Punitive damages are generally difficult to obtain.  And under Supreme Court precedent, punitive damages greater than ten times an award of compensatory damages is generally considered “grossly excessive,” raises due process issues, and is likely to be struck down or reduced by a court.

That is what makes a new decision from a federal appeals court so significant – in a Title VII case in which plaintiff recovered $1 in “nominal” damages the Court awarded plaintiff the full Title VII cap of $300,000 in punitive damages.  Three hundred thousand times the compensatory damages award!

See Arizona v. ASARCO LLC, 2014 BL 346185

money damages : Piggy bank Stock Photo

After an eight-day trial in a sexual harassment case, the jury awarded plaintiff no compensatory damages, but awarded $1 in nominal damages and $868,750 in punitive damages.  The Court applied “the due process analysis in [the US Supreme Court’s] BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), [and] concluded the punitive damages award was not unconstitutional but, given the $300,000 cap on compensatory and punitive damages found in § 1981a(b)(3)(D)[the Title VII damages statute], reduced the award to $300,000.”

The Court examined the elements set forth in the Gore analysis as to punitive damages:  “(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.”

After this analysis, the Court held in the case that:

“there is significant and compelling evidence that management was aware of, and did little to resolve, lewd, inappropriate, and sexually aggressive behavior directed to [plaintiff]; sexually explicit, targeted pictures of [plaintiff] on the walls of the bathroom rented specifically for her use; and overly aggressive management and criticism of [plaintiff]  by supervisors. [Plaintiff]  complained to management multiple times. The sexually explicit graffiti in the bathroom was not removed while she was working in the filter plant.  As the district court correctly noted, to the extent ASARCO did have an antidiscrimination or harassment policy, the existence of such a policy alone is not enough to save it. …

Further, the award is consistent with, and in some cases smaller than, punitive damages awards in other Title VII and 42 U.S.C. § 1981 cases we have considered.  … “

“In sum,” the Court stated, “we conclude that punitive damages awards conferred under § 1981a comport with due process. The statute provides specific notice of proscribed conduct. It specifies the maximum amount of damages that can be awarded, and incorporates both specified compensatory and punitive damages within the cap. The $300,000 dollar amount of the cap provides an extremely limited potential for recovery, and has not changed, nor been adjusted for inflation, since its adoption in 1991. There is nothing in our consideration of the Gore factors that would alter that conclusion. The record supports the district court’s conclusion that the punitive award was made in conformance with the statute and was not otherwise in violation of due process.”

money damages : A fist full of paper money money, dollars, smashing through the background, or wall.

Takeaway

Employers must be aware that under the federal anti-discrimination laws, even if a plaintiff is awarded a truly nominal sum after trial, the employer still may be socked with not only substantial punitive damages, but also reasonable attorneys fees.   All in all not a happy result.

Better to preemptively train your managers and employees well, have a good, solid (and updated) employment manual, and lead from the top down in terms of respect and zero tolerance in the workplace.

 

 

 

Reorganization, reduction in force (“RIF”), merger of departments – these are only a few reasons which employers give when firing an employee – and which is frequently alleged to be — and found to be a pretext in violation of Title VII, the ADEA or other anti-discrimination laws.

And also setting a performance bar too high to achieve, intending the employee to fail.  

All employment lawyers – both employee and management side – have encountered these scenarios.

age discrimination : Concept image depicting employment ageism and discrimination for people over fifty. Selective focus on the road text. Copy space.

A new Age Discrimination in Employment Act (“ADEA”) case filed by the EEOC illustrates the nature of such an alleged pretext.  The EEOC claims that Blinded Veterans Association (“BVA”), a non-profit Washington, D.C.-based service provider to blind veterans fired two longstanding employees because of their age.   (NB:  Another example of the EEOC targeting organizations “whose charter is to help people” or “who should know better.”  Readers are hopefully familiar with our many such posts, usually involving the ADA).

