No Horseplay Here: Jury Awards Employee $2.4 Million in Damages for Sex Discrimination

A company’s potential monetary liability for workplace discrimination can be crippling. A jury in the U.S. District for the Northern District of Illinois had awarded a male grocery store butcher $2.4 million in compensatory and punitive damages on his claim of sexual harassment against a small grocery store located in the south side of Chicago. The lower court ultimately reduced the award to $477,500, because of Title VII’s statutory damage caps and the excessiveness of the award. The U.S. Court of Appeals for the Seventh Circuit has affirmed the award. Smith v. Rosebud Farm, Inc., No. 17-2626, 2018 U.S. App. LEXIS 21481 (7th Cir. Aug. 2, 2018).

Robert Smith sued his former employer, Rosebud Farm, Inc., for sex discrimination, alleging his male colleagues sexually groped and insulted him for more than four years. Smith claimed that his male, meat-counter colleagues would grab his genitals and buttocks. They would also repeatedly mime oral and anal sex, along with other comments and gestures. Smith colleagues also allegedly made inappropriate, racially charged comments. Smith’s supervisor ignored his complaints. In fact, Smith’s supervisor sometimes participated in the sexually inappropriate behavior as well.

After Smith filed a charge alleging sex and racial discrimination with the Equal Employment Opportunity Commission, his supervisor told his colleagues to stop goofing around. Smith subsequently found his car with the tires slashed and windows broken while parked in an employee-only lot.

The Seventh Circuit rejected Rosebud’s argument on appeal that the district court should have awarded judgment as a matter of law with regard to Smith’s sex discrimination claim, as well as a new trial. Title VII prohibits discrimination against an individual because of that individual’s sex and unwanted sexual conduct such as the kind in this case would not be automatically deemed sex discrimination. Rosebud employed 6 to 7 females and 15 to 16 males who interacted daily. Rosebud argued that Smith’s colleagues engaged in “sexual horseplay,” not sex discrimination. The Court found, however, that despite the store being a mixed-sex workplace, only males were groped and taunted. Even though there were only males working behind the meat counter, the Court said the store was small and there were enough females working to qualify as a mixed-sex workplace. Accordingly, the Court found a reasonable inference that Smith’s male colleagues harassed him because of his sex.

Rosebud also claimed that the district court should have granted summary judgement for his retaliation claims because Smith did not present evidence that his colleagues knew he filed a charge with EEOC. It further claimed that a new trial is appropriate because Smith’s attorney’s comments during his closing argument associated Rosebud’s conduct with terrorism in the Middle East. The Seventh Circuit rejected these claims as well, because these claims were not raised before the lower court.

Supervisor training and immediate investigation following complaints of discrimination or harassment are important to minimizing an employer’s potential liability. Employers should be cognizant of workplace horseplay and jokes to ensure that the behavior does not constitute unlawful discrimination.

How to Minimize Exposure to Jury Verdicts with Internal Investigations

It is more important than ever that employers conduct internal investigations of workplace complaints and take appropriate action when there is cause to do so. Proper investigations and thorough pre-litigation assessments can help employers minimize exposure to unfavorable jury verdicts and awards.

A case from the U.S. District Court for the Southern District of New York, in which the court upheld a jury verdict in a race discrimination case and assessed damages of $880,000 against the defendants, illustrates how expensive a failure to investigate workplace complaints thoroughly and take corrective action can be.

In Rosas v. Balter Sales Co., Inc., et al., No. 12-CV-6557 (S.D.N.Y. June 29, 2018), the plaintiff brought claims for discriminatory termination, hostile work environment, and retaliation under Title VII, along with a state law claim for battery. After an eight-day trial, the jury found in the plaintiff’s favor on all four claims and the district court upheld the verdict on all four claims. The jury awarded the plaintiff $800,000 in compensatory damages and $1.4 million in punitive damages. The district court remitted the award to $180,000 in compensatory damages and $700,000 in punitive damages.

