Monday, July 19, 2021

An adverse jury verdict is just a number on a piece of paper

Late last week, a federal jury tagged Walmart with a verdict totaling more than $125 million in a disability discrimination lawsuit the EEOC brought on behalf of an employee with Down syndrome.

The facts were not great for Walmart. 

The jury concluded that the retail giant failed to accommodate Marlo Spaeth, a 16-year employee with Down syndrome, and then fired her because of her disability. After Walmart altered her shift hours by 60 to 90 minutes, she had requested an accommodation back to her original schedule, an accommodation that Walmart refused to grant.

I have no idea what the evidence was, or how poorly WalMart's witnesses testified. But it's safe to assume the evidence was bad and that the witnesses were terrible, because it takes a lot to enrage a jury to the point of an award of $125 million in punitive damages, in addition to the $150,000 compensatory award.

Here's the thing. That number, while eye-popping, is just a number of a piece of paper. The ADA's statutory damage caps will reduce that $125,150,000 verdict to a mere $300,000 when the court enters its final judgment.

In cases under federal law involving intentional discrimination based on a person's race, color, national origin, sex, religion, disability, or genetic information, the aggregate amount of non-economic compensatory damages and punitive damages are capped based on the size of the employer.
  • For employers with 15-100 employees, the limit is $50,000.
  • For employers with 101-200 employees, the limit is $100,000.
  • For employers with 201-500 employees, the limit is $200,000.
  • For employers with more than 500 employees, the limit is $300,000

Even without these statutory caps, however, the U.S. Supreme Court has long held that due process operates to cap the ratio of punitive damages to compensatory damages somewhere in the single digits. Thus, even without the ADA's statutory damage caps, Walmart would not even pay $1.5 million in punitive damages, let alone $125 million.

In announcing the verdict, EEOC Chair Charlotte A. Burrows said, "The substantial jury verdict in this case sends a strong message to employers that disability discrimination is unacceptable in our nation’s workplaces." Added Gregory Gochanour, regional attorney of the EEOC's Chicago District Office, "The jury here recognized, and apparently was quite offended, that Ms. Spaeth lost her job because of needless — and unlawful — inflexibility on the part of Walmart." Of course, they are both correct. And the headline-grabbing verdict definitely serves the EEOC's purpose in deterring future misconduct by other employers. 

But, and it's a big but, it's disingenuous to imply that Walmart will pay $125 million. It won't, and it's not even close. $300,000 is not even a drop in the bucket to a half-trillion-dollar company. So let's all pay attention to the lessons learned, but let's not delude ourselves into thinking that this employer will learn anything or change its behavior based on this case. A verdict might be a number on a piece of paper, but all this employer will care about is the exponentially smaller final judgment.