SUPREME COURT DENIES FEDEX BID TO REVIEW PUNITIVE DAMAGES AWARD UNDER DISABILITIES ACT

PRESS RELEASE
10-8-08

Justices Decline to Review Jury Award in EEOC Case on Behalf of Deaf Worker

WASHINGTON – The U.S. Equal Employment Opportunity Commission (EEOC) today announced that the Supreme Court has denied a petition for review by Federal Express Corporation (FedEx) of a ruling by the U.S. Court of Appeals for the Fourth Circuit upholding a $100,000 punitive damages award in an EEOC lawsuit under the Americans With Disabilities Act (ADA) on behalf of a deaf package handler.

On March 2, 2006, a federal jury in Baltimore found in favor of the EEOC in its lawsuit against FedEx for violating the ADA. The EEOC had charged the Memphis, Tenn.-based global shipping giant with failing to provide reasonable accommodations to Ronald Lockhart, a profoundly deaf employee who worked as a package handler at the company's Baltimore Ramp, which is located at the Baltimore-Washington International Airport. The EEOC's suit charged FedEx with violating the ADA by failing to provide Lockhart with American Sign Language interpreters and notes for mandatory employee meetings and trainings, despite his repeated requests for these accommodations.

The evidence at trial showed that FedEx delayed for nearly two years in providing reasonable accommodations to Lockhart, refusing to do so even for meetings in which critical safety information was provided shortly after the 9/11 terrorist attacks and subsequent anthrax attacks. The evidence also showed that although FedEx eventually provided Lockhart with some accommodations after he filed a charge of disability discrimination with the EEOC, the company never provided accommodations in a consistent or reliable manner.

The jury found FedEx liable for punitive damages in the amount of $100,000 as well as compensatory damages to Lockhart of $8,000. The EEOC's lawsuit was filed in U.S. District Court for the Northern District of Maryland on September 30, 2004 (Case No. 04 CV-3129), after the agency first attempted to reach a voluntary settlement out of court.

The Fourth Circuit, in a unanimous decision published at 513 F.2d 360, upheld the jury's punitive damages award on January 23, 2008. The court held that the jury was entitled to find that FedEx acted with reckless indifference to Lockhart's federal protected rights, thereby satisfying the standard articulated by the Supreme Court in Kolstad v. American Dental Association, 527 U.S. 526 (1999). The Fourth Circuit further held that "the mere existence of an ADA compliance policy will not alone insulate an employer from punitive damages liability."

FedEx filed a Petition for Writ of Certiorari with the Supreme Court on April 22, 2008. In opposing Supreme Court review on the EEOC's behalf, the Solicitor General said in the federal government's brief that the Fourth Circuit "properly reviewed" the punitive damages award "within the parameters" of Kolstad and that the appeals court's approach "is also consistent with that used in other circuits."

"As the Court recognized in Kolstad, the recklessness standard ensures that employers will not be held liable for punitive damages when they attempt in good faith to conform their conduct to the requirements of the law," the federal government's brief said. In this case, however, the jury specifically found that FedEx managers did not respond in "good faith" when Lockhart requested accommodations, the government pointed out. "[U]nder Kolstad, a jury may find that an employer that is fully aware of the ADA's requirements, but disregards the risk that its inaction will violate those requirements, has acted recklessly and is therefore susceptible to punitive damages," the government said. "The court of appeals properly applied that principle here."

Proceedings in the U.S. Court of Appeals for the Fourth Circuit were handled by Assistant General Counsel Lorraine C. Davis and Appellate Attorneys Davis L. Kim and Susan R. Oxford of the EEOC Office of General Counsel's Appellate Services Division. The EEOC was represented in the U.S. Supreme Court by the Office of the Solicitor General.

"The jury verdict in this case, the unanimous Fourth Circuit decision upholding the verdict, and the Supreme's Court's decision that further review is unwarranted, amply demonstrate that employers risk exposure to punitive damages when they ignore the ADA's requirement to provide reasonable accommodations to employees with disabilities," said EEOC Regional Attorney Jacqueline McNair of the agency's Philadelphia District. McNair headed the trial team along with EEOC Supervisory Trial Attorney Debra M. Lawrence and Trial Attorneys Maria Luisa Morocco and Stephanie Marino.

Title I of the ADA, enforced by the EEOC, prohibits employment discrimination against people with disabilities in the private sector and state and local governments. In Fiscal Year 2007, the EEOC received 17,734 charge filings alleging disability discrimination, up 14% from the prior year to the highest level in a decade. Further information about the EEOC is available on its web site at www.eeoc.gov.

This page was last modified on October 9, 2008.