$366 Million Single Plaintiff Race Retaliation Verdict Against FedEx Affirmed by Texas Federal Judge – Our Takeaways for Plaintiffs and Defendants
For employment law plaintiffs and defendants alike, submitting a case to the will of a jury at trial can be a daunting prospect, but last week, a federal court in Houston, Texas showed plaintiffs why it can be well worth the risk.
In Harris v. FedEx Corp.[1], based on the plaintiff’s claim of 42 U.S.C. § 1981/ Title VII prohibited retaliation, Southern District of Texas judge Kenneth Hoyt entered judgment on a jury verdict in favor of a former FedEx employee to the tune of over $366 million, $365 million of which were punitive damages.
Perhaps the most intriguing facet of the jury’s verdict is that the facts of the case, while compelling for plaintiff Jennifer Harris, were not by any means atypical or outlandish for a Section 1981/ Title VII retaliation claim. FedEx hired Ms. Harris in 2007 as an entry level Inside Sales Representative, after which she earned several promotions over the succeeding twelve years.
Beginning in 2017, Ms. Harris started reporting to a Managing Director named Michelle Lamb. Ms. Lamb began counseling Ms. Harris on her performance in early 2019, contending that she was not meeting her stated performance metric. In March of that year, Ms. Lamb asked her to take a demotion, citing performance.
While it is true that Ms. Harris had not reached her goal (which Ms. Lamb had set for her), which was to meet 100% of the previous year’s revenue, the evidence showed that Ms. Harris’s performance was only .11% below average when compared to other, similarly situated employees, and that at least two white managers in her position had performed significantly worse than her and were not counseled whatsoever.
Ms. Harris filed a complaint of racial discrimination to human resources a few days after Ms. Lamb’s suggestion that she take the demotion. Following that complaint, Ms. Lamb escalated her attacks on Ms. Harris’s performance, issuing her several write-ups, again, even though she was performing at or better than her some of her non-black peers. She filed yet another internal complaint of discrimination in August of that year.
FedEx terminated her employment on January 7, 2020 at the conclusion of its human resources investigation into her complaint. Ms. Harris contended that the real reason for her termination was either because of her race or the filing of her race discrimination complaints.
Ms. Harris also contended that the FedEx’s human resources division was inadequate and, like her previous treatment at the company, biased, going so far as to call it a “sham.” She alleged that FedEx’s human resources employees were not properly trained, that they did not interview all relevant witnesses to Ms. Harris’s grievance and that they did not review relevant documents. On one occasion, she said, an HR advisor told her, “Just go on with your job, it’ll all blow over.”
After a seven-day trial, the jury returned its verdict based solely on Plaintiff’s Title VII retaliation claim: $1.21 million in compensatory damages (for things like lost wages, mental anguish, etc.) and $365 million in punitive damages.
A jury can award punitive damages when a defendant knowingly violates someone’s rights or acts with deliberate indifference towards them. Punitive damages are intended to deter defendants from engaging in such behavior. In this case, Ms. Harris argued that she was entitled to punitive damages primarily because FedEx “intentionally siloed understaffed HR departments, kept them underqualified and undertrained, allowed and encouraged sham investigations, preventing the protection of those who make discrimination complaints, and training employees to defend, not to prevent.”
Some key takeaways for potential plaintiffs from this matter: first, if you feel that you are the victim of discrimination based on a protected characteristic like race, national origin, sex, or disability status, just to name a few, then know that if you complain internally about that discrimination, you are protected from retaliation on that basis. That is true even if, as in Ms. Harris’s case, your employer does not substantiate your claims. It is not necessary that you are ultimately found to have been the victim of discrimination based on your complaint—only that you suffered an adverse employment action because you made the complaint.
Second, while the punitive damages award in this case stands a good chance of being reduced on appeal, it is surely turning the heads of the leadership at major corporations and defense lawyers alike, who will want to do some serious analysis about whether their human resources departments are capable and competent. If you, as an employee, have dealt with dismissive, lethargic, uninterested, or otherwise incompetent human resources department at your job, you may have a good argument for punitive damages (assuming you have a viable claim to start with).
Lastly, this case goes to show that anything can happen at a jury trial. This case, while solid on its facts, does not showcase employer behavior that is by any means highly unusual. Ms. Harris may have been tempted to settle this matter before trial to avoid the risk of getting nothing if she lost, but she didn’t, and that decision paid off big time. Of course, we would not be surprised if Ms. Harris was offered very little, if anything, by FedEx to settle her claims prior to trial. Often large corporations like FedEx have taken a very aggressive litigation approach to employment claims. One would think (and hope) FedEx might take a different approach going forward, and that other large corporations would likewise take notice.
[1] No. 4:21-CV-01651 (S.D. Tex.).