Employment Law Daily Subway manager fired after reporting harassment wins $350K in damages, $204K in fees
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Friday, March 15, 2019

Subway manager fired after reporting harassment wins $350K in damages, $204K in fees

By Lorene D. Park, J.D.

An employer succeeded in having the manager’s attorneys’ fees reduced, but its motions seeking a new trial and to reduce damages were largely denied; the court awarded $150,000 in compensatory damages allocated to her state-law retaliation claim and $200,000 in punitives under Title VII’s cap.

After a jury found that a Subway restaurant retaliated against a manager by firing her a day after she complained to a state agency about sexual harassment, a federal district court in New York awarded $200,000 in punitive damages for her Title VII claim in accord with the statutory cap and $150,000 in compensatory damages for her state-law claim. Denying the employer’s motion for a new trial, the court explained that having a trial strategist at her attorney’s table taking notes rather than assisting with exhibits, as the employee’s attorney said he would do, was “totally improper,” but it did not create undue prejudice. The court refused the employer’s request to reduce compensatory damages to $35,000, finding that even though the employee’s emotional distress resembled garden-variety claims, compensation of $150,000 was not excessive. After certain reductions, the employee was awarded $204,116 in attorneys’ fees (Figueroa v. KK Sub II, LLC, March 11, 2019, Geraci, F., Jr.).

New manager’s misconduct. The employee, a manager at Subway, claimed that a new area manager visited her store once a week and on at least four separate occasions, he engaged in misconduct: (1) he called her a “bitch” by text message; (2) he said she looked like she was in a good mood and “must have gotten some last night;” (3) while assisting with a bottle of salad dressing he said “[I]t’s so slippery, it’s so wet, but don’t worry, I always get it in, I never miss;” and (4) he asked to see her nipple piercings.

Employee complains, is fired. The employee repeatedly complained to a district manager (DM), who ended up telling her and the alleged harasser that “this is how it’s going to have to be, you guys are both grown adults.” The employee then filed a sexual harassment complaint with the New York State Division of Human Rights. She was fired the next day “for abusing her supervisory position to obtain false statements from employees.” One of her coworkers had reported that, before her meeting with the DM, she solicited written statements from coworkers who witnessed the nipple-piercing remark.

Lawsuit. The employee sued for sexual harassment and retaliation under Title VII and the New York State Human Rights Law. In prior proceedings, the court held that the manager’s remarks were not severe or pervasive enough to support sexual harassment claims, but it denied summary judgment on her retaliatory discharge claim. After a five-day trial, the jury awarded the employee $150,000 in compensatory damages and $275,000 in punitive damages.

Strategist’s note-taking not prejudicial. Moving for a new trial, the employer argued that opposing counsel misrepresented a trial strategist’s role, gaining unfair advantage. Specifically, before jury selection, counsel introduced to the court a “professional jury assistant” that he said “won’t sit with me during the trial, but usually sits with me during this process.” Nonetheless, the attorney asked if the consultant could sit with him the second day of trial to assist with exhibits “so I move quicker.” Instead of helping with exhibits, the consultant took notes. The court called a side bar and chastised that this was “totally improper” and he could no longer sit at the table.

The employer conceded that the attorney did not misrepresent trial evidence, that the conduct did not influence the jury, and that there is nothing wrong with using trial strategists, but it argued that the in-court assistance gave plaintiff’s counsel an unfair advantage. Disagreeing, the court found no indication that the trial strategist interacted with the employee or any trial witnesses. Although displeased at counsel’s mischaracterization of the strategist’s role as an exhibit organizer, this was not a basis for a new trial because the actions were short-lived and did not create undue prejudice.

Damages capped and allocated. The employer also moved to eliminate punitive damages, to reduce compensatory damages to $35,000, or to reduce the total damages to $100,000 under Title VII’s cap. The employer submitted an affidavit by an HR manager explaining that she oversaw about 400 employees between the employer, KK Sub II, and KK Sub (a different entity), but that KK Sub II only employed about 180 of them. However, noted the court, in a prior response to discovery the employer clearly stated that KK Sub II’s number of employees was 475. Because it did not refute that document, the court held that the $200,000 statutory cap applied. But that did not end the analysis.

While Title VII caps the sum of compensatory and punitive damages, the NYSHRL does not cap compensatory damages and punitive damages are not available. The court therefore had to decide how to allocate the jury’s undifferentiated $150,000 compensatory damages award. In line with the typical practice of courts in the circuit, the court allocated the $150,000 compensatory award to the employee’s successful NYSHRL claim and allocated punitive damages to her successful Title VII claim, capping it at $200,000.

Compensatory damages not excessive. Refusing the employer’s request to reduce the employee’s compensatory damages to $35,000, the court explained that even though her emotional distress resembled garden-variety claims, compensation of $150,000 was not excessive under New York law.

Punitives not further reduced. The court also refused to reduce punitive damages any further than the statutory cap. The employer argued that its actions were not reprehensible because it fired the employee for soliciting false statements from subordinates. But the jury expressly rejected that explanation and found that the employer retaliated against her by firing her the day after she filed a sexual harassment complaint with the state. Furthermore, the ratio of punitive to compensatory damages was not excessive and, because punitives were capped by Title VII, the amount was not out of line with awards in similar cases.

Total damages. Based on the foregoing, the court denied the employer’s request for a new trial and awarded $200,000 in punitive damages for the Title VII claim in accord with the statutory cap and $150,000 in compensatory damages for the NYSHRL claim.

Attorneys’ fees. The employee requested a total of $292,002.50 in attorneys’ fees, but the court awarded $204,116, finding certain reductions appropriate. For one thing, even though the attorney achieved great success in this case, it was not a complex case and the requested hourly rates were higher than typically allowed in this context. There was also excessive time spent on trial and some time entries contained multiple tasks and were redundant and vague.

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