Link:  http://www.eeoc.gov/eeoc/newsroom/release/12-12-14.cfm

One 76-year old employee with 34 years tenure was asked repeatedly when he would retire.  When he said that he had no such plans, BVA (according to the EEOC) “announced that it was ‘reclassifying’ certain jobs, including [plaintiff’s], and that he needed to compete for one of the newly-created national field service officer positions if he wanted to remain employed by BVA.  In order to compete for one of the newly created jobs, BVA imposed on Martinez arbitrary and unrealistic requirements.”

A “bar too high to reach,” which led inexorably (and intentionally) to failure, is what this alleged “pretext” might be called, if proved true.

unfair race : You are pushing a flat cube while your competition is pushing spheres marked Them, symbolizing an unfair advantage others have in a race or the game of life, preventing you from success and achiving goals Stock Photo

The second employee, 70 years’ old with 15 years tenure, was asked repeatedly “When are you going to retire?” and “When are you moving to Florida?” 

Refreshing, don’t you think?  At least with the second employee the employer was honest in its age animus — thereby providing the employee direct evidence of age discrimination, without the messy and complicated pretext.

Takeaway

An EEOC attorney said it best:  “Targeting older workers under the pretext of a reorganization doesn’t fool anyone – it’s clearly age discrimination, and clearly unlawful.” 

 

A newly filed EEOC charge alleges that The Holy Family Catholic Community in Inverness, Ill fired its 17-year music director when the director announced on Facebook that he had just become an engaged to his male partner.  This, according to the Portland Press Herald.

See: http://www.pressherald.com/2014/12/06/music-director-fired-by-church-files-claim-for-discrimination/

gay weddings : Closeup of a gay couple holding hands, wearing a wedding ring. Couple is a hispanic man and a caucasian man.

The director, who alleges sex, sexual orientation and marital status discrimination, stated that he was told that “his same-sex relationship violated the tenets of the Roman Catholic Church.”

The Archdiocese of Chicago declined comment.

An Earlier Case

This case is strikingly similar to one we wrote about last February.

The Boston Globe and Boston.com reported what then may have been a legal first – a case filed with the Massachusetts Commission Against Discrimination (MCAD) against a religiously affiliated college prep school by a gay man who claimed that his offer of employment was withdrawn after the school discovered that he listed a “husband” as his emergency contact.

The applicant was offered a job as food services director, but claimed that a school official said that “the Catholic religion doesn’t recognize same-sex marriage, and that was her excuse.  She said, ‘We cannot hire you.’  If I’m planning and making meals for students, I’m not sure what my being gay has to do with the job. All I did was fill out the form honestly.”

He alleged sex and sexual orientation discrimination.

His attorney said that “There is a balance between important values, which are religious liberties, and discriminatory practices. This is a job that has nothing to do with religion . . . and this weighs toward discrimination.  Religiously affiliated entities do not have a free pass to do as they please in how they treat employees, particularly when it comes to our important laws against discrimination.”

The Ministerial Exception

Both cases involve what is called the “ministerial exception.”

On January 11, 2012, we reported about a significant First Amendment religious freedom decision involving the “ministerial exception” which was decided that day by the Supreme Court, Hosanna-Tabor Church v. Equal Employment Opportunity Commission.

The Court had before it a teacher in a religious institution who taught both secular subjects and a class in religion. When she threatened to file a charge of disability when a new teacher was hired to replace her, she was fired for insubordination. Her case involved a head-to-head confrontation between First Amendment religious freedom and the anti-discrimination employment laws.

At issue before the Court was the definition of “minister,” because” the “ministerial exception” holds, in effect, that the government should not get involved in internal church affairs involving “ministers,” and therefore courts should not become embroiled in lawsuits involving “ministers.”

The unanimous Court held that the religious institution must be free to choose its own ministers without state involvement: “The interest of society in the enforcement of employment discrimination statutes is undoubtedly important,” but “so too is the interest of religious groups in choosing who will preach their beliefs, teach their faith, and carry out their mission.”

