A federal judge found Tesla Inc (TSLA.O) responsible to a Black elevator operator who claimed the electric car firm ignored racist abuse at the factory where he worked on Wednesday, but cut the jury verdict from nearly $137 million to $15 million.
After jurors determined that Tesla subjected Owen Diaz to a hostile environment at Tesla’s factory in Fremont, California, by allowing and failing to stop the prejudice he faced, U.S. District Judge William Orrick in San Francisco declared.
Diaz, who worked at the facility for nine months in 2015 and 2016, said other employees called him racist names and drew swastikas and obscenities on the bathroom walls, including the “N-word.” He further claimed that a racial caricature was drawn at his workstation by one of his supervisors.
Orrick wrote in a 43-page ruling that the evidence “abundantly supported” the jury’s decision that Tesla was responsible for Diaz’s “profound” mental suffering and the company’s “often inadequate” disciplinary actions.
Diaz’s compensatory damages were reduced to $1.5 million from the jury’s “excessive” $6.9 million award, and punitive damages were cut to $13.5 million from the jury’s “unconstitutionally massive” $130 million award.
Diaz’s lawyer, Bernard Alexander, said in an interview that his client intends to fight the reduced damages award.
“We’re thrilled that the court supported the jury’s conclusion that Tesla’s behavior was extremely disgusting,” Alexander stated.
Requests for comment from Tesla and its lawyers were not immediately returned. The corporation had hoped to keep compensatory and punitive damages to a maximum of $300,000.
Tesla, which is led by billionaire Elon Musk, is facing similar allegations in other lawsuits.
California’s Department of Fair Employment and Housing claimed in February that Black workers at the Fremont facility were subjected to frequent harassment but that their complaints were ignored. Tesla has previously dismissed the complaint as stupid, claiming that company has implemented rules to prevent and punish racist behavior.Punitive damages are aimed to punish and discourage infractions, while compensatory damages are meant to pay actual losses.
Punitive damages should normally be less than ten times compensatory damages, according to US Supreme Court precedent.
Diaz’s original $137 million award was one of the greatest for a single plaintiff alleging workplace discrimination, according to legal experts. Diaz v Tesla Inc et al, No. 17-06748, U.S. District Court, Northern District of California.
