Peggy Kimzey v. Wal-Mart Stores

____________
Nos. 95-4219/4220
____________
Peggy Kimzey, *
*
Cross-Appellant/Appellee, *
* Appeals from the United States
v. * District Court for the Western
* District of Missouri.
Wal-Mart Stores, Inc., *
*
Appellee/Cross-Appellant. *
___________
Submitted: September 10, 1996
Filed: February 20, 1997
___________
Before FAGG, HEANEY, and MURPHY, Circuit Judges.
___________
MURPHY, Circuit Judge.
Wal-Mart Stores, Inc., appeals from a judgment awarding Peggy Kimzey,
its former employee, compensatory and punitive damages on her hostile work
environment and constructive discharge claims. The jury returned a verdict
of $35,000 for compensatory damages, $1.00 for back pay, and $50,000,000
for punitive damages. After trial the district court reduced the punitive
damages award to $5,000,000; this action is the basis of Kimzey's cross-
appeal. We affirm in part and reverse in part.
I.
In July 1988, Kimzey began work as an associate in the receiving
department at the Wal-Mart store in Warsaw, Missouri. She left her job for
a few months in the beginning of 1989 to care for her sick mother and
returned to her position at Wal-Mart in
April 1989. Kimzey left Wal-Mart in April 1993, and filed suit under Title
VII, 42 U.S.C. § 2000e-5(e), and the Missouri Human Rights Act (MHRA), Mo.
Rev. Stat. §§ 213.010-213.095, charging that she had been sexually harassed
throughout her employment and that management ignored her complaints, that
she had experienced a hostile work environment, and that she had been
constructively discharged.
During Kimzey's first period of employment, her supervisor and an
assistant store manager made sexual remarks to her and commented on her
body. One incident occurred when Kimzey was bending over a box to process
freight. Michael Mais, who was then an assistant store manager, gestured
toward her bottom and told Henry Brewer, Kimzey's supervisor, that "he had
found a place to put his screwdriver." Kimzey objected, but Mais continued
his gestures. When she told him that was enough, Mais replied: "Oh, you
don't know. You might enjoy it." On another occasion when Kimzey's
breasts touched a stack of boxes while she was moving freight, Brewer and
Mais laughed, and Mais said, "Well, you can't exactly get through there,
can you, with those things sticking out?" Brewer also smacked his lips and
made kissing noises at Kimzey.
After Kimzey's return to Wal-Mart in April 1989, both Mais and Brewer
engaged in similar behavior toward Kimzey and other women as well. Mais
continued as an assistant store manager until he became store manager
around 1991, and Brewer remained her supervisor during this period. There
was testimony that Brewer and Mais treated women differently from men and
that they did not act or talk to men in the same offensive manner. Mais
kicked the legs of Kimzey and other female employees when he walked by and
once shook a ladder on which Kimzey was standing and laughed when she
almost fell. Mais frequently called Kimzey names such as "mother-fucker"
and "lazy-son-of-a-bitch." When Kimzey or other women bent over to pick
up merchandise, Mais commented on their "tight-ass jeans." He also
commented on the women's anatomy and called one female employee a "fat
bitch." Mais used profanity with women, even
-2-
though he was aware that some of them were offended by this usage. Brewer
followed Kimzey around the store and out to the parking lot when she left
work, called her names like "damn dummy," "stupid," and "idiot" on a daily
basis, and regularly yelled at her for extended periods. He also told
Kimzey that another employee wanted to assist her when she worked on the
ladder so he could look at her "cute ass." Brewer screamed and swore at
other female employees as well.
Wal-Mart has an open-door policy under which employees are encouraged
to report harassment to any level of management. The Wal-Mart Associate
Handbook states:
Harassment of any type whether sexual, ethnic,
racial, etc. is not tolerated at Wal-Mart. We want
to provide a work environment where everyone is
comfortable. Harassment includes offensive
language, gestures, physical contact or other
conduct which destroys that environment.
If you have any problems with or questions
concerning harassment, use our Open Door Policy.
If your immediate supervisor is part of the
problem, go to the next level of management. There
will be no retaliation for reporting harassment and
all reports of harassment will be investigated.
Your individual privacy will be of utmost
importance. Individuals who engage in harassment
will be disciplined up to and including termination
depending on the circumstances.
