence and physiology of racial minorities.

Despite these concerns, Tesla, which notably operates without a traditional public relations office in North America, did not respond to requests for comment on the matter.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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