E.E.O.C. V. Federal Express Corp

E.E.O.C. v. Federal Express Corp. 513 F.3d 360 FOURTH CIRCUIT COURT OF APPEALS, JANUARY 23, 2008

Facts of the Case: Mr. Ronald Lockhart, an individual who is deaf from College Park, Maryland, is unable to speak or read lips. Instead he is fluent in American Sign Language (“ASL”). ASL is Lockhart’s primary language and English is his second. While attending the University of Maryland, he was employed by FedEx as a package handler at FedEx’s Baltimore- Washington International Airport facility (the “FedEx-BWI Ramp”).

Two years after Lockhart was hired, an ASL interpreter was made available on a limited basis, such as for monthly meetings, however he was denied a translator for daily briefings, training sessions, or quarterly meetings. Lockhart did not need or request accommodations for his daily job activities of handling packages such as sorting; however he did need accommodations for the mandatory employee meetings, which addressed job training, safety and benefits.

After nearly three years of repeatedly being denied an ASL interpreter and other accommodations for employee meetings and training sessions, Lockhart filed a formal complaint with the EEOC claiming that FedEx violated the ADA. The same month Lockhart’s supervisor learned of his discrimination complaint to the EEOC, FedEx gave him an official form for requesting disability accommodations. However, FedEx fired Lockhart a few weeks later claiming he had poor attendance. The EEOC tried to reconcile the situation through negotiations, but were unsuccessful.

As a result, the EEOC filed suit complaining that FedEx violated Title I of the ADA by failing to provide reasonable accommodations and for discharging him in retaliation for his discrimination complaint. Additionally, the complaint sought compensatory damages (i.e., damages paid to compensate the claimant for actual injury or harms they suffered) and punitive damages (i.e., exemplary damages paid to penalize the defendant) for their alleged failure to act in good faith, and for malice and reckless indifference to his federally-protected rights under the ADA.

The district court of Maryland awarded Lockhart the sums of $8,000 in compensatory damages and $100,000 in punitive damages, based on a jury finding against FedEx for failing to reasonably accommodate Lockhart under the ADA. FedEx appealed to the Fourth Circuit.

Issues of the Case: Whether (1) there was enough evidence to submit the question of punitive damages to the jury and (2) the $100,000 punitive damages award was constitutionally excessive.

Arguments & Analysis: The EEOC proved that (1) FedEx was aware of Lockhart’s disability, (2) FedEx was aware of their legal obligation to provide reasonable accommodations under the ADA and recklessly disregarded their obligations, and (3) $100,000 in punitive damages was not constitutionally excessive.

Prepared by the legal research staff of the Burton Blatt Institute (BBI): Centers of Innovation on Disability at Syracuse University (http://bbi.syr.edu/) for the DBTAC: Southeast ADA Center (Southeast DBTAC) (http://www.sedbtac.org/). This document does not provide legal advice. If you have further questions about the issues of this case that relate to you, please consult an attorney licensed in your state. FedEx Was Aware of Lockhart’s Disability The EEOC proved that FedEx knew of Lockhart’s disability when they hired him because Lockhart requested an ASL interpreter for the initial interview. His request was denied so he brought his own interpreter for the interview and initial orientation/training sessions. The Senior Operations Manager at the FedEx-BWI Ramp, acknowledged (at trial) that he was aware of FedEx’s ADA compliance policy, which is outlined in their human resources policy manual, called the “People Manual.” Some of Lockhart’s supervisors contacted FedEx officials in their legal department for clarification on what constitutes reasonable accommodation under the ADA. Lockhart’s supervisors often disregarded his requests for accommodations. Occasionally he would receive closed captioning for video presentations, but no accommodations were provided with regard to live presenters. Additionally, Lockhart “almost never” received notes from the meetings.

