Management’s Negligence Not Enough For Punitive Damages

Sherman & Howard L.L.C.

Sherman & Howard L.L.C.

The Fourth Circuit Court of Appeals recently reversed a jury award of punitive damages under Title VII because the plaintiff had not established the employer acted with malice or reckless indifference. The Court held that a plaintiff must show culpability beyond mere negligence at the management level in order to hold the employer vicariously liable for punitive damages.

The plaintiff in Ward v. Autozoners, LLC, No. 18-2100 (4th Cir. May 11, 2020), complained that his coworker groped him and used sexually explicit language. His managers asked the coworker to stop her behavior, but they otherwise did not take the complaints seriously. The plaintiff later prevailed at trial on his Title VII sexual harassment claim, and the jury awarded him punitive damages.

The punitive damages award was not to be, however. In reversing the lower court, the Fourth Circuit found the managers themselves did not engage in any harassment or otherwise carry out intentional discrimination. Rather, management failed to adequately respond to the coworker’s harassment and the plaintiff’s complaints. There was only negligence to impute to the employer. This evidence, the Court held, supports compensatory but not punitive damages under Title VII.

Here is the takeaway. While the Ward decision was a ‘win’ for employers, the employer in the case still had to pay damages to the employee. That is why employers must respond to complaints and remedy harassment of any kind whenever they encounter it. Diligently enforce your discrimination and harassment policy. Train your managers on how to respond to complaints. Do not be the employer who could have acted sooner or done more.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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