The plaintiff, a Hispanic employee, worked for Balter Sales as a truck driver. At trial, he presented evidence of numerous incidents of race-based harassment by the company’s Vice President and co-owner. This included using racial slurs, mocking the plaintiff’s Latin accent, and complaining about difficulty understanding the plaintiff’s “Latin accent.” The plaintiff also presented evidence that another supervisor subjected him to unwanted physical contact and sexual advances. Plaintiff testified that despite his multiple complaints to his supervisors, the defendants failed to take steps to remedy the situation.

The company terminated the plaintiff after 15 months of employment, alleging that he stole merchandise. After his termination, the plaintiff testified that he informed the company that he intended to hire a lawyer. The company then filed criminal charges against the plaintiff.

After the plaintiff was arrested, kept in a holding cell, and criminally charged with theft, the company found the merchandise. The plaintiff presented evidence that, when the Vice President was informed that the merchandise had been found, he “blew it off.”

The court ruled the evidence allowed a reasonable jury to find for the plaintiff. Moreover, the court rule that “the temporal connection between Plaintiff’s complaints and his firing, could allow a reasonable jury to conclude that the theft allegations were merely pretext for the discriminatory termination of Plaintiff’s employment.”

As this case illustrates, an employee’s workplace complaints can lead to expensive litigation against an employer that fails to conduct an appropriate investigation before taking an adverse employment action.

 

Massachusetts Jury Returns Unprecedented $28 Million Verdict for Retaliation Claim

A Suffolk County jury recently awarded a Haitian–American nurse an unprecedented $28.2 million in total damages on her claim of retaliation against Brigham & Women’s Hospital, her former employer. At the same time, the jury rejected the nurse’s claim of race discrimination.

This verdict serves to emphasize what most employment litigators know from experience: juries appear far more willing to find an employer liable on a retaliation claim than on a discrimination claim, and they tend to award higher damages on retaliation claims.

The unprecedented amount of this verdict, however, cannot be explained solely by the fact that it was a retaliation claim. It is unclear whether this verdict is the result of a “runaway” jury, the first indicator that recent social movements will have a longer-term impact on normally parsimonious Massachusetts jurors, or the result of some other factor. While this verdict is a data point employers should watch carefully, it does not yet mark a substantive change in how discrimination and retaliation cases should be assessed.

The verdict consisted of $450,000 in economic damages, $2.75 million in emotional distress damages, and $25 million in punitive damages. When compared with prior verdicts, the economic damages awarded are not remarkable. However the emotional distress damages are high and the punitive damages are unprecedented.

From the face of the pleadings, the facts of this case alone do not explain the amount of the verdict. Indeed, this case appears to have a fact pattern relatively common to retaliation cases. Gessy Toussaint had worked as a nurse at Brigham for more than 11 years when a manager allegedly discriminated against another black employee. Toussaint claimed that she supported her colleague’s claim of discrimination and experienced retaliation as a result, including incidents of patient neglect by Toussaint allegedly fabricated by management.

While retaliation claims carry a higher risk of both liability and punitive damages, neither the facts nor these factors appear to explain the $25 million punitive damages award to Toussaint. A number of less-tangible factors may provide some explanation for the amount of the verdict. A “runaway” jury could have returned a verdict that is vulnerable to a remittitur, or court-ordered reduction. The jury may have viewed Toussaint as particularly sympathetic or defense witnesses as particularly unlikeable. The current pervasiveness of societal movements demanding an end to discrimination (e.g., #BlackLivesMatter and #MeToo) cannot be ignored, and a jury may use punitive damages to send a message.

While the verdict has been touted as a new standard by plaintiffs’ counsel in demand letters and settlement negotiations, the reality is that the amount of this verdict may not survive a motion for remittitur. Even if the verdict stands, it is in stark contrast to the typical Massachusetts jury verdict.

Jury Award of Emotional Distress Damages Must Be Reduced by Millions, Judge Rules

A federal judge in New York has ruled that a plaintiff could recover only a small portion of the $2.5 million a jury awarded him, granting the defendant’s request for the reduction. Saber v. New York State Department of Financial Services, No. 1:15-cv-05944 (S.D. N.Y. July 20, 2018).  Plaintiff Nasser Saber, who is Muslim, had filed an eight-count complaint alleging that the employer, the New York State Department of Financial Services (DFS), discriminated against him based on his religion and national origin, and otherwise retaliated against him in violation of Title VII, Sections 1981 and 1983, and New York Executive Law Section 296.

