Employer Ordered to Pay $572K for Retaliation Claim

Last week, the federal Sixth Circuit Court of Appeals affirmed a $414,600 jury verdict for compensatory and punitive damages, back pay and front pay as well as $157,734 in attorney’s fees for retaliation claim brought by a former supervisor who claimed that she had been demoted on account of her gender and retaliated against when she complained internally and to the EEOC.   Hubbell v. FedEx Smart Post, Inc., No. 18-1373 (6^th Cir. 2019).   The plaintiff produced sufficient evidence to show that the employer had engaged in conduct towards her that would deter a reasonable person from exercising their protected rights through discriminatory disciplinary actions, surveillance and payroll policies.  Further, some of the actions occurred close in time to her protected conduct.  Finally, “the law in this circuit, however, is that a written anti-discrimination policy does not by itself shield an employer from punitive damages,” especially when there is evidence that the employer did not necessarily follow its own policies or investigate the plaintiff’s internal complaints of discrimination.


According to the Court’s opinion, the plaintiff had been working as a supervisor without any disciplinary record when the new hub manager suggested that women were better suited for administrative roles and she should seek a demotion.  When she refused, she claimed that he assigned her and other female supervisors the worse employees.  She was also given poor performance reviews and disciplinary actions.  When she objected and claimed to HR that he was discriminating against her, no formal or documented investigation was conducted.   After she was demoted, she was told that she – and she alone – could not clock into work more than three minutes early when all other employees were allowed to clock in and be paid 15 minutes early.    She subsequently filed an EEOC Charge.  She was then subjected to closer scrutiny, and was issued multiple disciplinary actions.  She was also restricted from working more than 8 hours/day.   When she filed another EEOC Charge, the guards were told to monitor her restroom breaks and other employees were interrogated about their conversations with her.   She was issued a disciplinary action for attendance even though she had doctor’s notes and was on medical leave.   Finally, she was not even assigned to work overtime during peak periods.  She was fired shortly after she initiated her lawsuit and then amended her complaint to include retaliatory discharge.  


While the trial court dismissed her hostile work environment claim on summary judgment, at trial several former co-workers testified in support that she was treated more harshly and more closely scrutinized than any other employee.  The jury found that she had suffered retaliation, and awarded her damages, but also initially found that the employer had acted in good faith, which would relieve it of punitive damages.  The judge told the jury to re-deliberate the issues with conflicting verdicts (i.e., punitive damages and employer’s good faith) and the jury returned by finding that the employer had not acted in good faith.   The trial court denied the employer’s post-trial motions, but reduced the punitive damage award in accordance with the damage caps in the 1991 Civil Rights Act.


On appeal, the Sixth Circuit affirmed the decision and verdict in all respects
.   

Supervisory knowledge.  There was no dispute that the decisionmakers were aware that she had filed EEOC Charges.  However, the court agreed that she did not carry her burden of proving that the decisionmakers were aware of her lawsuit until after she was fired.  One denied knowing about the lawsuit and another testified that he could not recall when he learned about it.  “Although [the plaintiff] argues that the question of whether to believe Jensen’s testimony should be left to the jury, Jensen’s statement that he did not remember when he learned that [she] filed suit is simply not enough to carry her burden of showing knowledge.”


Retaliation.  The trial court had found that the only materially adverse job action which the plaintiff had suffered was the employer’s refusal to let her clock in more than 3 minutes early when her co-workers had no such restriction.   However, regardless of how the trial court ruled on summary judgment, the jury and appellate court were not limited in considering such evidence that was introduced at trial.  Because this pre-dated her first EEOC Charge, the employer argued that she could not prove that she suffered any actionable retaliation from the negative feedback in her disciplinary actions and scrutiny.  The Sixth Circuit disagreed.

“a plaintiff seeking Title VII’s protection against retaliation need show only “that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”   . . . .reiterating that the showing required for a Title VII retaliation claim “is less burdensome than what a plaintiff must demonstrate for a Title VII discrimination claim.” 

Accordingly, the closer scrutiny, the unwarranted disciplinary actions over trial matters, and interrogating her co-workers about their conversations with her, etc.  could support a finding of retaliation.