Kimzey's expert witness testified that to implement this policy in a
company the size of Wal-Mart, a manager who becomes aware of a problem with
an employee should interview other employees to see if the problem is
ongoing or isolated. The manager should also prepare a written report to
include in the employee's file in order to track whether the problem
continues. Brewer testified that he had received no training on the
policy, and there was no other
-3-
evidence introduced indicating that any training was in place at the Warsaw
store.
Kimzey complained to members of Wal-Mart management several times
about the conduct of Mais and Brewer, but no action was taken on those
complaints and the situation did not improve. Kimzey also complained to
Mais about his "nasty remarks" and the profane language he used with her,
but he did not change. Kimzey and other women complained to Mais about
being kicked, but he did not stop the kicking. When Kimzey told Brian
Woirhaye, an assistant manager, about Brewer following her around the
store, he indicated he was aware of the problem and even referred to Brewer
as Kimzey's "shadow," yet he did not take any action. Her complaint to
Woirhaye in early 1992 about Brewer's drinking and resulting abusive
behavior did not result in an investigation or any other action.
Kimzey also reported to management about two different incidents
where she was pinched on the buttocks by a co-worker. After the first
incident, Kimzey complained to Woirhaye. He did not investigate, prepare
a written report, or take any other action. On receiving the second
complaint, Woirhaye laughed and said that he should probably do something
about it since two other female employees had also made similar complaints.
Woirhaye apparently did nothing further.
When Kimzey complained about Brewer to Marci Turner, another
assistant manager, Turner told her it sounded like sexual harassment.
Although Turner did not investigate the complaint or prepare a written
report, she did report Kimzey's complaint to Mais who had by then been
promoted to store manager. Mais spoke with Kimzey, and she repeated her
complaints about Brewer's behavior, drinking, and intimidation. Mais' only
response, however, was to ask Brewer if he had been drinking at work. The
situation did not improve, and when Kimzey continued to complain, Mais told
her there was nothing he could do about Brewer and became upset with her.
-4-
Other women at Wal-Mart also complained to management about Brewer's
conduct, but action was not taken on their complaints either.
There was testimony that Kimzey's demeanor changed during the time
she worked at the Warsaw store. At the beginning Kimzey had a positive
attitude about work, but she became upset after harassing incidents. Later
other employees began to see Kimzey crying, and toward the end of her
employment she appeared agitated, upset, and nervous almost all the time.
On April 7, 1993, Kimzey told Mais that she was leaving Wal-Mart
because of Brewer's conduct and management's indifference to her
complaints. Although Mais was aware of Kimzey's stated reasons for leaving
Wal-Mart, he did not indicate that he would investigate her complaints or
take any other action required by Wal-Mart's open door policy. In her exit
interview he did offer her other positions as an associate in either night
receiving or in the garden center. She declined both because she was
physically unable to work the hours required in night receiving and the
garden center schedule included nights, week-ends, and holidays.
On appeal, Wal-Mart claims that the district court erred in admitting
evidence of incidents before August 1992 because they occurred outside the
period for which Kimzey can recover. Wal-Mart also argues that Kimzey
failed to produce sufficient evidence of a hostile work environment or
constructive discharge, that punitive damages should not have been
submitted to the jury, and that the $5,000,000 punitive damages awarded in
the judgment is excessive. Kimzey responds that events before 1992 are
admissible because they were relevant background and because there was
evidence of a continuing violation. She also asserts she produced
sufficient evidence to support her sexual harassment claims and the
punitive damages award, and argues in her cross-appeal that part or all of
-5-
the punitive damages award should be reinstated.1
II.
The first issue raised on appeal is whether the district court abused
its discretion in admitting evidence from Kimzey's initial employment
period. Crane v. Crest Tankers, Inc., 47 F.3d 292, 294 (8th Cir. 1995).
Wal-Mart argues that any evidence of incidents before August 1992 is time-
barred because Kimzey cannot recover for those acts. It says these
incidents were unrelated to later conduct and irrelevant because Kimzey did
not believe she worked in a hostile environment when they occurred.
A sex discrimination complainant may recover for any discriminatory
act for which the statute of limitations has not expired. Gipson v. Kas
Snacktime Co., 83 F.3d 225, 229-30 (8th Cir. 1996) (citing Ashley v.
