$366 million dollars. That's how much a jury awarded Jennifer Harris, a Black sales manager targeted and then fired by FedEx after she complained to human resources that her boss discriminatorily demoted her.
That's $1.16 million in compensatory damages and $365 million in punitive damages.
The trial judge recently rejected FedEx's motion to reduce the punitive verdict as excessive and a violation of its due process rights.
Late last week, a federal jury tagged Walmart with a verdict totaling more than $125 million in a disability discrimination lawsuit the EEOC brought on behalf of an employee with Down syndrome.On Monday, a California jury awarded a former Autozone employee $185 million in punitive damages. She had sued the company for pregnancy discrimination, claiming that the district manager who fired her was promised a promotion if he fired all of the women in his stores. Last week, the same jury awarded the plaintiff $900,000 in compensatory damages for lost wages and emotional distress.
While $185 million is a staggeringly huge number, this plaintiff will only ever collect a tiny fraction of it, at best. Due process tells us that punitive damages must bear some reasonable relationship to the size of the compensatory award, typically not to exceed a ratio of 9:1.
Moreover, if this case was filed in Ohio, and not California, damage caps would kick in to severely restrict the verdict. Ohio’s tort reform law caps punitive damages in state-law employment discrimination claims to two-times the compensatory award. Thus, in Ohio, this plaintiff’s punitive award would cap at $1.8 million, still a large number, but out of the nine-figure stratosphere.
Jury verdicts are headline grabbers—big splashy numbers that grab everyone’s attention. Trust me, Autozone’s attention has been grabbed. It will file a motion to reduce the jury verdict, and it will appeal, while, at the same time, this plaintiff will file motions seeking her attorneys’ fees. Ultimately, this case will confidentially settle, and we will never know the final dollars exchanged.
More damaging than the amount of the award is the negative publicity associated with it. Because of the verdict’s inordinate size, the press has labeled Autozone as a company that discriminates against women in the worst way possible—systemically and intentionally. That damage is much worse than this employee punching a lotto ticket that she will never cash.
Trying an employment case to a jury is an art. You are limited by a jury’s attention span (which, by the way, is getting worse as a result of 1,000 channel cable systems and 140 character tweets) to convey your message as quickly and as simply as possible. Complex legal arguments are out; creative storytelling built around a unified theme is in.
The allegations of racial harassment in Turley v. ISG Lackawanna Inc. are horrible. They involve graffiti about King Kong and the KKK, a toy monkey with a noose around its neck tied to the plaintiff’s car, and death threats. For the full flavor, I recommend reading the court’s opinion denying (in part) the employer’s motion for summary judgment.
Yesterday, the jury returned a $25 million verdict in favor of Mr. Turley on his claims of racial harassment and intentional infliction of emotional distress. According to the Buffalo News, one of the employer’s themes at trial was that “much of what happened at the steel plant is the kind of ‘trash-talking’ that’s common in manufacturing facilities.”
I once handled a case with similarly egregious allegations of racial harassment (KKK graffiti, liberal n-bombs, threats to drag the plaintiff tied to a truck, and a fistfight with his allegedly racist supervisor). The case settled on the eve of trial for several decimal points less than $25 million.
At trial, I was not planning on debasing the plaintiff’s allegations by challenging their veracity (there were too many witnesses that would verify most of them), or by portraying the events as something they were not—such as horseplay or trash-talking. Instead, I built my case around the fact that the plaintiff had resigned in the face of these allegations and voluntarily chose to return to the same workplace a few months later. He only sued (I would argue) out of embarrassment after losing a fight. In other words, I was planning to try the case by challenging the plaintiff’s perception of the workplace and the harm it caused him, not the racial motivation of his co-workers.
I know nothing about Turley v. ISG Lackawanna other than what I’ve read in the above-linked opinion and news story. But, it strikes me that likening KKK graffiti and a toy monkey with a noose around its neck as common “trash talking” is a recipe for a disaster, even if $25 million strikes me as excessive.
Counting is wonderful,Under the Civil Rights of 1991, the sum of the non-economic damages (future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, other non-pecuniary losses, and punitive damages) in Title VII, ADA, and GINA cases is capped between $50,000 to $300,000, depending on how many employees a defendant “has … in each of 20 or more calendar weeks in the current or preceding calendar year.” According to Hernandez-Miranda v. Empresas Díaz Massó, Inc. (1st Cir. 6/29/11), when you count employees for purposes of determining the number of employees depends on how you define “current.”
