Dive Brief:
- A California state court judge struck the entire $83 million in punitive damages a jury awarded a former Liberty Mutual Insurance Co. employee last December after the jury found she was harassed and discriminated against because of her age, and fired because she complained, according to a May 11 order.
- Following the company’s appeal of the verdict, the judge said there was no evidence from which a jury could reasonably infer that Liberty Mutual acted with “intentional malice, trickery or deceit.”
- For instance, after the employee filed an anonymous complaint to Liberty Mutual’s leadership, the company promptly responded by sending an HR representative to investigate, and it gave employees an opportunity to voice their concerns, the judge pointed out. He denied the company’s request for a new trial and kept intact the jury’s $15 million award for past noneconomic damages and $5 million for future noneconomic damages.
Dive Insight:
The employee sued Liberty Mutual, alleging it violated California’s Fair Employment and Housing Act on several counts, including that it fired her after 31 years because of her age and in retaliation for complaining about age discrimination and harassment.
A jury found for the employee, and the judge upheld the verdict. He noted that the jury heard extensive evidence of an on-site supervisor’s bias against older, long-tenured employees, as well as how the supervisor persistently treated younger workers more favorably than their older peers.
Additionally, “multiple witnesses corroborated [the supervisor’s] pattern and practice of age discrimination,” and the jury’s award of noneconomic damages for emotional distress was not “so grossly disproportionate” as to be prejudicial, the judge held.
But the punitive damages award had to be struck, given “the degree of reprehensibility, the disparity between the award and the actual or potential harm suffered, and the difference between the size of the award and those in comparable cases,” the judge ruled.
Among other things, the employee didn’t suffer a physical assault or trauma, and the record was unclear as to whether the supervisor’s conduct was so “vile” or “contemptible” as to warrant the imposition of punitive damages, the judge said. Also, as “the largest age discrimination verdict in U.S. history,” the award “dwarfs those ‘authorized or imposed in comparable cases,’” he pointed out.
In an email to HR Dive, Justin Shegerian, the lead attorney for the employee, stated that, “While we are pleased that the Court upheld the $20 million award for the devastating harm [the plaintiff] suffered, the decision to strike the jury’s unanimous punitive damages award was unwarranted.”
He added that the jury’s finding “was supported by clear and convincing evidence” and the ruling “sends the wrong message to employers: if one of the wealthiest insurers in the world can get away with it with a slap on the wrist, then you can, too. That is a message society can’t accept.”
The attorneys plan to appeal the order, Shegerian said.
Punitive damage awards have sometimes reached amounts far beyond compensatory damages. But exorbitant awards can also be fleeting, such as when a court reduces them to meet a statutory cap or when it orders a new trial.
In January, a Utah jury awarded a former HR benefits generalist $75,000 in noneconomic damages and $5 million in punitive damages after finding she was fired in retaliation for complaining about a supervisor’s harassment and for substantiating a co-worker’s similar claims during a later investigation. The employer has asked the judge to revisit the case.
