$30 Million Punitive Damages Award In Sexual Harassment Case To Be Reduced

Gober v. Ralphs Grocery Co., 137 Cal. App. 4th 204 (2006)

Six Ralphs employees sued for sexual harassment after the store director allegedly engaged in inappropriate touching, used profanity, made inappropriate comments about some of the employees’ sex lives and threw various objects at some of them. The jury awarded each of the employees between $50,000 and $200,000 in compensatory damages and between $150,000 and $1.3 million in punitive damages. On retrial, a second jury awarded each of the employees $5 million in punitive damages – a ratio of punitive to compensatory damages ranging from 25 to 1 to 100 to 1. Relying upon “guideposts” articulated by the United States Supreme Court, the Court of Appeal held that a maximum ratio of 6 to 1 (punitive to compensatory damages) is sufficient to punish Ralphs and to deter it and others from similar conduct in the future. Cf. Arbaugh v. Y&H Corp., 546 U.S. 500, 126 S. Ct. 1235 (2006) (employer may have waived defense to Title VII sexual harassment claim by not asserting earlier that it had fewer than 15 employees).