Ohio Appellate Court Sets Low Bar for Establishing Damages in Workplace Discrimination Cases

Labor & Employment

On May 24, 2018, the Eighth Appellate District Court, which governs Cuyahoga County, Ohio, upheld a jury verdict for substantial “noneconomic damages” for emotional distress based only upon the testimony of the Plaintiff/Appellant employee and for significant punitive damages because the jury’s finding of retaliation was enough to establish “actual malice” on behalf of the Defendant/Appellee employer. This case emphasizes the potential for substantial damages in discrimination cases pursued under Ohio’s nondiscrimination statutes and confirms employers should evaluate potential risks before taking any adverse employment actions against those in protected classes. Kassay v. Niederst Mgmt., Ltd, 2018-Ohio-2057.

Factual Background: HR Epic Fail

John Kassay was hired by Niederst Management Ltd., a property management company which owns numerous apartment buildings, in August 2012 as a pest-control technician. Pest-control technicians were responsible for lifting heavy equipment, including fans, power cords, and furnaces (240 lbs.) utilized to exterminate bed bugs in apartments on higher floors of Niederst buildings without elevators. He was considered a good employee with no performance issues. In October of 2013 he showed up to work wearing a brace on his left wrist. He had worn the brace to work on occasion because he suffered from chronic wrist pain resulting from an injury he suffered at a previous job for another company. After one of his co-workers informed his immediate supervisor, Lisa Weth, that he was wearing a brace to work, Weth met with him because she had concerns as to his fitness for duty. She then informed him that she would have to speak to the human resources department about his ongoing employment. Weth later informed Kassay that, based upon instructions from the company’s Human Resources Director, Denise Pacak, he would have to complete Family and Medical Leave Act paperwork and prove he was able to “work without any limitations.” Weth apparently was confused as to why Kassay would have to fill out FMLA paperwork, as she believed it did not apply to him since he was not requesting leave, and told him that if he had any questions he should speak with Pacak in HR.

Thereafter, Kassay made multiple attempts to contact the HR department, but received no response. He thus continued to go to work through the next week. Weth eventually sent him a text message telling him not to report to work until he completed the requested FMLA paperwork. He also was told that he could not return until he submitted a “return-to-work note from the doctor.” Kassay eventually met with Pacak who reiterated that he needed to provide the FMLA paperwork and obtain medical documentation indicating that he could work without restrictions. At trial, Pacak testified that Niederst had a policy requiring that “employees must be able to work full time, full duty, with absolutely no restrictions in order to be able to work and be employed.” Pacak also testified that she did not give Kassay a deadline by which to return the FMLA documents, nor did she or Weth inquire as to whether Kassay was still able to perform his work duties while wearing the wrist brace.

Kassay eventually was able to arrange an appointment with his doctor and presented the FMLA paperwork for completion, but the doctor told Kassay that he would not fill it out “because it would constitute fraud since Kassay still intended to work.” Two weeks later, after Kassay contacted both Weth and Pacak to inform them that he had met with his doctor, Pacak informed him that he had lost his job because he failed to show or notify his supervisor that he was not coming to work for two straight days. Niederst’s handbook stated that “employees who are absent two (2) consecutive work days without notifying their supervisor are considered to have resigned.”

Defendants Get Tagged at Trial

Kassay filed suit against Niederst, Weth and Pacak, alleging that he had been unlawfully discriminated and retaliated against on the basis of his disability in violation of Section 4112.02 of the Ohio Revised Code. He also alleged that Niederst failed to provide him with a reasonable accommodation for his disability as required by law. At trial, the jury found in his favor against all three defendants and awarded a total of almost $800,000 comprised of approximately $32,000 in economic damages for backpay, $250,000 in “noneconomic damages” for emotional distress, $250,000 in punitive damages, $200,000 in attorneys’ fees, one year of front pay, and prejudgment interest. On appeal, Niederst did not argue that the jury’s decision finding in Kassay’s favor was incorrect, but instead claimed only that there was insufficient evidence supporting the awards for noneconomic and punitive damages.

Did the Facts Established at Trial Support the Damage Awards?