A reasonable factfinder could also find that some or all these acts were taken in retaliation for Hubbell’s EEOC complaint(s).  Trial evidence revealed that Hubbell was repeatedly disciplined within a year of filing her EEOC complaints, starting with three disciplinary writeups within approximately two months of filing her first EEOC complaint—the first one coming a mere four days after she filed her complaint.  Such close temporal proximity, standing alone, may be enough to prove causation.

Punitive Damages.   While a plaintiff is required to show, among other things, that the employer acted with malice or reckless indifference with respect to the plaintiff’s civil rights,  the plaintiff is not required to show that the employer’s behavior was “egregious.” While egregious behavior is sufficient to show malice or reckless indifference, less egregious behavior can satisfy the standard.   Moreover, even if the employer took steps to avoid discriminating by distributing and training on anti-discrimination policies, it can still be held liable for the actions of a manager acting within the scope of his employment who is also acting with malice or reckless indifference.  “The law in this circuit, however, is that a written anti-discrimination policy does not by itself shield an employer from punitive damages.  Tisdale v. Fed. Express Corp., 415 F.3d 516, 532–33 (6th Cir. 2005).”  Moreover, in this case, there was evidence that the employer failed to formally investigate the plaintiff’s allegations.  

Attorney’s Fees.  The court found no abuse of discretion in reducing the amount of fees, even if the employer had not objected to the amount.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Affirms $1.5M Verdict for Sexual Harassment of and Retaliation Against Temporary Employees

Last week, a unanimous Sixth Circuit affirmed a $1.5M jury verdict against a logistics employer which fired three women and one male employee who protested sexual harassment by a supervisor who also played significant roles in having each of them fired.  EEOC v. New Breed Logistics, No. 13-6250 (6^th Cir. 4-22-15).  The Court rejected the employer’s argument that opposing and protesting a supervisor’s sexual harassment to his face is not protected “opposition” under Title VII and specifically noted that the statute does not require the employee to protest to anyone in particular.  The Court also found the employer could be held liable for punitive damages based solely on the harassing supervisor’s knowledge and conduct and because the employer did not distribute the anti-harassment policy to temporary employees, did not conduct a good faith workplace investigation of the anonymous harassment complaint about the supervisor, and terminated three of the four plaintiffs during the workplace investigation.

According to the Court’s opinion, the defendant employer operated with mostly temporary employees assigned from staffing companies.  It only provided employee handbooks to its regular employees.  One of its supervisors had the authority to terminate temporary employees and was regularly harassing female subordinates with lewd comments and physical contact.   Not only did the employees object to his conduct, a male co-worker also requested that he stop it.  Only one of the employees ever complained to management and only did so anonymously.  The subsequent investigation was initially limited to interviewing the harassing supervisor.  All of the plaintiffs were ultimately fired shortly after the anonymous complaint was made.  Two of them were fired for purported attendance issues and two for making a mistake.   The harassing manager was found to have been the decisionmaker or to have played a role in all of their terminations.  The employees denied having attendance issues and evidence was presented that other employees had made mistakes without being fired.

The employer had argued that the plaintiffs could not prove retaliation because they could not show that they engaged in any protected conduct before their termination.  Only one of them had made an anonymous complaint to management prior to her termination.  The employer contended that the employees’ protest to the harassing supervisor himself and resistance to his harassment was not protected conduct.  Surprisingly, two other court decisions agreed with this argument, with one of them noting that resistance to harassment could not be protected conduct or every harassment claim would automatically constitute a retaliation claim as well.  The Sixth Circuit rejected this argument because Title VII’s opposition clause in the anti-retaliation provision prohibits retaliation against any employee because the employee opposed an unlawful employment practice.   The Supreme Court has previously noted that “oppose” means to resist.  Therefore, the Sixth Circuit has found protected opposition with informal complaints of discrimination:

[A] demand that a supervisor cease his/her harassing conduct constitutes protected activity covered by Title VII. Sexual harassment is without question an “unlawful employment practice.” If an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful  harassment—the opposition clause’s broad language confers protection to this conduct. Importantly, the language of the opposition clause does not specify to whom protected activity must be directed.