FedEx Was Aware of Its ADA Obligations and Recklessly Disregarded Them Lockhart testified that his need for accommodations became imperative after September 11, 2001, though his requests were denied. He claimed that he was excluded from several meetings that trained and informed FedEx employees on security concerns such as anthrax exposure. Additionally, he claimed that although he performed satisfactorily on all graded computerized tests at the conclusion of training sessions, it was only because someone was always appointed to sit next to him at his station and physically take the exam for him. The Appellate Court held that the evidence was sufficient for a jury to find that FedEx managerial staff acted with “recklessness.” The fact that FedEx had an ADA compliance policy did not protect them from liability for discriminatory actions made by their management officials. Instead, the court held that FedEx failed to take affirmative steps to implement their own policy, and therefore were responsible for their staff’s disregard of Lockhart’s ADA right to reasonable accommodations. In other words, FedEx’s inaction was evidence of their failure to engage in good-faith efforts to implement their ADA policies. The Appellate Court affirmed that there was enough evidence to submit the question of punitive damages to the jury, and FedEx was responsible for paying Lockhart punitive damages due to their reckless disregard of his rights.

$100,000 in Punitive Damages Is Not Constitutionally Excessive In assessing whether $100,000 in punitive damages was constitutionally excessive, the Appellate Court looked to the three factors identified by the Supreme Court in State Farm Mutual Automobile Insurance Co. v. Campbell: (a) the degree of reprehensibility of the defendant’s conduct; (b) the disparity between the compensatory damages and the punitive damages; and (c) the difference between the punitive damages awarded in this case and punitive damages awarded in similar cases. The Appellate Court held that (a) FedEx’s indifference to the fact that failure to provide Lockhart with ADA accommodations could jeopardize his safety and the safety of his co- workers proved the reprehensibility of their conduct; (b) the 12.5 to 1 ratio between compensatory and punitive damages is well below the 500 to 1 disparity that was deemed unconstitutional by the Supreme Court; and (c) the combined sum of the compensatory and punitive damages were well below the $300,000 statutory cap for civil penalties for discrimination under the ADA. Ultimately the court held that the punitive damages were constitutional.

Policy & Practice:

Seeking Punitive Damages. When seeking punitive damages on an ADA claim, the plaintiff must prove that his/her employer “engaged in a discriminatory practice … with malice or with reckless indifference to the federally protected rights of the [plaintiff].” This question is sent to a jury to make the decision as to whether the employer acted with this malicious or reckless state of mind. The Supreme Court in Kolstad v. American Dental Association held that if the plaintiff can prove “recklessness,” it is not necessary for them to prove “malice.” According to Kolstad, there must be enough evidence for a jury to make four findings: “(1) That the employer’s decision maker discriminated in the face of a perceived risk that the decision would violate federal law; (2) That the decision maker was a principal or served the employer in a managerial capacity; (3) That the decision maker acted within the scope of his employment in making the challenged decision; and (4) That the employer failed to engage in good-faith efforts to comply with the law.”

Avoiding Punitive Damages. If the employer is showing a good-faith effort to comply with the ADA, and it is a manager who is making discriminatory decisions, then the employer is not liable and punitive damages cannot be awarded to the plaintiff. However, adopting ADA compliant policies and procedures designed to prohibit discrimination in the workplace is insufficient to escape punitive damages liability; the employer must also take affirmative steps to ensure that managerial staff members are implementing the policies.

Supreme Court Denied Review of Punitive Damages. Federal Express filed a Petition for Writ of Certiorari with the United States Supreme Court on April 22, 2008 to determine whether the Fourth Circuit used an improper standard in allowing an award of punitive damages. On October 6, 2008, the Supreme Court denied the petition for review by Federal Express Corporation. Therefore, the punitive damages award of $100,000, upheld by the Fourth Circuit’s unanimous decision, prevails.

Links: E.E.O.C. v. Federal Express Corp., 513 F.3d 360 (4th Cir. 2008), available at http://pacer.ca4.uscourts.gov/opinion.pdf/061724.P.pdf

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