You can’t believe it. You’re still reeling.
You weren’t surprised when approximately 15 employees sued your company in federal court, alleging race discrimination. After all, it’s not unheard of for employees to sue for discrimination. What did surprise you was that you never got an EEOC charge, just a summons, and complaint to court. In their claims, they alleged –and ultimately won– tens of millions of dollars in punitive and other damages. That shocked you.
Don’t employees have to bring an EEOC charge before they can go to federal court? Isn’t there like a $300k cap on punitive damages? You didn’t think they had a case. Your counsel even filed a motion for summary judgment, hoping to get the claims dismissed. The court granted some of the motion, but some claims remained. You were so sure a jury would agree that the employees couldn’t prove their case. Clearly the jury had a different take. How does this happen?
Keep reading and to see how… 
As always (or at least usually) I do have a real case in mind. It’s Yarbrough v CSS Corp et al. In a nutshell, here’s what went down:
Approximately 15 employees sued Glow Network (aka CSS Corp). Most if not all of them were Black. Their allegations included, without limitation, unequal pay, promotion and raise denials, hostile work environment and retaliation ( in the form of firing, layoffs, demotions, etc). More specifically, they alleged that some workers were assigned to sit in a room with video surveillance, while others were not, and that almost all those subjected to video surveillance were Black. Some alleged that they were demoted, whereas whites or others who were not Black were not demoted. Some of the claims were dismissed through a summary judgment motion.
By the time of trial, the case, (which was not preceded by an EEOC charge) involved 10 employees, 9 of whom were Black. The jury delivered a whopping $70 million verdict. Yes, you read that right. Instead of focusing on the specific allegations or the employer’s response to complaints (or perhaps lack of response) I actually wanted to focus on some other points.
First: How is it the employees could sue in federal court without first filing an EEOC charge? An employee can bring a discrimination in federal court without alleging a violation of Title VII of the Civil Rights Act of 1964. There is another remedy, often overlooked, known as a Section 1981 claim (because it’s under Sec 1981 of the US Code). Like Title VII, Section 1981 outlaws employment discrimination based on race. One downside, however, is that it only outlaws intentional discrimination. Title VII outlaws facially neutral practices that adversely impact a disproportionate number of people from any of the classes enumerated in the statute. Section 1981 also only applies to racial discrimination. Section 1981 does not require an employee to first file a charge with the EEOC and therefore an employee is not subject to EEOC filing deadlines.
Second: Isn’t there a cap on punitive (and all) damages for employment discrimination claims? That cap only applies to Title VII claims, which cap both compensatory and punitive damages at $300,000 for larger employers, $100,000 for mid-size and $50,000 for small employers. Employees can get awarded back pay under Title VII, though. Here the employees sued under Section 1981 for punitive and compensatory/emotional distress damages. That resulted in a much greater payout to these employees, specifically about $3m in emotional distress and $4m in punitive damages each. Note that this amount does not include attorneys’ fees and court expenses that the court may at a later time order Glow Network to pay.
OK, are there any key takeaways for employers? In my humble opionion, yes. Here they are:
- Employees (with the help of attorneys) can be very creative. If the usual remedies won’t help them, they will often find other remedies. Those other remedies can actually pack a harder punch than the ones you normally expect. In this case, it means that an employee who missed EEOC filing deadlines may not only still have a way of suing, but, as this case shows, they might get far more in damages than they would have from the usual Title VII claim.
- Lawsuits like these often make a big splash in the news — often because they are not the usual method and because of the extraordinarily large verdict. The notoriety though, can lead to damage to your brand and hamper your ability to attract and retain good talent.
- Be mindful, not only of lawsuits. Many employees now are taking to social media. I read, hear — and write– about many stories of viral TikTok videos or subreddit posts from employees calling out their employers. Don’t think those aren’t damaging.
The above takeaways lead to perhaps the most overarching one of all: Strive to do right by your employees — or be prepared to live with consequences, that you cannot always anticipate.
I am fairly certain this employer did not antcipate a $70 million verdict, along with hefty legal fees and a splash in the media.
I think I’ve made my point. See you next time.
Are you an employer interested in proactively addressing workplace challenges and company culture? Visit my website, http://www.theemplawyerologist.com to contact me for a complimentary 20-minute consultation.
Watch the latest video clip in my series, “Ask the Employer’s Lawyer: My Employee Has Exhausted All Her FMLA Leave Time. What do I do?
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