No

STATEMENT OF JURISDICTION

The EEOC brought this enforcement action pursuant to section 706 of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-5. R.1 (complaint).[1] The district court’s jurisdiction was based on 28 U.S.C. § 1331. The district court entered its second amended judgment on March 13, 2014. R.162. The EEOC filed a timely appeal on May 9, 2014. R.175 (amended notice of appeal); Fed. R. App. P. 4(a)(1)(B). Jurisdiction in this Court is based upon 28 U.S.C. § 1291.

STATEMENT OF THE ISSUE

Consistent with Kolstad v. American Dental Association, 527 U.S. 526, 119 S.Ct. 2118 (1999), ten circuits and this Court’s own 2013 Civil Pattern Jury Instructions permit a jury to award punitive damages under 42 U.S.C. § 1981a when the discriminating employee acts in a “managerial capacity” for the employer, as the jury found in this case. This Court, however, continues to require that the discriminating employee be “high up the corporate ladder” or that “higher management countenanced or approved his conduct,” which compelled the district court to vacate the jury’s award of punitive damages. Should this Court correct its judicial precedent and reinstate the jury’s verdict?[2]

STATEMENT OF THE CASE

1. Nature of the case and course of proceedings.

This is an employment discrimination case in which a jury returned a verdict in favor of the EEOC and the Intervenor, Contrice Travis, finding that Exel Inc. discriminated against Travis based on her sex in denying her a promotion. The EEOC brought this enforcement action under Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000e-5), and Title I of the Civil Rights Act of 1991 (42 U.S.C. § 1981a) alleging that Exel violated Title VII when it refused to promote Travis to the position of Inventory Supervisor because of her sex. R.1 (¶¶1,15). The EEOC sought injunctive relief, back pay, compensatory damages, and punitive damages. R.1. Travis intervened and also alleged a violation of Title VII. R.12.

After a three-day trial, the jury returned a verdict in favor of the EEOC and Travis, finding that Exel denied Travis the promotion because of her sex. R.120, p.1 (verdict). The jury awarded back pay (stipulated to be $1,184.37), $25,000 in compensatory damages, and $475,000 in punitive damages. R.120, p.2 (verdict). In accordance with Title VII’s statutory limits, 42 U.S.C. § 1981a(b)(3)(D), the court reduced the punitive damages to $275,000. R.124, pp.1-2 (order). Exel subsequently filed a renewed motion for judgment as a matter of law or, alternatively, for a new trial, arguing that the evidence did not support the jury’s verdict as to liability or punitive damages. R.133-1 (motion). The district court denied the motion as to liability but granted it as to the punitive damage award, vacating the entire $275,000 award. R.147 (order). The EEOC filed a timely notice of appeal. R.175 (amended notice). Travis and Exel also filed timely notices of appeal. R.159; R.178.

2. Statement of the Facts

Exel provides supply chain management for customers in a wide range of industries. R.167, p.397 (transcript). Although Exel is headquartered in Ohio, Exel is part of a multinational corporation employing 500,000 people in 220 countries. R.147, p.23 (order). In 2008, Exel had 25,000 employees in 450 locations throughout North America. R.147, p.23 (order). Among other tasks, Exel stores customers’ products in warehouses for distribution. R.167, pp.397-98 (transcript). Exel maintains a campus in Fairburn, Georgia consisting of ten distribution sites about a mile apart from one another; each site typically serves one Exel customer. R.167, pp.397-98 (transcript). The entire Fairburn campus employed 1,300 employees in 2008. R.147, p.23 (order); R.167, p.445 (Guydon Tr.). One of the small sites on the Fairburn campus serviced customer Pittsburgh Paint & Glass (“PPG”). R.147, p.23 (order); R.167, p.447 (Guydon Tr.). The PPG site had about twenty-five employees and was responsible for shipping and storing products for PPG, such as paint and painting-related products. R.167, p.447 (Guydon Tr.); R.167, p.474 (Harris Tr.); R.165, p.110 (Travis Tr.).

Dave Harris became the General Manager of the PPG site in late 2006. R.116, p.477 (Harris Tr.). Harris was one of 329 General Managers at Exel. R.147, p.24 (order). Exel maintained three levels of General Managers (“GM”), whose designation depended on head count, profitability, and site size: “GM1,” “GM2,” and “GM3.” R.147, p.24 (order); R.167, pp.446-47 (Guydon Tr.). Harris was a “GM1,” the highest level. R.167, p.366 (Harris Tr.).

At the PPG facility, Harris was the highest-ranking Exel employee. R.167, p.343 (Harris Tr.). He had complete responsibility for the functioning of the PPG facility, including hiring and promotions. R.167, p.311-13 (Guydon Tr.), 343-44 (Harris Tr.), 524 (Harris Tr.). Harris coordinated with two other PPG facilities in other states and served as the network manager for all three PPG sites. R.167, pp.514-15 (Harris Tr.). Harris oversaw two tiers of management: Operations Managers (who reported directly to him), and supervisors (who reported to the Operations Managers). R.167, p.343-44 (Harris Tr.). Harris reported to Tom McKenna, a Director of Operations, whose office was on the Fairburn campus. R.167, p.523 (Harris Tr.).

Contrice Travis began working at Exel’s PPG facility in 2005. R.165, p.120 (Travis Tr.). She was soon promoted by General Manager Bob Brown (Harris’ predecessor) to Inventory Control Lead. R.166, pp.113 (Travis Tr.). As a lead, Travis ran a shift of fifteen people on the weekends. R.165, p.120 (Travis Tr.). A supervisor deemed her performance “outstanding” and said she “sometimes . . . performed better than the supervisors.” R.166, p.292 (Chambers Tr.). The PPG customer representative who worked at the site described Travis as “very good.” R.166, p.377 (Gezo Tr.).

In June 2007, a shift supervisor told Travis that James (Kenny) Teal was going to become the “Inventory Control Supervisor,” making him Travis’ supervisor. R.165, pp.116-17 (Travis Tr.). Travis immediately went to Harris to ask if “Inventory Control Supervisor” was a position. R.165, p.117 (Travis Tr.). Harris denied any such position existed. Id. Travis said if there were such a position, she wanted to be considered for it. Id.

Within a week of Harris denying the existence of an Inventory Control Supervisor position, Harris announced at a pre-shift meeting that Kenny Teal would be “the new Inventory Control Supervisor.” R.165, p.118 (Travis Tr.). Instead of managing ten to fifteen employees—as he had done as a shift supervisor—Teal now supervised only Travis and oversaw inventory. R.165, p.119 (Travis Tr.); see R.166, p.211 (Teal Tr.).

At some point, Travis also expressed her interest to Harris in two second shift supervisor positions. R.165, p.119 (Travis Tr.). Harris told her she “wasn’t qualified,” “wasn’t ready,” and “didn’t have a college degree.” R.165, p.119 (Travis Tr.). Neither Harris nor Teal had a college degree, however, and a college degree was not required for supervisory positions. R.167, p.497 (Harris Tr.); R.166, p.220 (Teal Tr.); R.166, p.273 (Crankshaw Tr.). At some point, Operations Manager Tommy Chambers also recommended that Harris promote Travis to Operations Supervisor, but Harris refused, stating that Travis was “not ready” and “needed more time.” R.166, p.293 (Chambers Tr.). Chambers believed that Harris would never promote Travis, and he told Travis she should consider finding a new job. R.166, pp.294-95 (Chambers Tr.). Chambers described Harris as “standoffish towards females, even the ones that were his direct reports.” R.166, p.295 (Chambers Tr.). Harris even wanted Chambers “to address” the women who reported directly to Harris. Id.

