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Posts Tagged ‘compensatory damages’

Court Upholds $1.9 Million Dollar Verdict In Gender Discrimination Case Against Wal-Mart

Friday, December 4th, 2009

Female Pharmacist Wins Appeal Including Punitive Damages and Huge Front Pay Award

It’s one thing to prove discrimination. It’s an altogether different thing to prove damages which occurred as a result of it.

In the recently published gender discrimination case of Haddad v Wal-Mart Stores Inc,*, the Supreme Court Judicial Court (“SJC”) of Massachusetts affirmed a jury verdict which included $733,000 for 19 years of front pay (future economic loss) and $1 million dollars in punitive damages – and that’s big news.

What Happened In The Case

Cynthia Haddad worked as a pharmacist at Wal-Mart for ten years (seven of those in the Pittsfield, Massachusetts store) mostly as a staff pharmacist. Throughout her time at Wal-Mart, she received excellent evaluations.  

Towards the end of her employment, Haddad accepted the position of pharmacy manager.

During that time, she received less pay than any male pharmacy manager which she consistently complained about.

On April 14th, 2004, Haddad was questioned by three Wal-Mart managers about abut two fraudulent prescriptions.

One of the prescriptions was written in 2002 while Haddad was on duty, and another was written in 2004 while a male pharmacist was on duty.

Haddad told the managers that she did not know anything about the fraudulent prescriptions.

She did admit that the 2002 fraudulent prescription could have been written when she briefly left the pharmacy area to buy a soda at a nearby counter, or when she was in the restroom, eating lunch, or talking to customers.

Haddad’s employment was terminated that same day.

She was told that the reason for her termination was based on her statement during the interview that she failed to secure the pharmacy and left Baran (the technician) unattended in the pharmacy area. Baran, who admitted that she falsified the prescription,was also terminated.

The other pharmacist involved — Richard Blackbird — was on duty the day the fraudulent 2004 prescription was written. That prescription contained his initials.

In a clear case of unequal treatment, neither Blackbird, nor any other pharmacist was questioned about or disciplined for the 2004 fraudulent prescription.

In stark contract to the treatment Haddad received,  Blackbird was appointed to be pharmacy manager at the time of Haddad’s departure.

In addition, Blackbird testified that he commonly left the pharmacy area unsecured to talk to a customer, go the restroom, or get a snack – and that he was unaware of any policy prohibiting this practice.

Haddad filed a lawsuit alleging unequal compensation and termination of employment in violation of Massachusetts laws against discrimination. (M.G.L. c. 151B, s.4) The complaint also stated a claim for defamation.

The jury found in Haddad’s favor and awarded $922,774 in compensatory damages which included:

  • $17,700 in special damages
  • $125,000 for emotional distress
  • $95,000 in back pay
  • $733,000 in front pay

The jury also awarded $1 million dollars in punitive damages.

The Appeal

Wal-Mart appealed claiming a number of errors.

Sufficiency of the Evidence

Wal-Mart claimed that Haddad did not introduce enough evidence to prove discrimination. The Supreme Judicial Court of Massachusetts disagreed. It held that there was sufficient proof to support the verdict including evidence that:

  • Wal-Mart’s proffered reasons for terminating Haddad were false
  • Similarly situated male employees were treated differently than Haddad for similar infractions of the same policy
  • Other incidents occurred  in which male pharmacists were not disciplined for far more serious infractions, ie. one pharmacist was caught writing prescriptions and taking drugs for himself and was not fired
  • Wal-Mart failed to follow its progressive discipline policy

Front Pay

The jury awarded the plaintiff nineteen years of future economic loss which consisted of the difference in pay and benefits that Haddad would have earned at Wal-Mart compared to the pay and benefits she earned at the job she held at the time of trial.

Nineteen years of compensation represented Haddad’s loss of earning through age 65.

Wal-Mart contended that the front pay award was excessive and speculative. The Court disagreed:

While the award of $733,307 represents a significant dollar figure for front pay, the evidence supported such an award ….

The plaintiff testified to her difficulty in obtaining a new job. There was evidence that Wal-Mart’s allegations concerning her alleged responsibility for drug losses became generally known….

[T]he award of lost income of nineteen years is consistent with the plaintiff’s anticipated retirement age of sixty-five.

