Compliance June 23, 2005

Wal-Mart ADA Jury Award Slashed to Meet Legal Caps

June 23, 2005 (PLANSPONSOR.com) - A federal judge has reduced a workplace discrimination jury verdict against Wal-Mart by $4.7 million while bemoaning the fact that a legal cap on punitive damages isn't likely to be significant to the giant retailer.

Reported by

Fred Schneyer

>US Magistrate James Orenstein of the US District Court for the Eastern District of New York made the move in an Americans with Disabilities Act (ADA) case involving an employee with cerebral palsy who had been awarded $7.5 million, including $5 million in punitive damages, the New York Law Journal reported.

>Most of Orenstein’s reduction was to the punitive damage award, dropping it to $300,000 – the ADA’s punitive damage cap. “The preceding ruling respects the law,” Orenstein wrote, “but it does not achieve a just result.”

>Only hitting Wal-Mart with the limited punitive damage award would have little impact on changing the behavior of a “commercial titan” like Wal-Mart, Orenstein complained. “There is no meaningful sense in which such an award can be considered punishment,” Orenstein wrote, pointing out that Wal-Mart had $300,000 in sales every 37 seconds last year.

>In Patrick S. Brady v. Wal-Mart Stores, CV 03-3843, plaintiff Patrick Brady, who suffers from cerebral palsy, sued Wal-Mart under the ADA and state law. In February, a Central Islip, New York jury found that personnel at the store in Centereach, New York, violated federal and state laws by improperly transferring him from the pharmacy to a more physically taxing position pushing carts in the parking lot, according to the verdict. See Wal-Mart Hit with $7.5M ADA Verdict .

“The statute calibrates its caps on punitive damages to reflect the size of the employer whose misconduct is to be punished – a scheme that would appear designed to assure that the civil punishment imposed on a corporate offender is meaningful but not fatal,” Orenstein wrote. Employers with 500 or more employers – like Wal-Mart – come under the $300,000 punitive damages ceiling.

>Orenstein found that in dealing with Brady, the company had not followed an out-of-court settlement with the US Equal Employment Opportunity Commission in 2001 requiring it to train managers and change hiring practices.

“The most generous conclusion I could draw … was that the Wal-Mart employees who testified are well-intentioned people whom the company willfully failed to provide with sufficient training to abide by the anti-discrimination law,” Orenstein wrote.