Although Harris never told Travis directly that he would not promote her because of her sex, Harris’ conduct made Travis believe she would not be promoted because she was a woman. R.165, p.181 (Travis Tr.). Harris “limited his contact” with female staff, even telling Travis he wanted her to “manage the ladies in the office,” which included the customer service representatives. R.165, Tr.161, 181 (Travis Tr.). While Harris offered male employees encouragement, Harris “really didn’t want to talk to [Travis] or deal with [her] on any level.” R.165, p.123 (Travis Tr.). Rather, Harris told Travis to talk to Teal and not to e-mail him. R.165, pp.123-24 (Travis Tr.).

Travis complained to a Human Resources (HR) official named Marie Murphy that she felt Harris would not promote her because she is a woman. R.165, pp.122-23 (Travis Tr.). Murphy told Travis she understood, as Murphy had dealt with the same problem in her position as HR Coordinator. R.165, p.124 (Travis Tr.). Because Murphy did not have oversight over the PPG facility, however, Murphy directed Travis to talk to HR Manager Franklin Hudson. R.165, p.122, 125 (Travis Tr.). Travis spoke to Hudson and reiterated her complaints, but Hudson merely told her his best advice was that she transfer to a different site. R.165, p.127 (Travis Tr.).

In June 2008, Harris promoted Teal from Inventory Control Supervisor to Operations Manager. R.166, p.212 (Teal Tr.). Teal did not formally apply for the position; rather, Teal told Harris he was interested in the job, and Harris promoted him. R.166, p.212 (Teal Tr.). Teal then recommended that Harris promote Travis into the vacant Inventory Control Supervisor position. R.166, pp.216-17, 236 (Teal Tr.). Harris refused, however, stating that Travis was unqualified and “he would not put a woman into a management position.” R.166, pp.216, 236-37 (Teal Tr.).

When Travis learned of Teal’s promotion, she went to Harris’ office and said “it’s out there now that there is a[n] Inventory Control Supervisor position” and she “asked for the opportunity” to fill that position. R.165, p.129 (Travis Tr.).

Harris told Travis that he would never make her a supervisor. R.165, pp.129-30 (Travis Tr.). Harris selected another Exel employee, Michael Pooler, for the Inventory Control Supervisor position. R.147, p.15 (order).

Pooler came to PPG from Exel’s Hawaiian Tropic site. R.166, p.324 (Pooler Tr.). Pooler had worked at the Hawaiian Tropic site as a quality assurance coordinator before being laid-off in a workforce reduction. R.166, pp.324-29 (Pooler Tr.); R.147, p.15 (order). According to Pooler, one Saturday morning he was called into the Hawaiian Tropic office for a meeting with his supervisor and Hudson. R.166, p.325 (Pooler Tr.). He was told “not to speak to anyone about anything” and was informed that there was an “inventory position” becoming available at the PPG site. R.166, p.325 (Pooler Tr.). Pooler’s supervisor was “very emphatic” and even “threatening” in instructing Pooler not to tell anyone about the PPG position, or the “position will not be available.” R.166, p.334 (Pooler Tr.).

After sitting at home for two weeks following the elimination of his Hawaiian Tropic position, Pooler received a call from Harris to come to PPG. R.166, pp.328-29 (Pooler Tr.). Although Harris later testified that Exel’s unwritten “priority transfer” policy called for selecting Pooler, since his position had been eliminated, Teal testified that he never heard of this policy. R.166, p.214 (Teal Tr.).

Pooler started at PPG as a first shift supervisor. R.166, p.325 (Pooler Tr.). A few days later, Harris moved Pooler to second shift supervisor. R.166, p.325 (Pooler Tr.). Harris told Pooler it seemed that he was not familiar with supervising or operations; Pooler agreed, stating he had been in “quality control, FDA guidelines.” R.166, pp.325-26 (Pooler Tr.). Another week went by, and Pooler, by his own account, was “looking stupid” and felt “lost.” R.166, p.326 (Pooler Tr.). During this time, Pooler was training with Travis in inventory; when Pooler expressed questions about his role, Harris told Pooler to continue training with Travis. R.166, p.326 (Pooler Tr.). For two weeks, Travis trained Pooler in “everything [she] knew about inventory.” R.165, p.131 (Travis Tr.).

Travis soon realized that although Pooler’s official title was second shift operations supervisor, she was actually training Pooler to fill Teal’s vacant position, or her own. R.165, p.132 (Travis Tr.). Given that realization, Harris’ “lie[]” about the existence of the Inventory Control Supervisor position, and Harris’ earlier statement that he would “never make [her] a supervisor,” Travis began looking for a new job. R.165, p.132 (Travis Tr.). By mid-July, Travis obtained a new job and gave her two-week notice. R.165, p.132 (Travis Tr.).

Once Travis announced she was leaving, Harris called Pooler into his office and told him he was Inventory Control Supervisor. R.166, p.326 (Pooler Tr.); R.166, p.356 (Harris Tr.) (agreeing he called Pooler “Inventory Supervisor” immediately after Travis’ departure). According to Pooler, Travis knew 100% more than he did about inventory and was “absolutely” more qualified for the Inventory Control position than he was. R.166, pp.331-32, 334 (Pooler Tr.). Even Harris agreed that Travis was 100% more qualified than Pooler “in the inventory area for the inventory position.” R.166, p.362 (Harris Tr.). When Pooler’s position was later eliminated, his position title was listed as “Inventory Management Supervisor.” R.166, p.332 (Pooler Tr.).

Confirming that Pooler really did take on the “Inventory Control Supervisor” position, Teal later testified that Pooler “was brought in to fill the position of Inventory Control Supervisor that I vacated.” R.166, p.213 (Teal Tr.). In Teal’s view, Travis—not Pooler—was the best candidate for the Inventory Control Supervisor position. R.166, p.214 (Teal Tr.). Teal explained that Travis was “very qualified” and regularly stepped in for him when he was absent. Id. Teal believed Harris refused to promote Travis because of her sex not only based on Harris’ statements to that effect, but also based on the fact that Teal had never seen a female in any management position during his seven years at Exel. R.166, p.218 (Teal Tr.) (“Anything that came open [in management] there was never a female to fill that position.”).

A few months after leaving Exel, Travis filed a charge of discrimination with the EEOC. Exel submitted a position statement asserting that Harris promoted Travis to inventory control lead, but Harris later admitted this was untrue; Bob Brown had promoted Travis before Harris came to PPG. R.166, p.353 (Harris Tr.); R.165, p.113 (Travis Tr.). The position statement also asserted that Harris encouraged Travis to apply for the Operations Supervisor position in June 2008, but Harris later admitted this was false; he had never encouraged Travis to apply. R.166, p.353 (Harris Tr.). The position statement further asserted that Travis told Harris she was not interested in a supervisor position because everyone knew her and it would be difficult to supervise her former co-workers, but Harris admitted this was another false statement; Travis had told him she wanted to be a supervisor, but Harris never considered her for the position vacated by Teal. R.166, pp.353-54 (Harris Tr.).

In June 2013, the case went to trial. In instructing the jury on the standard for punitive damages, the district court utilized this Court’s 2013 Civil Pattern Jury Instructions, issued a week before trial. Specifically, in accordance with Instruction 4.5, the district court instructed the jury that to be entitled to an award of punitive damages, plaintiffs had to prove that “an employee of Exel, acting in a managerial capacity” acted with malice or reckless indifference to Travis’ federally protected rights. R.119, p.13 (jury instruction). Exel did not object to the instruction. R.166, pp.568-69. The jury returned a verdict in favor of the EEOC and Travis and awarded $25,000 in compensatory damages, $1,183.37 in back pay (stipulated to before trial), and $475,000 in punitive damages. R.120 (verdict).

