A federal court judge pared down last year’s jaw-dropping $137 million damages award against Tesla in a racial bias lawsuit.  As covered previously here, a San Francisco federal court jury awarded $6.9 million in emotional distress damages and $130 million in punitive damages to a Black former elevator operator who worked at Tesla’s Fremont facility for approximately one year before quitting his employment in 2016.  On April 13, 2022, the judge granted Tesla’s motion for a reduction in the amount of damages in part and denied Tesla’s motion for judgment as a matter of law that it is not liable.  The judge explained in his order: “Great deference is owed to the jury’s verdict, but after careful review of the record, I conclude that the award of compensatory damages was excessive.”

Specifically, the judge reduced the emotional distress damages to $1.5 million, the highest award supported by the evidence, as compared to the $300,000 for which Tesla advocated.  With an eye toward United States Supreme Court precedent imposing constitutional limitations on punitive damages awards, the judge reduced the punitive damages to $13.5 million—nine times the amount of compensatory damages—as opposed to the one-to-one ratio Tesla proposed.  While the judge described the jury’s award as “unconstitutionally large,” he rejected the argument that no punitive damages are warranted.  The court granted the highest possible ratio of punitive damages (9:1) under the United States Supreme Court’s guidance that it is unlikely awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process.

The former Tesla employee may not accept the reduced damages and instead request a new trial on damages – and Tesla presumably will appeal to the Ninth Circuit as well.  As we’ve noted before here, here, and here, this case well exemplifies the advantages of arbitration for employers and employees alike—arbitration offers increased speed, finality, cost-efficiency, and predictability, which are all absent in a jury trial like this one.  We will continue to monitor this case and provide any relevant updates.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.

Photo of Michelle Lappen Michelle Lappen

Michelle Lappen is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She assists clients in a wide range of labor and employment matters in a variety of industries, including entertainment, financial services, and…

Michelle Lappen is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She assists clients in a wide range of labor and employment matters in a variety of industries, including entertainment, financial services, and technology.

Michelle earned her J.D. from Columbia Law School, where she was an articles and submissions editor for the Columbia Journal of Law & the Arts. During law school, she also was a teaching fellow for the Advanced Negotiation Workshop and advocated for state and federal legislation as a clinical student in the Columbia Law Health Justice Advocacy Clinic.