Ohio law defines “noneconomic damages” as “nonpecuniary harm that results from an injury or loss to a person or a property that is subject of a tort action, including, but not limited to, pain and suffering, loss of society, consortium, companionship, care, [or] assistance, … mental anguish, and any other intangible loss.” Kassay presented no expert testimony at trial about his emotional distress and admitted that he never received any medical treatment. Niederst argued that this lack of medical evidence corroborating his testimony prevented him from proving the existence of emotional distress that would justify the jury’s award of $250,000. However, the appellate court disagreed, ruling that Kassay had presented sufficient evidence to support its award for emotional distress. Kassay testified that, after losing his job at Niederst, he felt “less of a man” and that he was letting his family down. He also testified that the loss of his job income, “caused a lot of arguments … because of [the lack of] money.” He explained at trial that his family’s credit was severely impacted, he rarely slept, and that his relationships with his daughters suffered because of the time he spent trying to find another job. Significantly, the court held that evidence of doctor’s treatment for symptoms is not required to establish emotional distress, and that a jury may award compensatory damages to a plaintiff even though a plaintiff does not present expert testimony or testimony corroborating the plaintiff’s emotional state. Because Kassay’s testimony alone provided the jury with “some competent, credible evidence” of emotional distress, the court held that it would not disturb the jury’s award of substantial noneconomic damages on the facts of this case.

Niederst also argued that there was insufficient evidence to support the jury’s award of $250,000 in punitive damages because there was no evidence of malice. A jury may award punitive damages to a plaintiff if “the actions or omissions of the defendant demonstrate malice or aggravated or egregious fraud or that defendant as principal or master knowingly authorized, participated in, or ratified actions or omissions of an agent or servant” and the jury returned a verdict for compensatory damages (i.e., backpay) against the defendant. ORC §2315.21(C). To establish actual malice, a party must prove (1) that state of mind under which a person’s conduct is characterized by hatred, ill will or spirit of revenge, or (2) a conscious disregard for the rights and safety of other persons that has a great probability of causing harm. Punitive damages serve to punish offending parties, demonstrating society’s disapproval, and are designed to deter others from engaging in similar conduct.

Here, the court ruled that Kassay satisfied his burden to show actual malice. Weth and Pacak contradicted one another at trial on several occasions. Neither admitted to being involved in the decision to give Kassay FMLA paperwork or to end Kassay’s employment. Weth testified that she believed the paperwork did not pertain to Kassay but gave it to him anyway. Both Weth and Pacak admitted to consciously disregarding Kassay’s attempts to reach either of them, joking about his termination, and not taking corrective measures after realizing their mistakes. Kassay testified that his doctor believed he was asked to commit fraud when Kassay gave him the FMLA certification to complete. Niederst’s owner seemed more concerned about the lawsuit than as to the consequences that Kassay’s termination had on him and his family.

Significantly, the appellate court ruled that a finding of “actual malice” could be predicated upon evidence establishing “revenge” or “retaliation.” The court concluded that there was “certainly clear and convincing evidence allowing the jury to infer actual malice from the testimony, conduct, and surrounding circumstances.” Of significance here was the trial court’s approval of a jury instruction, approved by all counsel, given by the court to the jury. The instruction allowed the jury to find malice based only on the existence of retaliation. In other words, a finding that Niederst unlawfully retaliated against Kassay was sufficient support, without any additional evidence, for a finding that Niederst had acted with ill will, hatred, and/or a conscious disregard for Kassay’s rights.

Decision Impacts All Employers

Bad HR practices lead to bad results. Kassay was not asking for medical leave so the request that he complete FMLA paperwork was simply ridiculous. Moreover, policies requiring employees to be “100 percent healed” to perform and/or return to work are per se unlawful under both federal and state disability discrimination laws. Most employers realize they are required reasonably to accommodate physical limitations rising to the level of disabilities as a matter of law. Leaving aside the bad facts of this case, employers in Cuyahoga County now should recognize that emotional damages arguably suffered in any unlawful, discriminatory personnel action can be established at trial simply through a former employee’s testimony without medical support and/or corroborating evidence. Moreover, punitive damages can be established simply by a finding of retaliation without other evidence proving ill will, hatred and/or conscious disregard for an employee’s rights. Given these low bars for establishing significant damages, employers should carefully review the risks associated with any proposed non-hires, suspensions, demotions and/or terminations.

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