The court subsequently entered an order reducing the punitive damage award to $275,000 pursuant to Title VII’s statutory limit. See 42 U.S.C. § 1981a(b)(3)(D) (limiting combined compensatory and punitive damage award to $300,000 for the largest employers). Exel filed a renewed motion for judgment as a matter of law or for a new trial. R.133. On February 6, 2014, the court denied the motion as to the jury’s verdict on liability but granted it as to punitive damages. R.147 (order). On March 7, 2014, Travis filed a notice of appeal. R.158 (notice). On March 13, 2014, the court issued an order granting EEOC’s requested injunctive relief. R.161 (order). The court also issued a second amended judgment providing for injunctive relief. R.162 (judgment). On May 9, 2014, EEOC filed a timely notice of appeal. R.175 (amended notice). Exel also filed a notice of appeal. R.178 (notice).

3. District court decision

The district court granted Exel’s renewed motion for judgment as a matter of law as to punitive damages. R.147, pp.21-33 (order). The court agreed with Exel that this Court’s precedent compelled the conclusion that Harris was not sufficiently “high up the corporate hierarchy such that his behavior could be imputed to Exel or that higher management even knew about, much less countenanced or approved, his behavior.” R.147, pp.23, 24-29 (relying on Dudley v. Wal-Mart Stores, Inc., 166 F.3d 1317 (11th Cir. 1999); Miller v. Kenworth of Dothan, Inc. 277 F.3d 1269 (11th Cir. 2002); Howell v. Compass Grp., 448 F. App’x 30 (11th Cir. 2011); Ash v. Tyson Foods, Inc., 664 F.3d 883 (11th Cir. 2011)). The district court acknowledged the EEOC’s argument that this Court’s “higher management capacity” standard conflicts with Kolstad v. American Dental Association, 527 U.S. 526, 535 (1999), but the district court said it was “bound by the established Eleventh Circuit precedent adhering to the ‘higher management capacity’ standard post-Kolstad.” R.147, pp.28-29.

Applying this Court’s “higher management” standard, the district court concluded that no reasonable jury could find that Harris was “high-enough-up-the-ladder” to impute liability for punitive damages. R.147, p.26. Specifically, the court said that Harris was in charge of just twenty-five employees (.1% of Exel’s total employees) and reported to the Director of Operations, not to any vice-president at Exel’s Ohio headquarters. R.147, p.26-27. The court recognized that Harris had a “GM1” designation, oversaw two tiers of managers below him, and was a network manager for two other PPG sites, but the court held this evidence insufficient. R.147, p.27. According to the district court, Ash and Dudley compelled the conclusion that Harris was not sufficiently high up the corporate ladder to impute liability for punitive damages because this Court reached that conclusion in Ash, where the discriminating manager oversaw a plant of 1,400 employees, and in Dudley, where two Wal-Mart store managers had actual notice of racial discrimination. R.147, pp.24-26.

The district court acknowledged that this Court’s Civil 2013 Pattern Jury Instruction “strictly follows Kolstad” and makes no mention of the “higher management official” standard. R.147, pp.27-28. However, the court said, this Court’s resolution accompanying the instructions states that the publication of the “new pattern jury instructions did not constitute ‘adjudicative approval of the content’ of the instructions[,] ‘which must await case-by-case review’ by the Eleventh Circuit.” R.147, p.28.[3]

Finally, the district court conditionally ruled on Exel’s motion for a new trial as to the punitive damage award. R.147, pp.33-34. The court rejected Exel’s arguments that it was entitled to a new trial or remittance of the verdict on the ground that the award was excessive or that Exel had been punished arbitrarily and without fair notice that its denial of Travis’ promotion could subject the company to such a high award. R.147, p.34. The district court held that “the award is not excessive, serves the interest of deterrence, and . . . Exel had notice that it could be subject to the penalty” through the language of 42 U.S.C. § 1981a, which permits punitive damages. R.147, p.35.

4. Standard of Review

This Court reviews de novo a district court’s ruling on a motion for judgment as a matter of law on the issue of punitive damages. See Goldsmith v. Bagby Elevator Co., 513 F.3d 1261, 1275 (11th Cir. 2005).

Summary of argument

This Court should correct its standard for imputing liability for punitive damages under 42 U.S.C. § 1981a because this Court’s standard conflicts with Supreme Court precedent, every circuit to address the issue, and this Court’s own 2013 Pattern Jury Instructions. This Court’s judicial precedent holds that liability for punitive damages may be imposed only when the discriminating employee was sufficiently “high up the corporate hierarchy” or when “higher management countenanced or approved” the conduct. In Kolstad v. American Dental Association, 524 U.S. 526, 119 S.Ct. 2118 (1999), however, the Supreme Court stated that the imputation of liability for punitive damages under Restatement (Second) of Agency § 217 C(c) depends upon whether the discriminator acted in a “managerial capacity,” which the Court described as a fact-intensive inquiry focusing on the type of authority and the amount of discretion given the employee in what is done and how it accomplished. The Court also suggested that an employee must be “important” but need not be the employer’s top management.

Although this Court has held on several occasions that Kolstad did not disturb this Court’s “corporate ladder/higher management” standard, the EEOC respectfully disagrees. In the EEOC’s view, Kolstad’s “managerial capacity” standard abrogated this Court’s “corporate ladder/higher management” standard, as this Court’s own 2013 Civil Pattern Jury Instructions suggest. Indeed, this Court stands alone in requiring that a discriminating employee be “high enough up the corporate hierarchy” or that “higher management” countenance or approve the discrimination; ten other circuits apply Kolstad’s broader “managerial capacity” standard. Other courts have even recognized that this Court’s standard conflicts with Kolstad. Further, this Court’s standard effectively insulates large employers from punitive damage awards—as a review of this Court’s precedent reveals—which is a result Congress could not have intended. Accordingly, the EEOC urges this Court to reconsider its precedent and, if necessary, to sit en banc to correct it.

Application of the proper standard requires reinstatement of the punitive damage award in this case. At trial, the district court followed this Court’s 2013 Civil Pattern Jury Instruction 4.5—which follows Kolstad—in instructing the jury that it should “determine whether an employee acted in a ‘managerial capacity’ based upon the type of authority Exel gave the employee and the amount of discretion that the employee has in what is done and how it is accomplished.” The jury returned a verdict in favor of the EEOC and Travis as to punitive damages. Because the evidence was more than sufficient to support the jury’s determination that General Manager Dave Harris acted in a “managerial capacity” when he denied Travis a promotion because of her sex—since Harris was the highest-ranking Exel employee at the PPG site, oversaw twenty-five employees, and had hiring and firing authority—the punitive damage award should be reinstated.

ARGUMENT

This Court should correct its erroneous “high-enough-up-the-

corporate-ladder/higher management” standard for imputing liability for punitive damages and should reinstate the jury’s punitive damage award.

This Court’s “corporate ladder/higher management” standard for awarding punitive damages lacks any textual support, conflicts with the Supreme Court’s decision in Kolstad, and conflicts with the standard used by every other circuit court of appeals. This standard wrongly shields the largest employers from punitive damage awards, reserving such awards for small employers where there are few, if any, levels of management between a discriminating manager and the company’s top-level corporate officers. The EEOC accordingly urges this Court to reconsider its precedent and to reinstate the punitive damage award against Exel.

