Long-Running Tesla Racial Discrimination Lawsuit Resolved with Settlement

Facing discrimination at work can be a daunting experience. Still, the recent settlement between Tesla and a former employee at the company shows that workers who stand up for their rights can recover compensation for the unlawful treatment they endured on the job. The long-running case alleging racial discrimination resulted in an undisclosed settlement in San Francisco federal court.

Owen Diaz, a Black former elevator operator, started working at Tesla’s Fremont factory in 2015. He endured daily racial harassment, including slurs, graffiti and other demeaning behavior. Despite reporting the misconduct to his supervisors, his complaints were ignored.

Diaz decided to take legal action against Tesla in 2017 after enduring a hostile work environment. He sued the company for failing to address the rampant racism he and other Black workers faced. His case went through multiple trials and appeals, highlighting the challenges that can come with fighting discrimination in the workplace, particularly when the employer is a large company.

In the first trial, a jury awarded Diaz an astounding $137 million, one of the largest verdicts ever in a single-worker discrimination case. The jury also awarded punitive damages after determining that Diaz had suffered severe racial discrimination and that Tesla had failed to take action to stop the unlawful conduct at its factory.

However, the original amount was later reduced to $15 million by a judge who found it to be excessive. Diaz opted for a retrial arguing that Tesla’s lawyers had engaged in misconduct, which resulted in $3.2 million in damages in 2023. Finally, the long legal battle concluded with a confidential settlement agreement this year.

The incidents of racial discrimination Diaz faced were severe. He testified in San Francisco federal court that Tesla colleagues regularly used racial slurs to denigrate him and other Black workers. He was subjected to racist graffiti, including scrawled swastikas and even an offensive drawing left in his workspace. The hostility extended to threats and demeaning comments like being told to “go back to Africa.”

Throughout the legal process, Tesla maintained that it did not tolerate discrimination and had taken action against employees accused of racist conduct. However, the recurring nature of these incidents and the company’s response, or lack thereof, raised serious questions about its internal policies and commitment to fostering a safe workplace.

Diaz’s case also brought attention to the broader issue of systemic discrimination within Tesla. The company faces a pending class-action lawsuit on behalf of 6,000 workers who allege similar experiences of racial harassment at the Fremont plant. Additionally, the U.S. Equal Employment Opportunity Commission has sued Tesla, accusing the electric carmaker of tolerating widespread racial harassment and retaliating against those who opposed it.

Despite the fear of retaliation, speaking out about discrimination and reporting it is crucial. Diaz’s case might have started with him alone, but it resonated with many other workers who had similar experiences. Standing up to an employer takes courage, no matter the size of the company.

For workers experiencing unlawful treatment in the workplace, documentation is key. Keep track of the incidents of discrimination and harassment you face. Maintaining a record of discriminatory actions, including dates, descriptions and witnesses, can be crucial evidence in legal proceedings and help build a strong case.

Navigating a discrimination lawsuit can be complex. In some cases, the legal process may take a long time to conclude. As a result, it is vital to have an experienced employment lawyer by your side. Consulting with an attorney can provide guidance and improve the chances of a favorable outcome. Additionally, they will handle all aspects of the case while keeping you updated on developments.

Discrimination takes a significant emotional toll on victims. Diaz testified about the pain and suffering he endured, which also affected his family. Recognizing the emotional impact and seeking support from friends, family or professional counselors is essential for anyone facing similar issues.

If you are experiencing racial discrimination or other forms of discrimination at work, remember that you have rights and options. Document your experiences, seek legal advice and know that it is possible to hold your employer accountable.

While McCormack Law Firm was not involved with this lawsuit, our San Francisco employment lawyers are equipped to help you with your workplace dispute. Contact us today for a free initial consultation.