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An aerial view shows the Tesla Fremont Factory in Fremont, California on February 10, 2022.
Josh Edelson | AFP | Getty Images

A San Francisco federal jury has ordered Tesla to pay $3 million in punitive damages and $175,000 in economic damages to Owen Diaz, a former elevator operator at the company’s factory in Fremont, California, after he endured a racially hostile work environment during his time at the company.

Diaz, a Black man, was hired as a contract worker at Tesla in 2015 through a staffing agency.

He was previously awarded a verdict of $137 million in 2021, including punitive damages, after a jury determined Diaz had suffered civil rights violations at Tesla, and that the electric vehicle maker failed to take all reasonable steps to end and prevent the racist harassment.

Diaz and Tesla sought a retrial to decide damages after Judge William H. Orrick reduced the amount to $15 million.

A distressed and at times tearful Diaz told the court again last week about how his colleagues at Tesla used racist epithets to denigrate him and other Black workers, made him feel physically unsafe at work, told him to “go back to Africa” and left racist graffiti in the restrooms and a racist drawing in his workspace.

The drawing left at his workspace was a rudimentary one that resembled Inki the Caveman, a 1950s era cartoon widely regarded as racist, whose main character is a Black boy portrayed with big lips, wearing a loincloth, earrings, and a bone through his hair.

Diaz also testified that while he had encouraged his son to work at Tesla, he now considers that one of the greatest regrets of his life because his son was also exposed to a racially hostile workplace there.

Counsel for the plaintiff, Bernard Alexander of Morrison Alexander & Fehr, in his closing arguments urged the jury to hold Tesla accountable for failing to stop and prevent the racist harassment of employees, and for the suffering Diaz endured.

 ”No Black man in 2015 should ever be subjected,” Alexander said, “to this plantation mentality workplace.”

Alexander also urged jurors to decide on damages in an amount that “will get Tesla’s attention.” He characterized Tesla a company that has to accuse others of lying, because they cannot explain why they would allow violations of the Civil Rights Act at their factory.

The plaintiffs asked the jury to consider punitive damages around $150 million for Tesla, and to award Diaz $6.3 million in past non-economic damages, and $2 million in future non-economic damages.

Tesla counsel Alex Spiro argued that Diaz should only be awarded damages amounting to about half of his salary, some tens of thousands of dollars, not millions. Diaz had not disclosed his salary during the course of the trial, Judge William Orrick said in the midst of Spiro’s closing argument last week on Friday.

Spiro also told jurors on Friday that Diaz “lied to you.” He characterized the former Tesla contract worker as a confrontational person, who exaggerated issues in his testimony repeatedly. Diaz had previously mis-stated the number of months he had worked at Tesla, Spiro said. Spiro also accused Diaz of lying about his suffering to a doctor in order to seek greater monetary damages from the company.

Evoking the Civil Rights Act, Diaz’s attorney called on jurors to make an example of Tesla, saying “Do justice and justice is not cheap.”

Tesla has been sued more than 200 times by current or former contractors and employees since 2018 in the U.S., according to legal records database Plainsite. That number does not account for disputes that have gone straight to arbitration. As CNBC has previously reported, where it is legal to do so, Tesla has compelled employees to agree to mandatory arbitration.

Last week, a former Tesla service manager, a Black man named John Goode, filed a lawsuit in Northern California alleging that a white man who was his manager in Georgia repeatedly made racist remarks in his presence, was racially biased against him and another Black colleague, had him fired on false pretenses in retaliation after Goode objected to this treatment.

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