A. Legal standard for imputing liability for punitive damages.

1. Title VII

Title VII of the Civil Rights Act of 1964, as amended, prohibits “an employer” from discriminating based on sex. 42 U.S.C. § 2000e–2(a)(1). The statute defines “employer” as a person engaged in an industry affecting commerce with fifteen or more employees and “any agent of such a person.” 42 U.S.C. § 2000e(b). A “respondent” is defined as including “an employer.” 42 U.S.C. § 2000e(n).

Congress amended Title VII with the Civil Rights Act of 1991 (“CRA”). The CRA made punitive damages available upon a showing “that the respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual.” 42 U.S.C. § 1981a(b)(1). Because “respondent” includes “employer,” which, in turn, includes “any agent,” an employer may be held liable for the discriminatory acts of its “agent” taken with malice or reckless indifference to an individual’s federal rights.

2. The Supreme Court’s standard in Kolstad.

In Kolstad, 527 U.S. 526, 119 S.Ct. 2118, the Supreme Court granted certiorari to decide under what circumstances punitive damages may be awarded under Title VII for intentional discrimination. Specifically, the Court considered whether 42 U.S.C. § 1981a(b)(1) requires a showing of egregious or outrageous discrimination, as some courts—including this one—had held. See 527 U.S. at 535, 119 S.Ct. at 2124. The Supreme Court held that the statute does not require such a showing. Rather, the Court said, “malice” or “reckless indifference” pertains to “the employer’s knowledge that it may be acting in violation of federal law.” Id. Accordingly, a plaintiff must show that an employer “at least discriminate[d] in the face of a perceived risk that its actions w[ould] violate federal law.” 524 U.S. at 536, 119 S.Ct. at 2125.

Although the parties had not briefed the issue, the Supreme Court went on to address “the proper legal standards for imputing liability to an employer” for punitive damages. 524 U.S. at 540, 119 S.Ct. at 2127. The Court observed that “the common law has long recognized that agency principles limit vicarious liability for punitive awards” and that the courts of appeals—including this Court in Dudley v. Wal-Mart Stores, Inc., 166 F.3d 1317, 1322-23 (11th Cir. 1999)—have also relied on agency principles when interpreting 42 U.S.C. § 1981a. 524 U.S at 541, 119 S.Ct. at 2127. Next, the Court noted that the Restatement (Second) of Agency (1957) § 217 C sets out four grounds for imputing an agent’s misconduct to the principal for the purposes of awarding punitive damages: (a) the principal authorized the act; (b) the agent was unfit and the principal was reckless in employing him; (c) the agent was employed in a managerial capacity and was acting in the scope of employment; and (d) the principal or managerial agent ratified or approved the act. 524 U.S. at 542, 119 S.Ct. at 2128.

Discussing § 217 C(c), the Court noted that “‘unfortunately, no good definition’” of “‘managerial capacity’ has been found.” Id. (quoting 2 J. Ghiardi & J. Kircher, Punitive Damages: Law and Practice § 24.05, at 14 (1988) (internal quotation marks omitted)). The inquiry into “managerial capacity,” the Court said, remains a “fact-intensive” one. Id. Relying on a treatise, the Court added that “‘[i]n making this determination, the court should review the type of authority’” given the employee and “‘the amount of discretion the employee has in what is done and how it is accomplished.’” Id. (quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a), p.181 (3d ed. 1995)). Finally, the Court noted that the examples in the Restatement (Second) of Torts § 909 “suggest that an employee must be ‘important’ but perhaps need not be the employer’s ‘top management, officers, or directors,’ to be acting ‘in a managerial capacity.’” Id. (quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a), p.181).

The Court also addressed the “scope of employment requirement.” After determining that application of the Restatement of Agency’s “scope of employment” rule in the Title VII punitive damages context would undermine enforcement, the Court held that an employer could avoid vicarious liability for the discriminatory acts of “managerial agents” that “are contrary to the employer’s good-faith efforts to comply with Title VII.” Kolstad, 524 U.S. at 545, 119 S.Ct. at 2129 (quotation marks and citation omitted). The Court ultimately declined, however, to apply its newly articulated punitive damage standard to the case at bar, instead remanding the case for additional proceedings. 524 U.S. at 546, 119 S.Ct. at 2130.

3. This Court’s “high-enough-up-the-corporate ladder” and “higher

management” standard.

Prior to Kolstad, this Court had held that “constructive knowledge” is insufficient to impute liability for punitive damages. Splunge v. Shoney’s, Inc., 97 F.3d 488, 491 (11th Cir. 1996). Splunge involved harassment by a restaurant’s area supervisor, store manager, assistant manager, and dining room supervisor. Id. at 489. This Court held that the employer’s constructive notice of the harassment rendered the employer liable for the harassment. Id. at 490. However, this Court held that the employer’s constructive notice was not enough to impute liability for punitive damages because the plaintiffs failed to show that anyone “higher up the corporate hierarchy” acted with malice or reckless indifference. Id. at 491. This Court also held that the harassing employees’ state of mind did not “count[] as the state of mind of Shoney’s, the corporate employer, for punitive damages purposes.” Id. Citing Patterson v. PHP Healthcare Corp., 90 F.3d 927, 943 (5th Cir. 1996), this Court stated that other courts had also held that liability cannot arise where the “employee’s acts were not authorized or approved, implicitly or explicitly, by the company.” Splunge, 97 F.3d at 491. In concluding that the state of mind of the harassers—including the area supervisor and store manager—could not be considered the state of mind of Shoney’s, this Court noted, however, that the parties had stipulated that they “were both lower management.” Id. at 492 n.2.

This Court adhered to the “higher management” standard in several subsequent cases. In Reynolds v. CSX Transportation, Inc., 115 F.3d 860, 869 (11th Cir. 1997), vacated on other grounds, 524 U.S. 947, 118 S.Ct. 2364 (1998), this Court relied on Splunge and Patterson to hold that the employer could not be liable for punitive damages because the discriminating employee was not “higher management” and his acts had not been “countenanced or approved” by higher management. Similarly, this Court relied on Splunge and Reynolds in Dudley v. Wal-Mart Stores, Inc., 166 F.3d 1317 (11th Cir. 1999), to vacate an award of punitive damages based on two store managers’ racial harassment of the plaintiff. In reversing the award, this Court explained that “in part because of the egregious–conduct requirement,” punitive damages ordinarily cannot be awarded on the basis of constructive knowledge because punitive damages are intended to punish “those who have actually done wrong and not those who have liability by implication of law only.” Id. at 1323. Accordingly, this Court held, plaintiffs seeking punitive damages must show that the discriminating employee was “‘high up the corporate hierarchy’” or that “‘higher management countenanced or approved [his] behavior.’” Id. (quoting Reynolds, 115 F.3d at 869; internal quotation marks omitted). Applying this standard, this Court held that the plaintiff “failed to prove that Wal-Mart—the company—had the kind of notice and engaged in the kind of egregious acts required to award punitive damages.” Id. This Court emphasized that Wal-Mart “is a giant business” with 2,000 stores and questioned whether the discriminators (store managers) were even in the corporate management hierarchy. Id.

