Tesla got a court ruling to fall its way. A San Francisco-based federal judge ordered a new trial to determine the new damage award at the request of the EV maker after a former employee declined the reduced damage award won in a racial discrimination suit against the company.
The EV maker’s motion was granted after Owen Diaz, a former elevator operator at Tesla, declined to accept a $15 million award for a racial discrimination case he won against the company. The original award was $137 million; however, U.S. District Judge William Orrick declared the award was excessive and cut it to $15 million, reported Reuters.
Orrick, who is the judge who ordered the new trial, was criticized by Diaz’s lawyers last week, who said reducing the award was unjust and undermined his constitutional rights. The two sides will meet July 12 to determine the next steps in the process.
A cultural issue
Diaz sued the company after it failed to address racial taunting and graffiti aimed at him. The case is rare because Tesla employees are required to go through arbitration as a condition of their employment. Dias was a contract employee from a staffing agency.
It was the second case against Tesla for allowing a racially toxic work environment at its Fremont, California plant.
Melvin Berry, a black former Tesla employee received a $1.02 million award from the automaker wrapping up a lengthy arbitration case against the company last August.
Berry challenged the EV manufacturer after supervisors failed to respond when he complained about being called the “N-word” and having Nazi swastikas and other hateful graffiti posted around Tesla’s California assembly plant.
Magnet for lawsuits
Tesla and CEO Elon Musk have been hammered with several lawsuits in recent months, with billions of dollars in damages demanded by the aggrieved parties.
Musk is being sued for $258 billion in federal court in Manhattan by a Dogecoin investor accusing the entrepreneur of running a crypto-based pyramid scheme. Keith Johnson sued not only Musk, but also Tesla and SpaceX, claiming the CEO hyped up Dogecoin, driving the price up, only to intentionally let it fall for his “profit, exposure and amusement.”
Johnson asked for $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled.
Investor Solomon Chau filed suit against Tesla June 16, accusing the company of tolerating a “toxic workplace culture” in which racial discrimination and sexual harassment go unpunished.
“Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees,” the lawsuit said, adding the “environment has gestated internally for years, and only recently has the truth about Tesla’s culture emerged.”
Chau justified the lawsuit — which names not only Musk but also the full Tesla board — by noting that “Tesla’s toxic workplace culture has caused financial harm and irreparable damage to the company’s reputation.”