Because the supervisor knew of their protests of his behavior and played a role in their terminations, the Court had no difficulty finding sufficient evidence of but-for causation in their retaliation claims.   Where he merely played a role in two plaintiffs’ termination, the decisionmaker relied upon his evaluation of their work and gave inconsistent explanations about why she held them to a higher standard than other employees.   There was also a strong temporal proximity between the time of the protected conduct and the retaliatory terminations.  In addition, the EEOC was able to provide evidence that the reasons given for the terminations were pretextual because the harassing supervisor had told one of the employees that he would disguise her tardiness (instead of discharging her), one of the employees had never been accused of attendance issues before he was fired shortly after being interviewed during the harassment investigation, and two of the employees could show that other employees had make similar mistakes and not been fired.

The Court also refused to consider the employer’s Ellerth affirmative defense because each of the plaintiffs suffered a tangible employment action when they were fired.

The Court found that the employer could be held liable for punitive damages.  The Court rejected the employer’s argument that it could not be liable since sexual harassment was outside the scope of the supervisor’s employment because the tangible employment action -- firing the employees -- was within the supervisor’s authority.  The Court also rejected the employer’s defense that management could not have acted with deliberate disregard of federal law since management did not previously know about the harassment because the supervisor clearly knew about the harassment. “The EEOC only had to show that the “individual[] perpetrating the discrimination [or, here, retaliation]” acted with malice or reckless disregard for federally protected rights.”   

Further, the Court rejected the employer’s good faith defense because it did not undertake efforts to prevent and remedy the harassment by, for instance, providing an employee handbook or harassment policy to the temporary employees.  It also had initially only interviewed the supervisor after the anonymous complaint was made and did not interview all of the potential witnesses identified. “In assessing whether an employer engaged in good-faith efforts to comply with Title VII, we focus “both on whether the defendant employer had a written sexual harassment policy and whether the employer effectively publicized and enforced its policy.’”  Finally, the jury was entitled to infer a lack of good faith from the fact that three of the plaintiffs were terminated during the employer’s investigation of the anonymous complaint.  

The jury instruction on punitive damages omitted language about the employer’s good faith defense.  The Court found that the employer had waived its objection to this omission by failing to argue about the missing language during the charge conference even though the employer had submitted a proposed jury instruction with the missing language.   The Court also rejected the employer’s argument that it constituted plain error for the jury instruction to omit the employer’s good faith defense because the employer did not make an argument about its good faith during its closing arguments to the jury. 

The Court also rejected challenges to the jury instruction use of “because of” instead of “but for” in the retaliation instruction.  

The EEOC press release about its victory mentions that the lawsuit was first filed in September 2010 and the jury reached its verdict in May 2013.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

A Tale of Two Age Discrimination Cases in Central Ohio

Last week, a divided Franklin County Court of Appeals issued decisions in two different age discrimination cases.  One has been pending since 1999 and has been up and down the appellate process with a variety of results.  One has had several jury trials, while the other was a reversal of a bench trial.  In the first case, a nurse was terminated in 2009 for violating policies in the NICU at a local hospital after 21 years of service.  Although she appealed the case to an internal review board that recommended a lesser penalty, the president decided to sustain the termination of her employment.  The common pleas judge hearing the case ruled in her favor only to be reversed last week on appeal.  Mittler v. OhioHealth Corp., 2013-Ohio-1634.  In the second case, the plaintiff filed his lawsuit after his 1998 separation from employment.  The case was initially dismissed on summary judgment in 2001, was reversed on appeal, resulted in a jury verdict in 2002 awarding over $700,000 in compensatory (emotional distress) damages and $25M in punitive damages (as well as attorney fees), was reversed on appeal and so on.  More recently, the jury ruled against the plaintiff on his age discrimination claim, but last week a divided court of appeals remanded the case for yet another trial based on evidence it found was improperly excluded. Jelinek v. Abbott Laboratories, 2013-Ohio-1675.  This case is illustrative for a number of points, not the least of which is how unpredictable and how lengthy litigation can be.

