Why Employment Lawsuit Verdicts are Hitting - and Exceeding - $10 Million
There have been a number of recent unexpectedly high jury awards exceeding $10 million, which was previously highly unusual in the employment space. Employment claims that once may have been evaluated primarily through back pay, front pay, and attorneys’ fees now may carry a far larger risk profile when a jury considers all the factors. Even though the majority of these cases have been in California, or other western states, I thought it would be of interest to look at five of these cases that fall outside the parameters of normal, and see what we can learn from them.
A June 2022 verdict in California for $464 million against Southern California Edison (SCE) in a landmark employment retaliation and harassment lawsuit. Alfredo Martinez and Justin Page were the plaintiffs who reported a "fraternity-like" environment in the company's South Bay office, where management permitted frequent use of racist slurs and repeated sexual harassment. When the men reported this behavior, the company retaliated against them, ultimately forcing them out of their positions. The jury found that the company's systemic culture failures and management's willful negligence warranted an extreme punitive penalty, leading to one of the largest employment-related civil awards in U.S. history.
An October 2022 Texas federal jury verdict for $366 million in a case alleging racial bias by Jennifer Harris, a former Black district sales manager at FedEx. The jury found FedEx fired her in retaliation for reporting racial bias. FedEx appealed the verdict to the U.S. Fifth Circuit Court of Appeals. In February 2024, the appeals court threw out the $365 million punitive damages entirely. They ruled that a clause in Harris's employment contract prevented her from suing under Section 1981 (the law that allows for unlimited punitive damages. Because her remaining claims were filed under Title VII of the Civil Rights Act—which limits financial damages—the court reduced her final payout to less than $249,000.
A September 2023 $35 million jury verdict involving an ADA claim brought by the EEOC against Omaha-based trucking company Werner Enterprises on behalf of a deaf driver named Victor Robinson. Despite meeting the licensure qualifications to be a driver, a Werner executive explicitly told Robinson that the company would not hire him because he could not hear. The jury found the company violated the Americans with Disabilities Act (ADA) by failing to hire him and failing to provide reasonable accommodations (such as using flashcards or hand gestures for instruction). He was awarded $75,000 in compensatory damages (for emotional pain) and $36 million in punitive damages (to punish the company for reckless indifference. Because federal law limits (caps) damages in employment discrimination cases, the judge ultimately reduced the punitive damages down to the statutory maximum of $300,000. When factoring in lost wages, the final judgment was set at $335,682.
· An $11.25 million jury verdict in 2023 to Robynn Europe, a black personal training manager in New York who alleged she was fired by Equinox Gym after complaining about a co-worker’s racist and sexually inappropriate comments. Europe alleged her subordinates frequently made vulgar comments about Black women's bodies, used racially offensive slurs, and challenged her authority because of her race and gender. After she complained to higher-ups, the gym management ignored the toxic behavior and instead targeted her for termination. Equinox tried to justify the termination based upon chronic lateness, but Ms. Europe countered that this was a cover-up (pretext) for retaliation, noting that white employees with worse attendance records were not penalized. The jury awarded her $10 million in punitive damages, $1.25 million in compensatory damages for emotional distress and $16,000 in back pay.
· An April 2024 Pennsylvania federal jury verdict for $20.5 million in favor of Patricia Holmes, a black female, against American HomePatient (AHP) for a race-based hostile work environment. Ms. Holmes’ supervisor and coworkers called her racially derogatory slurs - the “N” word and the term “coonie” and referenced the Ku Klux Klan. Ms. Holmes complained to her supervisor’s supervisor and to AHP’s Human Resources department. HR investigated and issued a “written warning” to Ms. Holmes’s supervisor and one of her colleagues. When the harassment continued, Ms. Holmes resigned. The jury sided with Ms. Holmes, agreeing that AHP had intentionally discriminated against her and created a hostile work environment on the basis of her race and failed to exercise reasonable care to prevent or correct the racial harassment. It awarded Ms. Holmes $500,000 in compensatory damages. Additionally, the jury found that AHP’s actions were malicious or showed a reckless indifference to Ms. Holmes’s right to be free from racial harassment. On that basis, the jury awarded her $20 million in punitive damages. The court found the punitive damages award to be excessive and reduced it from $20 million to $1 million. Following this order, AHP was liable for a total of $1.5 million.
The trend that I see in many cases – including all of the above – is that both HR and in-house Legal departments fail to take an objective, unbiased look at the allegations, instead choosing to defend management “at all costs,” even when that support is just not merited by the facts. Perhaps they do so out of fear for their own jobs? Juries seem to respond forcefully when they believe an employer failed to act fairly, failed to follow the law, or failed to take employee concerns seriously.
I tell clients that HR is not there to help them, but is there primarily to support management. The number of cases of retaliation and termination of employment that occur after an employee reports a claim to HR bear out the unfortunate truth of this statement.
If you think you are being discriminated against due to your membership in a Title VII protected class (race, color, national original, religion, age, gender, disability, etc.), please schedule a consultation with a plaintiff attorney in your jurisdiction before you go to Human Resources or any company “hotline” to report your concerns. More than ever, it is important to properly set up your complaint before you go on record so that the company will actually “hear” you!