Based on the plaintiff’s ten-year tenure at Wal-Mart, her testimony that she had planned to continue working at Wal-Mart for the remainder of her career, and the limited number of pharmacies in the area around Pittsfield, the jury permissibly could have concluded that an award of nineteen years was appropriate.

The Court discussed other cases (both state and federal) in which employees were awarded economic loss for long periods of time into the future – particularly where the circumstances indicated that plaintiffs would have difficulty obtaining comparable employment.”

It’s a very helpful opinion for plaintiffs and their lawyers on the issue of damages for future economic loss in wrongful discharge cases

Punitive Damages

It’s not often that we see cases in which an award of punitive damages is affirmed on appeal.

To sustain the award of punitive damages in this case, Haddad had to prove that the defendant’s act “was outrageous, egregious, evil in motive, or undertaken with reckless indifference to the rights of others.”

Some of the evidence which the SJC of Massachusetts relied upon to support the award included proof that:

  • Wal-Mart was aware that gender discrimination was not illegal
  • Wal-Mart refused to pay Haddad the hourly rate it paid male pharmacy managers
  • Wal-Mart fired a ten-year employee for a single infraction after a sham investigation
  • Male pharmacists were not disciplined for similar or far more serious infractions

It wrote:

The jury was warranted in concluding that Wal-Mart’s pattern of unequal treatment of male and female pharmacists was outrageous and reprehensible.

Lessons To Be Learned

There is no doubt that in today’s economic climate the chances of finding comparable employment after a discharge are slim. What this means is that when employees unlawfully lose their jobs, and prove it, it’s likely that we will see larger and larger verdicts just like this one. It’s an important case both for its content and as a harbinger of what’s to come.

* Reprinted from Westlaw with permission of Thomson Reuters

** This post originally appeared in Employee Rights Post on December 1, 2009. Reprinted with permission from the author.

Images:

63.135.122.65/bergdahlphoto/Wal-Mart

www.a-fib.com/images

About the Author: Ellen Simon is recognized as one of the first and foremost employment and civil rights lawyers in the United States. With more than $50* million in verdicts and settlements and over 30 years of experience, Ellen has been listed in Best Lawyers in America and in the National Law Journal as one of the nation’s leading litigators. She has been lauded for her work on landmark cases that established employment law in both state and federal court. Ellen also possesses a wealth of knowledge as a legal analyst discussing high-profile civil cases, employment discrimination and women’s issues. Ms. Simon has been quoted often in local and national news media and is a regular guest on television and radio, including appearances on Court TV. She is the author of the Employee Rights Post, a legal blog devoted to employee and civil rights.

*prior results do not guarantee a similar outcome

Third Circuit Sends Wake Up Call to Employers About Discriminatory Hiring Practices

Thursday, April 30th, 2009

In the spirit of National Equal Pay Day on Tuesday, I wanted to share the important gender discrimination case of Donlin v. Phillips Lighting North America Corp. decided by the Third Circuit last week.

Here’s what happened in the case.

Colleen Donlin was hired by Phillips as a temporary warehouse employee at its Mountaintop, Pennsylvania distributions center. Her job was to help prepare orders for shipment.

Like other temporary workers, Donlin applied for a permanent position. She was not hired and her eight month temporary assignment ended.

Donlin got two other jobs after she left Philips. At the first job, Donlin earned  $14.70 an hour, but it was a 32-mile commute.

She left that job and found a job closer to home at which she made $13.00 an an hour. Had she been hired by Philips, she would have earned $14.67 an hour as a base salary

Donlin learned that Phillips hired several men for the position she had applied for after it refused to hire her.  She filed a Title VII lawsuit for gender discrimination,  won the trial and was awarded damages.

In discrimination cases, the compensation which can be awarded by a judge or jury is designed to make victims whole and put them in the position they would have been in had they not been discriminated against.

A winning employee can recover “back pay” and “front pay.”

  • Back pay represents losses from the the time of the discrimination up to the time of trial.
  • Front pay represents the losses that the victim will experience in the future if he or she does not find a comparable position.

Based on the premise that Donlin would have worked for another 25 years, an advisory jury awarded Donlin:

  • $63,050 in back pay
  • 395,795 in front pay
  • for a total of $458,845

The award was based on the difference in pay and benefits between the $13.00 hour job she was holding at the time of trial and the $14.67 hour job she would have had at Phillips had she not been discriminated against when Phillips refused to hire her.

The judge modified the front-pay award by reducing it to account for 10 years of damages instead of 25, finding that a 25 year period was too speculative — so the total award was $164,850.

