In the Fourth Circuit (the federal court with appellate jurisdiction over the district courts in Virginia, Maryland, West Virginia, South Carolina and North Carolina), six-figure compensatory damage awards are frequently viewed as excessive. This Court has repeatedly emphasized that while a plaintiff’s testimony can theoretically support a large emotional damage award, such evidence alone usually does not pass muster. The recent Virginia Federal Court decision of Huang v. The Rector and Visitors of the University of Virginia, et al., which involved a False Claims Act retaliation claim, followed the same line of reasoning and reduced the jury’s award by hundreds of thousands of dollars.
After a four-day trial, a jury found in favor of Plaintiff Huang on his False Claims Act retaliation claim and awarded $159,915 in lost wages and $500,000 in compensatory damages. The only evidence introduced by Plaintiff in support of compensatory damages was his own testimony of the effects of the retaliation by Defendants. Plaintiff testified that the retaliation ended his academic career at the University, caused the loss of his research grant, limited his ability to obtain subsequent employment, caused a significant fifty pound weight loss and sleep issues, and put a strain on his marriage. But, he did not present any evidence of medical treatment, counseling, medications, physical injuries, etc.
In reducing the jury award in Huang, the Fourth Circuit considered the succession of case decisions involving emotional damage awards. The Court rejected the implication that there is a bright-line rule in the Fourth Circuit that six-figure awards are excessive in the absence of medical evidence. But, the case awards examined all had been significantly reduced by the Court. Three cases ultimately resulted in awards no greater than $15,000 and another jury award was reduced to $50,000. In another case, the Fourth Circuit found that the plaintiff had presented “considerable objective verification of her emotional distress,” but the award was still reduced from $245,000 to $150,000.
The Fourth Circuit noted that certain factors were helpful in determining what evidence of emotional distress had been offered, such as whether the plaintiff had received medical attention or psychological treatment, or had physical injuries or loss of income. In addition, the Court noted that corroborating testimony of plaintiff’s distress was a factor to consider when deciding whether to reduce an award. Given the specific description of the emotional distress offered by the Plaintiff in Huang, the Court determined he had provided a solid basis for a significant award of compensatory damages. But given the lack of objective verification evidence, the award was reduced from $500,000 to $100,000.
In assessing the potential damages in a case, the above decision provides further assistance in placing a dollar value on emotional injuries. For injuries that defy a fixed rule of quantification, this legal authority is a helpful guide for the assessment of the degree of harm allegedly suffered.
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An employee who alleged she was subjected to a sexually harassing work environment, gender discrimination, and retaliation under Title VII of the Civil Rights Act of 1964 (“Title VII”) filed a Charge with the Equal Employment Opportunity Commission (“EEOC”). However, almost all of the facts supporting the employee’s Charge were put in the EEOC intake questionnaire and letters to the EEOC, rather than in the EEOC Charge Form. As such, only the claims and facts set forth in the Charge were considered by the Court and they were insufficient to state the discrimination and retaliation claims raised by the employee.
In the case of Balas v. Huntington Ingalls Industries, Inc. (2013), the United States Fourth Circuit Court of Appeals affirmed a ruling from the Eastern District of Virginia that the Plaintiff, Karen Balas, could not maintain claims which were solely asserted in her EEOC questionnaire and in letters to the EEOC. The Court ruled that an administrative charge serves a vital function in the process of [potentially] remedying unlawful employment practices because it serves to alert the employer of the alleged wrongs committed; allows for an investigation into the alleged wrongful activity by the employer and the EEOC; and allows for the EEOC to seek conciliation between the parties if it finds merit to the charges. The Court reasoned that since a plaintiff’s employer is not put on notice as to the claims and facts alleged in the EEOC questionnaire or in letters privately written by a plaintiff to the EEOC, only those claims formally made part of the EEOC Charge were allowed to move forward in a lawsuit against an employer.
The Fourth Circuit concluded that the district court was correct in its refusal to consider any of Ms. Balas’ Title VII claims that were not included in her EEOC Charge; and that the Court had no jurisdiction to hear such claims because the Plaintiff had failed to administratively exhaust her remedies before filing such claims in federal court.
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The Fourth Circuit Court of Appeals allowed a former city employee’s sexual harassment and retaliation claims to proceed to trial by reversing a lower court ruling which granted summary judgment in favor of the employer. Plaintiff Katrina Okoli, formerly an executive assistant for John P. Stewart, the director of Baltimore’s Commission on Aging and Retirement, filed a lawsuit alleging sexual harassment hostile work environment, quid pro quo sexual harassment, and retaliation. In the case of Okoli v. City of Baltimore, et al., Plaintiff Okoli alleged that over a four month span, Defendant Stewart repeatedly sexually propositioned her; told her of his alleged sexual exploits; asked her about her underwear; fondled her leg underneath a table on several occasions; and forcibly tried to kiss her when they were alone in a conference room. Okoli alleged that she rejected such advances by Stewart and also twice complained about the harassment to officials within the City government, as well as wrote a letter to Baltimore’s then-mayor Martin O’Malley concerning the harassment. Okoli was fired by Stewart just hours after her letter was received by the mayor’s office.
For its part, the City contended (and apparently the lower court agreed) that Stewart’s conduct was sporadic and infrequent and did not rise to the level of a hostile work environment. Further, the City argued that Okoli’s work had deficiencies, and that she was going to be fired even before she wrote the letter complaining of Stewart’s behavior. Additionally, the City argued, Okoli’s letter was non-specific and did not state that she was being “sexually” harassed by Stewart, only “harassed.” Therefore, they argued, Okoli did not engage in protected activity under Title VII to warrant a retaliation claim against the City.