Counting is marvelous,
Counting’s the best thing to do.
Counting is happiness,
Counting is ecstasy,
I love to count, don’t you?
– Counting Is Wonderful, Sesame Street
It is clear that Congress did intend to protect …smaller employers … from ruinously large awards…. Congress, we believe, intended such protection for those who were small employers at the time of the discrimination, and not those who by happenstance or design became smaller employers between the time of discrimination and the time of the verdict.
This construction best serves Title VII’s purpose of encouraging resolution of disputes before litigation commences. This purpose … is best advanced by providing clarity and certainty as to the size of potential damage awards from the outset of a dispute. [Non-economic damages] are inherently more difficult to value precisely than the back pay damages traditionally available under Title VII, rendering this type of clarity and certainty all the more important in allowing litigants to make informed decisions about settlement.
Clarity and certainty of potential liability also allows for both sides to set realistic litigation budgets and evaluate whether cases are worth bringing and defending. Such clarity and certainty allows businesses to set adequate reserves, disclose those reserves in annual reports as necessary, and make assessments about whether and how much to insure against the risk of litigation.Therefore, a court must count the number of people employed when the discrimination took place. The number of employees at the time of the verdict is irrelevant.
The acts of sexual harassment alleged by Ashley Alford against her supervisor, Richard Moore, in Alford v. Aaron Rents, Inc. are among most horrific I’ve ever encountered (taken from the court’s opinion denying the employer’s motion for summary judgment):
As reprehensible as these allegations are, what is perhaps more stunning is that Alford’s employer ignored her complaints for more than a year, and only took action after she involved the police.
Last week, a jury added up all of these facts and returned with one of the largest verdicts ever in a single-plaintiff harassment case—$95 million. The St. Louis Post-Dispatch quoted a representative of the company, who called the verdict “the work of a ‘classic runaway jury.’” I agree. The conduct proven at trial was horrendous, but no single-plaintiff employment case is worth $95 million.
Nevertheless, this verdict underscores the importance of prompt and thorough investigations into complaints of harassment by employees. The jury did not subject the employer to this verdict because of the acts of a rogue supervisor, but because the company did not do anything about him when the plaintiff complained.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
It has been almost two years since a Cuyahoga County jury handed down what remains the state’s largest single-plaintiff employment verdict: $46.6 million ($3.5 million in compensatory damages and an astounding $43.1 million in punitive damages). As is often the case, however, what the jury gave, the court of appeals took away (at least in part).
In Luri v. Republic Services (5/19/2011) [pdf], the appellate court concluded that employment discrimination claims are subject to Ohio’s damages caps in tort actions. In such actions, punitive damages are capped at two-times the compensatory award. Therefore, the trial court should have reduced the punitive award to a maximum of $7 million. This decision likely reduces the verdict from $46.6 million to a still-robust $10.5 million.
This case is significant for two reasons:
Ohio’s most recent foray into tort reform (effective since 2005) is vague on whether it applies to discrimination lawsuits. The Luri case joins the small list of cases to apply these tort reforms to discrimination claims. These reforms not only include the caps on punitive damages, but also the right to automatically bifurcate the issues of compensatory and punitive damages during covered jury trials. For this reason, this decision marks a significant victory for Ohio’s employers. I’ll have more on what these tort reform provisions mean tomorrow.
There are many opportunities after a plaintiff’s verdict for an employer to alter—or eliminate—the number that appears on a final judgment. Jury verdicts are followed by post-trial motions, which are then followed by appeals. While a jury verdict is often viewed as the final battle in a case, it rarely ends the war.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
The Department of Labor may not be the most hospitable place for employers these days. Federal juries, however, can prove to be just the opposite. Nearly a year ago, the DOL issued a game-changing Administrator’s Interpretation that mortgage loan officers are not exempt under the Fair Labor Standards Act. Last Thursday, a federal jury concluded that a class of 350 specific mortgage loan officers employed by Quicken Loans are exempt administrative employees under the FLSA.
Here’s the jury’s verdict form:
What does this mean?
