Tesla may end up paying only about half of the stunning $137m verdict a jury awarded a former contractor over racism at one of its car plants, if it appeals.
While on rare occasions high-multiple damages have been upheld, the Tesla award is “unlikely to survive a challenge”, Selmi said. The parties could also settle rather than risk an appeal, he said. Tesla has been dogged by allegations of racism at its car plant in Fremont, California, for years, but few cases make it to trial because most employees are bound by arbitration agreements. The rare verdict in the Diaz case was possible because he was a contract worker and never signed an arbitration agreement with Tesla.
Diaz’s case “highlights the stark disparity in cases brought in arbitration versus court”, said Jeannette Vaccaro, an attorney who won a rare $1m award for another Tesla worker in May in arbitration. “The jury also sent a strong message to Tesla by awarding $130m in punitive damages, something that is unheard of in arbitration.”
“We strongly believe that these facts don’t justify the verdict reached by the jury in San Francisco,” Capers Workman wrote. “We will continue to remind everyone who enters the Tesla workplace that any discriminatory slurs — no matter the intent or who is using them — will not be tolerated.”There were some awkward moments for Tesla in court. At jury selection, the company tried to exclude a black juror but the judge wouldn’t allow it, saying there was no nonracial justification for it.