Diaz v Tesla: The One Case a Jury Actually Decided
Why this case matters more than the headline figure
Every other race discrimination matter documented on this site is an allegation, a dismissal, or a confidential settlement. Diaz is the exception. Two separate juries found for the plaintiff, a federal judge upheld the finding of liability, and that judge wrote in a published order that the verdict was justified in light of the endemic racism at the Tesla factory.
The award fell from $136.9 million to $3.2 million across two trials, which is how the case is usually reported. The reduction was about the size of the damages. The finding of liability was never disturbed.
Who Owen Diaz was
Owen Diaz began work at Tesla’s Fremont factory on 3 June 2015 as an elevator operator. He was a Black contract worker, hired through a staffing agency rather than employed by Tesla directly. He worked there for roughly nine months.
He sued in 2017 under Section 1981 of the Civil Rights Act of 1866 — a Reconstruction-era statute passed to address former slave owners’ efforts to keep former slaves in conditions of indenture, which provides broad remedies for racial harassment and discrimination.
What he described
Diaz testified that colleagues used racist epithets against him and other Black workers on a near-daily basis, that he was told to go back to Africa, that racist graffiti appeared in the restrooms and a racist drawing was left in his workspace, and that he was made to feel physically unsafe at work. He reported it. Nothing effective was done.
Reporters covering the 2023 retrial described him as distressed and at times tearful while giving that evidence for a second time.
The first trial
On 4 October 2021, a federal jury in San Francisco unanimously found Tesla liable for severe and pervasive racial harassment, and found that the company had failed to take all reasonable steps to end and prevent it. It awarded $136.9 million — $130 million in punitive damages and $6.9 million for emotional distress. Diaz’s counsel believe it to be the largest single-plaintiff race harassment verdict in American history.
Tesla had argued damages should be capped at $600,000.
One juror, speaking anonymously afterwards, described the company’s response to complaints:
Juror, first trialTesla “claims to have a zero tolerance policy, but suspended rather than fired”
The reduction, and what it did not touch
In April 2022 Judge Orrick ruled the award constitutionally excessive and reduced it to $15 million. He gave Diaz a choice: accept the reduced sum, or take a new trial on damages alone before a different jury. Diaz declined the reduction.
The critical point is what Orrick left standing. His instruction to the second jury was unambiguous:
Judge William H. Orrick“It has been conclusively determined that Tesla is liable to Mr Diaz.”
The second trial did not revisit whether the harassment happened or whether Tesla was responsible. Those questions were closed. The jury’s only task was to set a number.
The second trial
The damages trial ran five days before an eight-person jury in April 2023. Diaz’s attorney, Lawrence Organ, invoked the Civil Rights Act and asked jurors to make an example of the company, telling them “Do justice and justice is not cheap.”
On 3 April 2023 the jury awarded $175,000 for emotional distress and $3 million in punitive damages — just under $3.2 million.
The order that matters most
Both sides then challenged the outcome. Diaz sought a third trial, alleging Tesla’s lawyers had asked improper questions about his mental state and cast him as a sexual harasser. Tesla sought to halve the award.
Orrick rejected both. He found that any misconduct by Tesla’s lawyers had not so permeated the trial as to have prejudiced the jury. And in upholding the $3.2 million, he explained why it was justified:
Judge William H. Orrick“the endemic racism at the Tesla factory and Tesla’s repeated failure to rectify it”
It is not our characterisation. It is not a claimant’s allegation. It is not a press release. It is a judicial finding on the public record, and it is the reason this page exists separately from our wider page on the Tesla cases.
How it ended
Diaz’s counsel said only that the parties had reached an amicable resolution and that the terms would not be discussed.
Tesla’s position
Tesla did not accept responsibility for Diaz’s treatment. Its then vice-president of people, Valerie Capers Workman, wrote in a 2021 blog post that “in 2015 and 2016 we were not perfect. We’re still not perfect,” adding that the company continued to improve in how it addressed employee concerns, that occasionally it would get things wrong, and that when that happened it should be held accountable.
What this case establishes, and what it does not
It establishes corporate liability. The defendant was Tesla, Inc. Elon Musk was not a party, was not found liable, and no finding was made about his personal conduct. Judge Orrick’s language concerns the factory and the company.
The settlement is not an admission. Confidential settlements resolve disputes without any admission of liability, and Tesla has consistently denied wrongdoing in the wider Fremont litigation.
One case is one case. A finding about conditions affecting one worker between 2015 and 2016 is not a finding about the plant as a whole across all periods, and the broader claims brought by California’s civil rights agency and the EEOC remain undecided.
Outstanding on this page
The docket in No. 3:17-cv-06748-WHO is public and Orrick’s April 2022 and September 2023 orders, the jury instructions and the March 2024 settlement filing should all be linked directly rather than cited through reporting. The juror’s remark is reported by the plaintiff’s own counsel and should be treated as a partisan source for that detail.
Sources
- Tesla ordered by jury to pay more than $3 million to Black ex-workerCNBC · 3 April 2023 · Diaz’s testimony, trial detail
- Tesla settles with Black worker who won two trials over racist discriminationCNBC · 15 March 2024 · the settlement
- Former Tesla worker settles discrimination caseAP via Spectrum News · 16 March 2024 · appeals and cross-appeal
- Ex-Tesla factory worker loses bid for new trial in race bias caseReuters via AOL · September 2023 · Orrick’s order upholding the verdict
- Tesla ordered to pay worker $3M-plus over racist treatmentThe Register · 4 April 2023 · jury instructions, Tesla’s 2021 statement
- Diaz v Tesla — case overviewCalifornia Civil Rights Law Group · plaintiff’s counsel · Section 1981, juror remark
- $137 million racial harassment verdict against Tesla slashed by new juryProskauer · defence-side employment law analysis · case number and figures
This article follows the standards set out in How This Site Sources Its Claims. If you believe anything on this page is inaccurate, please use our corrections policy and right of reply. Corrections are published, dated and logged.