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Gracia v. SigmaTron Int'l, Inc., No. 15-3311 (7th Cir. Nov. 29, 2016)

The Seventh Circuit affirms a jury award of $50,000 compensatory and $250,000 punitive damages in a Title VII retaliation case. The jury could have found, based on conflicting testimony, that the employer fired the plaintiff just two weeks after she filed an EEOC sex-harassment charge, based on an unsubstantiated complaint - reported by the alleged harasser himself - of a minor work-rule violation.

Gracia v. SigmaTron Int'l, Inc., No. 15-3311 (7th Cir. Nov. 29, 2016): plaintiff worked as an assembly supervisor at an electronics plant. "Team members on the assembly line connected electronic components to circuit boards according to the customers' requirements. Solder, the material used to attach components to circuit boards, may be made with lead or without lead." Customers could decide which solder be used. She was well-reviewed and promoted several times over her tenure.

During 2007, the plaintiff began to suffer conduct that she considered harassment from a production manager named Silverman, including e-mail delivery of graphic photographs, soliciting dates, and late-night phone calls. After Silverman started writing plaintiff up for tardiness, she finally reported the conduct to human resources about a year after it started. Yet, after two meetings with HR, the company's response was simply to order plaintiff and Silverman to shake hands and work together.

In November 2008, plaintiff filed an EEOC charge alleging sex harassment, which the company received notice of on November 19, 2008. Two weeks later, Silverman reported to management that according to another supervisor (Trujillo), plaintiff allowed an employee to sue the wrong kind of solder on a project and "when Trujillo pointed out the problem to [plaintiff] Gracia, she had not taken the matter seriously." Nevertheless, at trial, Trujillo "denied making any report to Silverman about Gracia or employees on her assembly line, and did not recall Gracia speaking to him about the soldering incident." Gracia testified that when the error was brought to her attention, "she addressed the problem immediately and appropriately." Nevertheless, There was evidence that the company went so far as to create false business records to substantiate their version of events.

The jury rendered a split verdict, finding no liability on harassment but in favor of plaintiff on the retaliation. It awarded $57,000 in compensatory damages and $250,000 in punitive damages. (The $57,000 was reduced to $50,000, to bring the total verdict within the $300,000 Title VII cap.)

The Seventh Circuit affirmed the verdict and damages.

First, it found There was sufficient evidence to support the retaliation verdict. "The company contends ... that she was terminated because of her record of tardiness and because she allowed an employee to use unleaded solder on a leaded circuit board." The panel easily dispensed with the first reason: the company did not rely on tardiness at trial and an executive even testified that he did not consider attendance while deciding to fire plaintiff. Regarding the second reason, There was plenty of reason for the jury to discredit. The company's own witnesses at trial contradicted themselves over whether Trujillo reported the incident to Silverman, Trujillo testified that Gracia responded appropriately, and the error itself was a fairly minor one that was easily rectified and never a fireable offense. Moreover, the jury could have found that the proximity of the decision (weeks after plaintiff filed an EEOC charge) and that the alleged harasser was involved in the termination raised a further inference of retaliation."

The panel held that it was for the jury to weigh the competing witness testimony:

"Gracia presented substantial evidence that she did not engage in the misconduct of which she was accused and that, even if she did, that conduct was not generally seen as cause for termination at the company. When a jury concludes that the employer's stated reason for the termination is a pretext, the jury may consider that pretextual explanation as evidence of retaliatory motive."

Second, the panel upheld the $57,000 compensatory damage award. The company argued that There was insufficient evidence of emotional distress. Principally, the witness testified about her own mental state: "It was hard. I was just depressed. I have always been used to working." The panel held that the jury could have awarded this sum based on the tenor and sincerity of the testimony, however succinct, and that lay testimony was sufficient to support an award. Also, the number fell well within the range of comparable awards in the Seventh Circuit.

There was more in the record to support the award: "that [plaintiff] had worked continuously from the age of sixteen; SigmaTron's own witnesses conceded that, prior to her termination, Gracia had been a spectacular employee at the company; and after her termination, at the height of the recession, Gracia remained unemployed for sixteen months despite her extensive efforts to find another job."

Finally, the panel upheld the punitive award. Given the Title VII cap of $300,000 on monetary damages, the ratio of punitive to actual damages "cease[d] to be an issue of constitutional dignity." (Nevertheless, the court holds that the 5:1 ratio "is well within the range we have approved in other cases." The panel also holds that the jury had ample evidence of willfulness. "[T]his standard is met when the employer engages in the act of retaliatory discharge and then makes efforts to hide it, in this case creating a false paper trail that included manufactured details of reports and meetings with Trujillo and other managers in an effort to hide the true nature of the discharge." Finally, it rejects as legally unsupported the argument that the jury could not award more than the plaintiff requested (in closing argument, the lawyer sought $200,000). "Finally, we are aware of no rule prohibiting a jury from awarding more in damages than a plaintiff requests and SigmaTron cites no authority for this claim"

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