Watch out! Employee can win punitive damages even if he suffered no loss

An employee can collect punitive damages even if a jury finds that no other damages are due.

Recent case: Barry, a salesperson, declined his organization’s health insurance benefits because he was covered on his wife’s plan. Then his wife lost her insurance coverage, so Barry asked to be added to his employer’s health plan.

At first, management refused, citing its fear Barry would be expensive to cover because of past medical problems. However, he was eventually allowed to sign up. Soon, Barry’s daughter required extensive medical care for a disability. That’s when the company terminated Barry.

He sued, alleging he had been terminated because of his association with a disabled person. That’s a violation of the ADA.

A jury agreed, but awarded Barry no economic damages, since he quickly landed another job. He wound up suffering little or no loss of pay.

However, the jury did award Barry $400,000 in punitive damages.

The court reduced that award to $50,000, which is the statutory cap for small employers. However, it rejected the employer’s argument that punitive damages have to be proportional to economic damages—in this case, $0. It said employers can be punished despite a lack of economic harm if a jury finds the employer violated the law. (Reiter v. Maxi-Aids, et al., ED NY, 2018)

Final note: The ADA makes it unlawful to refuse to hire or to fire someone because they have a disabled child or spouse who may be a costly addition to the company health plan.