Employment Law Daily Employee’s failure to report retaliation no defense to punitive damages
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Wednesday, June 1, 2016

Employee’s failure to report retaliation no defense to punitive damages

By Dave Strausfeld, J.D.

A car dealership could be held liable for punitive damages even if its employee never reported that her supervisor was retaliating against her, because her failure to report retaliation provided no defense to punitive damages under Title VII, held a federal district court in Tennessee, denying summary judgment on her retaliation claim and punitive damages claim. In effect, the car dealership was improperly attempting to import the Faragher/Ellerth defense into the Kolstad test for punitive damages. The clerk claimed she was fired in retaliation for alleging that the dealership’s general manager was sexually harassing female staff members (Anderson v. Miracle Chrysler Plymouth Dodge, Inc., M.D. Tenn., May 26, 2016).

Supervisor allegedly retaliated against her. In April 2012, a clerk in a car dealership’s accounting department was told by a former employee that the dealership’s general manager had made unwelcome sexual advances toward her. The clerk reported this to her supervisor, who allegedly responded “men will be men” and warned her not to speak with anybody else about these allegations. But a few weeks later when the clerk allegedly witnessed the general manager getting “hands-y” with a different female employee, the clerk reported the matter to the dealership’s service manager.

At this point, her supervisor got angry at her for disobeying the instruction to keep silent, and began treating her harshly, criticizing her and so forth, she said. Ultimately, her supervisor fired her in October 2013 for alleged poor performance, specifically deficiencies in her paperwork. This lawsuit followed.

Retaliatory discharge claim. According to the dealership, there was no evidence of any causal connection between the clerk’s complaints on behalf of her coworkers and her termination because there was a gap of nearly a year and a half; her last complaint about the general manager’s conduct was in May 2012 and she was not fired until October 2013. But the long time gap did not categorically preclude finding causation, the court explained. Also, the clerk had put forward other evidence to establish causality, such as that her supervisor began to belittle her in front of coworkers and even threatened to fire her several times after she reported the general manager’s alleged behavior. Thus she made a prima facie showing of causation.

Further, she offered evidence that the dealership’s explanation for firing her—poor performance—was pretextual. Although she had been counseled for performance deficiencies long before she complained about the general manager in 2012, her only written warnings were in 2010. On the record here, a jury could conclude that her performance was acceptable from 2010 on and became a problem only after she complained about the general manager. Consequently, her retaliatory discharge claim could proceed to trial, the court ruled.

Punitive damages claim. The dealership also sought summary judgment on the clerk’s claim for punitive damages. In the dealership’s view, the clerk’s failure to report her supervisor’s alleged harassment necessarily defeated her punitive damages claim, because her silence meant the dealership had no opportunity to enforce its written antiretaliation policy. In support of this argument, the dealership cited case law involving the effect of an employee’s failure to report harassment under the Supreme Court’s decisions in Faragher and Ellerth.

But the Faragher/Ellerth affirmative defense is specific to hostile work environment claims, the court stressed, and the clerk was asserting a retaliation claim. Moreover, unlike Faragher/Ellerth, the test for punitive damages under Kolstad v. Am. Dental Ass’n does not depend on the actions of the plaintiff. In particular, the Supreme Court did not impose a requirement in Kolstad that an employee follow known procedures for reporting harassment or retaliation in order to receive punitive damages. On the contrary, the dealership, to establish a good-faith defense under Kolstad, needed to show that it had adopted an antiretaliation policy and actually enforced it; it was not enough merely to show that the clerk failed to report the retaliation.

There was also enough evidence here of malice or reckless indifference, because the supervisor who allegedly said “men will be men” had apparently been designated as a point of contact at the dealership for fielding discrimination complaints. Because the dealership did not meet its burden on summary judgment of establishing that it was entitled to the Kolstad affirmative defense, the clerk’s punitive damages claim could move forward to trial.

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