Boyle's Famous Corned Beef Co., 66 F.3d 164, 167-68 (8th Cir. 1995) (en
banc). A Title VII complainant must file a charge with the Equal
Employment Opportunity Commission within 300 days of the discriminatory act
or occurrence. 42 U.S.C. § 2000e-5(e). The Missouri Human Rights Act
contains a 180 day period for filing. Mo. Rev. Stat. § 213.075(1).
Because Kimzey filed her charge in June 1993, she can recover for acts
reaching back to August 1992 under Title VII and to December 1992 under the
MHRA. Gipson, 83 F.3d at 230.
Evidence of incidents occurring outside the limitations period may
still be admissible. One instance is when the incidents are part of a
continuing violation. Burns v. McGregor Elec. Indus., Inc., 955 F.2d 559,
563 (8th Cir. 1992). Evidence of a hostile environment can constitute such
a continuous violation. Varner v.
1
After Wal-Mart pointed out that Kimzey had only objected to
the amount of the remittitur in the notice of appeal, she abandoned
the argument that the district court erred by remitting the
punitive damages award without offering the option of a new trial.
-6-
National Super Mkts., Inc., 94 F.3d 1209, 1214 (8th Cir. 1996); Gipson, 83
F.3d at 229. In a hostile work environment claim, evidence concerning all
circumstances of the complainant's employment must be considered, including
the frequency of the offending conduct, its severity, whether it was
physically threatening or humiliating, and whether it unreasonably
interfered with work performance. Harris v. Forklift Sys., Inc., 114 S.
Ct. 367, 371 (1993); Burns, 955 F.2d at 563-64 (district court was required
to consider harassing conduct which occurred during all periods of
employment). Incidents which occurred outside the filing period also may
be admissible as relevant background to later discriminatory acts. United
Airlines, Inc. v. Evans, 431 U.S. 553, 558 (1977).
There was evidence at trial that Mais and Brewer engaged in abusive
conduct during both periods of Kimzey's employment at Wal-Mart, that the
conduct was similar in nature, and that it upset Kimzey as it occurred.
This course of conduct included acts such as gesturing toward Kimzey's rear
with a screwdriver and making lewd suggestions, kissing noises, comments
on her breasts, following her around the store and out to the parking lot,
abusive language, and inappropriate physical contact such as leg kicking.
The failure of Mais and other managers to take action in response to her
complaints added to the hostile environment. Burns v. McGregor Elec.
Indus., Inc, 989 F.2d 959, 965 (8th Cir. 1993).
Kimzey concedes the statute of limitations began to run from the time
of her constructive discharge in April 1993. When she filed her complaint
in June 1993, the outside limit under the 300 day period for which she
could recover became August 1992. Gipson, 83 F.3d at 229-30. The
incidents which occurred prior to that date were relevant, however, to
illustrate a pattern of sex discrimination and its effects on Kimzey and
in determining whether a hostile work environment existed. The incidents
were not unduly prejudicial, and the district court did not abuse its
discretion in admitting the evidence.
-7-
III.
Wal-Mart contends that Kimzey did not produce sufficient evidence to
prove her hostile work environment claim because she failed to show that
the conduct occurred because of her sex and that she subjectively believed
she worked in a hostile environment. Wal-Mart also asserts that Kimzey
failed to prove a constructive discharge because it promptly investigated
her complaints when it became aware of them and offered her other jobs.
Kimzey responds that she produced sufficient evidence to meet her burden
under Title VII and the MHRA for her claims of a hostile work environment
and constructive discharge.
A jury verdict will be upheld if the evidence, viewed in the light
most favorable to the prevailing party, is sufficient for a reasonable jury
to have found for that party. Chicago Title Ins. Co. v. Resolution Trust
Corp., 53 F.3d 899, 904 (8th Cir. 1995). Whether an issue was properly
before the jury, however, is a legal question which is reviewed de novo.
Id. The evidence relating to each claim must therefore be examined.
A.
In order to establish an objectively hostile working environment, the
offending conduct must have been sufficiently severe or pervasive. Harris,
114 S. Ct. at 370. More than a few isolated incidents are required.
Meritor Sav. Bank v. Vinson, 477 U.S. 57, 67 (1986). Unless a victim of
harassment has a subjective belief that she is working in a hostile
environment, the harassment has not "actually altered the conditions of the
victim's employment." Harris, 114 S. Ct. at 370.