The DFS denied Saber’s allegations and filed a motion for summary judgment, which was denied in part and granted in part. The following issues remained for the jury, according to the court: “whether the failure to promote Plaintiff to the Chief Risk Management Specialist (“CRMS”) position was discrimination prohibited under Title VII”; (2) whether negative performance reviews, a two-day suspension, an unsatisfactory mid-year rating, and the assignment of lesser job responsibilities in 2014 was in retaliation for Saber’s complaint against DFS filed with the Equal Employment Opportunity Commission, and (3) “the amount of damages for Plaintiff Saber’s emotional distress, if any.”

After a six-day trial, the jury “(1) found that Defendant DFS had discriminated against Plaintiff Saber based on national origin, but not religion, when it did not promote him to CRMS, (2) found that Defendant DFS had retaliated against Plaintiff Saber for filing the EEOC complaint, and (3) awarded Plaintiff $2.5 million in damages for his emotional distress.”

DFS moved, pursuant to Federal Rules of Civil Procedure 50 and 59, for a judgment in its favor as a matter of law or, in the alternative, for remittitur of the jury’s damage award to an amount between $5,000 and $35,000. The court denied DFS’ motion for judgment, but granted its motion for remittitur in part and reduced the damages for emotional distress from $2.5 million to $125,000. The court noted that it was “[g]iving deference to the jury’s finding and yet honoring the principle that emotional distress damages are required to be compensatory (rather than punitive or exemplary.”

The court’s decision underscores the potential for an award of damages to be significantly reduced, and the importance of effectively litigating issues related to damages and filing appropriate motions following trial. Jackson Lewis attorneys have significant experience litigating and trying cases dealing with workplace issues, including discrimination, and retaliation.

Illinois Jury Rejects Transgender Worker’s Discrimination Claim

 

A federal jury in Illinois has rejected a transgender employee’s claim that she was discriminated against and illegally fired after she told her employer that she was transitioning.

In 2016, the EEOC filed a lawsuit against Rent-A-Center East, Inc., alleging the company discharged Megan Kerr illegally in 2014, after over a year’s worth of efforts to terminate her employment or force her to quit following her news that she was transgender. According to the complaint, the EEOC alleged that the effect of the practices of Kerr’s supervisors at the relevant store in Rantoul, Illinois, was to “deprive Kerr of equal employment opportunities and otherwise adversely affect her status as an employee because of her sex.”

Rent-A-Center denied the discrimination claims. According to the company, in July 2016, Kerr asked her supervisor to use a company truck on a Sunday to deliver furniture for a local civic organization project. Although Kerr’s request was granted, Kerr improperly used the vehicle to move her own personal belongings, in violation of Rent-A-Center policy. Kerr’s personal use of the vehicle, according to the company, is what led to her discharge the following day.

At trial, the eight-person jury rejected Kerr’s claims. It found that her transgender status was not a motivating factor in Rent-A-Center’s decision to fire her. Instead, it credited the company’s argument that the employee was discharged after she was caught improperly using a company delivery vehicle for her own personal use. The fact that Kerr’s story about her use of the company vehicle apparently changed dramatically over time may have been significant to the jury’s determination.

Discrimination claims based on transgender status are just one of many relatively new bases for bringing discrimination lawsuits. Jackson Lewis attorneys have significant experience representing employers dealing with workplace issues and lawsuits relating to transgender issues, whether they are allegations of discrimination or issues relating to internal training, requests for accommodations, and so on.

Restaurant Chain’s Spoiled Internal Investigation Leads to $8M Jury Award for Fired Employee

A Fresno, California jury has awarded nearly $8 million to former Chipotle employee Jeanette Ortiz on her claim of wrongful discharge.

