Retaliation Claim Results in Large Jury Award

March 3, 2011  |  From HRCalifornia Extra

An employee was awarded $1,237,086 in compensatory damages and another $1,237,086 in punitive damages, in a case that serves as an example of what not to do when you receive a complaint about sexual harassment.

A long-term employee, Teresa Green, worked as the activities director for Las Flores, a convalescent hospital, and was terminated after one of the residents was badly burned while smoking. Green sued for wrongful termination and retaliation, stating she had been fired for refusing to give false information about the burned resident, and because she complained about the sexual harassment of one of her colleagues. Green v. LAIBCO, LLC, 192 Cal. App. 4th 441 (2011)

Green had an exemplary work record for 20 years. A new company took over the operation of the convalescent hospital and Green complained to the new management about safety, patient care and staffing issues. Green was either ignored or told that management would look into her concerns.

About a year after the new management took over the facility, a resident who was smoking without adequate supervision set himself on fire. Green testified that she was pressured to create, backdate and sign a new evaluation of the smoker to indicate that he should not have been unsupervised while smoking.

The facility manager also called Green on her day off, asking her to state that she had been present on the patio the day the patient was burned. Green refused to do so. Within a matter of days, Green was terminated. The manager claimed to have conducted an investigation into the smoking incident, but nothing was documented to back up the claim that the resident's burns were a result of Green’s negligence.

At the trial, the jury awarded Green compensatory and punitive damages after deliberating less than one hour. The employer filed a motion for a new trial, and the lower court granted it, but missed the 60 day time period during which the court could grant a new trial. The court of appeal overturned the grant of a new trial and upheld the damage awards, citing the evidence that supported the jury’s award.

In the appeal, the employer argued that there was insufficient evidence to support the retaliation claim for reporting sexual harassment. The appellate court disagreed, pointing to the evidence:

Green’s assistant, Marroquin, complained that another worker was harassing her, following her around, asking her out and that it made Marroquin uncomfortable and upset. Green observed the behavior by the other employee, and also heard of other incidents from other employees.

Green reported the harassment, as required by company policy, and the facility manager stated he would look into it. Instead, the activities department suffered retaliation from other departments, including those managed by the girlfriend of the harasser, and another close friend. Both Green and Marroquin were denied raises, and Green was asked by another manager why she reported the harassment, as it had hurt the feelings of the harasser’s girlfriend, causing her to cry.

This evidence resulted in the jury’s decision that the employer terminated Green in retaliation for Green’s sexual harassment complaint. The appellate court affirmed the jury’s damage award of $2,474,172.00. Additionally, Green was awarded reimbursement of the costs for her appeal, and the trial court was ordered to hear her motion for an award of attorney fees and costs for the initial trial.

The employer appealed the damage awards alleging that the trial court failed to establish the employer’s financial condition (i.e., did it have sufficient earnings to support such a large damage award?). However, the company failed to comply with an order to submit financial information before and during trial. After the jury’s damage award, the company presented a balance sheet and profit and loss statement that the employee’s attorney found incomprehensible. Even the company’s CEO apparently found the information incomprehensible – when called to testify he could not give a response as to the current net assets of the company. The appellate court concluded that the failure to present financial evidence of ability to pay was the company’s fault. The court went on to note that the lack of sufficient information about the company’s assets resulted from the CEO engaging in stonewalling by claiming no knowledge of the company’s net worth, and the company failing to provide the financial information prior to trial, as had been ordered.

Best Practices

  • Take all allegations of sexual harassment and retaliation seriously.
  • Follow your company anti-harassment policy when responding to complaints of sexual harassment.
  • When appropriate, conduct a prompt, timely and thorough investigation of sexual harassment complaints.
  • Employers with 50 or more employees must provide supervisors in California with two hours of sexual harassment training every two years.
  • Give every California employee a sexual harassment pamphlet at the time of hire.
  • Under no circumstances should an employee be asked to falsify documents or give false testimony.
  • Employers who owe customers or clients a higher level of duty/care (minors, elderly, etc.) should take seriously any and all concerns expressed by employees, and comply with all state and federal laws governing the care of the clients.
  • Consult with legal counsel before terminating an employee who has brought harassment, discrimination, or other concerns to your attention.
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