A workplace permeated with "discriminatory intimidation, ridicule,
and insult" is sufficiently severe to establish a hostile work environment.
Harris, 114 S. Ct. at 370 (citing Meritor, 477 U.S. at 65). Here Kimzey
introduced evidence that Mais and Brewer
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engaged in numerous incidents of offensive conduct against Kimzey and other
women working at the Warsaw Wal-Mart. Mais gestured with a screwdriver
toward Kimzey's rear and kicked her leg on several occasions. Brewer made
kissing noises at Kimzey and followed her around the store. Mais and
Brewer also made sexual comments about Kimzey and spoke to her with abusive
language. This behavior began shortly after Kimzey started work at the
store and continued throughout her employment. Management repeatedly
ignored her complaints despite the written policy against harassment and
the requirement under that policy to investigate all complaints and take
appropriate disciplinary action. This evidence demonstrates more than a
few isolated incidents of harassment and is sufficient to establish a
hostile work environment. See Hall v. Gus Constr. Co., 842 F.2d 1010 (8th
Cir. 1988).
There was also evidence that both Mais and Brewer treated women
differently from men and that the conduct upset Kimzey. Mais singled out
women to kick and commented on their "tight-ass" jeans or their physical
anatomy. Other employees testified that Mais and Brewer directed harsh
treatment, abusive language, and profanity at women, but not at men. Co-
workers testified they noticed that Kimzey appeared agitated, upset, and
nervous almost all the time toward the end of her employment. Kimzey
herself testified that she found the conduct upsetting as it occurred.
Kimzey produced sufficient evidence to establish her hostile work
environment claim as a matter of law, and on this evidence a reasonable
jury could find that Kimzey was treated differently because of her sex and
that she had a subjective belief she worked in a hostile environment that
"altered the conditions of [her] employment."
B.
Wal-Mart claims that Kimzey failed to prove she was constructively
discharged. Wal-Mart contends that she did not complain to management
until a few months before her resignation and that it responded
appropriately by investigating that complaint
-9-
and offering her other positions.
A constructive discharge occurs when an employer renders the
employee's working conditions intolerable, forcing the employee to quit.
Johnson v. Bunny Bread Co., 646 F.2d 1250, 1256 (8th Cir. 1981). If an
employee quits because she reasonably believes there is no chance for fair
treatment, there has been a constructive discharge. Winbush v. State of
Iowa by Glenwood State Hosp., 66 F.3d 1471, 1485 (8th Cir. 1995). An
employee must give an employer a reasonable opportunity to work out a
problem before quitting. West v. Marion Merrell Dow, Inc., 54 F.3d 493,
497 (8th Cir. 1995) (citations omitted). Merely offering a different job
to an employee does not necessarily shield an employer from liability for
constructive discharge, however. Parrish v. Immanuel Med. Ctr., 92 F.3d
727, 732 (8th Cir. 1996) (constructive discharge where employee required
to work nights doing tasks she would find demeaning).
Here, there was evidence that members of Wal-Mart management knew
Kimzey had been harassed throughout her employment and that the frequency
of her complaints increased as Brewer's behavior became more abusive. See
Burns v. McGregor Elec. Indus., Inc., 955 F.2d 559, 565 (8th Cir. 1992)
(owner's participation in harassment and employee's complaints to
supervisors shows management knew of harassment); cf. Zimmerman v. Cook
Cty. Sheriff's Dept., 96 F.3d 1017, 1019 (7th Cir. 1996) (request for
transfer because of personality conflict does not notify employer of
harassment by nonsupervisory employee). Kimzey had tried using Wal-Mart's
open door policy and complained to several members of management on
different occasions about the harassment by Mais and Brewer, but management
generally ignored those complaints. The one time that Mais looked into a
complaint, he told her there was nothing he could do about it. There was
evidence that the conduct and indifference were increasingly upsetting to
Kimzey. A reasonable jury could find that the continuing harassment and
management's indifference rendered Kimzey's working conditions intolerable
and
-10-
forced her to quit.
