A black former Tesla employee who won a racial discrimination lawsuit against Elon Musk’s electric car maker has two weeks to seek his $15 million settlement, according to court documents.
Last October, a jury in federal court in San Francisco ordered Tesla to pay Owen Diaz a total of $137 million in compensatory and punitive damages.
Diaz, who operated an elevator at Tesla’s factory in Fremont, California, during his nine-month stint with the company from late 2015, said his colleagues at the company called him the word N and other racial slurs.
He claimed other employees and a supervisor drew racist caricatures and swastikas.
But in April, US District Judge William Orrick reduced the sum to $15 million.
In a new court filing on Tuesday, Orrick said the original nine-figure verdict was excessive and that allowing the judgment to go on appeal would “further delay the resolution of a case that is already five years old.”
The court filing was cited by TechCrunch.
“Tesla’s progressive image was a facade masking its regressive and demeaning treatment of African-American employees,” Diaz’s original lawsuit said.
In court, Diaz testified that he suffered “sleepless nights” and weight loss from losing his appetite.
“Some days I would sit on my stairs and cry,” he told the jury.
It’s a rare case in which Tesla – the world’s most valuable automaker – had to publicly defend itself in court against a former worker.
The company has a reputation for using binding arbitration to settle employee disputes behind closed doors.
Private arbitration often allows companies to avoid costly damages or engage in major remedial action. Tesla rarely takes a big hit in arbitration, despite paying a $1 million award last May in a case brought by another ex-entrepreneur similar to Diaz’s.
The company has come under pressure from activist shareholders to limit its use of arbitration and be more transparent about diversity and other issues.
An activist equity fund, Nia Impact Capital, has expressed concern that the use of mandatory arbitration could enable and mask sexual harassment and racial discrimination.