Non-Ministerial Duties

In a post in June 2013, we reported that the Roman Catholic Archdiocese of Cincinnati fired a non-Catholic computer teacher in a parochial school allegedly for violating an employment contract requiring her “to conform with Catholic doctrine, which considers pregnancy out of wedlock through artificial means ‘gravely immoral.’”

Did the ministerial exception apply to her and thus permit her firing?

Plaintiff was a female non-Catholic, gay, unmarried parochial school computer teacher. She claimed that she was fired for being pregnant and unmarried.  Prior to trial, the archdiocese lost a motion based upon the recognized “ministerial exception,” since although Plaintiff was a non-Catholic (and thus did not conform to “Catholic doctrine”) she taught only computer classes (and not, for example, religion classes) and was even barred under church rules from teaching religion to her elementary school students.

Therefore, since she did not have ministerial duties in teaching computer classes, the exception did not apply, and a federal jury in Ohio agreed with her and awarded her $171,000 in damages and back pay.

The anti-discrimination laws trumped religious considerations in that case.

With respect to the Massachusetts case in early 2014, a Boston lawyer, Nancy Shilepsky, was quoted as saying that “Our Supreme Judicial Court takes a serious look at issues involving religious liberty and at issues involving discrimination.  They are careful to try to strike the appropriate balance.”

Takeaway

“Balance” and “accommodation” are always key in analyzing religious discrimination cases, or cases where religious practices are involved.

 

There are two takeaways in today’s post.

First:  Beating a dead horse, we are constrained to remind health care and medical providers, yet again, that the EEOC continues to target you for ADA violations, or (in the case we will discuss), Title VII pregnancy violations; and

Second:  Be aware that Title VII, a “make whole” statute, provides for possible remedies that include, besides monetary awards, reinstatement.  Employers forget that.    

welcome back to work : Welcome back to school writen by chocolate pencils on line paper - realistic illustration with perspective and deep of field Stock Photo

This post is prompted by a an EEOC announcement of a consent decree in a Title VII lawsuit against an Illinois rehab center which provides short- and long- term medical and rehabilitation care located in suburban Bridgeview, Ill.   The EEOC alleged that the administrator of the center, after learning that a staff social worker was pregnant, reduced her hours and then fired her while she was on maternity leave. 

The consent decree “provides for reinstatement of the employee and monetary compensation in the form of a salary adjustment and repayment of nursing school loans.  In addition, the consent decree requires [the center] to report to the EEOC for the next two years on all employee complaints of pregnancy discrimination.  The company must also train all its employees at this location on the prevention and eradication of pregnancy discrimination.”

Link:  http://www.eeoc.gov/eeoc/newsroom/release/12-11-14.cfm.

“Reinstatement” (and a commensurate salary adjustment) is what we want to highlight about the consent decree, since it is not often that a company, or the former employee, agree to it (virtually all EEOC settlements and consent decrees contain provisions requiring anti-discrimination training, and EEOC oversight for a period of time – usually a couple of years).     

In any event, the EEOC noted that “Pregnancy discrimination remains a problem.  In too many workplaces too many times, employers are too quick to determine that the pregnant employee is the expendable employee.  But we’re pleased with the result here.  It includes getting the employee back on the job and positioned to progress in her career.”

 

We wrote a post the other day entitled “Is There A Duty To Mitigate Emotional Damages?”

In it we cited a case where a court held that the EEOC was not required to prove that groped female employees made reasonable efforts to limit their emotional harm caused by the alleged harassment:   “Congress’ deliberate decision to carve out this duty to mitigate damages [for back pay losses] clearly signifies that Congress did not intend to create a duty to mitigate all compensatory damages. If Congress intended there to be a duty to mitigate all compensatory damages, it is illogical that it chose to single out the duty to mitigate back pay alone.”

One of our lawyer-readers begged to differ.

