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Judge cuts $137M awarded to Tesla employee in discrimination suit to $15M

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A federal judge on Thursday cut a payout awarded to a former Tesla contractor for racial discrimination he faced at the company from $137 million to $15 million. File&nbsp;Photo by Terry Schmitt/UPI | <a href="/News_Photos/lp/1485db199327929bdac07147e0e24002/" target="_blank">License Photo</a>
A federal judge on Thursday cut a payout awarded to a former Tesla contractor for racial discrimination he faced at the company from $137 million to $15 million. File Photo by Terry Schmitt/UPI | License Photo

April 14 (UPI) -- A federal judge on Thursday cut a $137 million payout to a Black former contract worker who sued Telsa for racial discrimination to $15 million.

Judge William Orrick ruled that the payments of $6.9 million in compensatory damages and $130 million in punitive damages Owen Diaz received as a result of the suit were too high after Tesla challenged the verdict but affirmed that there was ample "disturbing" evidence to support the outcome of the trial.

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In his ruling, Orrick said that the emotional distress damages "may be untethered to the distress to which Mr. Diaz and his witnesses testified" stating that "the highest award supported by the evidence" to compensate Diaz was $1.5 million.

He added that the punitive damages of nearly 20 times the amount of the distress payment were "extremely high," cutting the payment to $13.5 million.

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According to the lawsuit, Diaz worked as a contract elevator operator at a Tesla factory located in Fremont, Calif., between 2015 and 2016 and was subjected to multiple instances of racial discrimination as Tesla employees called him and other workers racial slurs, drew racist images left around the factory and told him to "go back to Africa."

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In the face of the evidence, Orrick rejected Tesla's argument that damages paid to Diaz should not exceed $300,000, stating that the emotional effects of hearing the racial slurs "repeatedly and frequently" were profound.

"All of this leads me to conclude that this is not, as Tesla attempts to frame it, a case of 'garden variety' emotional distress that was 'fortunately mild and short-lived," the judge wrote.

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Larry Organ, an attorney for Diaz, said that Orrick "gave the highest ratio that he constitutionally thought he could give" but added that the sum remains far lower than what the jury determined and that his team was exploring options for a potential appeal.

Tesla is facing another lawsuit by the state of California that the Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discrimination in job assignments, pay and promotions, thus creating a "hostile work environment," based on complaints from hundreds of workers.

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