Tesla settles racial discrimination lawsuit

Electric vehicle manufacturer Tesla settled a racial discrimination lawsuit in which a federal jury previously awarded $3.2 million in damages to Owen Diaz, a black man who worked as an elevator operator at his Fremont, California, factory in 2015.

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

The same firm represents current and former Tesla employees in a proposed class action lawsuit, Marcus Vaughn v. Tesla Inc., alleging that racist discrimination and harassment against Black workers has continued at the automaker. Diaz is not a party to that litigation.

Organ told CNBC by phone on Friday: “It took immense courage for Owen Diaz to stand up to a company the size of Tesla. Civil rights laws only work if people are willing to take those kinds of risks. Even If the litigation chapter of his life is over, there is still much work for Tesla to do.”

He said: “When I brought this case, I suggested that the conduct would stop if Elon Musk made a statement and pledged to his employees that this is not tolerated. We have not heard that after seven years of litigation, a Nine-figure verdict, then seven-figure verdict. Why doesn’t he stop this behavior? That’s what doesn’t make sense to me. Tesla should be the factory of the future. But this behavior is a thing of the Jim Crow past.”

The U.S. Equal Employment Opportunity Commission also sued Tesla, accusing the automaker of violating “federal law by tolerating widespread and ongoing racial harassment of its black employees and subjecting some of these workers to retaliation for opposing harassment”.

Tesla called EECO’s allegations “a false narrative that ignores Tesla’s track record of equal employment opportunity.”

In 2023, as CNBC previously reported, Diaz testified in a San Francisco federal court that his Tesla colleagues regularly used racist epithets to denigrate him and other Black workers, making him feel physically unsafe at the factory, telling him to “go back to Africa”. ” and left racist graffiti in the bathrooms.

Diaz’s Tesla colleagues also left a racist drawing in his workspace, he said. The drawing was a rudimentary reference to Inki the Caveman, a 1950s cartoon whose main character is a black boy portrayed with big lips, wearing a loincloth, earrings and a bone in his hair.

During his trials, Diaz said he encouraged his son to work at Tesla, but would later regret the postponement because his son had also been exposed to a racially hostile workplace.

In his first trial, a jury awarded Diaz a much larger verdict, including punitive damages, of $137 million, after he and his lawyers convinced the jury that he had suffered severe racist discrimination and that the company did not she had managed to take all reasonable steps to put an end to it and prevent this from happening. and further civil rights violations.

Diaz and Tesla asked for a new trial to decide damages after Judge William H. Orrick reduced the jury’s award to $15 million. Diaz prevailed once again, securing the $3.2 million verdict.

The agreement with Diaz comes as Tesla CEO Elon Musk faces widespread criticism for his handling of hate speech on X, formerly Twitter, which he owns and operates as CTO.

As NBC News recently reported, this month Musk shared unverified claims of cannibalism in Haiti on X and shared posts vilifying Haitian migrants as likely cannibals.

The progressive news organization MotherJones also reported that “the tech billionaire has retweeted prominent racist scientists on his platform” and “spread misinformation about the intelligence and physiology of racial minorities.”

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