By Christopher DeGroff, and Reema Kapur
On May 1, 2013, the United States Equal Employment Opportunity Commission (EEOC) secured a jury award of $240 million in an ADA case. The verdict is the largest ever obtained by the EEOC, a fact it is already touting on its website.
The verdict was handed down in EEOC v. Hill Country Farms, Inc., No. 3-11-CV-41 (S.D. Iowa) with a jury finding that an Iowa turkey-processing company discriminated against its intellectually disabled workers and subjected them to a hostile work environment on the basis of their disability.
While this case is a factual outlier, employers should take note of the EEOC’s expansive legal theories here as we expect them to resurface in pattern or practice cases.
We discussed the background of this case in our previous post regarding the EEOC’s partial summary judgment win here. In September 2012, the EEOC secured summary judgment and damages of over $1.3 million on its claim that Hill Country Farms discriminated against intellectually disabled workers by paying them lower wages than non-disabled persons.
The EEOC tried its remaining claims to a jury. It alleged that claimants were subjected to a range of “severe and pervasive unwelcome conduct,” including being called names and being hit and kicked by defendant’s employees. (Complaint, ¶ 9(a).) It also alleged that claimants were subjected to harsh discipline and discriminatory job assignments due to their disability. (Id., ¶ 9(b).) Finally, it contended that claimants were discriminated against when they were assigned to substandard living, given inadequate medical attention, not allowed to move or communicate freely, restrained or confined to rooms, and denied bathroom breaks. (Id.)
After a week-long trial, the jury found against defendants in connection with both the discrimination and hostile work environment claims.
The jury awarded $5.5 million in compensatory damages and $2 million in punitive damages to each of the 32 claimants in the lawsuit for a total damages award of $240 million. The verdict is subject to reduction because the ADA caps damages but for now it is a symbolic victory for the EEOC.
To put the verdict in context — between 1997 and 2012, the EEOC secured a total of $89 million in damages for all ADA claims. During the same time, the EEOC secured a total of $3.25 million in damages for all intellectual disability claims under the ADA. Thus, the verdict in this case is 77 times the total amount of damages the EEOC has obtained for all intellectual disability claims between 1997 and 2012.
The facts of this case are extreme. Leading up to the EEOC’s lawsuit, Hill Country Farms failed to change its pay practices or improve work conditions despite several government investigations that revealed violations. By apparently mistreating its disabled workers for two decades, the defendant practically invited the spectacularly bad outcome in this case.
However, putting aside the shocking facts of this case, from a legal perspective, certain of EEOC’s allegations in this lawsuit are problematic. The EEOC shoe-horned into an ADA claim allegations regarding unlawful and potentially criminal conduct including that defendant provided substandard or unsafe housing and restricted employees’ movement and communications. Without question, defendant’s conduct is reprehensible and should have been prosecuted. But the ADA is not the appropriate vehicle to do so. These types of violations are subject to other federal and state laws and statutes, each with its own enforcement mechanisms and remedial schemes. For example, in this case, the state stepped in and closed down the living quarters that the EEOC alleged to be unsafe and uninhabitable. Similarly, allegations that defendant restricted employees’ movement could have been addressed through state law claims such as the tort of false imprisonment.
Hill Country Farms did not challenge the EEOC’s legal theories concerning its discrimination and hostile work environment claims. It did not move to dismiss or strike certain of the allegations in the EEOC’s lawsuit to trim down the scope of the claims nor did it engage in any other dispositive motion practice. Instead, it chose to go to trial and lost.
Implications For Employers
Hard cases make bad law. Whether the record-breaking jury verdict in the EEOC v. Hill Country Farms case may prove the wisdom of that maxim remains to be seen.
This verdict may encourage the EEOC to continue to stretch civil rights laws beyond their plain statutory meaning. Because of headline-grabbing facts and defendant’s strategic choice not to challenge the EEOC’s claims as a matter of law, the EEOC’s expansive legal theories have been blessed by at least one federal jury. Employers may see this case cited as precedent to support the EEOC’s wide-ranging pattern or practice claims through which it impermissibly seeks to expand its jurisdiction into the realm of tort and criminal violations.