Wal-Mart also argues that under Smith v. Goodyear Tire & Rubber Co.,
895 F.2d 467 (8th Cir. 1990), Kimzey was required to try management's
solution to her complaints and move to the garden center or the night shift
in receiving. There was no evidence in Smith, however, that the employer
had made the employee's working conditions intolerable. Rather, the
employer in Smith was restructuring and offered the employee the same
position other similarly situated workers were being offered. Id. at 473.
In contrast, Kimzey's constructive discharge claim rests on evidence of a
hostile work environment and an unresponsive management. Even at the exit
interview when Mais offered her the other positions, he made no suggestion
he would investigate her complaints or try to ameliorate the situation or
consider disciplinary action. The district court therefore did not err in
submitting Kimzey's constructive discharge claim to the jury.
IV.
Both sides contest the punitive damages award. Wal-Mart argues that
evidence at trial was insufficient to meet either the state or federal
standard for punitive damages because both require outrageous misbehavior.
According to Wal-Mart, punitive damages were not appropriate because Brewer
was equally abusive to all employees, and management at the Warsaw store
responded properly to Kimzey's complaints. Kimzey responds that there was
sufficient evidence to support punitive damages and argues that all or part
of the punitive damages should be reinstated.
The standard under Missouri law for punitive damages requires
"conduct that is outrageous, because of the defendant's evil motive or
reckless indifference to the rights of others." Burnett v. Griffith, 769
S.W.2d 780, 789 (Mo. 1989) (en banc) (quoting the Restatement (Second) of
Torts § 908(2) (1979)). The requisite level of recklessness or
outrageousness can be inferred from
-11-
management's participation in the discriminatory conduct. Compare Kientzy
v. McDonnell Douglas Corp., 990 F.2d 1051, 1062 (8th Cir. 1992) (awarding
punitive damages where a supervisor disciplined a female employee more
harshly than male employees who violated similar rules), with Varner, 94
F.3d at 1214 (denying punitive damages where only one co-worker who was not
a supervisor or manager harassed the plaintiff).
There is a similar standard under Title VII which permits punitive
damages when an employer is found to have "engaged in a discriminatory
practice with malice or with reckless indifference to the federally
protected rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1).
Title VII provides that the upper limit on an award including punitive and
compensatory damages in a case such as this is $300,000. 42 U.S.C. §
1981a(b)(3) (limits on the sum of compensatory and punitive damages awards
for different size employers).
We have found nothing in the instructions or the record explicitly
stating whether punitive damages were submitted to the jury under Missouri
law, federal law, or both. The court instructed the jury that:
In addition to the damages mentioned in the other
instructions, the law permits the jury under certain
circumstances to award an injured person punitive damages in
order to punish the defendant for some extraordinary misconduct
and to serve as an example or warning to others not to engage
in such conduct.
[I]f you find that defendant acted with malice or with
reckless indifference to plaintiff's right not to be
discriminated against on the basis of her sex . . . you may .
. . award plaintiff an additional amount as punitive damages .
. ..
No instruction was given on the Title VII damages limitation, and after
trial the district court treated the award as one under Missouri law, since
its reduction resulted in an amount far above
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the federal maximum.
There was sufficient evidence to support the claim going to the jury
under either state or federal law. There was evidence that Brewer,
Kimzey's supervisor, and Mais, the store manager, instigated and
participated in many incidents of harassment and that they treated women
differently from men. Mais commented on Kimzey's breasts and her "tight-
ass" jeans and made crude jokes about her, including suggesting that he had
found in her rear a place to put his screwdriver. Mais called Kimzey names
like "mother-fucker" and "lazy-son-of-a-bitch" and kicked her when he
walked by. Mais also kicked other women, commented on their bodies, called
them names, and used profanity with them. Brewer participated with Mais
in crude jokes, made kissing noises at Kimzey, called her names, and
followed her around the store. Brewer also used profanity with other women
at the Warsaw store.
Wal-Mart management repeatedly ignored the complaints made about this
conduct, and there was evidence that the corporate policy was not carried
out at the Warsaw store. Kimzey complained to Brewer and Mais directly
several times about their behavior, but they ignored her complaints. Other
members of management were made aware of the offending conduct, but did not
investigate complaints or make any attempts at discipline as a result.