The jury found Chipotle had fired Ortiz in retaliation for her filing a worker’s compensation claim of carpal tunnel syndrome. It also found Chipotle falsely accused Ortiz of stealing money to disguise the unlawful motive.  Faced with the possibility of additional punitive damages on top of the initial trial verdict, the fast-food giant settled with Ortiz after trial for an undisclosed sum.

Ortiz was a 14-year employee of Chipotle and worked as General Manager. By all accounts, she was a stellar employee with excellent performance reviews prior to her termination. Chipotle accused Ortiz of taking $636 out of a company safe on December 29, 2015, and placing it into her backpack. Ortiz vehemently denied stealing the cash. She told the company that the money was still in the safe on December 30, when she checked the safe with another manager. The second manager confirmed this. Ortiz reported the money missing on January 3, 2016. During its investigation of the theft (the money was not located), the company refused to show Ortiz the surveillance video purportedly showing her taking the money because it was against policy. The footage later was inadvertently deleted. Chipotle maintained that Ortiz had motive and opportunity and fired her.

How can employers avoid missteps in their internal investigations? First, take appropriate steps to preserve evidence. Chipotle’s surveillance camera automatically taped over itself after 45 days and the footage of Ortiz allegedly pocketing the $636 was then lost. Evidence may be on cell phones, in emails, in forensic data from a computer, or, as in this case, on a surveillance video. Do not wait until litigation is filed and rely on your attorneys to gather all of the documentation after-the-fact; in some situations, by the time a company hires outside employment counsel, evidence already has been lost. Management should be trained or advised to take such steps themselves. Everything relied upon in making an employment decision should go into the personnel file, including a disc with a copy of any electronic files.

Second, timing is key. The timing of employment decisions can have major consequences. Here, Ortiz texted her bosses on January 3, 2016, to say that the money was missing from the safe. Her supervisors later accused her of stealing the money and refused to show her the surveillance video. On January 18, Ortiz requested a medical leave of absence because her carpal tunnel syndrome was worsening. While she was on leave, her employment was terminated. Chipotle took too long to make its decision and an intervening event, Ortiz’s medical leave, made its timing appear suspect. Not only do companies have to act thoroughly, they must act quickly in making decisions related to employee misconduct, particularly when a termination is being considered.

Finally, know when to ask for help.  Any difficult employment investigation or personnel decision should be reviewed with experienced counsel to avoid potentially costly blunders.

Jury Enters Sexual Harassment Verdict in Favor of Plaintiff; Awards No Damages

A jury in the Northern District of Georgia recently entered a verdict in favor of the plaintiff in a sexual harassment case, yet awarded her no damages.

In Furcron v. Mail Centers Plus, LLC, a former mailroom clerk, Myra Furcron, sued her former employer, Mail Centers Plus, LLC, for sexual harassment as a result of an alleged hostile work environment created by an autistic coworker.

Mail Centers Plus provides onsite mailroom and copying services for various mid-sized and large corporations. After receiving multiple complaints about an autistic employee (including sexually inappropriate and threatening conduct), the company transferred him to the facility where Furcron happened to be working.

Shortly after the transfer, Furcron complained to her supervisor that her autistic coworker frequently invaded her personal space, brushed up against her, and stared at her with an erection. Furcron’s supervisor responded that Furcron’s coworker meant no harm and that his conduct should be tolerated because of his disability. Furcron subsequently took a picture of her coworker’s erection in an effort to make management take her complaints more seriously. The managers apparently laughed at the picture and said that Furcron’s coworker always looked like that.

The company terminated Furcron a few days after she complained to management. Furcron claimed retaliation. The company claimed that she was terminated for violating company policy by taking a sexually suggestive photograph of a coworker without his permission and showing it to other employees, despite the company’s instructions that she keep the photograph and the employment matter confidential.

The trial court initially entered summary judgment in favor of Mail Centers on Furcron’s sexual harassment and retaliation claims, and Furcron appealed. On appeal, the Eleventh Circuit affirmed the grant of summary judgment in favor of Mail Centers on the retaliation claim, but it found that there was a question of fact with regard to whether the alleged harassment was severe and pervasive enough to support her sexual harassment claim. The sexual harassment claim was remanded and proceeded to trial.

