# Diaz v. Tesla *Owen Diaz v. Tesla, Inc.*, No. 3:17-cv-06748-WHO (N.D. Cal.), was a federal racial-harassment suit by a Black former elevator operator at [[Tesla]]'s Fremont, California factory. It produced one of the largest racial-discrimination verdicts in U.S. history: $137 million in October 2021. Two trials later, the award was about $3.2 million, and in March 2024 the case ended in a confidential settlement. The shrinking dollar figure made the headlines, but the liability finding never changed. The jury found Tesla responsible for a racially hostile workplace, the judge upheld that finding, and the second jury was called only to set damages. ## The facts Diaz worked at the Fremont plant in 2015–16. He was hired through staffing companies rather than directly by Tesla, and the jury treated Tesla as his joint employer. At trial, witnesses described about a dozen coworkers calling him the n-word, including one supervisor who used it at him at least 60 times. They also described racist graffiti and swastikas in the bathrooms, being told to "go back to Africa," and a racist caricature left at his workstation. His complaints to supervisors did not stop it. ## Timeline | Date | Event | |---|---| | 2015–2016 | Diaz works as an elevator operator at Fremont through a staffing agency | | 2017 | Suit filed in the Northern District of California (Judge William H. Orrick) | | Oct 4, 2021 | Jury awards $136.9M: $4.5M past emotional distress, $2.4M future, $130M punitive | | Apr 2022 | Orrick upholds liability but reduces the award to $15M (Tesla had asked to cap it at about $600K) | | 2022 | Diaz rejects the $15M and chooses a new trial on damages only | | Apr 2023 | Second jury awards just under $3.2M: $175K emotional distress, $3M punitive | | Mar 2024 | Confidential settlement ends both sides' appeals | ## Why it matters **The statute.** Diaz sued under [[Section 1981]] of the [[Civil Rights Act of 1866]], the Reconstruction guarantee of the equal right to make and enforce contracts, rather than relying on Title VII of the [[Civil Rights Act of 1964]]. The difference is money. Title VII caps compensatory and punitive damages together, at $300,000 for the largest employers, while Section 1981 has no cap. That is the only reason a nine-figure verdict was possible. In the vault, the Section 1981 page otherwise records the statute's newer use: conservative litigators turning it against [[DEI]] programs as discrimination against white people. *Diaz* is the statute doing the job it was written for, a Black worker's claim against a racially hostile workplace. **The staffing loophole that wasn't.** Diaz was not on Tesla's payroll, but the jury held Tesla responsible anyway, as a joint employer, for conditions on its own factory floor. Employment lawyers count access to open court, rather than arbitration, as one of the three preconditions for the verdict, along with egregious facts and a statute without a damages cap (Spiggle Law). **The remittitur trap.** The award kept shrinking after the jury spoke. The judge set aside the $137M as excessive and offered $15M. Diaz gambled on a second jury and got $3.2M, 2.3% of the original verdict. The episode shows how much of a civil-rights verdict's deterrent value depends on judges and later juries, not on the jury that heard the evidence first. **The pattern.** Tesla fought liability, won large reductions and then settled confidentially. That sequence has recurred across the other Fremont cases. See the race-discrimination section of the [[Tesla]] page for the Vaughn class action, the California Civil Rights Department's suit (a bench trial that began September 21, 2026) and the [[EEOC]]'s federal suit. ## See Also - [[Tesla]] — Fremont race-discrimination cases in context - [[Elon Musk]] - [[Section 1981]] - [[Civil Rights Act of 1866]] - [[Civil Rights Act of 1964]] - [[EEOC]] - [[Legal Cases Hub]]