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Tesla settles with Black worker who won two trials over racist discrimination

Tesla has settled a case for racist discrimination against Owen Diaz, a Black elevator operator at its Fremont, California facility in 2015. The federal jury awarded Diaz $3.2 million in damages.

Attorney Lawrence Organ of the California Civil Rights Law Group, who represented Diaz, told CNBC via email that “the parties have reached an amicable resolution of their disputes.” The specifics of the settlement are secret, and we will make no further comment.”

The same firm is representing current and former Tesla employees in a proposed class action case, Marcus Vaughn v. Tesla Inc., which alleges that racist discrimination and harassment of Black employees has persisted at the automaker. Diaz is not involved in that lawsuit.

Organ told CNBC over the phone on Friday, “It required enormous courage for Owen Diaz to stand up to a firm the size of Tesla. Civil rights laws are only effective if people are ready to face such risks. Even if the legal chapter of his life is over, Tesla still has a lot of work to do.

He stated, “When I launched this lawsuit, I urged that the behavior stop if Elon Musk made a statement and a pledge to his employees that this is not acceptable. After seven years of litigation, we haven’t heard of a nine-figure verdict followed by a seven-figure verdict. Why isn’t he ceasing this behavior? That’s what makes no sense to me. Tesla is intended to be the factory of the future. But this behavior comes from the Jim Crow era.”

The US Equal Employment Opportunity Commission has also filed a lawsuit against Tesla, accusing the carmaker of breaking “federal law by tolerating widespread and ongoing racial harassment of its Black employees and by subjecting some of these workers to retaliation for opposing the harassment.”

Tesla has described the EECO’s charges as “a false narrative that ignores Tesla’s track record of equal employment opportunity.”

Diaz’s Case

As previously reported by CNBC, Diaz testified in a San Francisco federal court in 2023 that his colleagues at Tesla frequently used racist epithets to denigrate him and other Black workers, made him feel physically unsafe at the factory, told him to “go back to Africa,” and left racist graffiti in restrooms.

Diaz’s Tesla coworkers also put a racist drawing in his workspace, he claimed. The painting was a crude parody to Inki the Caveman, a 1950s cartoon whose primary character is a Black lad with huge lips, a loincloth, earrings, and a bone in his hair.

During his trials, Diaz stated that he had urged his son to work at Tesla but later regretted the reference because his son was likewise subjected to a racially unfriendly workplace.

In his first trial, a jury awarded Diaz a much larger verdict, including punitive damages, of $137 million after he and his attorneys persuaded the jury that he had been subjected to serious racist discrimination and that the company had failed to take all reasonable steps to end and prevent that, as well as other civil rights violations.

Diaz and Tesla sought a retrial to determine damages after Judge William H. Orrick reduced the jury’s award to $15 million. Diaz won again, this time with a $3.2 million verdict.

Elon Musk discusses X

The deal with Diaz comes as Tesla CEO Elon Musk faces considerable criticism for how he handled hate speech on X, previously Twitter, which he owns and oversees as CTO.

According to NBC News, Musk published unconfirmed tales of cannibalism in Haiti on X this month, as well as posts portraying Haitian migrants as cannibals.

According to progressive news organization MotherJones, “the tech billionaire has been retweeting prominent race scientist adherents on his platform,” as well as “spreading misinformation about racial minorities’ intelligence and physiology.”

Tesla, which does not have a traditional public relations office in North America, did not return a request for comment.



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