The Detroit Free Press quotes Quicken Loans founder and Chairman Dan Gilbert, “It was never about money for us. It was always about right and wrong.” Crains Detroit Business estimates that the defense verdict saved Quicken Loans between $4 million and $30 million in damages for unpaid overtime. Sometimes, it absolutely pays to fight these battles.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
According to the agency’s pre-suit investigation, Derek Nelson, who had been employed by IPC as a machinist for over ten years, went on medical leave in 2008 in order to undergo chemotherapy. The EEOC’s suit alleges that in January 2009, when Nelson sought to continue working part-time while he completed his treatment, IPC discharged Nelson for exceeding the maximum hours of leave allowed under company policy. That decision, the agency contends, violated IPC’s obligation to reasonably accommodate Nelson’s disability.Meanwhile, in Boca Raton, Florida, a federal jury awarded Kara Jorud $8.1 million for her claim that Michael’s Arts and Crafts terminated her because of her cancer. Ms. Jorud, suffering from breast cancer, had a double mastectomy and was ill from the follow-up chemotherapy. She claimed that her manager forced her back to work early following her surgery, required her to work while ill, and harassed her. The Palm Beach Post recounts Jorud’s manager telling her, “How often do you have to do this? You will be here on Monday after chemo.” LawyersandSettlements.com fills in the rest of the details:
In her lawsuit, Jorud said she had taken a six-week medical leave following her surgery, but within days the cancer patient began taking calls from her District Manager inquiring as to her return. Jorud was originally tasked to turn around the store’s reportedly failing operations.
Jorud returned to work less than a month after surgery because, she testified, she feared for her job.
At one point, the plaintiff brought her fiancé and his son into the store to help her shift inventory ahead of a pending delivery because she was weak from the aftereffects of chemotherapy. The cancer patient was fired three days later, reportedly one day before her next scheduled chemotherapy treatment.
The plaintiff was also accused of theft prior to her firing, a charge that Jorud later disproved and the district manager later admitted to be false, according to the newspaper account.
These cases should serve as a warning sign for employers dealing with employees with serious treatable illnesses. It is no longer enough to provide an employee the statutorily mandated 12 weeks of FMLA leave, or to merely follow one’s own leave of absence policy. Instead, as these cases illustrate, employers should consider reasonable accommodations such as part-time or modified work schedules.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
Yesterday at Jottings By An Employer’s Lawyer, Michael Fox praised the Employment Law Group for announcing a jury trial loss in a blog post. You may be asking yourself why would a defense lawyer announce a loss. It’s what I call smart marketing. There are two things employment plaintiff’s count on to extort a high settlement: 1) a denied summary judgment motion with a firm trial date, and 2) cold feet by a business or its lawyer to take the case to a jury. If you want to obtain a fair settlement in your next employment case, hire an attorney with a proven track record of trying cases. Before you hire the lawyer to defend your next claim, ask him or her how many cases he or she has tried to a jury, and how long ago the last jury trial was.
There are very few things in the law that take more guts than taking an employment case to trial as an employer. No one wants a jury to resolve a dispute. Knowing that your lawyer has the confidence to try your case will give you the confidence to draw a reasonable settlement line in the sand. That line might be at or near zero. You should never pay more than you think a case is worth merely to avoid a trial. Knowing your lawyer can and will try your case for you will enable you to hold that line.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
At the center of the dispute is a product Allied … developed…. Between 1992 and 2001, court papers say, Mark Ramun had access to “highly confidential proprietary information and documentation” related to the Allied MT while employed at the company. Those trade secrets, Allied alleged, were given to Genesis after the company hired the younger Ramun in 2003. Allied argued in its case that Mark Ramun kept nearly 15,000 documents that contained “a substantial array of highly confidential and proprietary information.”There is a good lesson to be learned from this story. When there is money to be made, even those who you trust the most are apt to let you down. I don’t know what the relationship between senior and junior Ramuns was like (although I’m pretty sure they won’t be sharing a Thanksgiving turkey anytime soon). I am confident, however, that dad never for a second thought his son would divert confidential information to a competitor. Even those who you trust the most should be locked down with agreements, and diligently pursued when they breach your trust.
In October 2009, Working Mother magazine named Novartis Pharmaceuticals one of its 100 best companies for working families, lauding its flexible work schedules, job-sharing, telecommuting, and customizable child-care offerings. According to a federal jury in Manhattan, all was not what it seemed at Novartis. That jury found that Novartis had discriminated against women over pay and promotions. The cost to Novartis: $3.3 million in compensatory damages to the 12 name plaintiffs, and another $250 million in punitive damages to a class of 5,600 female sales reps and entry-level managers. The allegation that perhaps led the jury to award more than a quarter-billion dollars was this gem from a Novartis manager explaining his preference against hiring young women: “First comes love, then comes marriage, then comes flex time and a baby carriage.” That statement has not only cost Novartis a whopping 2.6% of its annual revenue, but also its reputation as a great workplace for working moms.
