The 5th U.S. Circuit Court of Appeals overturned a jury’s decision to award $365 million to a worker who sued FedEx for retaliation. The court ruled that punitive damages weren’t warranted because FedEx demonstrated “good-faith efforts” to comply with Title VII of the Civil Rights Act of 1964. The case, Harris v. FedEx Corporate Services, Inc., involved a Black district sales manager who filed a race discrimination complaint against her White supervisor. She alleged that the supervisor suggested she step down due to poor performance.
Following the initial complaint, the worker received a letter from her supervisor mandating a performance improvement plan, hinting at termination if she didn’t improve. Subsequent complaints of retaliation followed, with the supervisor issuing another performance warning. Eventually, the supervisor requested termination from HR, citing poor performance. FedEx fired the worker, who later filed a lawsuit alleging race discrimination and retaliation under Title VII.
At trial, the jury found retaliation but not discrimination, awarding the worker $1,160,000 in compensatory damages and $365 million in punitive damages. However, FedEx appealed, arguing the punitive damages were excessive and the 5th Circuit agreed. The court emphasized FedEx’s efforts, including conducting thorough investigations after each complaint and preventing the supervisor from disciplining the worker during investigations.
While the punitive damages were dismissed, the court upheld the retaliation claim but reduced compensatory damages to $248,619.57 in line with Title VII’s damages cap. Such reductions have drawn criticism from agencies like the U.S. Equal Employment Opportunity Commission for potentially undermining deterrence against violations. Despite FedEx’s request, the court denied a new trial, stating the company could have addressed witness testimony issues during cross-examination but failed to demonstrate its substantial impact on the jury.
