The Threat Of Lawsuits Is Real ...And Growing.

Schepel Buick & GMC Truck, Inc., a car dealership, employed a used car manager for many years. The manager developed muscular dystrophy, and had delegated some of his inspection functions to other personnel due to decreasing mobility. After recovering from an accident, he was not permitted by Schepel to return to work, and brought an ADA claim, seeking lost back wages, lost future income, and mental distress. A jury awarded $1,050,000.
Farmers Insurance Exchange was found liable for $90 million in unpaid overtime pay. Farmers had improperly classified its claims representatives as administrative personnel exempt from overtime requirements. Farmers appealed, the verdict was upheld, and $34.5 million was added to the judgment. Farmers had offered $8 million to settle the case before trial.
Coca-Cola Co. paid a record $192.5 million to settle a racial discrimination suit alleging the company discriminated against African American salaried employees in pay, promotions and evaluations. The settlement consisted of cash, future salary adjustments and the establishment of an independent panel to stand watch over its employment practices. The panel required, among other things, a review of the company’s diversity efforts and human resources operations as well as annual diversity training.
Ford Motor Co. reached a settlement with the EEOC to pay $7.75 million to as many as 900 women to settle complaints that they were groped and subjected to crude comments and graffiti at two Chicago-area plants. The settlement also called for sensitivity training by outside consultants at Ford plants across the nation at a cost estimated by the EEOC at $10 million. "This settlement demonstrates the EEOC's commitment to eradicate harassment from the workplaces of America," the commission's chairwoman, Ida L. Castro stated.
Aydin Corporation agreed to pay $4.1 million to settle a class-action suit brought by former employees and executives who claimed that they were entitled to overtime pay. Aydin had classified the employees as exempt salaried workers, but docked their pay for absenteeism, as if they were non-exempt. This fact dramatically strengthened the case against Aydin, and led to the settlement.
Home Depot settled a sex discrimination class action brought by female workers at its west coast stores for $87.5 million, including attorneys’ fees and costs. In addition, the company committed itself to modifying it’s hiring, promotion, and compensation practices in ways that will ensure that interested and qualified women will be hired for, and promoted to, sales and management positions. Through 2002, the injunctive relief created thousands of new job opportunities in sales and management positions at Home Depot, generating the equivalent of over approximately $100 million per year in wages for female employees.
A female newscaster for WWOR in New Jersey was fired after filing a workers' compensation claim and an EEOC complaint. The jury awarded $2,000,000 for pain and suffering and emotional distress and $2,835,436 for economic loss. The jury also found that the conduct of WWOR’s upper management was in reckless disregard of the newscaster’s rights, and on that basis awarded punitive damages in the amount of $2,500,000. The total verdict amounted to $7,335,436.
Two female branch managers in their 50’s sued a New Jersey bank, National State Bank, and obtained a total verdict of $4,248,025. The bank laid off a substantial number of employees as part of a reduction in work force and a number of branches were closed. The plaintiffs, however, were falsely advised by managers that they were terminated for poor performance, and they contended that this caused them extreme emotional upset, since they had always been model employees. They also contended that it took more than a year to obtain appropriate alternative banking employment, and one of the plaintiffs claimed gender discrimination as well. The jury’s verdict included $2,000,000 in punitive damages for each plaintiff.
A male corrections officer sued the State of New Jersey, claiming that he was continuously subjected to extensive harassment by a female corrections officer because he rebuked her advances, and that he was continually harassed by a number of her co-worker/friends because of the hostility generated by the harassing female co-worker. Plaintiff contended that the continued harassment created a hostile work environment and caused him to suffer severe emotional distress. He also charged that the State’s managers failed to respond in an appropriate and timely manner and that their repeated failure to take remedial action over a nine year period constituted outrageous conduct and deliberate indifference to the continuing harassment, warranting punitive damages. The jury awarded $750,000 in compensatory damages and $3,000,000 punitive damages.
Salomon Smith Barney was ordered to pay $3.2 million, including $1.5 million in punitive damages, to a female stockbroker who accused it of sexual harassment. The stockbroker had brought the issue to the personnel department, but the company’s investigation of the allegations was found to be lacking and, instead, management blamed the woman for complaining.
Buffalo Hilton Hotel employed a bartender who tested positive for HIV. His condition became known when he submitted a disability insurance form. Buffalo Hilton Hotel fired the bartender, who then brought a claim under the ADA and the New York Human Rights Law. The jury awarded the bartender compensatory damages consisting of $65,000 in back pay, $50,000 for future health insurance premiums, $324,000 for future medication costs, and punitive damages of $1 million, for a total award of $1,439,000. The judgment was later modified in light of certain statutory caps.
Mitsubishi Motors paid a record $34 million to settle claims brought by female auto workers who alleged that they had been groped and subjected to lewd jokes and behavior while working on the assembly line at its Normal, Ill., plant. The EEOC publicized the outcome as a warning. "Make no mistake about it, the Mitsubishi situation is not unique and no employer should assume that it can't happen in my company,” EEOC Chairman Paul M. Igasaki told a news conference. “Other employers should take heed. EEOC will aggressively pursue problems like this.”
Radio Shack Corporation paid $29.9 million to settle an overtime claim brought by its managers. Radio Shack claimed the managers were properly exempt from overtime requirements; the plaintiffs claimed they were essentially non-exempt sales persons. In similar circumstances, Starbucks settled for $18 million, and SBC Pacific settled for $35 million.
The University of Pennsylvania was held for more than $115,000 in damages, including $25,000 in punitive damages, plus $175,000 in attorney’s fees, in a reverse sex discrimination suit filed by a male candidate for the position of coach of the women’s crew team. The University hired a qualified woman for the position, but the court found that the University based its actions on gender, not just qualifications, in violation of its own policies.
A jury awarded nearly $550,000 as damages (including back pay, front pay, liquidated damages, attorney fees and interests) against Caesar’s Atlantic City Hotel & Casino. The court found that Caesar’s violated the federal Family and Medical Leave Act (FMLA) when it terminated a blackjack dealer because of absenteeism related to the worker’s documented back complaints.
When a third-party insurer failed to send a terminated employee notice of his right to continued health coverage under COBRA, a court ordered Suncoast Beverage Sales Ltd. to pay a fine of $10,800. The company argued that it wasn’t liable because it acted in good faith by hiring its insurer to send out the notice, but the court disagreed.