Phillips appealed and the decision came out last week. The issues decided are very important for both victims of discrimination and their lawyers.

Here are the highlights:

1. Front Pay:

Donlin was in her 30’s at the time of her employment with Phillips and 40 at the time of trial. The question presented was: was how far into the future can a younger employee like Donlin claim economic loss?

For those of us who represent individuals in employment cases, the issue has always been a hard one to deal with when it comes to a younger worker.  The reason is because past damages can be calculated with certainty, but future losses can not:

  • Is the person going to get another job?
  • If so when and for how much?
  • How do we know what someone will be doing 20 or 30 years from now?

When we represent someone in an age discrimination case, and the terminated employee is 55 for example,  it’s easy for us to project damages until age 65 or 70  (whatever the age is that the person was likely to retire).

It’s not speculative to assume that the person would have worked for another 10 or 15 years, and it’s not hard to calculate what he or she would have earned and what the total losses are.

It’s much more complicated when we represent a younger person.  Since the law does not allow “speculative” damages, it’s simply very difficult to predict how far into the future the court will allow us to project.

In this case, the  district court judge ruled that Donlin was entitled to receive damages for economic loss for 10 years into the future. The Court of Appeals affirmed the ruling :

We note that there will often be uncertainty concerning how long the front-pay period should be, and the evidence adduced at trial will rarely point to a singe, certain number of weeks, months , or years.  More likely, the evidence will support a range of reasonable front-pay periods.  Within this range, the district court should decide which award is most appropriate to make the claimant whole …

We find that the District Court did not abuse it’s discretion when it awarded Donlin front- pay for 10 years.

This means that we now we have a decision with a sound analysis for front -pay involving a relatively young employee from a high level court.  It’s a decision that other victims and their lawyers can rely on and it’s a decision that carries considerable weight. It’s very good news.

2. Mitigation

In an employment case, the employee  who has lost a job has a duty to mitigate — which means that she  (or he) must make reasonable efforts to minimize her loss of income. The precise language of the statute says

Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable.

In other words:

  • a person who is claiming damages in an employment case has a duty to look for work
  • damages into the future end if an employee gets an equivalent job or better job

In this case, Donlin first got a job in which she earned $14.70 and hour.  The problem was that it was a 32 -mile commute. She worked at the job for two years, and then found a job closer to home at which she made $13.00 an an hour.

She would have received $14.67 an hour as a base salary had she been hired at Philips.

Phillips argued:

  • Donlin’s “voluntary transfer” to a lower-paying job was inconsistent with her “duty to mitigate”
  • Phillips should not have to make up the difference.

Donlin argued:

  • once you factor the cost of the commute
  • the the two jobs were substantially the same.

The Court of Appeals agreed with Donlin:

An employee need not seek employment which involves conditions that are substantially more onerous than [her] previous position…

It is well settled that a claimant has not failed to make a reasonable effort to mitigate damages when she refuses to accept employment that is an unreasonable distance from her residence.

[T]he job at Mission constituted a substantially equivalent opportunity as that available at Romark.  Donlin should not be penalized for accepting that opportunity.

Accordingly, the District Court’s finding that Donlin sufficiently mitigated her damages was not clearly erroneous …

Certainly our clients still have a duty  to mitigate and make a “reasonable effort” to find comparable work if they intend to claim damages in a lawsuit.  This decision does not change that fact.

But this decision certainly delivers great news since it clearly states that a person is not required take a job which places an onerous burden on him (or her)  in order the meet that obligation.

On many fronts,  this is a hugely helpful case on questions of damages in employment cases. While we deal with these problems every day, it’s certainly not every day that we get federal circuit court case law on these particular issues.

It’s also a wake up  to employers to be careful about their hiring practices.

The bottom line is that Donlin worked as a temp at a company for eight months. Because she was discriminated against when the company hired a man instead of her into a permanent position, she is now entitled to all of her past losses plus 10 years of damages into the future. That’s a big win.

Images: images.businessweek.com

About the Author: Ellen Simon is recognized as one of the foremost employment and civil rights lawyers in the United States. Ms. Simon is the owner of the Simon Law Firm, L.P.A., and Of Counsel to McCarthy, Lebit, Crystal & Liffman, a Cleveland, Ohio based law firm. She is also the author of the legal blog, the Employee Rights Post. Her website is www.ellensimon.net.

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