Tesla, the electric vehicle manufacturer, has settled a racist discrimination lawsuit where a federal jury had previously awarded three million two hundred thousand dollars in damages to Owen Diaz, a Black man elevator operator at a Fremont, California factory in 2015.

The California Civil Rights Law Group

Lawrence Organ, an attorney from the California Civil Rights Law Group representing Diaz, emailed CNBC to inform them that both parties have reached an amicable resolution. However, the settlement terms are confidential, and no further comments will be provided.

The California Civil Rights Law Group, which represented Diaz, is also representing current and former Tesla employees in a proposed class action lawsuit, Marcus Vaughn v. Tesla Inc., which alleges ongoing racist discrimination and harassment against Black workers at the automaker.

Musk Unbothered with The Seven-Year Legal Battle

Organ mentioned to CNBC over the phone on Friday that Owen Diaz showed great courage in standing up to a company as large as Tesla and emphasized that civil rights laws rely on people willing to take such risks. Despite the legal battle being over for Diaz, Organ highlighted that there is still much work to be done for Tesla. He mentioned that when the case began, he proposed that the behavior would cease if Elon Musk made a clear statement and commitment to his employees that such conduct is unacceptable. Even after seven years of legal battles and large financial penalties, they still have not heard a clear statement from Elon Musk to stop this behavior. Tesla is supposed to represent the future of factories, yet its behavior reflects practices from the "Jim Crow past."

Diaz's Racial Discrimination Case

The U.S. Equal Employment Opportunity Commission (EEOC) has sued Tesla, alleging that the company violated federal law by allowing widespread racial harassment of its Black employees and retaliating against those who opposed it. Tesla has denied these allegations, stating they present a false narrative and overlook Tesla's history of providing equal employment opportunities.

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In CNBC's 2023 report, Diaz testified in a San Francisco federal court that his colleagues at Tesla often used racist language to insult him and other Black workers, making him feel physically threatened at the factory, telling him to "go back to Africa," and leaving racist graffiti in restrooms.

Diaz's colleagues at Tesla also left a racist drawing in his workspace, which resembled Inki the Caveman, a character from a 1950s cartoon known for its racist portrayal of a Black boy with exaggerated features, including large lips, a loincloth, earrings, and a bone in his hair.

During his trials, Diaz shared that he had once encouraged his son to work at Tesla. However, he later regretted this recommendation because his son also experienced a racially hostile work environment.

In his initial trial, a jury granted Diaz a significantly larger sum, totaling one hundred thirty-seven million dollars, which included punitive damages. Diaz and his legal team convinced the jury that he had faced severe racist discrimination, and the company did not take adequate measures to stop or prevent it, along with other civil rights violations. Diaz and Tesla requested a retrial to determine damages after Judge William H. Orrick reduced the jury's awarded amount to fifteen million dollars. Diaz won again, receiving a three million two hundred thousand dollars verdict.

Elon Musk's Hate Speech Criticism

The settlement with Diaz happens as Tesla CEO Elon Musk receives extensive criticism for managing hate speech on X, previously known as Twitter, which he owns and oversees as CTO.

As NBC News recently stated, Musk posted unverified claims of cannibalism in Haiti on X this month, along with sharing posts that smeared Haitian migrants as potential cannibals.

Progressive news outlet MotherJones also reported that the tech billionaire has been retweeting prominent race scientists on his platform and spreading misinformation about the intelligence and physiology of racial minorities. Without a conventional public relations office in North America, Tesla did not reply to a request for comment.

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