A Perfect Storm of Liability: One Employee’s Discrimination and Retaliation Claim Costs T-Mobile $2.5 Million in Damages

Posted in: Employment Law by Dowling Aaron on

On April 29, 2020, the California Court of Appeal issued a sobering decision in Stephen Colucci v. T-Mobile USA, Inc., demonstrating once again how important it is to properly respond to employee harassment and discrimination claims and to take steps to avoid potential retaliation claims.  A jury in San Bernardino County awarded the plaintiff, a T-Mobile store manager, over $1 Million in compensatory damages for his harassment and discrimination claim, but added a $4 Million punitive damage award for his claim that he was fired in retaliation for requesting a medical accommodation and complaining about workplace harassment and discrimination.  Even after the Court of Appeal reduced the punitive damage award by more than half, T-Mobile is still left with a judgment against it of over $2.5 Million.

The plaintiff was a manager for a T-Mobile store with supervision over ten employees.  When a new District Manager attempted to transfer the plaintiff to a kiosk inside of a mall, the plaintiff requested a medical accommodation, claiming that he suffered from an anxiety disorder that prevented him from performing his job in the crowded mall location.  The manager allegedly said, “this is the most ridiculous thing I’ve ever heard,” but sent the request to Human Resources, who requested a physician’s note.  The plaintiff obtained a diagnosis and provided the physician’s note describing his limitations, after which he was granted the accommodation and not required to transfer.

Later, the plaintiff complained to the manager that a coworker was spreading false and inflammatory statements about him, which created a tense and uncomfortable work environment.  Rather than completing a thorough investigation, the manager allegedly told the plaintiff to “quit complaining” and that he had been “nothing but problems.”  Subsequently, another coworker accused the plaintiff of using company equipment to support a side business selling cars. When the manager went to the store to interview the plaintiff about the accusation, the plaintiff requested medical leave due to severe back pain (which later required surgery for), made worse by anxiety due to the work environment.  The manager granted the medical leave request, but two hours later processed the plaintiff’s termination “for cause,” bypassing the company’s progressive discipline policy.

Before learning of his termination, the plaintiff lodged a second complaint with the company claiming that the manager was discriminating against him due to his medical condition and accommodation request by neglecting to resolve his “defamation” complaint.  The company nevertheless proceeded to terminate the plaintiff.

The plaintiff sued T-Mobile for discrimination and retaliation.  The jury awarded him $1,020,042 in total compensatory damages, including past and future economic loss, and past and future noneconomic loss (emotional distress).  The jury then awarded punitive damages of $4 Million, being persuaded that the manager acted with “malice and oppression.”

A company is liable for punitive damages in retaliation cases when an officer, director or managing agent acts with “oppression, fraud or malice.”  The Court ruled that the manager was a “managing agent” because of his authority to manage multiple stores, final independent authority to hire and fire employees and discretion to bypass the progressive discipline policy and go straight to immediate termination.

On appeal, the Court agreed that the manager acted with “malice and oppression” because there was evidence that he was angry that the plaintiff complained about him and it was despicable to allow the plaintiff to leave the store under the belief that he was permitted to go on medical leave, and then turn around and use his inability to complete an interview that day as a basis for firing him.  However, the Court said that $4 Million was excessive and ruled that a proper award would be a multiplier of 1.5 times the total compensatory damages (or about $1.5 Million).   Even after reducing the punitive damages by more than half, T-Mobile was still left with a total judgment against it of over $2.5 Million for just one employee’s discrimination and retaliation claim.

COUNSEL TO MANAGEMENT:

It is critically important that employers respond promptly and properly to any employee’s complaint of workplace harassment or discrimination by conducting a thorough investigation and taking appropriate remedial action.  All employees, especially supervisors, must be properly trained on responding to claims of harassment and discrimination.  It is equally important that employers check with competent counsel before taking any disciplinary action against an employee who has requested medical accommodations or made complaints about workplace or coworker conduct.  This case demonstrates how the collision of these problematic areas can cause a perfect storm of liability.  If you have any questions or concerns about your company’s anti-harassment and discrimination policies, or how to properly respond to personnel issues, contact the experts at The Saqui Law Group, a division of Dowling Aaron Incorporated.

By: Manuel E. Ignacio and Justin Lomas

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