Explosive Punitive Damages In California Employment Cases And Why They Matter

Key Takeaway

The recent Tesla verdicts and recent class action lawsuit by the Department of Fair Employment and Housing demonstrate that employers can still be subject to large punitive damage awards, and in light of this, plaintiffs' counsel are likely to file class action lawsuits and more individual lawsuits. 

In the past six months, juries have awarded huge punitive damages awards in individual California employment cases. Given that these individual cases could also proceed as class actions, it is important to examine the frequency and reasoning behind the juries' decisions.

For example, Tesla Inc. faced an individual race discrimination lawsuit in which Owen Diaz, a former elevator operator at Tesla's Fremont factory, alleged that he faced harassment and racial slurs. At trial, Mr. Diaz argued that the use of racial slurs was pervasive and virtually everywhere at the Fremont factory, and that the working conditions were so physically demanding and