William Deveney, from the Atlanta area wrote:

“To paraphrase Mona Lisa Vito (Vinny Gambini’s girlfriend in My Cousin Vinny [played by Marisa Tomei]), ‘The EEOC is wrong.”

Marisa Tomei : New York, NY, USA - April 18, 2014 Actress Marisa Tomei attends the 2014 Tribeca Film Festival Word Premiere Narrative

“There has long been a general duty recognized under law that a victim is required to mitigate damages. The Supreme Court cited McCormick’s 1935 treatise on damages (more specifically, the entire chapter addressing the Avoidable Consequences doctrine) in EEOC v. Ford Motor Co., in which the Court rejected the EEOC’s position regarding whether an employee’s failure to accept what might be reasonably described as an employer’s half-measures nonetheless constituted a failure to mitigate back pay.

The Court cited that same theory again in Faragher “import[ing] from the general theory of damages, that a victim has a duty ‘to use such means are reasonable under the circumstances to avoid or minimize the damages’ that result from violations of the statute.”

The Court cited Ford Motor Co., as supporting this statement, and again cited McCormick’s treatise. McCormick’s treatise specifically addresses personal injuries. It may be difficult to show a failure to mitigate garden-variety emotional distress damages, but emotional distress damages are not necessarily limited to garden variety claims.

To state as a general principle that mitigation of emotional distress is not required at all runs counter to general damages principles that the Supreme Court has adopted in Title VII cases.”

[Editor’s Aside:  Our response to William is to quote the lovely Mona verbatim:  “Ooh you are a smooth talker.  You are… you are!”].

A couple of readers of our blog post yesterday relating to employer dress and grooming policies helpfully added a couple of points about an employer’s legitimate health and safety concerns, which we publish below.

Marc Brenman, a university instructor in Olympia, WA:

“There are also issues of mutable characteristics, and safety. And issues such as the fact that the ability to wear long hair doesn’t mean the employee can drag it thru the food.”

long hair men : Portrait of a smiling and handsome man giving a peace sign isolated on white

Peter Mangles, healthcare exec in Aberdeen, UK:

“This is a very interesting article about the rules and laws around discrimination and uniform and dress code policies. We have for many years in the health sector dictated to employees and staff about dress codes, uniforms and the wearing of jewelry at work. The wearing of rings, bangles and nail polish has for example been frowned upon and “banned” because of infection control and occupational health and safety reasons.

Shoe and uniform styles are often stipulated and enforced because of potential needle stick injuries and the exposure to blood and other bodily fluids. Depending on an individuals area of expertise other personal protective equipment (PPE) may be necessary that also affects what an individual may or may not wear.

The article was an interesting read in regards to the various precedents set in the courts in relation to grooming and uniform policy enforcement, something to mindful and aware of in the future.”

Our post the other day about plaintiff/employee’s requirement of mitigating damages in employment discrimination cases drew some good comments, posted below.

But before we get to the comments, we wanted to discuss the duty to mitigate emotional damages.

emotional pain : young white woman sadly sitting with his head propped on his hands Stock Photo

Is There A Duty To Mitigate Emotional Damages?

We previously wrote about a case of apparent first impression in which a court held that that the duty to mitigate does not extend to emotional damages, because while Title VII explicitly requires a plaintiff to mitigate back pay losses, Congress’s deliberate decision not to require such mitigation when it comes to emotional damages means that there is no such duty.

The Court held that the EEOC was not required to prove that groped female employees made reasonable efforts to limit their emotional harm caused by the alleged harassment:   “Congress’ deliberate decision to carve out this duty to mitigate damages [for back pay losses] clearly signifies that Congress did not intend to create a duty to mitigate all compensatory damages. If Congress intended there to be a duty to mitigate all compensatory damages, it is illogical that it chose to single out the duty to mitigate back pay alone.”

And now to our readers:

Lisa York Bowman, an attorney in the Atlanta area:

“This is a great reminder. Plaintiffs often think they can sue and then fly to Vegas. On behalf of employers, I rely on this defense regularly.”

