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Black v. Pan American Laboratories, No. 09-51092 (5th Cir. July 11, 2011)

A Fifth Circuit panel unanimously affirms a jury verdict for a woman sales representative who suffered discrimination in compensation and termination, in violation of Title VII and Texas state law. The panel divides, though, on the question of the appropriate back pay remedy. It also divides on the question of how to apply the compensatory and punitive damage caps in a multiclaim case under 42 U.S.C. § 1981a(b)

Black v. Pan American Laboratories, No. 09-51092 (5th Cir. July 11, 2011): The employee raised claims of being subjected to a discriminatory sales quota, and of retaliatory/discriminatory termination. 

Despite being promised that she would be spared a quota when hired in 2003, within a few months time she was put on a sales quota that was higher than the one set for a comparable male representative named Livingston. "Black complained to her supervisor about her quota, who directed her complaints to Stephen Camp, Pamlab's Vice-President of Sales and Marketing. Black testified that, when she complained to Stephen Camp, he replied that the quota 'shouldn't matter to you, [because] you're not the breadwinner anyway.'"

Black complained about incidents of harassment, as well, where the company's president, director of sales and district manager all made "sexually explicit" remarks about her body, and one executive propositioned her. Some of these same executives eventually met and determined to fire Black in 2006, allegedly because she failed to attend sessions at a National Sales Meeting.

Black sued under Title VII and Texas state law. At trial, "[t]he jury returned a verdict in Black's favor on all three discrimination claims. It awarded Black: (1) $200,000 in compensatory damages for each claim; (2) $150,000 in back pay for each claim; and (3) a total of $2,400,000 in punitive damages." The district court then reduced the awards according to the requirements of Title VII and Texas law:

"Because the jury's verdict resulted in double recovery of back pay resulting from Black's termination, the court reduced the $300,000 in total back pay awards for her termination and retaliation claims to $150,000. It then reduced Black's total compensatory/punitive damages award to $200,000 pursuant to Title VII's and the TCHRA's damages cap."

(It appears that the district court used the jury as an advisory jury to assess back pay, though no explanation is offered.)

The Fifth Circuit substantially affirms. The panel unanimously holds that There was sufficient evidence to support liability on the quote and termination claims, it then evaluates the district court's treatment of the monetary relief.

The panel majority reverses the treatment of back pay on the quota claim, holding that because the employee's theory at trial was that she was subjected to a higher quota than a comparable male, her back pay award should ought to have been calculated differently:

"[Black] is only entitled to back pay equal to the difference between her actual commissions and the commissions that she would have earned with Livingston's quota. The jury's award of $150,000, however, was calculated based on the difference between Black's actual commissions and what her commissions would have been if she had zero quota. On remand, the district court should calculate a proper back pay award based on what Black's commission would have been if she would have had Livingston's quota." (Emphasis in original.)

The panel also affirmed the district court judge's application of the § 1981a(b) and Texas law compensatory and punitive damage caps to the total of her claims rather than to each claim. It held, consistent with the D.C., Sixth, Seventh and Tenth Circuits, "that the plain language of § 1981a(b)'s cap applies to each party in an action."

Judge Dennis, dissenting in part, sets himself apart from both of these damage rulings by the majority. On the issue of the back-pay award (which is not subject to damage caps), Judge Dennis would hold that There was enough evidence to support a different theory at trial: that Black would have received no quota if not for her gender -

"As Pamlab now concedes, There was evidence that Samuel Camp, Pamlab's President, and his son, Stephen Camp, Pamlab's Vice President of Sales and Marketing, had the authority to adjust sales quotas; also, Pamlab did not explain how its neutral formula led to Black's having a sales quota, and yet, numerous male employees had no sales quotas. Moreover, There was addition al evidence that Samuel Camp and Stephen Camp were motivated by sex-based animus and were principally responsible for Black's discriminatory sales quota. . . . There was adequate evidence to support a finding that absent discrimination, Black would not have had any sales quota; and it is undisputed that the jury's back pay award should be sustained if There was adequate evidence to support such a finding. Therefore, I respectfully dissent from Part III.B of the majority's opinion, which concludes that the back pay award should be reversed."

And although Judge Dennis agreed that the § 1981a(b) damage caps applied to all of Black's claims in total, he would reserve for future consideration a situation where a party's discrimination claims were not interrelated and that might warrant separate caps for each claim:

"[T]his would be a different case if Black had asserted claims that were not based on the same nucleus of operative facts and could have been brought in separate lawsuits. In that case, it would lead to an absurd result to not apply Title VII's damages cap separately, to each distinct claim or each related group of claims, viz., a plaintiff with distinct claims would be forced to bring separate lawsuits for each claim or each related group of claims, in order to recover the full amount of compensatory and punitive damages that Title VII provides. This, of course, would waste precious judicial resources and result in exponentially higher attorney's fees than would otherwise be necessary."

Judge Dennis notes that Sixth, Seventh and D.C. Circuits have all held open the possibility of applying the law of claim preclusion as "a practical rule for distinguishing separate claims" that might be entitled to separate caps.

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