Workers assemble cars on the line at the Tesla factory in Fremont. David Butow (Photo by David Butow/Corbis via Getty Images)
David Butow | Corbis News | Getty Images
Manufacturer of electric vehicles Tesla has 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 its Fremont, Calif., plant in 2015.
Attorney Lawrence Organ, with the California Civil Rights Group, who represented Diaz told CNBC by 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 company is representing current and former Tesla employees in a proposed class-action lawsuit, Marcus Vaughn v. Tesla Inc., alleging racial discrimination and harassment of black workers continued at the auto industry. Diaz is not a party to this lawsuit.
Organ told CNBC by phone Friday: “It took a lot of 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 though the chapter of his trial Life is over, there’s still a lot of work to be done for Tesla.”
He said, “When I started this case, I suggested that the behavior would stop if Elon Musk made a statement and a commitment to his employees that this would not be tolerated. We have not heard that after seven years of litigation, a nine-figure verdict and then seven-figure verdict. Why doesn’t he stop this behavior? That’s what makes no sense to me. Tesla is supposed to be the factory of the future. But this behavior is from the Jim Crow past.”
The US 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 by subjecting some of those workers to retaliation for objecting to the harassment.”
Tesla called EECO’s claims “a false narrative that ignores Tesla’s record of equal employment opportunity.”
The case of Diaz
In 2023, as CNBC previously reported, Diaz testified in federal court in San Francisco that his colleagues at Tesla regularly used racial epithets to denigrate him and other black workers, made him feel physically unsafe at the factory, told him “to returned to Africa and left racist graffiti on the toilets.
Diaz’s colleagues at Tesla also left a racist drawing in his workplace, he said. The design was a rudimentary reference to Inki the Caveman, a 1950s-era cartoon whose main character is a black boy depicted with big lips, wearing an undergarment, earrings and a bone in his hair.
During his trial, Diaz said he had encouraged his son to work at Tesla, but would later regret his referral because his son had also been exposed to a racially hostile workplace.
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 once again prevailed, securing the $3.2 million verdict.
Elon Musk at X
The settlement with Diaz comes as Tesla CEO Elon Musk faces widespread criticism for his handling of hate speech at X, formerly Twitter, which he owns and runs as CTO.
As NBC News recently reportedMusk shared unverified claims of cannibalism in Haiti this month on X and shared posts smearing Haitian immigrants as potential cannibals.
Progressive news organization MotherJones also reported that “the tech billionaire retweeted prominent race scientists on his platform” and “spread misinformation about the intelligence and physiology of racial minorities.”
Tesla, which does not have a traditional North American PR office, did not respond to a request for comment.