Kimzey complained to Woirhaye, an assistant store manager, about pinching,
being followed around the store, and Brewer's abusive conduct, but Woirhaye
failed to investigate the complaints or take any other action as required
by the Wal-Mart policy. Kimzey also complained to Turner, another
assistant manager, about Brewer, but she also failed to investigate. When
Turner reported Kimzey's complaint to Mais, he merely asked Brewer if he
was drinking on the job. On other occasions when Kimzey complained about
Brewer's conduct to Mais, he not only failed to investigate the complaint,
but became upset with her. There was evidence that other women complained
about Brewer's conduct, but management took no action. This evidence was
sufficient to establish the reckless or intentional
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indifference to Kimzey's rights necessary for submitting punitive damages
to the jury under both state and federal law.
Wal-Mart contends that the amount of the award "shocks the
conscience" because it is out of proportion to the actual damages and so
excessive it violates the Fourteenth Amendment. BMW of N. Am., Inc. v.
Gore, 116 S. Ct. 1589, 1598 (1996). Wal-Mart contends that the total
damages award should not exceed $300,000, the Title VII cap, which it
argues is the national consensus for the upper limit of awards in
employment discrimination cases.
There is no language in Title VII indicating that its upper limit is
to be placed on awards under state anti-discrimination statutes, and Wal-
Mart points to no legislative history showing this intent. State law
cannot be displaced by federal law without the clear intent of Congress,
Hillsborough Cty. v. Automated Med. Labs., Inc., 471 U.S. 707, 715 (1985)
(citations omitted), and evidence of such intent is missing here. Wal-
Mart's argument that the award under state law can be no larger than
$300,000 thus fails.
Missouri places no set limit on punitive awards, but requires that
"when punitive damages are awarded by a jury, both the trial court . . .
and the appellate court review the award to ensure that it is not an abuse
of discretion." Call v. Heard, 925 S.W.2d 840, 849 (Mo. 1996) (en banc).
Several factors may be considered, including the degree of malice or
outrageousness of the defendant's conduct, aggravating and mitigating
circumstances, the defendant's financial status, the character of both
parties, the injury suffered, the defendant's standing or intelligence, and
the relationship between the two parties. Id. at 849 (citing Moore v.
Missouri-Nebraska Exp., Inc., 892 S.W.2d 696, 714 (Mo. Ct. App. 1994)).
"An abuse of discretion is established when the punitive damages award is
so disproportionate to the factors relevant to the size of the award that
it reveals 'improper motives or a clear absence of the honest exercise of
judgment.'" Call, 925 S.W.2d at
-14-
849 (citation omitted).
The district court found that the $50,000,000 punitive damages
awarded by the jury was excessive and theorized that "the disparity arose
from the aggravating behavior of defense counsel at trial."2 In reducing
the award to $5,000,000 the district court considered management's
participation in the harassing behavior, its failure to improve Kimzey's
situation or to educate supervisors about the "Civil Rights Act," and its
attempt to punish Kimzey by forcing her to change jobs. The court found
no mitigating factors.
A district court's determination concerning whether a punitive
damages award is in accordance with state law is reviewed for abuse of
discretion. Browning-Ferris Ind. of Vermont v. Kelco Disposal, Inc., 492
U.S. 257, 278-79 (1989); Gasperini v. Center for Humanities, Inc., 116 S.
Ct. 2211, 2223-24 & n.18 (1996). Wal-Mart argues the $5,000,000 punitive
damages award is excessive under Missouri law because it does not reflect
the type of injury Kimzey suffered or the mitigating circumstances present.
Kimzey contends in her cross-appeal that the district court erred in
reducing punitive damages because the jury's verdict was supported by the
evidence and the award should be reinstated completely or in part.
Punitive damages awards in sexual discrimination cases under the MHRA
have previously been upheld by federal courts in a range of amounts. In
Kientzy, 990 F.2d at 1062, an award of $400,000 was affirmed where a woman
was treated differently from male employees for violating similar company
rules, resulting in her discharge. An award of $125,000 was approved in
Finley v. Empiregas, Inc., 975
2
For example, the district court noted that defense counsel
waved his middle finger in Kimzey's face and "rudely shouted"
during cross-examination, "Ma'am, do you know that to most of us
[this] means fuck you? Do you know that?" The court also observed
that the defense produced only one witness, Brewer, even though
Mais was present through the whole trial and the proceedings were
delayed by Brewer's late arrival.
