Want to drive out litigious employees? $7.5 million is the going rate

Question: It’s natural to get mad when one your employees files a legal complaint or lawsuit. Getting mad is fine … getting even isn’t. But “getting even” seems to be a popular pastime in American businesses today. That’s why claims of retaliation are the fastest-growing form of illegal discrimination claimed by U.S. employees.

A perfect Case in Point this month: Execs at a Virginia Beach time-share company effectively froze out (and then fired) the sales manager after she contacted the EEOC about filing a discrimination charge. The damage: $2.5 million in compensatory damages and $5 million in punitive damages … a whopping $7.5 million total.

The background: Pamela Depaoli was a very successful sales manager for a vacation time-share company when she inquired about a promotion to director. The company president told her the position was being eliminated. Instead, three weeks later, the president hired a man for the “eliminated” position. Smell fishy? There is more stink to come.

Depaoli later complained to the president that the new director was harassing her based on her sex and age. Unhappy with the president’s response, she contacted the EEOC but didn’t file a charge at the time. (But she did let the company VP and other employees know that she’d called the EEOC.)

When the director position again opened up, Depaoli saw her opening. She inquired, but a male was hired again. That sent her over the edge. She filed an EEOC claim for sex and age discrimination, plus retaliation. Eventually, the company fired her. (Depaoli v. Vacation Sales Associates LLC, 4th Cir., 6/12/07)

Why did she claim retaliation? Depaoli was able to produce a long list of alleged slights and unwise comments, including:

  • She said her sales records dropped radically after her second contact with the EEOC. She had a strong suspicion the company was manipulating her prospects, giving her only the most difficult ones to close.

  • The president allegedly declared, “I am not going to have any lawsuits on my watch.”

  • The president allegedly requested to have Depaoli undergo “closer supervision” than other managers. When others said this would cause her to quit, the president said that’s exactly what he hoped she’d do “for going to the EEOC.”

  • A vice president told Depaoli, “If you didn’t start an investigation with the EEOC, you would have gotten that in-house director position.” He also threatened another employee that they would “end up like Pam Depaoli” (fired) if they went to the EEOC.
What does this ruling mean to you?

Lessons Learned … Without Going to Court

  • Don’t mess with employees who’ve made EEOC inquiries or filed charges. Enough said. They know their rights (as do their lawyers) and how to report you further. Threatening or firing them will simply become more grits for their lawsuit.

  • Don’t announce that jobs are eliminated and then fill them. It sounds fishy and that’s what courts are looking for to determine whether your actions were a “pretext” for discrimination.

  • Proactively train presidents, vice presidents and all in charge on the EEO laws. An effective EEO training course for the big bosses would have made them more aware of the dangers of their overt actions and statements. It could have prevented them from doing and saying stupid things. Any training initiative would have cost less than the jury verdict (later reduced because of caps), time spent defending the lawsuit, attorney fees ($163,000 paid by the defendant) and loss of reputation.