California Employment Law Notes - January 2015

$300,000 In Punitive Damages Upheld In Sexual Harassment Case Despite Nominal Damages Award

State of Arizona v. ASARCO LLC, 2014 WL 6918577 (9th Cir. 2014) (en banc)

Angela Aguilar who worked in a copper mine for approximately 11 months claimed she was sexually harassed, retaliated against, subjected to intentional infliction of emotional distress and was constructively terminated from her employment. After an eight-day trial, the jury found ASARCO liable on Aguilar's sexual harassment claims in violation of Title VII of the Civil Rights Act but not on her constructive termination or retaliation claims. The jury awarded Aguilar $1 in nominal damages and $868,750 in punitive damages. The district court reduced the award to $300,000 based on the statutory cap found in 42 U.S.C. § 1981a(b)(3)(D). ASARCO argued in this appeal that the 300,000-to-1 ratio of punitive to compensatory damages violated its due process rights under BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996). Although conceding that "Gore is undeniably of some relevance in this context," the United States Court of Appeals for the Ninth Circuit distinguished Gore on the ground that Aguilar (unlike the plaintiff in Gore) had "asserted a claim under a statute, Title VII, which includes a carefully crafted provision, § 1981, that imposes a cap on punitive damages" and, therefore, the due process issues raised in Gore do not apply to employment discrimination claims brought under Title VII. The Court also noted that the district court had instructed the jury that it could not award more than $1 in nominal damages to Aguilar. Finally, the Court found no error in the district court's admission of evidence of sexually explicit graffiti found in the bathrooms that was similar to the graffiti directed at Aguilar and affirmed an award to Aguilar of $350,902.75 in attorney's fees and costs.

Employee Who Was Sued By Former Employer Collects $271,000 From Employer

Pacific Corp. Group Holdings, LLC v. Keck, 2014 WL 7012380 (Cal. Ct. App. 2014)

PCGH sued its former employee, Thomas Keck, to collect on an unpaid promissory note. Keck defended against the action by claiming that any money he owed PCGH was offset by monies PCGH owed him for unpaid bonus and severance payments due under two employment agreements he had with PCGH. In a special verdict, the jury found that PCGH owed Keck $270,547.95 under the terms of a 2006 employment agreement. PCGH filed a motion for judgment notwithstanding the verdict or for new trial, and Keck filed a motion for additur or in the alternative for a new trial on damages on the ground that the jury had awarded him inadequate damages. The trial court granted Keck's motion and issued an additur and a conditional order granting a new trial on damages to which PCGH refused to consent. Both parties filed motions for attorneys' fees, which the trial court denied. Both parties filed appeals, but because the trial court's order granting a new trial on damages resulted in a vacatur of the underlying judgment, the Court of Appeal concluded that it lacked appellate jurisdiction to consider the parties' appeals and, thus, affirmed the trial court's orders and remanded the matter to the trial court with directions to conduct a new trial on damages. See also Danko v. O'Reilly, 2014 WL 7201693 (Cal. Ct. App. 2014) (adding name law firm partner as additional judgment debtor in former law firm attorney's successful breach of contract action did not violate bankruptcy stay or doctrines of res judicata or collateral estoppel).

School Teacher With Breast Cancer Could Proceed With Disability Discrimination Lawsuit

Swanson v. Morongo Unified School Dist., 2014 WL 7399317 (Cal. Ct. App. 2014)

Lauralyn Swanson was a teacher for the Yucca Valley Elementary School who was diagnosed with breast cancer and underwent a mastectomy. After the district's board of education voted not to renew Swanson's contract, Swanson sued for discrimination based on medical condition, denial of reasonable accommodation and refusal to engage in the interactive process. The trial court...