At the conclusion of the trial, the jury entered a verdict in favor of Furcron on her sexual harassment claim. It found that: (1) Furcron had been harassed because of her gender; (2) the harassment created a hostile work environment for Furcron; (3) Furcron’s supervisor knew or should have known of the hostile work environment; (4) the supervisor did not take prompt remedial action to correct it; and (5) Furcron suffered damages as a result of the hostile work environment. Despite finding that she suffered damages as a result of a hostile work environment, the jury found Furcron should not be awarded any damages to compensate for emotional pain and mental suffering caused by the hostile work environment. In short, Furcron won her case, but took home nothing.

Furcron illustrates the uncertainty at trial, particularly with regard to the jury’s views toward key witnesses. While she was able to successfully establish the elements of her sexual harassment claim, the jury’s lack of sympathy for Furcron (who flaunted inappropriate pictures of her autistic coworker), and possible empathy toward her autistic coworker, arguably played a large part in its decision.

Reward for Highest Score: No Promotion, But $1.2 Million Jury Verdict

A long-time New Jersey police department employee applies for a promotion to captain. On the promotional exam, he scores higher than any other applicant. He isn’t promoted. His consolation prize, however, is a jury verdict of more than $1.2 million in state court last month.

In Downing v. Borough of Roselle and Chief Gerald Orlando, Bradley Downing, a former police officer, sued his former employer and supervisor for, among other things,  race discrimination and failure to promote. Downing, who is black, earned the highest score on the promotional exam to become a Captain in the police force. However, shortly before and after the exam scores were announced, Downing’s supervisor, who is white, disciplined Downing for allegedly minor offenses and then failed to recommend Downing for promotion.

Downing sued and the case eventually went to trial. Following a jury trial, Downing was awarded a total of $1,278,240, including $250,000 in punitive damages.

In motions filed after the trial, the defendants claimed that several of the trial court’s evidentiary rulings and actions prejudiced their case, including: (1) the court’s apparent refusal to allow evidence of the racial composition of the Borough Council, the entity that decided who would receive the promotion to Captain; and (2) the court’s questioning of a witness in front of the jury about a racially charged flyer pertaining to another candidate for the Captain position, whom Downing’s supervisor had recommended for promotion. The defendants argued that the flyer was hearsay evidence, extremely prejudicial, and should not have been admitted at trial. Whether the defendants’ post-trial motions and/or appeals are successful remains to be seen.

The Downing case illustrates the uncertainty inherent in a trial. While parties can file motions in limine, and raise objections at trial, there is no guarantee what evidence will come in and what evidence will be kept out. Surely the defendants in this case did not anticipate being barred from presenting evidence they considered critical to their case, or that the court would question a witness about a damaging, allegedly hearsay document.

 

 

 

Well-Documented Investigation and Carefully Written Policies Give Win to School District Against Discrimination, Retaliation Claims

 

Following nearly 10 days of witness testimony, a jury in Denton, Texas, has ruled in favor of the Denton Independent School District (ISD), and rejected an ISD para-professional’s claim that he was fired in retaliation for complaining about discrimination. Although the ISD’s termination letter to the para-professional stated that his history of filing meritless discrimination complaints constituted grounds for termination, the jury determined that it was the para-professional’s well-documented troubling and insubordinate conduct on October 31, 2014, that lead to his suspension and termination. Kenneth Lyons v. Denton Independent Sch. Dist., No. 15-05355-158 (158th Judicial Dist. Court, Denton County, TX).

In 2013, Kenneth Lyons, a former all-star basketball player at the University of North Texas, accepted a para-professional position with the ISD. In this role, Lyons mentored students who were struggling academically or had behavioral issues. On October 31, 2014, Lyons was working at one of the high schools in the district when he approached the school principal with a complaint about the school’s secretary, but the principal said he would discuss the matter with Lyons later. Both men claimed the other became upset and abusive during this conversation. Later that day, the principal – accompanied by an assistant principal – went to Lyons’ office to find out what was going on. Lyons insisted on discussing the matter privately and refused to speak with the pair. The principal returned later that day, but Lyons would not unlock his office door. An audio recording of that exchange included the principal threatening to call the police and ultimately telling Lyons to leave the building immediately.