To start with the briefer case, in Mittler, the plaintiff was fired following two incidents.  In one, she took a picture of a volunteer holding infant twins without first obtaining the permission of the babies’ mother (who later objected to volunteers holding her babies).  She had given a copy of the photo to the volunteer before obtaining permission and did not self-disclose her alleged HIPAA violation when the mistake came to light. She also mistakenly administered eye drops to the same infants and failed to submit an incident report. The HIPAA violation subjected the plaintiff to immediate termination.  On appeal, the problem review committee unanimous recommended the imposition of a less serious penalty.  However, the hospital’s president upheld the termination. 

The case was tried to the bench (instead of a jury) and the court found that the plaintiff would not have been terminated but for her age.  However, on appeal, the Court of Appeals concluded that she could not prove age discrimination because she could not show that she was replaced by a younger person.  According to the Court’s majority, no new employees were transferred to her shift after her discharge; her duties were merely redistributed among existing employees (some of whom were older than her).  The dissent noted that four older nurses had been terminated in two months and night shift nurses were hired and eight months later a day shift nurse was hired.  Therefore, the dissent agreed with the trial court that the plaintiff’s termination result in the hiring and retention of younger employees.

The plaintiff also could not show that younger employees were treated differently.  Her alleged comparators all reported their mistakes, unlike the plaintiff.  The dissent focused on alleged mistreatment of older nurses in other contexts.  In short, the dissent did not believe that the plaintiff would have been fired, but for her age.

The Jelinek case has had a long and tortured history.  The case was re-filed in 1999 alleging, among other things, that the plaintiff had been constructively discharged in 1998 on account of his age when he had been reassigned to an allegedly less desirable sales territory that included Gary, Indiana instead of to one that included Memphis, Tennessee which had been assigned to a younger peer who had previously worked in Chicago. The plaintiff had worked for the company for more than 30 years and was the oldest of the district managers when all of the district manager positions were eliminated.   The case was first dismissed on summary judgment in 2001, but was reinstated later that year on appeal (in an opinion written by Judge Tyack), on the grounds that the transfer to the smaller Indiana district instead of Tennessee could be discriminatory.  The Court also reinstated his claims for promissory estoppel and constructive discharge, but affirmed dismissal of the plaintiff’s claims for wrongful discharge in violation of public policy and retaliation.  The court denied the plaintiff’s motion for reconsideration and the Supreme Court declined to take his appeal.

Back at the common pleas court, the case proceeded to a jury trial in 2002.  Although the jury found for the employer on the promissory estoppel and constructive discharge claims, it found that the plaintiff had been discriminated against on account of his age, awarded him $700,000 in compensatory damages (for emotional distress), attorney fees, and $25,000,000 in punitive damages.  (This made a lot of news).   After motions for JNOV (judgment notwithstanding the verdict), a new trial and remittitur, the judge made a number of conditional orders in 2003.  First, he granted the defendants’ jnov motions.  Should that be reversed on appeal, he granted the defendants’ motion for a new trial.  Should that also be reversed, he denied the defendants’ motion for a new trial unless the plaintiff rejected a remittitur reducing the amount of compensatory damages to $100,000 and punitive damages to $4,000.000.  The trial judge also denied the plaintiff’s request for attorney fees.

On appeal, the case was remanded for another new trial on the age discrimination claim in 2005.  The Court agreed that there was enough potential of evidence of age discrimination to support the jury’s verdict and, therefore, the trial court had erred in granting the jnov motion.  However, there was insufficient evidence of intolerable working conditions necessary to show a constructive discharge.  The Court also concluded that it was within the trial court’s discretion to condition the grant of a new trial.

