Tesla and a former employee have agreed to settle a closely watched lawsuit that has cast a harsh light on the automaker’s treatment of black workers.
Attorneys for Tesla and Owen Diaz, who worked at the company’s factory in Fremont, California, did not disclose terms of the settlement in a legal filing Friday. “The parties have reached an amicable resolution of their disputes,” Lawrence A. Organ, a lawyer for Mr. Diaz, said in an email, adding that he could not comment further.
Last year, a jury in federal court in San Francisco awarded Mr. Diaz $3.2 million after presenting evidence that he had been repeatedly harassed by supervisors at the Tesla factory, including being subjected to racial slurs more than 30 times. A supervisor drew a racist caricature near his workstation, according to testimony in the case.
Tesla did little to discipline supervisors or address rampant racism at the factory, the jury found.
Mr. Diaz appealed, saying the $3.2 million was insufficient compensation for the psychological damage he suffered, including loss of sleep, depression and damaged relationships with his wife and son. Mr. Diaz’s lawyers also argued that the award was not enough to punish Tesla for failing to stop the harassment.
It was the second trial in the case. In the first, in 2021, jurors awarded Mr. Diaz $137 million, but a judge ruled that the amount was excessive. The second trial last year was solely about how much Mr. Diaz should receive in damages.
In a ruling last year, U.S. District Court Judge William H. Orrick said, “Tesla’s conduct was reprehensible and repeated, and it failed to take responsibility or change its ways during Diaz’s time at the company.” But he decided that $3.2 million was sufficient compensation. Mr. Diaz’s appeal of that decision was pending when he and Tesla agreed to settle.
In court filings, Tesla’s lawyers denied that the company failed to respond to the harassment. “Tesla had clear official policies prohibiting racially discriminatory harassment and did not condone, permit, permit or tolerate such conduct,” Tesla’s lawyers wrote last year. They did not respond to a request for comment Friday.