One of the very first posts I wrote on this blog (almost three years ago to the day) discussed a $2.1 million verdict handed down by a Cuyahoga County jury against Kohl’s. In that case, the plaintiff claimed discrimination because of her parenting role for her two young children. Witnesses testified at trial that as she was being passed over for promotion after promotion, managers asked questions like: “You’re not going to get pregnant again, are you?” and “Did you get your tubes tied?” Following the trial, the Cleveland Plain Dealer quoted one juror’s explanation for the multi-million dollar verdict: “I think she was very poorly treated because she was pregnant, because she wanted to have a family.”
Ashby Jones, writing at the Wall Street Journal’s Law Blog, quotes Mike Delikat, the chair of Orrick’s employment law practice, who thinks that this verdict is the beginning of a dark age for employers:
“It should clearly cause the employer community to sit up and look at its potential exposure in this area,” said Delikat. “You’re going to see more class-actions filed, and more individual claims of gender and race discrimination. It could be a bonanza.”
Delikat said that the Novartis ruling was a “game changer,” in that it provided a new arrow for plaintiffs lawyers to tuck into their quivers. “How many employers are going to be willing to take a case now that we have a case like this on the books?” he asked. “The case is going to encourage even more defendants to settle—and pay a lot more than they used to.”
While I’m not ready to go as far as Mr. Delikat, there is real danger that lurks for employers in these types of cases. People think that women are entitled to have a career and a family, and juries continue to punish employers that prioritize the former over the latter. If employers have not been paying attention to family responsibility discrimination, they better be now.
For more coverage of this story, I recommend the perspectives of my fellow bloggers: Delaware Employment Law Blog, HR Lawyer’s Blog, Maryland Employment Law Developments, San Antonio Employment Law Blog, UndercoverLawyer, LawMemo Employment Law Blog, and Jottings By An Employer’s Lawyer.
For more on issues and trends in family responsibility discrimination, I recommend a few of my earlier posts:
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
If a white employee stands up for her black co-workers, and is then ostracized and called racially-charged names because of it, is she entitled to compensation for the alleged harassment? According to one Nashville jury, the answer is no.
In Barrett v. Whirlpool Corp. (6th Cir. 2/23/09), the 6th Circuit determined that an employee cannot pursue a claim for retaliation based solely upon a relationship to a co-worker who engages in protected activity. The court also remanded for trial the racial harassment claim of one of the plaintiffs, Treva Nickens. She claimed that after she spoke out in favor of black co-workers who had filed a race discrimination suit against Whirlpool, she faced routine racist slurs and graffiti (such as being called a “nigger lover”), was told that she should stay with her own kind, was disciplined more harshly than whites, and was passed over for a promotion. According to The Tennessean, the jury rejected Nickens’ associational harassment claim.
Despite the jury’s verdict on the specific facts presented by Nickens, the law remains that harassment as a result of one’s association with or advocacy for protected employees is just as unlawful as harassment directed at a member of a protected class.
Even though Whirlpool escaped liability in this case, employers should not read this verdict as a license to permit harassment against employees associated with employees in a protected class. Employers must treat all allegations and complaints of harassment seriously. Investigations should be timely and thoroughly completed. Policies should be reviewed and reinforced. Appropriate corrective action should in instituted where warranted.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.
For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.10 years ago, an Atlanta restaurant fired its highest ranking female manager. Last month, a federal jury finally dismissed her sexual harassment case. The latest verdict was the third handed down by a federal jury in the last five years. In the interim:
Law.com quotes the plaintiff’s lawyer, Edward D. Buckley III: “The moral of the story is that there is real value to settling these kinds of cases for both parties. That is something that there were many occasions when it could have occurred, but unfortunately it didn't. The 11th Circuit urged us to engage in meaningful settlement discussions. At least one of the district judges involved in the case urged us [to settle] and tried to facilitate that. Unfortunately, it didn't happen.”
