Originally awarded $130m, which a judge reduced to $15m, plaintiff opted for new trial against the electric vehicle maker

Tesla will pay about $3.2m to a Black former employee after a federal jury in San Francisco ruled the electric-vehicle maker failed to prevent severe racial harassment at its flagship assembly plant in California.

The amount is far less than the $15m that the plaintiff, Owen Diaz, rejected last year in opting for a new trial. Diaz asked for a new trial on damages after the judge reduced the amount he was awarded in a 2021 ruling from $137m to $15m. Diaz accused Tesla of failing to act when he repeatedly complained to managers that employees at the Fremont factory frequently used racist slurs and scrawled swastikas, racist caricatures and epithets on walls and work areas.

The jury on Monday awarded him $175,000 in damages for emotional distress and $3m in punitive damages designed to punish unlawful conduct and deter it in the future.

Bernard Alexander, a lawyer for Diaz, urged jurors during closing statements on Friday to award him nearly $160m in damages, and send a message to Tesla and other large companies that they will be held accountable for failing to address discrimination.

“Mr Diaz’s outlook on the world has been permanently changed,” Alexander said. “That is what happens when you take away a person’s safety.”

Tesla’s lawyer, Alex Spiro, countered that Diaz was a confrontational worker who had exaggerated his claims of emotional distress, and said his lawyers failed to show any serious, long-lasting damage caused by Tesla.

Diaz testified last week, tearfully recounting various incidents during the nine months that he worked at the Fremont factory. Diaz said the job made him anxious and strained his relationship with his son, who also worked at the plant.

Lawyers for Tesla highlighted what they said were inconsistencies in Diaz’s testimony and repeatedly raised the fact that he did not lodge written complaints to supervisors. Diaz testified that he verbally complained to managers numerous times and discussed his complaints with Tesla human resources officials.

The carmaker is facing similar claims of tolerating race discrimination at the Fremont plant and other workplaces in a pending class action by Black workers, a separate case from a California civil rights agency and multiple cases involving individual workers. The company has denied wrongdoing in those cases.

Diaz had sued Tesla for violating a California law that prohibits employers from failing to address hostile work environments based on race or other protected traits.

The first jury in 2021 awarded Diaz $7m in damages for emotional distress and a staggering $130m in punitive damages. The award was one of the largest in an employment discrimination case in US history.

A US district judge last year agreed with the jury that Tesla had broken the law, but said the award was excessive because Diaz had worked at the factory for only nine months and had not alleged any physical injury or illness, and cut it to $15m.