William Deveney, also an attorney in the Atlanta area:

“There’s also a good argument that the failure-to-mitigate damages goes to more than just a lost wages claim.

From Faragher: ‘If the victim could have avoided harm, no liability should be found against the employer who had taken reasonable care, and if damages could reasonably have been mitigated no award against a liable employer should reward a plaintiff for what her own efforts could have avoided.’”

Sheila Halliman, an attorney in the Dallas/Fort Worth area:

“It should be noted that mitigating damages can be helpful to the claimant too. It reveals the effort put forth by the victim and the in some cases the difficulty of obtaining similar or better suitable employment.”

Dr. Ralph Steel, a professor in the Dallas-Fort Worth area:

“Good post exchanges addressing mitigating damages and how it can be used to defend as well as put forth an employment discrimination case.”

 

OK, so we engaged in a little Page 6 headline hyperbole – the Nuns were not literally “tossed out” of the court, but just had their discrimination claims  dismissed.  But the case is important, and we wanted to catch your eye.

A major issue for employers these days is whether individuals are employees or independent contractors.  There are serious employment and tax consequences inherent in this distinction.  In that regard, we commend for your edification a new federal appeals court decision which dissected this issue and discussed it at length in the course of an interesting case involving two altruistic Catholic Nuns.

Seehttp://laborandemploymentlaw.bna.com/lerc/2440/split_display.adp?fedfid=59126599&vname=lefepcases&split=0

nuns : Two attractive young nuns with rosary and bible praying

In that case, the two Catholic Nuns were disaster relief volunteers for the American Red Cross and the [Ohio] Ross County Emergency Management Agency for extended periods of time.  As the Court noted, they “dedicated their lives to assisting the poor and serving the good of the community.”

After some issues with management at both places, they filed a Title VII case (and also claims under Ohio law), claiming religious discrimination, retaliation, and harassment, as well as Section 1983 violations of their constitutional rights to free speech, free exercise of religion, and equal protection under the law.

The issue framed by the Court was:  “Under what circumstances are volunteers protected from employment discrimination by Title VII? … The parties agree that the critical issue is whether the Sisters were ‘employees’ of the Red Cross or RCEMA.”

In summarizing the relevant facts (followed by a long discussion), the Court held that the Nuns “have not shown that they received compensation, obtained substantial benefits, completed employment-related tax documentation, were restricted in their schedule or activities, or were generally under the control of either organization through any of the other incidents of an agency relationship. … Therefore, their volunteer relationship does not fairly approximate employment and is not covered by Title VII. Nor, as will be explained, were the Sisters’ constitutional rights violated.”

The Court goes through all of the relevant factors which distinguish employees from independent contractors, as well as discussing the status of “volunteer.”

Worth a read.

We have written little about the requirement in Title VII (and the other anti-discrimination  laws) that a plaintiff-employee has a duty to mitigate damages.  This may be because many lawyers backburner this issue in their zeal to deal with the merits of a case, or perhaps they ignore (repress?) this issue because it presupposes that the plaintiff has or will prevail.

Whatever the reason, it can be a powerful weapon for employers to substantially reduce damages if they can show that the employee has failed in this duty.  And oftentimes an expert can be extremely helpful.

What is the duty to mitigate?

It is an old legal concept that a plaintiff may not recover damages for any harm that she could have avoided or minimized with reasonable effort.  In employment law, it is generally the rule that an employee who sues for what may be referred to broadly as “wrongful discharge” (although this precise cause of action is not recognized in NY) must show that she has taken all reasonable steps to minimize damages by seeking other employment, or else her damages may be reduced accordingly.

job seeking : 3d people - man, person with magnifying glass searching for job.

The EEOC has stated in a published Guidance that “if the respondent [employer] can prove that the complaining party [employee] failed to exercise reasonable diligence to mitigate his/her damages and could have avoided or minimized such damages with reasonable effort, the damages may be reduced accordingly.”

