Discrimination Damages and Remedies in the 5th Circuit - the Palasota Story Continues
Today, a 5th Circuit panel issued the second substantive decision in the case of Palasota v. Haggar Clothing Co. (5th Cir. 9/7/07). Its first decision almost 4 years to the day earlier, overturned the trial court's granting of a judgment notwithstanding the verdict. On remand after the first decision, the trial court entered a judgment in favor of Palasota for The Court found that the issue of liability was foreclosed by its first decision and that there was sufficient evidence (detailed in the opinion) to support a willful finding, and the accompanying $840,000 liquidated damage award. In what appears to be a throw-away comment and without any citation, the Court added this unhelpful language: Haggar’s unsuccessful efforts to have Palasota release it from ADEA claims upon his termination tended to show that Haggar had knowingly violated the ADEA or recklessly disregarded whether its conduct toward Palasota was prohibited by the statute. Given the size of the judgment and that liability was already decided, the opinion is the rare case where the Court talks at length about damages and remedies. Among the holdings -- Although they may not be intended to be "punitive" given that the trial court did not believe that discrimination was proved, my guess is it would be hard to convince the employer of that. Labels: age, damages, discrimination
Posted
12:07 PM
by Michael Fox
Given that requesting a release is a standard practice when a severance package is being given, such evidence standing alone is unlikely to be sufficient to sustain a finding of willfulness. It's the sort of thing that if the Court is asked to revisit its opinion should be eliminated as being unnecessary, but not necessary harmless, dicta.
Mixed Results on 43 Million Dollar Raiding Case
the Court assumed the conduct was intentional and felt only two of the other factors merited further discussion since the conduct was economic not physical, and the health or safety of others was not in danger. The Court gave little weight to financial vulnerability, in large part because of Chicago Title's own claim that notwithstanding the defections they remained the number one company in the contested markets. The Court also limited the review of repeated actions to actions against other parties (of which there were none), as opposed to repeated actions against Chicago Title, distinguishing State Farm's teaching that damages (as opposed to liability) can not be based on conduct against third parties. The bottom line, no punitive damage award available. Labels: competing employees, damages
No Backpay For Hostile Environment Alone
Labels: attorneys fees, damages, hostile environment
Posted
9:49 AM
by Michael Fox
Although the case turned strictly on interpretations related to a covenant not to compete and a related tortious interference with contract claim, the dispute between two title companies that resulted in a $43 million dollar judgment is really a "raiding" case, where 30 employees switched from one title company to another.
Raiding cases are unusual in that they are a form of behavior that is quite problematic, but one where there is no clear cut cause of action specifically designed to fit it. There are a number of causes of action that are brought to bear in these situations but no "silver bullet" even though as can seen by the lower court judgment reviewed in Chicago Title Insurance v. Magnuson (6th Cir. 5/21/07) [pdf], it is apparent that in the right circumstances a jury can be considerably offended. $32 million of the judgment was for punitive damages.
The Court of Appeals affirmed liability, reversed the punitive damage award and sent the case back to the lower court for a re-trial on the compensatory damages.
While the discussion of liability and compensatory damages may shed some light on covenant not to compete law in Ohio, the ruling on punitive damages carries a broader message and continues to show how such damages are currently in disfavor.
Ultimately the Court found the award could not pass constitutional muster under the U.S. Supreme Court precedent contained in State Farm and BMW of North America. Focusing on the 5 factor test for reprehensibility derived from those cases:
Posted
4:16 PM
by Michael Fox
Today's decision in Spencer v. Wal-Mart Stores, Inc. (11/22/06)[pdf], makes one of those simple points that it is easy to overlook. Plaintiff made two ADA arguments — failure to accommodate and hostile environment. She did not claim constructive discharge. The jury found against her on the accommodation claim, but for her on hostile environment. It awarded $12,000 for emotional damages and $15,000 for backpay.
Wal-mart successfully argued that back pay is an equitable remedy, only for the court's determination and should not have been submitted to a jury. Since there was no claim of constructive discharge, there should have been no award of backpay. Both the district court and now the 3rd Circuit agreed, throwing out the $15,000 award.
And to make matters worse, although the trial court ultimately decided that plaintiff had been the prevailing party because of her win on the hostile environment issue, it also decided that her requested attorneys fees of just over $150,000 should be reduced by 75%. Given that the trial court had compared her success to what she had claimed to have suffered, over $500,000 in damages, and that she did not benefit in any way other than the $12,000 damage award since she had resigned, the appellate court did not find the trial court's reduction an abuse of discretion.
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