Although the Supreme Court decided Kolstad a few months after Dudley, this Court continued to rely on Dudley’s punitive damage standard after Kolstad. See Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1279-80 (11th Cir. 2002). In Miller, this Court applied Dudley’s “higher management” standard to hold that the plaintiff’s supervisor was “sufficiently high level in the company” that notice to him constituted notice to the company for the purpose of imposing liability for compensatory damages. Id. at 1279 (distinguishing Dudley). In reaching this determination, this Court cited evidence that the supervisor was one of just two managers at the facility where the plaintiff worked and that just a single level of management separated the supervisor from the president/owner. Id. However, this Court held that liability for punitive damages could not be imputed to the employer because it lacked “actual notice.” Id. at 1280 (also finding a lack of malice or reckless indifference). Rather, this Court said—again citing Dudley—a plaintiff must show the discriminating employee was “‘high up the corporate hierarchy’” or that “‘higher management countenanced or approved [his] behavior.’” Id. at 1280 (quoting Dudley, 166 F.3d at 1323).

Significantly, this Court did not consider in Miller the impact of Kolstad on this Court’s “corporate ladder/higher management” standard for imputing liability for punitive damages.[4] Rather, this Court cited Kolstad only for the proposition that malice or reckless indifference is established by showing that the employer discriminated in the face of knowledge its action would violate federally protected rights and that employers may avail themselves of the good-faith defense. Id. Similarly, a few years after Dudley this Court held in Wilbur v. Correctional Services Corp., 393 F.3d 1192, 1205 (11th Cir. 2004), that liability for punitive damages will be imputed only when the plaintiff establishes that the discriminating employee was high up the corporate hierarchy or that higher management countenanced or approved his behavior. But this Court again failed to address Kolstad’s “managerial capacity” standard or consider whether it abrogated Dudley; rather, this Court merely cited to Miller. Id.

Nearly ten years after Miller, this Court held explicitly in Howell v. Compass Grp., 448 Fed. Appx. 30, 38 (11th Cir. 2011), that the “corporate ladder/higher management” standard remains good law after Kolstad, but this Court still did not grapple with Kolstad’s discussion of “managerial capacity.” This Court instead relied on Miller to hold that “[e]ven after Kolstad . . . the high-enough-up-the-ladder rule for punitive damages set forth in Dudley is still binding precedent.” Id. This Court also noted that the Kolstad Court had cited Dudley with approval “for its use of the common law rule that agency principles limit vicarious liability for punitive damages awards against employers.” Id. at 38 n.5. Applying Dudley’s higher management standard, this Court held that the discriminating supervisor—the Director of Dining Services—was not sufficiently high up the corporate ladder to impose punitive damages because the employer’s parent company had 144,000 employees in the United States and the subsidiary company (Morrison) had 20,000 employees; Morrison had 400 facilities, each with its own Director of Dining Services; and the discriminator was just one of the 400 Directors of Dining Services “in the Morrison hierarchy.” Id. at 38.

Although Howell was unpublished, a month later this Court reiterated in Ash v. Tyson Foods, Inc., 664 F.3d 883 (11th Cir. 2011), that Kolstad “did not abrogate Dudley’s requirement that there could be no punitive damages based on constructive knowledge unless the decision maker w[as] high in the corporate hierarchy.” Id. at 902 n.12 (citing Miller, 277 F.3d at 1280 and Kolstad, 527 U.S. at 541, 119 S.Ct. at 2127). However, as in Miller and Howell, this Court did not discuss any of the pertinent language in Kolstad concerning the “managerial capacity” standard. See id. at 901-02 (applying Dudley and Miller without considering Kolstad’s language). Applying Dudley, this Court held that the discriminating employee—a plant manager—was not sufficiently high up the corporate ladder to impute liability, even though the plant had 1,400 employees. Id. at 903 (stating that the law does not “allow a jury to impose punitive damages on the basis that a decision maker was in charge of one of the hundreds of plants and offices that the employer had worldwide”). This Court emphasized that “Tyson is a huge, multi-national company” worth $11 billion with 300 facilities and 107,000 employees, meaning that less than 1.5 percent of its employees worked at the plant in question. Id. at 902-03. In fact, this Court said, it was questionable whether the plant manager “was in the hierarchy at all.” Id. at 904.

4. This Court’s 2013 Civil Pattern Jury Instructions

On May 29, 2013—just a week before trial—this Court issued a resolution authorizing distribution of its Civil Pattern Jury Instructions. The preamble states that “this resolution shall not be construed as an adjudicative approval of the content of such instructions which must await case-by-case review by the Court.” See 2013 Civil Pattern Jury Instructions, available at http://www.ca11.uscourts.gov/documents/pdfs/civjury.pdf. Pattern Jury Instruction 4.5 instructs the jury on who must have knowledge of a violation for the purpose of assessing punitive damages against the employer. In accordance with Kolstad, the instruction states that a plaintiff must show an employee acted in a “managerial capacity” and that “[t]here is no bright-line rule about which employees act in a managerial capacity. You must determine whether an employee acted in a ‘managerial capacity’ based upon the type of authority [name of defendant] gave the employee and the amount of discretion that the employee has in what is done and how it is accomplished.” Pattern Jury Instruction (PJI) 4.5, pp.105-106.

Although Pattern Jury Instruction 4.5 reflects what Kolstad suggested was the standard for “managerial capacity,” the annotations and comments to Instruction 4.5 are more ambiguous about this Court’s standard. The annotations and comments cite Miller for the proposition that punitive damages are ordinarily not available where the employer had only constructive knowledge of the violations. Annotations and Comments to PJI 4.5, p.115. The annotations and comments also state that Kolstad “did not define ‘managerial capacity’” but acknowledge—although this Court’s judicial precedent has not—that Kolstad “suggested that the employee must be ‘important, but perhaps need not be the employer’s top management, officers, or directors to be acting in a managerial capacity.’” Id. (quoting Kolstad, 527 U.S. at 543). The annotations further review Kolstad’s discussion of the “managerial capacity” issue but then state that “[e]ven after Kolstad, the Eleventh Circuit has continued to require that the conduct be taken or approved by the employer’s ‘higher management.’ Miller, 277 F.3d at 1280 (citing Dudley, 166 F.3d at 1323).” Id. at 115-16. Thus, there is a disconnect between Instruction 4.5—which uses Kolstad’s “managerial capacity” standard—and the annotations and comments, which state that this Court continues to apply the “higher management” standard of Dudley.

