Workers assemble cars on the line at Tesla’s factory in Fremont. David Butow (Photo by David Butow/Corbis via Getty Images)

David Butow | Corbis News | Getty Images

Electric vehicle maker Tesla has settled a racist discrimination lawsuit in which a federal jury previously awarded $3.2 million in damages to Owen Diaz, a Black man who worked as an elevator operator at its Fremont, California factory in 2015.

Attorney Lawrence Organ, with the California Civil Rights Law Group, who represented Diaz told CNBC via e-mail: “The parties have reached an amicable resolution of their disputes. The terms of the settlement are confidential and we will not have additional comment.”

The same firm is representing current and former Tesla employees in a proposed class action lawsuit, Marcus Vaughn v. Tesla Inc., alleging that the racist discrimination and harassment of Black workers has continued at the automaker. Diaz is not part of that litigation.

Organ told CNBC by phone on Friday, “It took immense courage for Owen Diaz to stand up to a company the size of Tesla. Civil rights laws only work if people are willing to take those kinds of risks. Even though the litigation chapter of his life is over, there’s still a lot of work to do for Tesla.”

He said, “When I started this case, I suggested that the conduct would stop if Elon Musk would make a statement and a commitment to his employees that this is not tolerated. We haven’t heard that after seven years of litigation, a nine-figure verdict then a seven-figure verdict. Why isn’t he stopping this conduct? That’s what doesn’t make sense to me. Tesla is supposed to be the factory of the future. But this conduct is from the Jim Crow past.”

The U.S. Equal Employment Opportunity Commission has also sued Tesla, accusing the automaker of violating “federal law by tolerating widespread and ongoing racial harassment of its Black employees and by subjecting some of these workers to retaliation for opposing the harassment.”

Tesla has called the EECO’s allegations “a false narrative that ignores Tesla’s track record of equal employment opportunity.”

Diaz’s case

Elon Musk on X

The settlement with Diaz comes as Tesla CEO Elon Musk faces widespread criticism for his handling of hate speech on X, formerly Twitter, which he owns and runs as CTO.

As NBC News recently reported, Musk has shared unverified claims of cannibalism in Haiti this month on X, and shared posts smearing Haitian migrants as likely cannibals.

Progressive news organization MotherJones also reported that “the tech billionaire has been retweeting prominent race scientist adherents on his platform,” and “spreading misinformation about racial minorities’ intelligence and physiology.”

Tesla, which lacks a traditional public relations office in North America, did not respond to a request for comment.



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