Let this case serve a lesson for all businesses. This case spun out of everyone’s control – the lawyers and the parties. If everyone had put emotion aside (and their is no doubt that three trials and two appeals over 10 years is fueled purely by anger or spite, and not common sense and reason), the plaintiff would have realized that a guaranteed something is better than a roll of the dice, and the employer would have realized that paying a settlement is better than losing everything on principle.
I’m not arguing that the parties should have caved as soon as the case was filed. Indeed, some cases can only be resolved by a trial. After that trial, however, the parties should have listened to the court and viewed the verdict for what it was -- an opportunity to settle, not a reason to fight on.
Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.
For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.
File this case under the category of never underestimate your opponent. The 6th Circuit has affirmed a trial court’s $120,000.50 verdict in a race discrimination case in which the plaintiff appeared pro se (without an attorney). In Madden v. Chattanooga City Wide Service Dept. (6th Cir. 11/25/08), the plaintiff was fired by management after a supervisor reported him for setting off firecrackers at a work site. The problem for the employer is that the plaintiff happened to be black, and he knew of two white employees who had done the exact same thing without being reported by the same supervisor.
The appellate court was unfazed by the fact that the person with the discriminatory animus, the reporting supervisor, was not the ultimate decisionmaker in Madden’s termination. Instead, the Court imputed the supervisor’s animus to the decision makers under what is known as “cat’s paw” liability. Cat’s paw liability is when an adverse employment decision is made by a person who lacks impermissible bias, but was influenced by another individual who was motivated by such bias.[1] The court found that the employer was liable because the supervisor discriminatorily decided which employee to report for identical misconduct.
There is the problem posed by the fact that Madden was fired not by his supervisor, Templin, but by senior managers—Templeton and Leach—who were unaware of incidents in which white workers set off fireworks without facing discipline. … We have held that when a plaintiff challenges his termination as motivated by a supervisor’s discriminatory animus, he must offer evidence of a “causal nexus” between the ultimate decisionmaker’s decision to terminate the plaintiff and the supervisor’s discriminatory animus. … In the instant case, there was an investigation of the events for which Madden was fired, which was conducted by Boyd and Templeton. This investigation led to Templeton’s recommendation that Madden be fired, which Leach accepted. … There was evidence that Templin discriminated in the information that he provided about employee misconduct to senior managers by reporting the misconduct of a black employee, but not the virtually identical misconduct of white employees. By relying on this discriminatory information flow, the ultimate decisionmakers “acted as the conduit of [the supervisor’s] prejudice—his cat’s paw.”
Because the decisionmaker acted on the supervisor’s word, without any additional investigation, the court imputed the supervisor’s animus to the decisionmaker.
There are two important lessons for employers to take from this case:
The Blawg is taking the rest of the week off for the Thanksgiving Holiday. Everyone enjoy your turkey. I’ll be back on Monday with thoughts on the aggressive advertising campaign started by labor organizations in support of the Employee Free Choice Act. What I’m Reading This Week will return next Friday with a supersized edition.
Next time you consider whether you really want to litigate a case, consider the following case study.
On Friday, I reported about a case in which a jury vindicated a city administrator whose secretary accused him of sexual harassment for staring at her breasts. She filed her case in December 2002. In July 2006, the trial court dismissed the lawsuit on the employer’s motion for summary judgment. In February 2008, the court of appeals reversed that ruling. The trial was finally held on October 31, 2008, nearly six years after the case was originally brought. On Point reports this saga has cost the employer nearly $400,000 to defend. And, it’s not over yet. The plaintiff has filed a motion for new trial, and when that is denied, she’ll likely go back to the court of appeals. Everyone had their day in court, but at what cost?
Earlier this week I reported that fewer plaintiffs are winning their federal employment cases. Another study, however, suggests that those those are winning are winning bigger verdicts. Mark Toth at the Manpower Employment Blawg reports on a study released by Jury Verdict Research, which concludes that the median discrimination verdicts rose from $147,500 in 2006 to $252,000 in 2007, an astounding 70% increase.
The good news, however, is that employers really are better off in federal court, where they won 43% of the time, compared to only 34% in state court. And, in the cases won by plaintiffs, the median jury award in federal court was 22% lower than the median state jury award.
Is this increase a trend or an anomaly? It's hard to say. 2008 already saw the largest employment law jury verdict in the history of Ohio, $46.6 million. In a today's difficult economy, it is certain that more employment cases will be filed. It will remain to be seen if jurors who are facing their own tough economic times will continue to be generous.