Again back at the common pleas court, there were two attempts at new jury trials, but both resulted in mistrials.  That judge then recused himself in 2008 and the case was assigned to a new judge who “issued a decision stating that 'the scope of the new trial is confined to the age-discrimination claim and excludes a retrial of the constructive-discharge claim, including facts or allegations that relate to that claim.'"  The plaintiff attempted to force the trial judge to permit him to again try his constructive discharge theory and filed a mandamus action for force the trial judge to do so.  The Court of Appeals agreed in 2010 that he had not prevailed on the constructive discharge as a separate claim in the last jury trial and the court had previously overruled his only objection to that verdict.   Therefore, the trial court had not manifestly erred.  On appeal to the Ohio Supreme Court, the decision denying the mandamus was affirmed near the end of 2010.  The plaintiff remained free to pursue his argument on appeal from any future verdict based on the trial court’s ruling, just as every party has a right to do.

The case was again tried to a jury in 2011 and this time the jury ruled against the plaintiff and in favor of the defendants.  Prior to deliberations, the trial court had directed a verdict for the defendants on the issue of punitive damages. The plaintiff again appealed and the appellate court again reversed, but this time based on evidentiary rulings against the plaintiff.   In ruling on pre-trial motions in limine, the plaintiff was precluded from introducing evidence concerning his prior claims that had been dismissed:  promissory estoppels, retaliation, wrongful discharge in violation of public policy and constructive discharge.  The Court again overruled the plaintiff’s objection to the exclusion of all evidence related to his constructive discharge theory.   The Court also affirmed the trial court’s directed verdict on the issue of punitive damages.

 According to the Court’s opinion from last week (coincidentally, also written by Judge Tyack),  the plaintiff “was precluded from referring to the crime rate in Gary, Indiana, the quality of the Lake County territory, and any testimony referring to a memorandum allegedly saying that all employees over 50 years old with 20 years of service should take early retirement.”  This evidence had previously been introduced to support the plaintiff’s defunct constructive discharge claim.  However, the plaintiff argued that he should still be permitted to introduce this evidence to explain why this territory was undesirable and why the employer should not be believed in contending that it was equivalent to the territory offered to younger peers.

 

Evidence that the territory was "collapsed" from twelve counties to two shortly before it  was offered to [the plaintiff] addresses both the issue of pretext, and the reason why [the plaintiff] was reluctant to accept the territory. This pretext evidence was critical to [his] ultimate burden of proof and therefore its exclusion was highly prejudicial. By taking the extreme position that any mention of the quality of the territory related only to constructive discharge, the trial court abused its discretion.

The trial court also excluded testimony by a former salesperson that the retired vice-president of sales had discussed with him in 1999 a memorandum written in 1997 that employees over the age of 50 with over 20 years of service (like the plaintiff) should retire.  No such memorandum was ever produced as evidence and the company denied that it even existed.  The defendants objected to this testimony as hearsay because the vice president had retired the year before the alleged conversation.  However, the plaintiff argued and the Court agreed that it could constitute evidence of an admission by a party-opponent because the vice-president was an individual defendant at the trial. “Since the alleged memorandum was never produced, the jury can decide how much weight, if any, to give to [the vice president’s] admission.”

 There were some other interesting evidentiary issues.  Typically (and was true in this case), it is the plaintiff and not the defendant which seeks to introduce evidence about the other party’s wealth.  In this case, however, because the plaintiff’s constructive discharge claim had been rejected in prior proceedings, his only claim for damages for related to the emotional distress of losing his substantial income and having bills to pay.   The defendants showed that he was a millionaire at the time he resigned and had just bought his wife a Mercedes automobile.  They also showed pictures of his home to the jury.  The Court found it was within the trial court’s discretion to allow this evidence because the plaintiff’s:

 

financial situation was at issue because his claim for compensatory damages was based entirely on emotional stress caused by his financial concerns.  [The plaintiff] testified that he had sleepless nights, tossing and turning, worrying about how much money he had in the bank, that he was very stressed about money, and he was concerned about making ends meet.

The defendants argued (and the jury was instructed) that the plaintiff’s position was eliminated in a reduction in force.  However, the plaintiff was denied discovery on the RIF and precluded from introducing statistics.  The company argued that statistics were irrelevant since he had not alleged a disparate impact theory. The Court overruled the plaintiff’s objection at this point as moot, but ordered that “if, when the case is retried, [the company] intends to argue that the elimination of  [the plaintiff’s] position was part of an overall reduction in force in order to receive the heightened jury instruction, [he] should be allowed to rebut [its] claim by means of statistical evidence.”

