A $137 million verdict against Tesla for failing to prevent racism against contract employee Owen Diaz may be cut in half if the automaker appeals.
Law professor Michael Selmi said the original verdict of punitive damages about 20 times as large as actual damages is “well in excess” of typical punishment, according to Bloomberg.
Punitive damages are usually calculated at 9 to 1 or 10 to 1, the report notes.
This means the $137 million award is “unlikely to survive a challenge,” according to Selmi.
This doesn’t mean the jury didn’t send a strong message in the case. One juror told Bloomberg: “They claim to have a zero tolerance policy, but suspended rather than fired, and ignored rather than rectified or retrained their employees on proper prevention.”
Recall, a jury awarded Diaz $137 million for enduring “racist abuse” while working for the company.
Diaz’s attorneys told CNBC that the case was only able to move forward because Diaz didn’t sign one of the company’s mandatory arbitration agreements.
One attorney, J. Bernard Alexander, said: “We were able to put the jury in the shoes of our client. When Tesla came to court and tried to say they were zero tolerance and they were fulfilling their duty? The jury was just offended by that because it was actually zero responsibility.”
Diaz found the work at Tesla through a staffing agency in 2015 and told the jury that coworkers told him to “go back to Africa” and left racist graffiti in the company’s restrooom. They also left a racist drawing in his workspace, he told the court.
Back in August, Tesla was forced to pay another former employee $1 million for enduring racism while working at the company. The former employee won a ruling that the company failed to stop his supervisors from calling him the “N-word” at the company’s Fremont factory.
Melvin Berry won the discrimination award after a closed-door proceeding that came on the heels of “years of complaints from Black workers that Tesla turned a blind eye to the commonplace use of racial slurs on the assembly line,” Bloomberg wrote at the time.
Similarly, it was also alleged that the company was slow to remove graffiti containing hate symbols.
Berry was hired by Tesla in 2015 and quit within 18 months. He claimed that when he confronted a supervisor about being called the “N-word” he was forced to work longer hours and “push a heavier cart”.
Diaz commented on the verdict, stating: “I’m really happy to be able to shine a light on what happened. I want it to be less about me and more about what’s going on at Tesla. It’s like they saw right through the smoke and mirrors. They were courageous in saying ‘enough’ to this billion-dollar company and say, ‘This is not acceptable.”’