An Iowa federal judge who frequently attends business-friendly judicial education conferences slashed a landmark $240 million verdict to $1.6 million for 32 mentally disabled workers who suffered abuse and discrimination at the hands of their employer.
It might appear that a pro-business judge made a predictably pro-business ruling. Turns out the judge had no choice. The 22-year-old Americans with Disabilities Act — designed to protect the rights of disabled workers — is to blame for the paltry award.
On Tuesday, U.S. District Judge Charles R. Wolle of the Southern District of Iowa ordered Henry’s Turkey Service to pay $50,000 in damages to each of the workers involved in a discrimination lawsuit brought by the Equal Employment Opportunity Commission. In total, the judge ruled, the company must pay the workers $1.6 million.
Wolle’s decision came two weeks after a federal jury awarded each of the workers a total of $7.5 million in damages — $240 million in all. Jurors found that Henry’s, a now-defunct Texas company, violated the Americans with Disabilities Act by subjecting the disabled workers to years of unfair treatment and harassment.
The EEOC’s complaint, filed in 2011, accused Henry’s of taking advantage of the workers’ mental disabilities, paying them substandard wages — $60 to $65 per month despite working at least 35 hours per week — failing to attend to the workers’ illnesses and injuries, and subjecting them verbal and physical abuse.
The company, jurors unanimously agreed, acted with “malice or with reckless indifference” to the workers’ federal civil rights. The jury awarded each of the 32 men $5.5 million to compensate them for their pain and suffering, and another $2 million in punitive damages.
In a May 1 press release, the EEOC trumpeted the “historic verdict,” claiming that the $240 million in total damages amounted to “the largest verdict in the federal agency’s history.”
Not so fast.
As it turns out, the Americans with Disabilities Act limits the amount of damages that can be awarded to plaintiffs. That’s why Judge Wolle so drastically reduced the award.
Under the act, compensatory and punitive damages are capped at $50,000 for companies like Henry’s that employ between 14 and 101 employees.
The limit is $300,000 for companies that employ more than 500 employees.
EEOC attorney Robert Canino acknowledged the caps in a brief he filed on May 10.
The EEOC “understands that the amount of damages of $7,500,000 assessed and awarded by the jury to each of the 32 class members, while certainly an appropriate and meaningful measure of the actual harms suffered by these victims of discrimination, including but not limited to, the mental anguish, pain and suffering, and ‘loss of enjoyment of life,’ must be drastically reduced in order to come within the stringent statutory limits for recovery under” the law, he wrote.
Robert Dinerstein, an American University law professor who specializes in disability law, says the caps on damages were implemented in an effort to balance plaintiffs’ needs to be compensated for their pain and suffering without unnecessarily putting companies out of business.
Still, he says, “I think the [caps] are problematic.”
For one thing, Dinerstein says, plaintiffs are already burdened with proving to a jury that the discrimination they’re alleging is real and intentional. “It’s not as if any Tom, Dick and Harry can go to a sympathetic jury and win,” he says.
Moreover, Dinerstein says $300,000 is “chump change” for a large company employing more than 500 workers.
When companies discriminate against their disabled employees, “They should pay the piper.”
Even though the damages were significantly cut, Dinerstein says, “You still have a symbolic victory.”
That symbolic victory is also supplemented by a previous judgment ordering Henry’s to pay the workers a total of about $1.3 million in back pay.