Quest for ‘new blood’ could bleed bank account if it results in huge punitive damages award — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Quest for ‘new blood’ could bleed bank account if it results in huge punitive damages award

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in Discrimination and Harassment,Human Resources

If you place an older worker who has complained about age discrimination on a performance improvement plan (PIP) that is essentially impossible to complete, watch out! You’re setting yourself up to pay out huge punitive damages—even if the employee winds up winning just a modest retaliation verdict.

Recent case: James was 64 years old and performing his job well, according to company standards. Then his supervisor began making comments about the advancing age of some company managers and suggested that “new blood” was in order.

Shortly afterward, the company brought in a new hire to work in James’ office. James believed the man was being groomed to replace him.

James complained about age discrimination, but was told that none had occurred. Then he was placed on a PIP requiring him to produce far more in sales than he had ever been tasked with before. He failed and the company fired him.

James sued, alleging discrimination and retaliation. A jury awarded him $100,000 for retaliation and added on $500,000 for punitive damages. The company appealed, arguing the award was excessive.

The appeals court disagreed, letting the award stand. It reasoned that a 5:1 ratio was reasonable, given the jury’s belief that the company had set up James for certain failure as punishment for alleging age discrimination. The employer also had to pay more than $200,000 in legal costs for James’ attorneys. (Trickey v. Kaman Industrial Technologies, No. 12-1061, 8th Cir., 2013)

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