Lyons was suspended and ISD investigated the incident. On March 11, 2015, ISD concluded that Lyons behaved inappropriately on October 31, 2014, and that his October 2014 complaint of discrimination, as well as several similar complaints he had filed, lacked merit and had been made in bad faith. ISD then terminated Lyons employment because of the October 31, 2014, incident, as well as his numerous, baseless allegations of discrimination. ISD noted its employment policies prohibit the filing of baseless complaints.

Lyons sued ISD in 2015 for discrimination and retaliation. After two mistrials, and nearly 10 days of witness testimony, in early-2018 a Texas jury ruled in favor of ISD. Among other things, the jury found that Lyons’ conduct on October 31, 2014, was the true cause of his termination. It also found that the ISD did not retaliate against Lyons in violation of public policy when it factored Lyons’ discrimination complaints into its assessments.

This case offers a variety of lessons. First, trials often take on a life of their own. This relatively straightforward case is a strong reminder that every trial requires a significant investment of time and energy, and the outcome is rarely a sure thing. Second, employers must take all complaints about discrimination seriously, investigate them appropriately, and carefully document the investigation and findings. The ISD’s ability to substantiate its investigations, combined with its existing policies, were sufficient to sway the jury in ISD’s favor.

Ignorance of Interplay between FMLA and ADA Can Be Costly To Employers

One mistake often made by employers is assuming that after an employee has exhausted his or her 12 weeks of protected Family Medical Leave Act (FMLA) leave, the employer’s obligation is fulfilled. While this may satisfy the employer’s medical leave obligations, the employer also must account for any potential duties under the Americans with Disabilities Act (ADA). The ADA requires employers to “reasonably accommodate” employees with disabilities and such accommodation can include granting additional leave.

A California case highlights this point. A California jury, finding that her former employer had violated the ADA, awarded a former drug addiction counselor more than $4.5 million in damages. Hill v. Asian American Drug Abuse Program, Inc., No. BC582516 (Cal. Sup. Ct. Jan. 19, 2018). Della Hill, while out on protected medical leave after breaking her arm, was diagnosed with major depressive disorder. Her medical leave was set to expire on March 23, 2015, but prior to its expiration, she submitted additional medical information to her employer on her diagnosis and requested additional leave. Instead of granting the request, her employer, the Asian American Drug Abuse Program (AADAP), terminated her on March 31, 2015, for failing to return from medical leave.

After determining that AADAP had failed to reasonably accommodate her disability, the jury awarded Hill $1.9 million in damages (approximately $550,000 in economic damages, and $1,350,000 in non-economic damages). The jury also determined that AADAP had acted with malice, oppression, and/or fraud, which allowed the jury to award another $2.6 million in punitive damages.

Hill’s attorney noted that AADAP did not provide “a single example of any effort … to accommodate Hill,” and claimed that AADAP had attempted to “cover up” its violation with pretextual reasons for Hill’s termination. Indeed, if the jury perceived AADAP’s proffered reasons as pretextual, it may have been key in determining AADAP had acted with “malice, oppression, and/or fraud,” triggering the additional punitive damages.

Key takeaways from this case include:

  • Don’t assume that adverse employment actions are permitted simply because an employee has not returned to work after exhausting FMLA leave. Consider whether additional leave is available under the ADA. If uncertain, consult with qualified employment attorney prior to taking action.
  • The broad definition of “disability” can include mental afflictions such as depression and anxiety. Further, an employee need not mention the ADA or ask for a “reasonable accommodation” to put the employer on notice of a possible need for accommodation.
  • Diligently document all interactions, especially on reasonable accommodation. Employers must be able to show that they engaged in a good faith interactive dialogue about potential accommodations.
  • Consider the situation objectively, and be aware of potential pretextual reasons for an adverse employment action. A jury may determine that pretext constitutes “malice, oppression, and/or fraud,” which opens up the possibility of punitive damages.

 

 

LexBlog