Bayer v. Neiman Marcus Group, Inc., No. 15-15287 (9th Cir. June 26, 2017)

| Jun 26, 2017 | Daily Developments in EEO Law |

Here’s a timely reminder to include a prayer for nominal damages in Title VII and ADA complaints. At least in some circuits, including the Ninth, such relief is deemed equitable and thus may protect a claim from being mooted by intervening changed circumstances. That little toehold for $1.00 in damages may be the difference between outright dismissal and prevailing-party status.

Bayer v. Neiman Marcus Group, Inc., No. 15-15287 (9th Cir. June 26, 2017): “In June 2007, Bayer filed a charge of discrimination with the EEOC alleging Neiman Marcus had failed to reasonably accommodate his disability in violation of the ADA.” He complained that the retailer sought (due to medical issues) to cut Mr. Bayer’s hours below the threshold to receive employee benefits. Mr. Bayer filed a lawsuit based on this claim, which was dismissed pursuant to settlement in 2008.

Also in June 2007, Neiman Marcus implemented a mandatory arbitration policy for its staff, and issued acknowedgement forms to all of the affected employees (including plaintiff) upon which to accept the terms. Mr. Bayer though, in the midst of an live dispute with Neiman Marcus, “refused to sign an acknowledgment form or otherwise agree to be bound by the arbitration agreement.”

Mr. Bayer filed a second EEOC charge in July 2007 “alleging that Neiman Marcus was unlawfully interfering with his ADA rights by requiring him to agree to be bound by the arbitration agreement as a condition of his continued employment,” culminating in his termination. Bayer filed his second suit alleging retaliatory discharge against Neiman Marcus in July 2011. In November 2011, “the district court denied a motion to compel arbitration filed in that suit by Neiman Marcus on the ground that Bayer had never consented to be bound by the arbitration agreement.” The Ninth Circuit affirmed this decision in 2014, holding “that the arbitration agreement was not binding as to Bayer.”

There followed a third EEOC charge and lawsuit in 2013 – the subject of this post. Mr. Bayer alleged that Neiman Marcus interfered with Bayer’s ADA rights in violation of 42 U.S.C. § 12203(b) “by requiring him to consent to be bound by the arbitration agreement as a condition of his continued employment.” The district court dismissed this third lawsuit on mootness grounds, because – following the Ninth Circuit’s prior decision in Mr. Bayer’s second case – the arbitration agreement was not binding on the plaintiff and thus There was no injury to remedy.

The Ninth Circuit reverses. While the panel agrees that most forms of relief available to Mr. Bayer are moot, it holds that his prayer for nominal damages at least remained a live controversy.

for claims brought under § 12203(b), the ADA adopts by reference (42 U.S.C. § 12117) the equitable and declaratory remedies available under Title VII, 42 U.S.C. § 2000e-4 to -9. “[T]he parties agree[d]” under prevailing circuit law “that the district court had the power to award Bayer only equitable remedies.”

The panel thus ticked through the possible remedies under this section:

1. Injunctive Relief: Mr. Bayer conceded that because the arbitration agreement was enforcable against him, There was no basis for prospective injunctive relief. He argued that the district court could order the employer to place a letter in his personnel file, should Mr. Bayer ever return to work There, but he “provided no evidence to indicate Neiman Marcus could reasonably be expected to attempt to enforce the arbitration.” And as a former employee who was not seeking reinstatement, Mr. Bayer lacked standing to seek a broad systemic injunction against future interference.

2. Monetary Relief: Any monetary relief that Mr. Bayer sought “on the ory that concrete financial losses [such as uncompensated medical expenses] he suffered as a consequence of [the employer’s] allegedly unlawful conduct should rightly be restored to him” was a claim for legal, not equitable, relief and could not be awarded under 42 U.S.C. § 12117.

3. Declaratory Judgment: There being no future conduct to address, There was no basis for declaratory judgment. “[A] declaratory judgment merely adjudicating past violations of federal law – as opposed to continuing or future violations of federal law – is not an appropriate exercise of federal jurisdiction.”

4.  Nominal Damages: Despite striking out in the first three categories, Mr. Bayer won in the fourth. At the gateway, There was an issue of whether Mr. Bayer waived the claim by not including it in his prayer for relief. The panel holds that it was preserved by a general “claim for damages and a general prayer for such other relief as the district court deemed proper,” and that the defendant was not prejudiced by the issue emerging for the first time at summary judgment.

The panel then notes that although There was little in the way of direct case law under the ADA, There is a robust case law under Title VII in which not fewer than five circuits held that nominal damages could be equitable under 42 U.S.C. § 5000e-5, while a minority of circuits held that nominal damages were not available.

The Ninth Circuit joins the majority view, holding that such relief under Title VII and the ADA serves a different function from legal relief. “[N]ominal damages are divorced from any compensatory purpose.” They are awarded singularly to vindicate rights. “Particularly when a statute provides for the award of court costs to the prevailing party, a court may award nominal damages to avoid ordering the plaintiff to pay court costs and ensure the cost burden is on the defendant.” Accordingly, a claim for nominal damages is enough to prevent dismissal on grounds of mootness.

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