In a recent case out of a federal court in Houston, a former African American sales representative for FedEx received a jury verdict in the amount of $366M. In that case, Jennifer Harris claimed that she opposed racial discrimination and that she was retaliated against and terminated for engaging in her protected activity. She brought her claim under Section 1981, a federal law that lacks the EEOC administrative exhaustion requirement or the damages caps that apply to civil rights claims under Title VII. And while the $366M verdict will likely be reduced because the punitive damages represented 314 times the compensatory damages found by the jury, the judgment entered by the Court will be significant. FedEx apparently has insurance that may cover the portions of the judgment between $10M and $75M although there may be disputes over whether the punitive damages are covered by the applicable insurance policies or insurable under Texas law. And, the jury verdict does not include amounts for back pay, front pay and attorney’s fees which will likely be awarded by the court and also significant.
FedEx had to know the case was not going well. In Jury Question No. 3, the jury asked:
And then in Jury Question No. 4, they asked:
While Title VII cases can have significant liability, racial discrimination and retaliation claims under Section 1981 carry all the risk and danger of a Title VII race claim without the guardrails of statutory damages caps, administrative exhaustion requirements and a truncated statute of limitations. Take these claims seriously or the jury may ask for a calculator.