former tesla employee rejects compensation
Image for representational purpose only

$15 million compensation rejected by former tesla employee on racial abuse lawsuit

Owen Diaz, a former Tesla employee who used to work at the Tesla factory in Fremont, California, has rejected $15 million payouts on a lawsuit he filed.

In the lawsuit, Owen Diaz accused his supervisor and colleagues of harassing him racially while he used to work at the factory. He was working at tesla as an elevator operator. The suit stated that they used racially sensitive words to address Owen and even showcased racist pictures inside the factory.

Owen got 2 weeks as Judge William Orrick of the San Francisco district court to decide whether he was accepting $15 million compensation.

Owen’s lawyers filed a response statement in the federal court today rejecting the offer. According to the filing, the $15 million awards was “unjust and would not deter future misconduct by Tesla”.

While the jury awarded Owen Diaz $137 million as punitive and compensatory damage, Judge William Orrick reduced it to $13 million.

In April 2022, the judge gave his pronouncement reducing the compensation awarded by the jury. In the order, he stated that the award by jury was excessive and unconstitutionally large.

Lawyers of the former tesla employee stated in the filing that Owen is rejecting the offer and requesting for a new trial.

Aerial view of Tesla cars parked at a Tesla showroom
There are several other lawsuits filed against Tesla in various parts of the USA. Source: Ars Technica

“Mr Diaz is again asking a jury of his peers to evaluate what Tesla did to him and to provide just compensation for the torrent of racist slurs that were directed at him,” his lawyers said.

By rejecting the offer, the case will now go for an entirely new trial on the allegations. A new trial is likely to impact Owen Diaz negatively, as there are chances he might get a lower award from the new trial.

According to lawyers specializing in employment laws, judicial reductions of awards which are extraordinarily high are common. Such reductions can happen either at the post-verdict stage or during the appellate process.

Helen Rella, a lawyer at Wilk Auslander, told TechCrunch that with this rejection of the offer, the focus will be now on whether the reduction of $137 million to $15 million was reasonable or not. The question in the case will be whether the reduction was justifiable for the harm suffered by former employees.

Tesla hasn’t so far reacted or made any comments on the rejection of the payout.

Other cases against Tesla

Tesla is currently facing a string of lawsuits across the USA on charges of violating labour laws, racial abuse and violation of several federal laws. Another lawsuit by an investor levelled serious allegations against the CEO of Tesla Elon Musk and the board of directors.

The lawsuit alleged Tesla management did not take action on complaints relating to discrimination and abuse, thus creating a toxic work environment.

Tesla has either rebuked all the lawsuits or called them unlawful.