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Sex bias and retaliation verdict for FedEx employee upheld; punitive damages reduced to $300K

By Kathleen Kapusta, J.D.

She claimed that after she filed an EEOC charge complaining of her manager’s discriminatory remarks, she was watched more closely by management, her daily actions and work routine were scrutinized, and she experienced write-up after write-up after write-up.

Sufficient evidence, said the Sixth Circuit, supported a jury verdict in favor of a discharged FedEx employee who alleged that the company retaliated against her for filing complaints with the EEOC after a manager told her “females are better suited to administrative roles and males are better suited to leadership roles,” repeatedly disciplined her, and eventually demoted and fired her. Sufficient evidence also supported the jury’s verdict on liability and punitive damages. The district court also did not abuse its discretion in substantially reducing the amount of attorneys’ fees requested by the employee (Hubbell v. FedEx SmartPost, Inc., August 5, 2019, Stranch, J.).

Demote yourself. Hired as a part-time parcel assistant in 2006, the employee was ultimately promoted to lead parcel sorter, a non-management position with some supervisory responsibilities. The following year, a new hub manager took over and, according to the employee, he repeatedly told her to “demote herself” to an administrative role, suggesting that if she didn’t, things would get harder for her.

And things got harder. She claimed that after this, low-performing parcel sorters were placed in her area, she was not given enough workers, and she was given multiple conflicting work assignments and then criticized for failing to effectively complete them all. She also received a poor performance review.

It’s “favoritism,” not discrimination. Although she complained to HR, a senior HR manager purportedly told her that he preferred the term “favoritism” to “discrimination” because “discrimination” was an “inflammatory word.” He also told her that “maybe [she] just had a bad review, and to keep [her] head down, and let the managers do their job.” After she was demoted to parcel sorter in August 2013, she filed a charge with the EEOC.

Fired. As a result, the employee claimed, she was heavily scrutinized and experienced “write-up after write-up after write-up.” She was told that she could not clock in more than three minutes early, even though other workers could clock in up to 15 minutes early and would receive extra pay, and she could not work more than eight hours a day. She filed a second EEOC charge and allegedly experienced further retaliation. She was ultimately fired, supposedly for leaving work early. Although she had received no disciplinary write-ups before the new manager’s arrival, she received 15 to 16 write ups after he took over.

Lower court proceedings. She sued for gender discrimination and retaliation, and the lower court found only FedEx’s alleged refusal to allow her to clock in and out at the same time as her fellow employees constituted a materially adverse action sufficient to support a claim of retaliation. FedEx then removed the employee’s parallel state-court case and the district court consolidated the state-law claims with the federal claims.

Jury. Her gender discrimination and retaliation claims went to trial, and the jury initially returned an inconsistent verdict finding that FedEx had acted in good faith but also awarding the employee punitive damages. After the court sent the jury back to deliberate further, it crossed out its finding that FedEx had acted in good faith and kept the award of punitive damages in the amount of $403,950.

On post-trial motions, the district court found the employee presented sufficient evidence for the jury to find in her favor on retaliation and punitive damages, denied FedEx’s motion for a new trial, and reduced the amount of the punitive-damages award to $300,000. It also awarded the employee attorneys’ fees, reducing the amount to less than half what she requested.

Retaliation. On appeal, FedEx did not dispute that its managers knew about the employee’s EEOC charges but claimed it had no knowledge of her lawsuit until after she was fired, and the court agreed that there was no evidence any of her managers knew of her lawsuit before her termination. FedEx also relied on the trial court’s summary-judgment opinion, as well as pre-2006 precedent, for the proposition that its alleged refusal to allow the employee to clock in and out at the same time as her coworkers was the only possible adverse action that could support her retaliation claim based on the first-filed charge. And because she was demoted two months before the charge, she did not establish causation, the company argued.

Adverse actions! But FedEx, the court pointed out, relied on outdated cases regarding what constitutes a materially adverse action sufficient to support a Title VII retaliation claim. Although it had previously held that the same requirements apply to Title VII retaliation claims and discrimination claims, the appeals court noted that the Supreme Court made clear in Burlington Northern that the requirements for a retaliation claim are in fact considerably less stringent. Further, the court noted, in its 2018 decision in Rogers v. Henry Ford Health Sys., it reiterated that the showing required for a Title VII retaliation claim “is less burdensome than what a plaintiff must demonstrate for a Title VII discrimination claim.”

Thus, applying this standard, a reasonable factfinder could find that a number of the actions the employee testified about would be sufficient, on their own or in combination, to dissuade a reasonable worker from filing or pursuing an EEOC complaint. Specifically, the employee and others testified that she was placed under close surveillance, a security guard testified that he was told to track only the employee’s bathroom trips, and another worker testified that the employee was the only coworker he could not talk to because managers were constantly watching her. There was also evidence that after the new hub manager took over, the employee was subject to numerous disciplinary write-ups, which she claimed were unjustified and ultimately led to her termination.

In addition, the employee was repeatedly disciplined within a year of filing her EEOC complaints, starting with three disciplinary write-ups within approximately two months of filing her first EEOC complaint—the first one coming a mere four days after she filed her complaint. Such close temporal proximity, said the court, standing alone could be enough to prove causation, and a jury could have reasonably inferred that retaliation for filing the EEOC charge was a but-for cause of the adverse actions.

Punitive damages. FedEx next argued that there was insufficient evidence of egregious conduct to warrant an award of punitive damages. Noting that an employer can be held vicariously liable for punitive damages if its employee “was employed in a managerial capacity and was acting in the scope of employment,” as long as it has not engaged in “good faith efforts to comply with Title VII,” the court found ample evidence to support the jury’s verdict.

FedEx did not dispute that the hub manager and others were employed in a managerial capacity and were acting in the scope of employment when they allegedly discriminated and then retaliated against the employee.

Further, the court found it “far from clear” that the company’s anti-discrimination policy was “extensively implemented.” FedEx’s corporate HR manager testified that if an employee had complained to her of gender discrimination, she would open an investigation. But she had not seen a report of any investigation by FedEx into the employee’s reports of discrimination and retaliation. She also testified that she did not know if FedEx followed its own policies in this case.

No good faith effort to comply. And while FedEx also relied on testimony that any investigation into an EEOC complaint “would be handled by [FedEx’s] legal department,” to argue that “[i]t is not accurate to say that FedEx never investigated, only that the HR Department did not,” this was an implicit concession that its HR department never investigated the employee’s gender discrimination claim. Nor was there any evidence in the record to indicate that any FedEx department investigated the employee’s claims, said the court, and thus a reasonable factfinder could determine that, despite its formal anti-discrimination policy, FedEx did not engage in good-faith efforts to comply with Title VII.

Inconsistent verdict. As to FedEx’s assertion that the jury’s initial indication it acted in good faith precluded punitive damages as a matter of law, despite the jury’s expressed intention to award punitive damages, the court found this inconsistent with the weight of Sixth Circuit precedent holding that when a jury returns an inconsistent verdict, the trial court should “poll the jury or send it back to the jury room to further deliberate with appropriate instructions to bring back consistent verdicts.” Further, the court observed, “Our sister circuits agree that a trial court has the authority to resubmit an apparently inconsistent verdict to the jury with appropriate instructions.”

Attorneys’ fees. Turning to the employee’s argument that because FedEx did not object to her requested fees, the district court was required to award her the amount requested, the appeals court observed that in a detailed 17-page opinion, the lower court awarded her $157,733 in attorney’s fees, which was less than half the fees requested by lead counsel. Noting that the district court presided over the entire litigation process, the court found its determination of a reasonable expenditure of time for this case was entitled to substantial deference.