CALIFORNIA: Huge punitive damage award upheld in retaliation case

Speaking up about concerns in the workplace, and being fired as a result, resulted in a huge jury verdict against a California employer. In a recent case, a federal district court upheld a jury verdict awarding an employee over four million dollars for being fired in retaliation for raising an issue about the company’s meal and rest period practices. The employee was managing a department and told her supervisor that the department was understaffed and, as a result, employees couldn’t take their meal and rest breaks. After raising the concerns, her supervisor almost immediately put her on a performance improvement plan that the court called “formulaic and virtually unattainable.” Not surprisingly, the employee couldn’t live up to the unrealistic performance plan and was later terminated. A jury awarded the employee $300,000 in economic damages, $850,000 in non-economic damages, and a whopping $3.5 million in punitive damages for being terminated in violation of public policy and retaliation. The court noted that the jury’s verdict was “probably tough to swallow,” but refused to set it aside or award the employer a new trial (Steffens v. Regus Group, PLC, SD Cal, Aug. 2013).

Tips: This was a very expensive lesson for this employer, and a mistake you should avoid making at all costs. Employees can be protected from retaliation under numerous laws, from workplace safety to consumer product standards to financial practices, so tread lightly whenever you want to take action against an employee who is being vocal about an unlawful or unsafe practice going on at your company. Even if a claim is false or unfounded, an employee may be protected from retaliation for the act of raising the issue. Review our Legal Guide, “Retaliation Claims: How to Avoid Them” (1308) and call your Vigilant staff representative to discuss any potential retaliation issues. Learn more about the complex employment issues we help employers navigate throughout California and the Northwest.