5. The circuits uniformly apply Kolstad’s “managerial capacity” standard.

No other circuit applies this Court’s “corporate ladder/higher management” standard for awarding punitive damages. Rather, ten circuits apply the “managerial capacity” standard Kolstad suggested, which requires a fact-intensive inquiry into the type of authority and discretion given the discriminating employee.[5] See, e.g., Monteagudo v. Asociacion de Empleados Estado Libre Asociado de Puerto Rico, 554 F.3d 164, 176 (1st Cir. 2009) (citing Kolstad and stating that plaintiffs must show the discriminating employee “was a managerial agent acting within the scope of his employment”; holding the standard was satisfied where the discriminator was a “a payroll, fringe benefits, and compensation manager” who supervised the plaintiff); Zimmerman v. Assoc. First Capital Corp., 251 F.3d 376, 384-85 (2d Cir. 2001) (quoting Kolstad’s “managerial capacity” language and affirming award where the discriminator was the Operations Vice-President of Retail Sales Finance); Medcalf v. Tr. of Univ. of Pa., 71 F. App’x 924, 932 (3d Cir. 2003) (citing Kolstad and holding that a rational jury could have found that the discriminator—the Senior Associate Athletic Director, who was in charge of hiring—was “acting in her managerial capacity”); Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 442-44 (4th Cir. 2000) (stating that Kolstad’s standard for determining whether an employee is acting in a managerial capacity requires a determination of the authority given the employee “and the amount of discretion that the employee has in what is done and how it is accomplished”; holding that the discriminator, who had supervisory and hiring authority, satisfied this standard, although “[she] was not top management, nor an officer or director”) (emphasis added); Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 285-86 (5th Cir. 1999) (relying on Kolstad’s managerial capacity standard and focusing on the Court’s “fact-intensive inquiry” language to hold that a Wal-Mart district manager satisfied the standard); EEOC v. Service Temps, Inc., 679 F.3d 323, 336-37 (5th Cir. 2012) (citing Kolstad’s “managerial capacity” standard, which focuses on the authority and discretion given the discriminator, and holding that Account Manager was acting in a managerial capacity because he had supervisory authority and made hiring decisions); Tisdale v. Fed. Exp. Corp., 415 F.3d 516, 531-32 (6th Cir. 2005) (applying Kolstad’s standard and stating, “We, along with several other courts of appeals, have held that non-senior management employees can serve in a managerial capacity”); Hertzberg v. SRAM Corp., 261 F.3d 651, 661-63 (7th Cir. 2001) (citing Kolstad and stating that “managerial capacity” standard is a fact-intensive inquiry turning on the kind of authority and discretion given the employee; holding that plant manager with hiring and firing authority was a managerial agent); Ogden v. Wax Works, Inc., 214 F.3d 999, 1010 (8th Cir. 2000) (applying Kolstad’s fact-intensive managerial capacity standard and holding that employee who supervised several stores and conducted performance evaluations was a managerial agent); Swinton v. Potomac Corp., 270 F.3d 794, 810-12 (9th Cir. 2001) (applying Kolstad and holding that supervisor of shipping department who was responsible for receiving complaints qualified as a managerial agent; rejecting the defendant’s argument that the supervisor was too “low-level” to impute liability for punitive damages); EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1247 (10th Cir. 1999) (applying Kolstad’s standard and holding that assistant manager and store manager both qualified as managerial positions).

B. This Court should correct its “corporate ladder/higher management” standard because it conflicts with Supreme Court precedent and is out of line with the other circuits.

The EEOC urges this Court to reconsider its “corporate ladder/higher management” standard for imputing liability for punitive damages. Although this Court has held that Dudley’s “corporate ladder/higher management” standard remains good law after Kolstad, this Court has never fully grappled with Kolstad’s “managerial capacity” definition or explained how it can be reconciled with this Court’s precedent. In the EEOC’s view, it cannot be reconciled. Rather, the EEOC submits that the correct standard is the “managerial capacity” standard set out in Kolstad, which is consistent with this Court’s own Pattern Jury Instructions and with every one of the ten other circuits to address the issue. Therefore, if necessary, we respectfully request that this Court sit en banc to reverse its precedent. See United States v. Vega-Castillo, 540 F.3d 1235, 1236 n.3 (11th Cir. 2008) (stating that in the Eleventh Circuit, “prior precedent must be followed unless the prior precedent has been overruled by this court en banc or by the United States Supreme Court”).

1. This Court’s standard conflicts with Kolstad.

In the EEOC’s view, Kolstad abrogated Dudley’s “corporate ladder/higher management” standard. Although Kolstad is most often cited for its rejection of the “egregiousness” standard for punitive damages, the Supreme Court spent considerable time discussing the standard for imputing liability for punitive damages. As discussed, Kolstad held that liability for punitive damages may be imputed under Restatement (Second) of Agency § 217 C(c) when an agent acts “in a managerial capacity.” See supra pp. 20-22. The Supreme Court eschewed any bright-line rule in defining “managerial capacity.” Rather, the Supreme Court endorsed a flexible “fact-intensive” inquiry into whether an employee acted in a “managerial capacity” that focuses on the type of authority and amount of discretion given the discriminating employee. See Kolstad, 527 U.S. at 543, 119 S.Ct. at 2128. Consistent with its discussion of “managerial capacity,” the Court also held that an employer may avoid vicarious liability for discriminatory decisions made by the company’s “managerial agents” when those decisions contravene the employer’s good-faith efforts to comply with Title VII. 527 U.S. at 545, 119 S.Ct. at 2129.

But this Court requires more than a showing that the discriminating employee acted in a “managerial capacity.” Rather, this Court requires that the employee be in the “corporate hierarchy” and be sufficiently “high up” the corporate hierarchy. See, e.g., Dudley, 166 F.3d at 1323 (questioning whether Wal-Mart managers are even “in the corporate management hierarchy at all”). This Court’s standard conflicts directly with Kolstad, then, because Kolstad does not require that the discriminating employee be part of the company’s top hierarchy. To the contrary, Kolstad states that an employee “must be ‘important’ but perhaps need not be the employer’s ‘top management, officers, or directors.’” 524 U.S. at 543, 119 S.Ct. at 2128 (quoting 1 L. Schlueter & K. Redden, Punitive Damages § 4.4(B)(2)(a), p.181 (3d ed. 1995)). Kolstad’s broad, fact-intensive inquiry also negates the conclusion that liability for punitive damages may be imposed only when the discriminating employee is at the pinnacle of a corporation’s hierarchy.

Several courts have noted explicitly that the Dudley’s “corporate ladder/higher management” standard is irreconcilable with Kolstad. See, e.g., Jeffries v. Wal-Mart Stores, Inc., 15 F. App’x 252, 265 (6th Cir. 2001) (holding that Kolstad “rejected” Dudley’s corporate ladder/higher management standard and refusing to adopt it); Ciesielski v. Hooters Mgmt. Corp., 03 C 1175, 2004 WL 2997648, at *3 (N.D. Ill. Dec. 27, 2004) (stating that Dudley “is not the law of this Circuit or supported by the Supreme Court’s decision in Kolstad” and rejecting its higher management standard); Lopez v. Aramark Unif. & Career Apparel, Inc., 426 F. Supp. 2d 914, 959 (N.D. Iowa 2006) (refusing to follow Dudley and stating that “the viability of Dudley was significantly eroded and undercut by the Supreme Court’s opinion in Kolstad”); Cavouti v. New Jersey Transit Corp., 161 N.J. 107, 128, 735 A.2d 548, 560 (N.J. 1999) (calling Dudley “of doubtful precedential value after Kolstad”). Even if the “corporate ladder/higher management” standard does not directly conflict with Kolstad, it is, at a minimum, in significant tension with Kolstad.

As the preceding discussion of this Court’s precedent shows, supra at pp. 23-28, this Court has never actually addressed Kolstad’s “managerial capacity” standard. Rather, in Miller this Court simply applied Dudley without any discussion at all of whether Kolstad had upended the Dudley standard. See Miller, 277 F.3d at 1280. In Howell and Ash, this Court held that Dudley remained good law, but this Court did so by citing back to Miller, which, again, never actually considered Kolstad’s discussion of “managerial capacity.” See Howell, 448 F. App’x at 38; Ash, 664 F.3d at 902 n.12.[6] As this Court recognized in Ash, Kolstad cannot be lightly disregarded. See Ash, 664 F.3d at 907.

