FedEx $366M Race Bias Verdict Reversed by Appeals Court, Liability Capped at $249K

In an unexpected turn of events, the long-standing case against FedEx reaches its climax with the U.S. Fifth Circuit Court of Appeals rescinding the $366 million verdict. The lawsuit results from an accusation against FedEx by Jennifer Harris, a Black district sales manager from Texas. Harris claimed she was unlawfully dismissed in retaliation for alleging racial discrimination against her supervisor.

Jennifer Harris, backed by an initial jury, was awarded $120,000 for prior personal damages, $1,040,000 for future damages, and a staggering $365,000,000 in punitive damages payable by FedEx. This brought the total sum required to a substantial amount of $366,160,000.

Legality of Harri's Actions

FedEx didn't accept the judgment passively. They challenged the ruling via an appeal, raising several questions concerning the legality of Harris's actions. With a clause in her contract stating that any legal proceedings against FedEx should be commenced within the law-specific time frame or six months from the relevant event, FedEx challenged whether Harris had enough proof to back her retaliation claim and if the existing amounts of her damages were attainable due to the max-recovery rule.

The court with initial jurisdiction over this complex case ruled against FedEx. Their judgment was rooted in what they perceived as a violation of public policy by the contractual provision. Within a later ruling, the court maintained its opposition to FedEx, this time providing the rationale that the contractual provision should only be applied to cases that originated from her employment agreement.

However, the appeals court had a different viewpoint and reverted the outcome, concluding that the provision did prevent Harris from initiating the lawsuit. It ruled that the limitation provision was reasonable and enforceable, encompassing Harris's claims, expunging her right to demand a trial. The court specifically said that the most Harris could acquire was $300,000.

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Appeals Court Agreement and Future Damages

Even though the appeals court overturned the ruling, it did agree that there was substantial evidence indicating that FedEx held a retaliatory stance against Harris. The court had to decide whether the $300,000 worth of damages was excessive, given this was the most she could receive based on the initial verdict.

FedEx maintained that the harm experienced by Harris wasn't specific enough to warrant more than $15,000. In response, Harris presented evidence showing she sought treatment for physical and mental discomforts, which included weight gain, stomach issues, and mental ailments such as anxiety and depression.

Court's Final Decisions on the Damages

The court declared Harris deserving of more than the argued $15,000 but less than $300,000, finally settling on a "more appropriate" base sum of $100,000. After considering inflation and to avoid superseding the jury's decision, the court finalized that she was entitled to $250,000 in compensatory damages.

In the case of punitive damages, the court went through a deliberation process. Despite Harris's supervisor acting with malice and reckless indifference, FedEx had displayed compliance with Title VII. Based on this, the court deemed punitive damages unjustified.

The court also viewed the original district court's decision to allow one of Harris' experts to testify in the case as a mistake. It was found that the expert, under cross-examination, admitted having no knowledge of FedEx's HR policies, basing her testimony solely on Harris' complaint. Nevertheless, it doesn't impact FedEx negatively, and even if it influenced the jury's decision to provide punitive damages, the appeals court reversal any bias.

Resisting a new trial, compensatory damages totaling $248,619.57 are the only damages FedEx owes Harris, according to the appeal court's ruling. After the ruling, FedEx voiced its confidence in its initial action of dismissing Harris.

Harris, now relieved of her role as a district sales manager, was initially hired by FedEx in 2007. Her contract contained a clause that limited her ability to start a legal proceeding against FedEx unless it was within the allocated time frame or six months from the incident date.

She ascended to her managerial position in 2017, guiding a team of eight account executives. Her performance, as stated by FedEx, was initially commendable enough to earn her an award in 2018. However, a steady decline in her performance followed, and her supervisor, Michelle Lamb, recommended she step down from her position. Soon after this, Harris alerted a company vice president of potential racial discrimination within the firm, leading her down the contentious route she now finds herself in.

After rounds of complaints, performance improvement plans, and investigations, Harris was eventually fired from FedEx. This dismissal led to the initiation of her lawsuit in May 2021, a full 16 months after being removed from her position.

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FedEx, $366M, Race Bias Verdic, Reversed, Appeals Court

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