 The Court agreed that the plaintiff had failed to present sufficient evidence to request the jury to rule on punitive damages.  At best, his evidence showed that there may have been a lack of formal EEO instruction, “but to infer that [the company] exhibited a conscious disregard for [his] right to be free from age discrimination requires a leap of logic not supported by the evidence.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

A Hodgepodge of Activity in February

There have been a few interesting decisions within the past month in the employment context, but none of them are earth-shattering (unless you are facing a factually similar situation in your workplace).   The NLRB once again dinged a non-union employer for terminating an HR employee for discussing confidential salary information with co-workers because the employer failed to show she was a statutory supervisor and employees have a right to discuss wage information.  After she declined reinstatement, the employer offered “to make the former employee whole by paying her backpay, 401(k) contributions, medical expenses and interest in the total amount of $107,000, to revise its policy to delete the prohibition on employees of discussing their salaries, and to post a Board Notice describing these actions.”  Of course, whether this decision survives is an open question since the D.C. Court of Appeals ruled last month that President Obama lacked the authority to make three recess appointments to the NLRB on January 4, 2012 and, without those recess appointments, the NLRB lacks a quorum to vote.  (Yes, here we go again).  The NLRB announced it intended to appeal the decision in that particular case and essentially otherwise ignore the decision while conducting business as usual until the Supreme Court tells it otherwise.  The Sixth Circuit also issued a few interesting decisions.

In one case, Quinn v. Griffith, No. 12-1465 (6^th Cir. 2-21-13) the Sixth Circuit affirmed a jury verdict holding an employer liable for a sexually hostile work environment created by the manager in a two-person office and the imposition of punitive damages.  The employee apparently set up a hidden camera in the office to substantiate her allegations after the employer’s internal investigation concluded that it could not substantiate her allegations. The trial court refused to permit testimony by the employer’s lip-reading expert to rebut what the jury saw on the videotape.  Even without lost wages, the plaintiff was awarded $25,000 in compensatory damages and $50,000 in punitive damages.   (Attorney fees for a prevailing plaintiff were not discussed in the opinion).  The matter was remanded for the trial court to clarify or modify the allocation of damages among the individual and corporate defendant and among the state and federal claims.  The Court had no difficulty in rejecting the employer’s argument that it should not be held liable for the manager’s conduct because it failed to preserve the Ellerth/Faragher affirmative defense in its answer to the plaintiff’s complaint or in its summary judgment motion.  Moreover, the employer failed to present any evidence of how it had exercised reasonable care to prevent and remedy the harassment.   (Obviously, this is difficult when it failed to distribute a sexual harassment policy, but not impossible according to the Court).   The same could be said of its argument that it could not be liable for punitive damages.  “An employer may avoid liability by showing that it engaged in good-faith efforts to comply with Title VII, which is most often shown by effective implementation of an anti-harassment policy.”

The Sixth Circuit has also heard and rejected a few appeals involving firefighters suing the City of Columbus.   Yesterday’s decision in Arnold v. City of Columbus likewise found no evidence of race discrimination.  This case involved a series of external and internal investigations over a few years into the conduct of the inspections section/fire protection bureau of the fire department.  Employees complained, in particular, about how the internal investigations were conducted and alleged that they were treated differently than white employees in terms of the presence of union officers in interviews, whether certain interviews were tape recorded and whether they could object to the presence of union officers in interviews, etc.   Ultimately, the Court found that the plaintiffs were not treated differently on account of their race.   In the Fullen case, the Court upheld disciplinary action when a plaintiff refused to be interviewed in the presence of a union representative.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Hears Oral Argument on Apportioning Punitive Damages in Retaliation Case

On Wednesday, the Supreme Court entertained oral argument concerning the apportionment of punitive damages among defendants in a wrongful discharge case. As previously reported here, the Cuyahoga County Court of Appeals ruled last year that Ohio's Tort Reform Act required the reduction of $43M in punitive damages to no more than $7M (which was twice the amount of compensatory damages awarded by the jury) in a retaliatory discharge case brought under the Ohio Civil Rights Act where the plaintiff had alleged that he was fired in retaliation for refusing to fire the shift’s three oldest workers. Luri v. Republic Servs., Inc., 2011-Ohio-2389. There was joint and several liability for compensatory damages (under a single-employer theory). The plaintiff argued that the punitive damages should be awarded against each plaintiff individually in order to punish and deter similar misconduct in the future.  Defendants argued that they were prejudiced by the failure of the trial court to bifurcate the case to hear punitive damages separately.