The other reason this Court has given for continuing to rely on Dudley is that “Kolstad cited Dudley with approval for its use of the common law rule that agency principles limit vicarious liability for punitive damages awarded against employees.” Howell, 448 F. App’x at 38 n.5. To be sure, this is true. But Kolstad’s citation to Dudley did not signal the Supreme Court’s approval of Dudley’s “higher management” standard. Rather, Kolstad merely cited Dudley for the general concept that courts of appeals have relied on agency principles in interpreting 42 U.S.C. § 1981a. See Kolstad, 527 U.S. at 541, 119 S.Ct. at 2127. The Court quickly moved off that point to discuss in more detail the Restatement (Second) of Agency § 217 C(c)’s pronouncement as to when an agent’s misconduct can be imputed to the principal for the purpose of awarding punitive damages. 527 U.S. at 542, 119 S.Ct. at 2128. The Supreme Court’s subsequent discussion about the “managerial capacity” standard thus did not endorse Dudley in any way; to the contrary, as discussed above, the Court suggested that the managerial capacity standard is a fact-intensive inquiry focusing on the discriminator’s discretion and authority and suggested that while the discriminator must be “important,” he “perhaps need not be the employer’s top management, officers, or directors.” 527 U.S. at 543, 119 S.Ct. at 2128.

The Supreme Court’s rejection in Kolstad of the egregiousness requirement also undermined Dudley’s standard. In Dudley, this Court stated explicitly that “in part because of the egregious-conduct requirement, punitive damages will ordinarily not be assessed against employers with only constructive knowledge of the violations.” Dudley, 166 F.3d at 1323 (emphasis added). Thus, Dudley’s reasoning turned, in part, on this Court’s view that because a plaintiff must show “egregious” conduct, it is not enough that an employer have only “constructive knowledge” of the discrimination. Rather, the employer must have had “actual knowledge,” which could be shown by proving that the discriminator was sufficiently high up the corporate hierarchy or that higher management countenanced or approved his behavior. Id. But Kolstad rejected the egregiousness requirement altogether, thereby undermining Dudley’s reason for adopting the “higher management” standard in the first place.

EEOC also submits that the “constructive notice” and “actual notice” terminology employed in Dudley are themselves misnomers. The imputation of punitive damages under Restatement (Second) of Agency § 217 C(c) does not concern whether an employer had “notice” of the acts of his agent. Rather, it concerns whether the discriminating employee—the “agent” of the employer—was acting in a “managerial capacity” within the scope of his employment such that his malice or reckless indifference could be imputed to the company. In other words, the question is whether the agent’s acts were the acts of the employer. See 42 U.S.C. § 1981a(b)(1) (punitive damages are available when a “respondent” acts with malice or reckless disregard); 42 U.S.C. § 2000e(n),(b) (defining “respondent” as including “employer,” and “employer” as including “any agent”).

2. Dudley’s foundation has been eroded.

This Court should also reconsider Dudley’s “corporate ladder/higher management” standard because the core case it stood upon is no longer good law. In holding that the discriminating employee must be “high up the corporate hierarchy,” Dudley relied on Splunge v. Shoney’s, 97 F.3d 488 (11th Cir. 1996), which, in turn, relied on Patterson v. PHP Healthcare Corp., 90 F.3d 927 (5th Cir. 1996). The Fifth Circuit retreated from Patterson, however, in Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 285 (5th Cir. 1999), where the Fifth Circuit held that the district court had erred in relying on Patterson to hold that Wal-Mart’s district manager was insufficiently high up the corporate hierarchy to impute liability for punitive damages. Rather, the Fifth Circuit held, the evidence sufficed “under Kolstad” to show that Wal-Mart’s district manager was a “managerial agent” because he had supervisory authority over the plaintiff, could fire the plaintiff, and managed six stores. Id. at 285-86. As for Dudley’s “countenanced or approved by higher management” standard, this Court relied on Reynolds v. CSX Transp., Inc., 115 F.3d 860, 869 (11th Cir. 1997), which, in turn, relied on Patterson for its “higher management” standard. But, again, the Fifth Circuit subsequently recognized in Deffenbaugh-Williams that Patterson’s standard conflicted with Kolstad.

3. No other circuit applies this Court’s “corporate ladder/higher management”

standard.

As discussed, supra, at pp.31-33, this Court stands alone in adhering to its “corporate ladder/higher management” standard after Kolstad. The ten other circuits to address the issue have uniformly followed Kolstad’s “managerial capacity” standard, and several courts have explicitly stated that Dudley is not good law after Kolstad. To be sure, this Court is not bound by any other circuit’s precedent. But the uniformity of the other circuits’ application of Kolstad’s standard for imputing liability suggests that this Court should reconsider its precedent, sitting en banc if it needs to do so. See generally Fed. R. App. P. 35(b)(1)(B) (en banc consideration may be warranted if the case “involves an issue on which the panel decision conflicts with the authoritative decisions of other United States Courts of Appeals that have addressed the issue”).

The divergence of this Court’s standard from those of other circuits is underscored by the apples-to-apples comparison of how Wal-Mart store managers are treated for the purposes of imputing liability for punitive damages. Multiple circuits have specifically interpreted the managerial capacity standard in Kolstad to include the manager of a single Wal-Mart store. See Brady v. Wal-Mart Stores, Inc., 531 F.3d 127, 137 (2d Cir. 2008) (affirming punitive damages for a Wal-Mart sales-floor associate based on the actions of his immediate supervisor and store manager); Arrieta-Colon v. Wal-Mart Puerto Rico, Inc., 434 F.3d 75, 89-90 (1st Cir. 2006) (affirming punitive damages for a worker based on the actions of two assistant managers); Jeffries v. Wal-Mart Stores, Inc., 15 F. App’x 252, 265 (6th Cir. 2001) (affirming punitive damages for a customer service manager based on the actions of the store manager and district manager); EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1247 (10th Cir. 1999) (holding that assistant manager and store manager were managerial agents under Kolstad and affirming punitive damage award). But in this circuit, the malice or reckless indifference of a Wal-Mart store manager cannot be imputed to the company. See Dudley, 166 F.3d at 1323. The availability of punitive damages under federal law should not depend upon the vagary of the location of the particular Wal-Mart in which an employee works.

4. This Court’s standard wrongly insulates large employers from punitive

damages.

Some of the courts that have rejected this Court’s “corporate ladder/higher management” standard have done so because they recognize that this Court’s rule unfairly insulates large companies from punitive damage awards. In a large company (especially a global one) there are so many levels of corporate hierarchy that it practically eliminates the possibility that any particular manager—even one with significant authority—would be sufficiently close to the top of the corporate hierarchy that this Court’s standard would be satisfied. See, e.g., Tisdale, 415 F.3d at 531. In Tisdale, the Sixth Circuit rejected FedEx’s argument that “all of its employees involved in [the plaintiff’s] termination are middle management and therefore, liability cannot be imputed to FedEx.” Id. To the contrary, the court said, “[t]he mere fact that FedEx is a large, global corporation with a multi-layered management structure is insufficient by itself to shield it from liability under Title VII.” Id.; see also Cavouti, 161 N.J. at 127-28, 735 A.2d at 560 (disagreeing with Dudley and stating, “[i]f a Wal-Mart store manager were not considered ‘upper management,’ many large, national corporate employers could escape punitive damages liability simply because of their size and corporate structure”).

Effectively reserving punitive damage awards for the smallest employers also contravenes the statutory limits on punitive and compensatory damages that Congress put into the statute. When amending Title VII to allow for punitive and compensatory damages, Congress recognized that large employers should, and would, be held liable for such damages. Specifically, Congress directed that large employers (500+) could be liable for a combined total of $300,000 in compensatory and punitive damages. 42 U.S.C. § 1981a(b)(3)(D). Congress expressed its intent, however, that smaller employers would be liable for smaller awards by setting a limit of $200,000 for employers with 200-500 employees, $100,000 for employers with 101 to 200 employees, and $50,000 for employers with 15-100 employees. 42 U.S.C. § 1981a(b)(3). Thus, Congress intended not only that large employers be liable for punitive damages but that they be liable for a higher amount of damages than smaller employers. Yet this Court’s standard all but ensures that the largest employers will only rarely pay punitive damages while the smallest employers will pay more often, since they have fewer levels of corporate hierarchy. Congress clearly did not intend this result.

