11TH CIRCUIT SETS ASIDE $1 MILLION PUNITIVE DAMAGE AWARD IN A RACE DISCRIMINATION CASE

ELEVENTH CIRCUIT SETS ASIDE $1 MILLION PUNITIVE DAMAGE
AWARD IN A RACE DISCRIMINATION CASE

On December 16, 2011, the Eleventh Circuit Court of Appeals issued its fifth opinion in the case of Ash v. Tyson Foods, Inc., No. 08-16135 (11th Cir. 2011). The case was initially filed in 1995 and has been appealed to the Eleventh Circuit and United States Supreme Court on multiple occasions. The Eleventh’s Circuit’s most recent decision will substantially benefit employers that are faced with claims for punitive damages in discrimination suits.

Plaintiff John Hithon (“Mr. Hithon”), an African-American, alleged that Tyson Foods, Inc. (“Tyson”) discriminated against him on the basis of his race by denying him a promotion to a shift manager position. At trial, the evidence presented by Mr. Hithon showed he had significantly more poultry processing experience than the Caucasian selected for the shift manager position. Evidence also showed the decisionmaker responsible for selecting the shift manager had referred to African-American employees as “boy,” which the plaintiff argued had racial connotations.

The jury returned a verdict for Mr. Hithon and awarded $364,049.33 in compensatory damages, $300,000.00 of which was for mental anguish. The jury also awarded $1 million in punitive damages.

The district court denied Tyson’s request to remit the compensatory damages award. However, the district court vacated the punitive damages award.

On appeal, Mr. Hithon contended the district court erred by vacating the punitive damages award. In affirming the district court’s decision vacating the punitive damages award, the Eleventh Circuit emphasized that punitive damages awards are disfavored by law and are only appropriate to punish defendants and deter future wrongdoing, and for punitive damages to be proper, there must be substantial evidence the employer acted with actual malice or reckless indifference for federally protected rights.

The Court relied substantially upon the Unites States Supreme Court’s decision in Kolstad v. Am. Dental Ass’n., 527 U.S. 526 (1999), and held that employers may assert a good faith defense to vicarious liability for punitive damages where an employer has made good faith efforts to comply with federal anti-discrimination laws. The Eleventh Circuit ultimately concluded the decisionmaker’s actions could not be imputed to his employer and that Tyson had anti-discrimination policies in place designed to prevent discrimination in the workplace. In light of these facts, the Eleventh Circuit held that punitive damages were not proper.

The Eleventh Circuit’s decision underscores the importance of employers implementing anti-discrimination policies and providing appropriate anti-discrimination and harassment training. Though the implementation of policies and training cannot completely insolate an employer from liability for employment practices, the good faith implementation of such policies can protect employers against awards of punitive damages.