However, it is the employer’s burden to show that the employee failed to exercise reasonable diligence to mitigate her damages, and as the EEOC has put it, parsing the relevant caselaw:

— the employer has the burden of showing that the plaintiff failed to make reasonable efforts to find work to mitigate her damages when seeking backpay;

—  the burden is on the employer to prove, as an affirmative defense, that the employee failed to mitigate damages when seeking lost wages; and

—  the employer has the burden of producing sufficient evidence to establish the amount of interim earnings or lack of diligence in mitigating damages on the part of the plaintiff.

The key when it comes to actual litigation is the notion that the plaintiff has the duty to “mitigate” lost wages by using “reasonable diligence” to seek “substantially equivalent” employment.  But what does that mean?  What is substantially equivalent” employment, and what is “reasonable” when it comes to “diligence” in job hunting, expecially in this iffy economy?

Does a plaintiff have to take any job?  The first job offered?  Any job in her “field?”  Any job in a related “field?”

Does a plaintiff have to show a list of hundreds of prospective employers which she contacted?  And what amount of effort must she show in her “diligent” job search — must she show hours of effort for each job applied for?

job seeking : Several business people wander through a maze looking for a job

As noted above, a lot of lawyers pay little attention to these thorny issues, assuming that the answers to these questions are obvious.  Not so – and the payoff for focusing attention on these issues can be enormous for the client.

We shall examine this in greater depth in a follow-up post or two.

 

Last week’s post about blatantly discriminatory job ads in New Zealand elicited a number of comments from folks who could not believe that such ads were actually published.  To remind you, these were some of  the ads:

* Young and vibrant waiting staff wanted

* We’re looking for vibrant salespeople with a young, passionate energy

* If you’re a motivated, talented young marketer

* We’re on the hunt for young, fit and competent carpenters for immediate starts

* Young person willing to learn – mechanic technician

Reader Comments

To those of our readers who were surprised — even shocked — at such ads, other readers provided examples from their own practices or corporate experiences which are truly “surprising.”

Read on.

Louise Walker, a Solicitor in Glasgow, UK:

“Helpful article Richard. If an individual has the skills and qualifications required to carry out a job, then their age should not matter. Employers would be well advised to take care when placing adverts to ensure they are not exposing themselves to a claim for discrimination.”

Ed Skinner, an HR expert in the Cincinnati area:

“Amazing … in this day and age! Might as well open the checkbook for a LARGE settlement.   Human Resources Professionals in the United States are less likely to commit that error!”

David Gabor, a Boston attorney:

“Ed, I wish that were true. I recently had a case in which the interview notes contained comments such as “sexy but married….too bad.” “Not my type. Not blond.” “Too skinny” “Pregnant … no way!!!” “Hot and single”

Guess which one got the job? Shortly thereafter she sued for sex harassment. Small wonder.

Worse … Head of HR was in the interviews with the Director!”

Ed Skinner:

“Wow. Bet those two were dropped into HR from some other discipline. Couldn’t have been trained in HR ! I hope. Makes one wonder doesn’t it.”

David Gabor:

“The training received in HR is superior. Sadly, performance does not always follow. Human nature often rears its ugly head.”

Lisa York Bowman, an attorney in Atlanta:

“I recently had a case where the interview notes written on the back of the application were similar to those described by David, despite the superior training that took place within the company.”

Dana Pearl, an EEO/HR consultant in Chicago:

“A client of mine had to fire their plant manager who had attended two of my training programs over a few years, and one of another contractor, because the guy accepted an employee’s offer to ‘service’ him in his car after work.  She turned around and filed a sexual harassment charge. The manager said it was mutually consensual.

Stupid is as stupid does, and no amount of training is going to make someone behave.

hostile workplace : Angry woman makes face behind person over white

I tell my clients that I can ‘lead the horses to water, but can’t make them drink.’ It’s up to the individuals to make the choice to be professional — or not.”