Further, effectively exempting the largest employers from punitive damage awards contravenes Kolstad’s recognition of the prophylactic purposes of Title VII and the deterrence rationale of punitive damages. See Kolstad, 527 U.S. at 545, 119 S.Ct. at 2129 (taking care to fashion a punitive damage standard that serves Title VII’s underlying purpose of incentivizing employers to “adopt antidiscrimination policies and to educate their personnel on Title VII’s prohibitions”). When large companies are shielded by their multiple levels of corporate hierarchy from liability for punitive damages for discrimination committed by their agents acting in a managerial capacity, they have a decreased incentive to implement and administer anti-discrimination policies and to educate their employees—no matter how far flung—about Title VII’s prohibitions. Such a situation severely frustrates the statutory purposes of Title VII and undermines the deterrence nature of punitive damage awards against large companies.

The concern that this Court’s standard insulates the largest employers from punitive damages while reserving them for smaller employers is not a theoretical concern. Rather, this Court’s decisions bear out this perverse dichotomy. In cases against large corporations, this Court has routinely struck down punitive damage awards or held they are unavailable. See, e.g., Ash, 664 F.3d 903 (vacating punitive damage award where plant manager oversaw 1,400 employees because that represented just 1.5 percent of the company’s 107,000 employees); Howell, 448 F. App’x at 38-39 (holding punitive damages unavailable because the discriminator was one of 400 Directors of Dining Services at subsidiary company, which had 20,000 employees, and because parent company had 144,000 employees in the United States and 366,000 internationally); Dudley, 166 F.3d at 1323 (vacating punitive damage award because discriminators were just store managers and Wal-Mart “is a giant business” with 2,000 stores). In contrast, in cases with small companies, this Court has routinely upheld punitive damage awards. See, e.g., Goldsmith v. Bagby Elevator Co., 513 F.3d 1261, 1284 (11thCir. 2008) (in case brought under Title VII and 42 U.S.C. § 1981, upholding $500,000 punitive damage award against company with 150 employees); Thomas v. Alabama Home Constr., 271 F. App’x 865, 867-69 (11th Cir. 2008) (upholding punitive damage awards of $50,000 and $25,000 against a company that argued it did not even satisfy Title VII’s fifteen-person numerosity requirement); EEOC v. W&O, Inc., 213 F.3d 600, 612 (11th Cir. 2000) (upholding punitive damages limited to statutory cap of $100,000, which means the employer had between 100 and 200 employees). Certainly, Congress could not have intended to reserve punitive damages for the smallest employers covered by Title VII, as small employers are less likely than large employers to be able to afford a robust human resources department to prevent discrimination and are less likely to be able to absorb the cost of a punitive damage award.

Significantly, adoption of Kolstad’s “managerial capacity” standard will not make employers automatically liable for the discriminatory acts of their managerial agents. Rather, the statute, and the Supreme Court, have imposed two significant limiting principles. First, plaintiffs will continue to have to show that the managerial agent acted with “malice” or “reckless indifference to the federally protected rights of an aggrieved individual.” 42 U.S.C. § 1981a(b)(1). Second, even if a plaintiff meets this showing, an employer may avoid vicarious liability by showing that the managerial agent’s employment decisions contravened the employer’s good-faith efforts to comply with Title VII. 527 U.S. at 545, 119 S.Ct. at 2129.

C. The punitive damage award should be reinstated because the jury was

instructed on the proper standard and the evidence at trial supported

the jury’s finding that Harris acted in a “managerial capacity.”

Application of the proper standard for imputing liability for punitive damages requires reversal of the district court’s grant of Exel’s motion for judgment as a matter of law and reinstatement of the jury’s punitive damage award. When instructing the jury, the district court used this Court’s 2013 Civil Pattern Jury Instruction 4.5, which correctly utilizes the “managerial capacity” standard as defined by Kolstad. R.119, p.13 (instructing the jury that “You must determine whether an employee acted in a ‘managerial capacity’ based upon the type of authority Exel gave the employee and the amount of discretion that the employee has in what is done and how it is accomplished.”); R.120, p.2 (verdict) (assessing punitive damages in the amount of $475,000). The facts at trial showed that Harris was a “GM1” (the highest-ranking level of General Manager employed by Exel), oversaw twenty-five employees at the PPG site, was the highest-ranking Exel employee at PPG, and had hiring and promotion authority. R.147, pp.26-27 (order). This evidence was more than enough to support the jury’s determination that Harris acted in a “managerial capacity” when he denied Travis a promotion because of her sex, and it is undisputed that Harris acted within the “scope of employment.” Kolstad, 527 U.S. at 545, 119 S.Ct. 2129.

In fact, Exel never even argued in its renewed motion for judgment as a matter of law, or, alternatively, for a new trial that Harris did not satisfy the “managerial capacity” standard. See R.133-1. Rather, Exel argued only that Harris was not sufficiently high up in the corporate hierarchy and that higher management neither countenanced nor approved his discrimination. R.133-1, pp. 31-36. As discussed, however, this Court’s “corporate ladder/higher management” standard irreconcilably conflicts with Kolstad’s “managerial capacity” standard. Because the evidence at trial supported the jury’s finding that Harris acted in a “managerial capacity” with malice or reckless disregard to Travis’ federally protected rights, the jury’s punitive damage award of $275,000 should be reinstated.

CONCLUSION

For the foregoing reasons, the EEOC respectfully requests that this Court reconsider its precedent as to the “corporate ladder/higher management” standard for imputing liability for punitive damages and reinstate the jury’s award of $275,000 in punitive damages.

[1] As used in this brief, “R.” refers to the district court docket entry, which is also the tab number used in the Plaintiffs’ Joint Appendix.

[2] The EEOC has considered whether to file a petition for initial en banc review on the ground that the punitive damages question is one of “exceptional importance” involving an issue on which the Eleventh Circuit’s rule conflicts with “every other United States Court of Appeals that has addressed the issue.” Fed. R. App. P. 35(b)(1)(B). Although the EEOC believes that the issue presented in this case warrants en banc review, the EEOC has not filed a petition for initial en banc review because Exel has cross-appealed as to the merits.

[3] The district court also rejected the EEOC’s argument that liability for punitive damages could be imputed to Exel because it ratified Harris’ acts through its HR officials. The EEOC is not challenging that ruling on appeal.

[4] Based on review of the Plaintiff-Appellee’s brief in Miller, it appears that the Plaintiff never argued that Kolstad’s “managerial capacity” standard had overruled Dudley’s “higher management standard.” 28-32. Instead, the Plaintiff argued that he satisfied the pre-Kolstad standard from Dudley. See Br. for Appellee at 29-32, Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269 (11th Cir. 2002) (No. 00-10544), available at 2000 WL 33977050.

[5] It appears that the District of Columbia Circuit has not addressed the standard for imputing liability for punitive damages after Kolstad (which arose from the District of Columbia Circuit).

[6] In fact, review of the case law suggests only one instance where this Court used the phrase “managerial capacity” in discussing punitive damages, and that was when this Court recited Kolstad’s standard for the good-faith defense. See Ash v. Tyson, 129 F. App’x 529, 545 (11th Cir. 2005), vacated and remanded, 546 U.S. 454 (2006).