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Federal Appeals Court Affirms Large Retaliation Award in Sex Discrimination Case

  • June 1, 2000

In March 2000, the U. S. Court of Appeals for the Ninth Circuit affirmed an award of nearly $4 million against an employer for unlawful retaliation in violation of Title VII of the Civil Rights Act of 1964. The trial court in Washington had reduced the jury award of $11.7 million. The appeals court sent the case back to the lower court only to consider a potential employer defense to punitive damages in light of a landmark ruling by the U. S. Supreme Court in 1999.

With the explosive growth in retaliation litigation, this case will guide courts in California, Washington, Oregon, and other Ninth Circuit jurisdictions when awarding damages under the differing standards of state and federal discrimination law. It also will lead the courts in developing the employer's "good faith" defense to punitive damages in federal anti-discrimination law. [Passantino v. Johnson & Johnson Consumer Products, Inc., 9th Cir., March 10, 2000.]

The plaintiff had been a star performer at her company but suspected she had been passed over for several promotions because of her sex. Her supervisor allegedly had made derogatory comments about women and had promoted two male co-workers with similar attitudes. When the plaintiff and another female employee complained, they were told the military market was "an old boy network in which it was hard for women to be successful, and everyone needed to "shape-up and act professional" or be put "off the team." The plaintiff and her colleague "felt that they were being told that if they did not shut up they would be fired."

After the plaintiff filed an EEOC complaint charging sex discrimination and retaliation, she alleged she lost significant job responsibilities, and lucrative accounts were transferred to other employees without notice. The company excluded her from important meetings. Her performance goals were reduced, and her job title changed. Her supervisor became distant, and she lost bonuses and sales opportunities because she received information late. She was described as "not to VP level" and her performance evaluations were singled out for screening by the division vice-president, after which she was offered four demotions and a lateral transfer that amounted to "a step backward." Finally, she was deemed " no longer promotable."

The federal appeals court held that the plaintiff's complaints within the company were a protected activity under Title VII. It concluded her lower performance reviews, decreased job responsibilities, diminished portfolio, and exclusion from planning meetings established retaliation. Additionally, it found the short period of time between the plaintiff's complaints and the employer's adverse actions indicated retaliation.

In reviewing the amount of the damages award, the appeals court found the trial court had properly allocated the back pay, front pay, and emotional distress damages awarded to the plaintiff under her state law claims. The trial court also had properly reduced the award of punitive damages to $300,000, which it allocated to her federal Title VII claim. The appeals court returned the case to the district court to determine whether the employer had a defense under Kolstad v. American Dental Association, the recent United States Supreme Court opinion on punitive damages under Title VII. The Kolstad case had not been decided at the time of the trial in the district court, and the case was sent back solely to determine whether the division vice-president and the plaintiff's supervisor were at a level high enough to be the employer's "proxies" and whether the company had undertaken sufficient "good faith efforts at Title VII compliance." The court held that such efforts must go beyond merely having a policy against discrimination and a complaint mechanism and must show at a minimum that the policy was "fairly and adequately enforced."

Editor's Note

Since this case involves the significant discrimination issues of retaliation and punitive damages, and it is the first Ninth Circuit opinion on the employer defense since the Supreme Court's Kolstad decision, it offers some important lessons for employers:

  1. Management personnel must be trained not to retaliate against employees making claims of discrimination. They should know what actions may be considered retaliatory, particularly after receiving a complaint or charge of discrimination.
  2. Performance reviews that show a decline in the employee's evaluation following a complaint of discrimination should be reviewed for possible signs of retaliation by the manager or supervisor conducting the review.
  3. There is a difference between an "adverse employment action" in a retaliation case and a "tangible employment action" in a harassment case. In a retaliation case, an actual demotion or termination resulting from the complaint of discrimination is not required. Some interference with the complainant's ability to perform his or her job is enough to show retaliation.
  4. Managers and supervisors who are high ranking enough to be considered "proxies" and whose actions will be attributable to the employer should have extended training on retaliation issues. This kind of extensive training conducted on a regular basis will also assist the company in showing its good faith effort to comply with the anti-discrimination provisions of Title VII, as required under the Kolstad case to avoid liability for punitive damages.

©2000 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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