Callous treatment may cost you punitive damages — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Callous treatment may cost you punitive damages

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Under the California Fair Employment and Housing Act (FEHA), employers that don’t reasonably accommodate disabilities may be liable for both actual and punitive damages. And those punitive damages can add up, frequently exceeding the amount of actual damages.

Train all managers and supervisors on the consequences of being perceived as intentionally ignoring the law.

Recent case: Kimberly McGee worked for a credit union as vice president of lending when she was diagnosed with breast cancer. After surgery, she began aggressive chemotherapy treatment. The credit union told her that if she didn’t return to work by the end of four months, she would be fired.

McGee asked for additional time off or permission to work from home while she finished treatment. Instead, the credit union told her she would be demoted if she took any additional time off. McGee showed up for work and was demoted anyway, plus her employer cut her hours. That meant she lost her health insurance coverage.

McGee sued under FEHA, and a jury awarded her almost $2 million in actual damages, plus $1.2 million in punitive damages. The judge agreed with the credit union that the actual damages were excessive and ordered a new trial unless McGee agreed to take $750,000 in damages. She agreed. The credit union appealed anyway and asked for the punitive damages to be reduced, too.

But the Court of Appeal of California refused. It said juries have wide discretion to set punitive damages if they are designed to deter similar behavior. In this case, the court said the credit union’s “conduct was reprehensible,” thus the damages weren’t excessive under the circumstances. (McGee v. Tucoemas Federal Credit Union, No. F049458, Court of Appeal of California, Fifth Appellate Division, 2007)

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