Labor & Employment Law

Punitive damages without an award of compensatory damages.

Abner v. The Kansas City So RR (5th Cir 01/02/2008)

Eight African American employees sued claiming a work environment hostile to race, in violation of Title VII and 42 USC 1981. A jury returned a verdict finding the employer liable, awarded no compensatory damages, and awarded $125,000 in punitive damages. The 5th Circuit affirmed.

The evidence, which extended over a ten year period, indicated that the employees were subjected to racial graffiti, a noose hanging outside a door, racially derogatory comments, and discriminatory assignments. The jury found that supervisors caused and/or failed to properly respond to this racially derogatory behavior.

(1) The court held that a punitive damages award under Title VII and Section 1981 need not be accompanied by compensatory damages. This was based on the "plain language" of the statute, the legislative history, and the purpose of punitive damages. Any concern about unbounded jury discretion is directly addressed by the statutory cap on punitive damages. Due to the statutory cap, it is not necessary for a trial court to award "ceremonial" nominal damages of $1 to each plaintiff.

(2) The court rejected the employer's argument that an award of punitive damages violates due process under the test in BMW of North America v. Gore, 517 US 559 (1996), saying that "the three-factor Gore analysis is relevant only if the statutory cap itself offends due process." As with cases in which punitive damages accompany nominal damages, "a ratio-based inquiry becomes irrelevant."

(3) The court held that it was proper to allow the plaintiffs to testify about conduct over a ten year period. National Railroad Passenger Corp v. Morgan, 536 US 101 (2002) said that if "an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered." To the extent that there was testimony outside of the ten year period, it did not cause prejudicial error.

Full post as published by Ross' Employment Law Blog on January 04, 2008 (boomark / email).