Tesla reaches settlement in racial discrimination lawsuit with ex-employee

Tesla reaches settlement in racial discrimination lawsuit with ex-employee

Tesla has settled with a former employee in a long-running discrimination case that drew attention to the electric vehicle maker’s treatment of people of color.

Owen Diaz, who was awarded nearly $3.2m by a federal jury last April, reached a “final, binding settlement agreement that fully resolves all claims”, according to a document filed Friday with the US district court in San Francisco.

The document, which gave no details of the agreement, said both parties agree that the matter has been resolved and the case against the company run by Elon Musk can be dismissed.

Messages were left Saturday seeking details from Tesla lawyers and from Lawrence Organ, Diaz’s attorney.

The April verdict was the second one reached in Diaz’s case seeking to hold Tesla liable for allowing him to be subjected to racial epithets and other abuses during his brief tenure at the Fremont, California, factory run by the automaker.

But the eight-person jury in the latest trial, which lasted five days, arrived at a dramatically lower damages number than the $137m Diaz won in his first trial in 2021. The US district judge William Orrick reduced that award to $15m, prompting Diaz and his lawyers to seek a new trial rather than accept the lower amount.

In November, Organ filed a notice that Diaz would appeal the $3.2m verdict, and Tesla filed a notice of cross-appeal.

The case, which dates back to 2017, centers on allegations that Tesla didn’t take action to stop a racist culture at the factory located about 40 miles (65km) south-east of San Francisco. Diaz, a Black man, alleged he was called the N-word more than 30 times, shown racist cartoons and told to “go back to Africa” during his roughly nine-month tenure at Tesla that ended in 2016.

The same Tesla plant is in the crosshairs of a racial discrimination case brought by California regulators. Tesla has adamantly denied the allegations made in state court and lashed back by accusing regulators of abusing their authority. The US Equal Employment Opportunity Commission filed a similar complaint against Tesla in September.

Musk, Tesla’s CEO and largest shareholder, moved the company’s headquarters from Silicon Valley to Austin, Texas, in 2021, partly because of tensions with various California agencies over practices at the Fremont factory.

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