The Appellate Court disagreed and held that the statements attributed to Stewart were both severe and pervasive. In addition, the Court held that a plaintiff need not mention the “magic words” of “sex” or “sexual” to effectively advance a sexual harassment complaint. Citing decisions from other circuit courts, the Court held that the complainant only need put the employer on notice that unlawful behavior is afoot. Okoli’s use of the words “unethical,” “degrading and dehumanizing” in her letter complaining about Stewart’s behavior were enough to raise a sexual harassment complaint. Finally, the Court determined that the district court erred in concluding that simply because Stewart had a document on his computer that pre-dated Okoli’s letter, such document was a termination letter. Stewart modified the computer document three times before delivering it to Okoli as a termination letter just hours after her sexual harassment complaint reached the mayor’s office. Under those facts, the Court concluded that there was sufficient evidence to infer that Stewart did not intend to fire Okoli prior to receiving word that she complained about his behavior to the mayor and his staff.
The Fourth Circuit Court of Appeals hears appeals involving Virginia employment cases.
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Federal employee Robert T. Perry (“Perry”) had a long-running legal battle with his federal employer, the Pension Benefit Guaranty Corporation (“PBGC”). After three lawsuits, two of which were settled, Perry’s claims of hostile work environment and retaliation have now been dismissed on summary judgment.
The case, Perry v. Gotbaum, was the third lawsuit brought by Perry against the PBGC and centered around Perry’s allegations that the PBGC discriminated and retaliated against him based upon a Settlement Agreement entered into by the parties to settle the first two lawsuits. As required under the Settlement Agreement, the PBGC provided Perry with a grade and step increase in salary, paid for $10,000 worth of training, paid Perry a lump sum of $60,000, and placed him on Leave Without Pay (“LWOP”) Status for a time-period not to exceed six months. In addition to proving Perry with a salary increase and training, it appears that the impetus behind the Settlement Agreement was to provide Perry with an opportunity to find employment outside of the PBGC and give him a lump sum payment during his job search. Per federal government regulations, the personnel actions required under the Settlement Agreement had to be documented using a federal government Standard Form 50 (“SF-50”).
In his third lawsuit, Perry complained, inter alia, that the comments section of the SF-50 forms used to process the personnel actions included information referencing his prior lawsuits and the Settlement Agreement. According to Perry, such comments would have a chilling effect on his ability to seek employment outside of the PBGC because it would be clear that he had engaged in protected activity. Further, Perry complained that the PBGC had used a more generic code when processing SF-50 forms for other employees, and therefore he should have been afforded the same treatment.
While the Court agreed with Perry that he engaged in protected activity regarding his prior lawsuits and the resulting Settlement Agreement, the Court ruled in favor of the PBGC finding that the Agency actually went back and corrected the SF-50 forms to respond to Perry’s concerns about the remarks placed on the forms. Further, since the Settlement Agreement was not confidential and had been filed with the Court, it was a public record and Perry could not base his claims of a retaliatory and/or discriminatory disclosure upon information that was generally available to the public. In addition, the Court found that there was no basis to find the PBGC’s “honest mistake” was an attempt to hamper Perry’s future job opportunities since it was in the Agency’s interest to have Perry find employment outside of the PBGC as soon as possible. As such, the Court dismissed Perry’s federal employment discrimination and retaliation claims.
It should be noted that the legal standard applied by the Court in this public sector case applies to private sector Virginia businesses as well.
In a unanimous recent opinion, the United States Supreme Court broadly construed the term “person aggrieved” in Title VII's antiretaliation provision to include a co-worker who is a relative or close associate of a targeted employee.
In the case of Thompson v. North American Stainless, LP, Plaintiff Thompson worked as a metallurgic engineer for North American Stainless (“NAS”), the owner and operator of a stainless steel manufacturing facility in Kentucky. Thompson began dating a coworker, and thereafter they became engaged to be married. According to the lawsuit, the couple’s engagement was common knowledge at the facility. Three weeks after the Equal Employment Opportunity Commission notified NAS that Thompson’s fiancée had filed a discrimination charge, NAS fired Thompson. Thompson pursued a retaliation claim against NAS for his discharge.
NAS moved for dismissal of the case before trial, contending that Thompson’s claim of third-party retaliation under Title VII was insufficient as a matter of law. The trial court granted NAS’s motion for summary judgment, which decision was affirmed by the Sixth Circuit Court of Appeals. In denying Thompson a trial, the Sixth Circuit joined several other appeals courts in holding that the authorized class of claimants under Title VII’s antiretaliation provision is limited to persons who have personally engaged in protected activity.
The Supreme Court disagreed, and rejected this narrow interpretation of aggrieved persons under the law. However, it declined to expand the provision into the outer boundaries of the standing standard set forth in Article III of the Constitution – which would allow anyone who claimed an injury by a Title VII violation to sue. The Court noted that such expansive interpretation would allow a shareholder to sue a company for firing a valuable employee for racial discriminatory reasons if he showed a decrease in his stock value as a consequence.
In settling on the middle ground, the Supreme Court stated that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” The Court’s concern was to prohibit employer action that would dissuade a reasonable employee from asserting or supporting a discrimination claim. Thompson fell within the zone of interests protected by the law.
Employment Pointer: This decision clears up the ambiguity over whether third parties have standing to sue for retaliation under Title VII. Although, the Court noted that there is no bright line test for who is protected. Given the broader scope of persons to be protected under this law, companies must be aware of its management’s underlying reasons for adverse employment actions and ensure that indirect revenge against an employee for filing a discrimination charge has not been a contributing factor.