As stated by the Court’s website, the issue presented is “When a jury awards the plaintiff in a civil lawsuit compensatory damages for which multiple defendants are jointly and severally liable, and also finds that each defendant is subject to punitive damages, does the state law capping punitive damages at “two times the amount of the compensatory damages awarded to the plaintiff from that defendant,” allow a punitive damage award against each defendant of two times the total compensatory damages, or does the cap limit the punitive damages recoverable from all the defendants collectively to a total of two times the plaintiff’s compensatory damages?“ In other words, is the punitive damages 'cap' the maximum amount recoverable from each defendant, or from all defendants collectively where the jury found each of multiple defendants subject to punitive damages.

The plaintiff’s argument focused on the apportionment of the punitive damages and led to few questions from the bench. The jury awarded different amounts of punitive damages against each of the five defendants (as requested by the jury interrogatories submitted by the defendants).

The defense attorneys argued that the entire case should be retried because the case was not bifurcated on the issue of punitive damages as required by the Supreme Court’s February decision in Havel v. Villa St. Joseph, 131 Ohio St.3d 235, 2012-Ohio-552. The plaintiff argued at trial about the wealth of the defendants during the liability portion of the case, which Defendants assert prejudiced them, even though – as asserted by the plaintiff’s attorney – the defense objection was waived by the defendants’ failure to object to the questions and arguments at trial. The plaintiff’s attorney also argued that the bifurcation issue was not applicable. Among other things, the defendants did not immediately appeal the denial of their request to bifurcate the case on damages. (Even though the recently decided Havel concluded that bifurcation decisions are final appealable orders, the defendants argued the issue was not that clear and should not prejudice them from raising the issue now).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Appeals Court Lowers $46.5M Damage Award to $10.5M In Retaliatory Discharge Case

Last Thursday, the Cuyahoga County Court of Appeals ruled that Ohio's Tort Reform Act required the reduction of $43M in punitive damages to no more than $7M (which was twice the amount of compensatory damages awarded by the jury) in a retaliatory discharge case brought under the Ohio Civil Rights Act. Luri v. Republic Servs., Inc., 2011-Ohio-2389. In that case, the plaintiff general manager alleged that his employer manufactured a reason to fire him in April 2007 in violation of Ohio Revised Code § 4112.02(I) after he refused to fire the company's three oldest employees in November 2006. He had protested that one of the older employees had strong performance evaluations and could sue the company for age and disability discrimination. In addition, the plaintiff presented evidence that the defendants had altered and/or fabricated evidence to support its illegal termination decision and then refused to waive his non-competition agreement after firing him.

The Court held that the trial court did not abuse its discretion in refusing to bifurcate the trial (between liability and damages) because the evidence that proved liability was also relevant to the defendant's bad faith, justifying punitive damages. In particular, evidence that the defendants had manufactured evidence proved not only guilty intent in the termination decision, but also bad faith. The Court refused to find an error in the jury instructions because the defendants had failed to ask in the jury interrogatories or instructions for the economic and non-economic damages to be separately specified. In addition to the $3.5M in compensatory damages awarded by the jury, the trial court also awarded over $1M in attorney fees and prejudgment interest. However, the Court of Appeals found that the Tort Reform Act at Ohio Revised Code § 2315.21(D) limited the punitive damages to twice the amount of compensatory damages and those damages should be imposed collectively, rather than per plaintiff. Otherwise, the amount of the $43M punitive damage award did not shock the Court's conscience or constitute a violation of due process under the circumstances.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.