5th Circuit Vacates Punitive Award in Xerox Retaliation Case

March 29, 2010 (PLANSPONSOR.com) - The 5th U.S. Circuit Court of Appeals has vacated a district court jury’s decision to award punitive damages to an employee who filed a lawsuit alleging age and gender discrimination after she was terminated by her employer.

In its ruling for Kim Y. Smith vs. Xerox Corp., the court said “neither party in this case addresses the punitive damages issue in terms of the subjective framework” and found there is insufficient evidence to show Xerox acted maliciously and recklessly when it terminated Smith, Business Insurance reported.       

“In light of the competing evidence that impugned Smith’s performance, we cannot say that the evidence supports a finding that Xerox managers acted with malice or reckless indifference to the possibility that her termination could violate federal law,” the court said in its opinion, according to Business Insurance. “We therefore hold that, although evidence is sufficient to find retaliation was a motivating factor in the termination, the punitive damages award based on malice or reckless indifference to federal rights cannot stand. That portion of the district court’s judgment must be vacated.”      

Smith, who had been a sales representative with Xerox for 22 years, claimed she was wrongfully terminated after she filed a complaint against Xerox with the Equal Employment Opportunity Commission alleging she was being discriminated against based on her gender and age.       

Smith argued her performance was not held to a fair standard and that Xerox cut her territory and client level, which impeded her ability to meet monthly sales goals. Xerox said it fired Smith due to poor sales performance.   

A U.S. District Court jury found that Xerox had not discriminated against Smith on the basis of her gender or age. However, it found Xerox was guilty of terminating Smith in retaliation for filing the EEOC complaint and awarded her $67,500 in compensatory damages and $250,000 in punitive damages. The court ruled that Xerox should pay for her attorney fees.       

The court opinion is here.