Fourth Circuit affirms $108,000 jruy verdict against FedEx

In EEOC v. Federal Express Corporation, No. 06-1724 (4th Cir., Jan. 23, 2008) (PDF), the Fourth Circuit unanimously affirmed a $108,000 judgment against FedEx in a disability discrimination case. The EEOC filed suit on behalf of Ronald Lockhart, a former package handler who is deaf. The jury awarded $8,000 in compensatory damages and $100,000 in punitive damages for FedEx's failure to reasonably accommodate Lockhart under the Americans with Disabilities Act (ADA).

FedEx's arguments on appeal were twofold: (1) that there was insufficient evidence on which to submit the question of punitive damages to the jury; and (2) that the punitive damages award was constitutionally excessive.

On the first issue, the Court found that the evidence supported a punitive award. The EEOC established that Lockhart's supervisors were aware of his disability, familiar with the ADA and FedEx's obligations thereunder, but nevertheless failed to provide sign language interpreters or other accommodations to Lockhart at employee meetings and training sessions. Since 1991, FedEx has maintained an internal ADA compliance manual called the "People Manual." However, the Senior Operations Manager acknowledged at trial that although he knew about the policy, he never utilized the People Manual to ascertain how to accommodate Lockhart's deafness disability. He also failed to train Lockhart's direct supervisor.

Regarding the second issue, the Court held that the 12.5 to 1 ratio of punitive to compensatory damages did not render the award unconstitutional. It noted that although the punitive damages award "should bear some reasonable relationship to the corresponding award of compensatory damages," the relationship is "only one factor in an excessiveness analysis. ... Indeed, the [Supreme] Court has specifically declined to draw some mathematical bright line between constitutionally acceptable and unacceptable ratios." Because FedEx's conduct was sufficiently reprehensible, the award was reasonably proportional, and the total award was within the $300,000 statutory cap, the Court found the award not to be unconstitutionally excessive.