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

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.