October 2022 brought some notable developments in the employment law world, including large discrimination / retaliation verdicts for employees nationally and in Pennsylvania, and a notable Appeals Court ruling that could have widespread impacts for remote workers. Further details are below.
Fed-Ex hit with $366M Retaliation Verdict
An African-American former salesperson for FedEx was awarded more than $366 million in damages after a Texas federal jury concluded that FedEx disciplined and eventually fired her for complaining that she was being discriminated against because of her race. Notably, the jury awarded the worker $365 million in punitive damages in the face of (only) $120,000 for past pain and suffering and $1.04 million for future mental anguish.
FedEx defended it’s the case by asserting that the actions taken by the company were due to performance issues. However, according to the complaint the worker was a rising star in the company who had received several awards and promotions because of her performance. In March, 2019, she was allegedly asked to take a demotion by her manager, which the worker reported to human resources. The worker alleged that the company failed to properly investigate her complaint, which led her receiving discipline and disrupting her commission structure. The worker further alleged that she reported the manager again for discrimination and retaliation in August, 2019, however FedEx failed to perform a meaningful investigation, and the worker was eventually terminated in January, 2020 based on the track laid by the manager.
FedEx said in a statement that the company plans to appeal the verdict. Regardless, the verdict serves as a reminder of the severe consequences that can arise out of equal opportunity complaints, and the need by employers to fully and effectively investigate them.
The case is Harris v. FedEx Corporation, case number 4:21-cv-01651, in the U.S. District Court for the Southern District of Texas.
Western Pennsylvania Jury Awards County Jail Guard $1.2M for Novel “Associational Discrimination” Claim
A former guard at the Allegheny County Jail was awarded $1.2 million dollars in damages in the U.S. District Court for the Western District of Pennsylvania after he claimed that he was wrongly fired for filing a workplace complaint about a supervisor who made offensive comments about his biracial niece. Notably, the case had been previously dismissed at the trial level, before the Third Circuit Court of Appeals reversed and held for the first time that “associational discrimination,” or acting with prejudice toward someone because they associate with someone of a different race, could form the basis for a legal claim under Title VII of the Civil Rights Act.
The employee, who is white, alleged that a supervisor had called his biracial grandniece an offensive, racially charged name, and also had texted the employee pictures with racist depictions of African and Asian-American people captioned with the names of other jail employees. After the employee escalated his complaint, the supervisor was eventually placed on paid administrative leave during an investigation, and then retired. The employee allegedly was then subjected to retaliation from other administrators and employees allied with supervisor, and he was terminated seven months after making his report.
The case is Kengerski v. Allegheny County, case number 2:17-cv-01048.
Federal Appeals Court Rules that Time Spent by Employees Booting up Computers is Compensable under Federal Law
The Ninth Circuit Court of Appeals ruled this month that the time spent by a group of call center workers booting up their computers is intertwined with their work and therefore compensable under the Fair Labor Standards Act. “The employees’ duties cannot be performed without turning on and booting up their work computers, and having a functioning computer is necessary before employees can receive calls and schedule appointments,” a panel opinion stated. The opinion reversed a lower court ruling granting summary judgment to the employer, which held that the tasks the workers completed before and after they logged out of the company’s timekeeping system weren’t compensable because they weren’t connected to their jobs. Though the lower court was reversed, the appeals court clarified in a footnote that its ruling focused on the pre-shift activities, stating that turning the computers off would not be an integral part of the workers’ jobs (and presumably not compensable).
The Ninth Circuit encompasses Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington State. Nonetheless, the holding can serve as a reminder to employers nationwide to carefully consider whether they are properly paying their employees for “compensable” time, especially remote and other computer-based workers.
The case is Cariene Cadena et al. v. Customer Connexx LLC et al., case number 21-16522, in the U.S. Court of Appeals for the Ninth Circuit.
Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.
