Recently, California juries have been handing out large monetary awards for employees who took their claims of workplace harassment and retaliation to trial. As was widely reported, a San Francisco federal court jury awarded $6.9 million in emotional distress damages and $130 million in punitive damages to a black former elevator operator who worked at Tesla’s Fremont facility for approximately one year. The employee testified that Tesla employees frequently used the “n-word” and that they had drawn swastikas and nooses as well as racially disparaging images in the workplace.
In January of this year, an in-house attorney for Farmers Insurance sued the company claiming, among other things, that he was the victim of a “retaliatory discharge.” California law prohibits an employer from firing an employee for engaging in certain forms of protected conduct—i.e., in retaliation for it. In the Farmers case, the attorney was fired right after Famers settled a discriminatory pay class-action lawsuit. In that lawsuit, he gave deposition testimony that supported the plaintiffs’ allegations that Farmers discriminated against its female attorneys. He claimed that his termination was retaliation for cooperating and assisting in the discrimination suit. The jury agreed, and awarded him $150 million in punitive damages.
Most recently, this month a Los Angeles jury awarded $440 million in punitive damages to two men who alleged they were forced out of their jobs at Southern California Edison after complaining about repeated sexual and racial harassment at a South Bay office. Normally, to bring a wrongful termination suit, the employee must show that the employer terminated his employment. But in this case, one employee prevailed on the theory of “constrictive discharge.” Under this theory, the fact that the plaintiff resigned from employment will not bar recovery for wrongful termination if she can prove that the employer’s conduct forced her to resign and thus amounted to a constructive termination. The doctrine transforms a resignation into a firing.
Due to constitutionally-imposed limits on punitive damages, however, the Tesla award was reduced from $130 million to $15 million. A substantial reduction—but still a notable result. Most likely, the punitive damages verdicts in the most recent two cases will see reductions, but will still likely remain multi-million dollar awards.