Whistle Blower Retaliation Awards for Punitive Damages

A FLordia resident received what is probably the highest damage award in history against R.J.Reynolds Tobacco Comkpany. The verict was 23.6 Billion (with a B!), based on “only” $17 Million compensatory losses. Punitive damages are available under California State Law (Civil Code 3294, 3295) when an “officer, director or managing agent” engages in “malice, oppression or fraud”. jAt Los Angeles Employment Attorneys, we are proud of our own decision in Maxwell vs. Beverely Enterprises, which affirmed a high punitive damages award. While this Flordia case does not arise from employment, it is very instructive since the same standards apply in our California cases.

The question usually is “what amount of punitive damages” is the jury likely to award you in your employment case? Assuming we’ve satisfied the malice, oppression or fraud standard by the right decision-maker, we find the following guidelines:

1. Punitive damages are generally discretionary with the jury and the burden is on the employee to prove malice, oppression or fraud by clear and convincing evidence. This is a higher standard than needed to win liability but less than a criminal standard of “beyond a reasonable doubt.”

2. An award too high based on the amount of compensatory damages might offend the due process requirements of the 14th Amendment to the US Constitution, which would then require reversal or reduction of the award. For example, in BMW vs. Gore (1996) the court reversed a punitive damage award of $2M based on a $4,000 compensatory award. (BMW had secretly repainted cars damaged in shipping). This ratio of 145:1 was too high for the court. Justice Kennedy has suggested that a single digit multiplier (up to 9:1) might be sustainable.

3. The five factors Justice Kennedy cited (and which remain controlling law on both state and federal courts) are:

Was the harm physical (bad) or economic (still not good, but not as bad)?

Was the conduct indifferent behavior or reckless disregard for health and safety (of the employee)?

Was the plaintiff (person bringing the lawsuit) financial vulnerable?

Did the defendant (employer) engage in this course of conduct repeatedly or just a one-off?

Was the bad act intentionally malicious, trickery or a mere accident?

The Flordia smoker’s case is a ratio of actual to punitive damages of 1390:1. There is virtually no doubt it will be substantially reduced. However, if you as an employee lose, for example, $100,000 in wages by being unemployed for several years following your discharge for whistle blowing, then you could expect a jury verdict of up to $1,000,000 to potentially survive a motion to reduce it.

We always seek punitive damages in whistle blower cases where its’ pretty clear that the act of retaliation (whether complaining about Labor Code, Government Code or federal regulations) played a role in the retaliation and termination. Let’s talk! Give me a call at 877 789 9707. Steve