A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit has largely undone a $366.1 million award — which included $365 million in punitive damages — that a jury rendered in favor of a FedEx Corporate Services employee who alleged retaliation and discrimination.
In a ruling issued Thursday, the court found that the claim brought by Jennifer Harris under section 1981 were time-barred by a provision in the employment contract she signed, but found there was sufficient evidence to support her Title VII retaliation claim. But because damages recovered on Title VII claims are capped at $300,000, the court held Harris was only entitled to $248,619 of the $1.1 million in compensatory damages the jury had awarded.
The court also determined that Harris was entitled to none of the $365 million in punitive damages the jury awarded her.
Judge Cory T. Wilson, writing for the court, explained Harris failed to present sufficient evidence to support the award of punitive damages. Specifically, Harris failed to show that Michelle Lamb, the supervisor who retaliated against her, did so “in the face of a perceived risk” that she was violating federal law.
“The evidence suggests that Lamb believed Harris should be disciplined for ‘insubordination,’ not in retaliation for her complaints. And for punitive damages, it is the employer’s subjective intent that matters,” Judge Wilson wrote. “Even if Lamb had acted with malice and reckless indifference, FedEx was still entitled to judgment as a matter of law because FedEx made good-faith efforts to comply with Title VII.”
Brian Sanford of Sanford Firm, who represents Harris, told The Lawbook in an interview Friday that he plans to challenge the court’s ruling, either via seeking rehearing en banc at the Fifth Circuit or taking the case to the U.S. Supreme Court.
“If you read the opinion strictly, it appears to say that if the decisionmaker gets on the stand and says I never intended to retaliate, then you will not get punitive damages,” he said. “It would be as if you can’t convict a murderer of murder — but maybe manslaughter — if they say I never intended to kill someone. It’s a frustrating standard.”
Sanford said he believes he has a strong case on other elements of the Fifth Circuit’s ruling, including the “artificial caps” the court says apply to the recovery in this case. He said he believes there is a circuit split on the maximum recovery rule, which may make the case appealing to the U.S. Supreme Court.
“They’re creating law to artificially hold down what a jury would find is full justice,” he said. “And so that’s what we’re facing, partial justice, which is not justice.”
FedEx issued a statement to The Lawbook in support of the court’s ruling.
“We remain confident that we acted properly regarding the termination of Ms. Harris and are pleased with the court’s decision to reduce the damages,” the company said.
A weeklong trial before U.S. District Judge Kenneth Hoyt ended with the $366 million award in favor of Jennifer Harris. Harris was fired by FedEx in 2020 after the company alleged she repeatedly failed to meet the requirements of her managerial position. But Harris alleged in her May 2021 lawsuit, filed 16 months after she was fired, that she was the victim of racial discrimination and retaliation and was fired for “opposing racial discrimination in the workplace.”
In its October 2022 verdict, the jury rejected the claim of racial discrimination but did find that Harris’ firing was retaliatory. It awarded her $120,000 for past pain and suffering and about $1 million for future pain and suffering before tacking on $365 million in punitives for FedEx’s “reprehensible conduct.”
The employment contract Harris signed with FedEx contained a “limitation provision” that required she bring any claim against the company within six months of the date of the event giving rise to the claim, rather than the four-year limitations period under the law. Judge Hoyt had found, and Harris argued on appeal, that the limitation provision applied only to lawsuits arising out of the employment contract and not claims of discrimination or retaliation.
Judge Hoyt had also found the limitation provision “cut against public policy and sidestepped a federal administrative process designed to meet and defeat long-standing policies of bias and discrimination in the workplace.”
But the Fifth Circuit sided with FedEx’s argument that the six-month limitation was reasonable.
“To sum up: The limitation provision in Harris’s contract is reasonable and enforceable, and the district court erred by allowing Harris’s § 1981 claims to proceed to trial,” the panel held. “That determination has outsized importance here because § 1981 claims are not subject to statutory caps, but Title VII claims are. Because we reverse the district court’s denial of FedEx’s motion for judgment as a matter of law as to Harris’s § 1981 claims, the most she can recover is $300,000.”
FedEx had argued on appeal that Harris was at most entitled to $15,000 in compensatory damages. The Fifth Circuit, in comparing Harris’ claims to its own precedent in similar cases, determined “a base sum of $100,000 is more appropriate.”
Citing a $100,000 award a plaintiff received in a 2002 ruling, the court accounted for inflation and determined today that award would be worth $165,746. The court then multiplied that number by 150 percent, as court precedent requires, to arrive at the $248,619 award for Harris.
Judges Leslie H. Southwick and Kurt D. Engelhardt also sat on the panel.
Harris is also represented by Elizabeth J. Sanford of Dallas.
The case number is 23-20035.