-15-
F.2d 467, 472 (8th Cir. 1992), where a manager had told a female employee
that company policy would not permit her to be promoted to store manager
because she was a woman. See also Farhat v. Sally Beauty Co., 1994 WL
645282, No. 91-2177-C-CAS, at *1 (E.D. Mo. 1994) ($200,000 punitive damages
under the MHRA for replacing the plaintiff during her maternity leave with
someone without experience and then offering the plaintiff a job paying
one-half her previous salary).
The district court was correct to reduce the amount of punitive
damages awarded by the jury because the amount was excessive. No
reasonable jury could have awarded $50,000,000 in punitive damages based
on the evidence and the application of the relevant factors under Missouri
law. Kimzey has not shown that the amount of punitive damages awarded in
the judgment should be increased.
Careful review of the evidence in light of the relevant factors under
Missouri law and considering awards in other similar cases leads to the
conclusion that the $5,000,000 punitive damages award in the judgment was
still excessive. The district court did not indicate it considered the
nature of the harassment or certain mitigating circumstances. The
harassing conduct was certainly objectionable but was not the most
egregious type of sexual harassment. Just as in Kientzy, Empiregas, and
Farhat, there was no serious sexual assault or physical touching, no quid
pro quo harassment, or no retaliation for complaints. The jury assessed
low actual damages of $35,000 (and one dollar in back pay), even though
Kimzey had requested damages for emotional pain, inconvenience,
humiliation, embarrassment, and degradation and her expert had testified
she lost over $130,000 in income.3 Moreover,
3
Punitive damage awards approved in other Missouri gender
discrimination cases are in a much lower ratio to actual damages
than the dissent's suggested award of $2,000,000 would be. For
example, in Kientzy punitive damages were only twice the amount of
actual damages. In Finley, where the company had a policy to
discriminate, punitive damages were less than thirty times the
actual damages awarded. An award of $2,000,000 here would be
almost sixty times the amount of actual damages.
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Wal-Mart has an appropriate corporate policy in place against harassment
and there was no evidence that anyone outside the Warsaw store was made
aware of the incidents occurring there. Although there was conflicting
testimony on whether this policy was effective, one of Kimzey's witnesses
testified that the policy had worked for another employee and that she had
been encouraged to use it. Considering all the aggravating and mitigating
circumstances, including the nature of the harassment and the involvement
of managers in it, the lack of responsiveness to complaints, the existence
of a corporate policy against harassment, the failure to train supervisors
about the policy or of on-site managers to carry it out, the amount awarded
in actual damages, and the relative size of Wal-Mart, an award of punitive
damages in the amount of $350,000 would be reasonable under Missouri law.4
The district court abused its discretion by not reducing the award to such
reasonable amount in light of all relevant factors. The case must
5
therefore be remanded for further proceedings.
V.
For these reasons, the district court is affirmed with respect to
liability and compensatory damages, but reversed with respect to the amount
of punitive damages awarded. The judgment is vacated, and the case is
remanded for further proceedings consistent with
4
Since such amount is not out of proportion to the other
damages awarded, any due process argument based on
disproportionality would be moot.
5
The dissent suggests that a remand for a new trial on
punitive damages would be preferable, but no rule requires adoption
of that procedure in our circuit. Compare Guzman v. Western State
Bank of Devils Lake, 540 F.2d 948, 953 (8th Cir. 1976) (district
court to enter judgment on the remitted punitive damages) with
Morrill v. Becton, Dickinson & Co., 747 F.2d 1217, 1225 (8th Cir.
1984) (option of new trial or acceptance of remittitur).
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this opinion.
HEANEY, Circuit Judge, concurring and dissenting.
The majority has written a thorough and well-reasoned opinion from
which I depart only on a narrow aspect of its discussion of punitive
damages. I agree that the evidence warranted the submission of punitive
damages to the jury under both state and federal law, that the jury's award
of $50 million was excessive, and that the district court properly reduced
the punitive award. I also agree that, in considering a reduction of the
award, the federal cap on punitive damages does not apply to state anti-
discrimination statutes. My only concern is with the majority's $4.65
million remittitur. The assessment of $350,000 in punitive damages against
Wal-Mart does not adequately punish the company for its conduct. Nor will
it serve to deter Wal-Mart or other similarly-situated companies from
violating their employees' civil rights. Thus, I respectfully dissent from
that portion of the majority opinion that reduces the punitive award to
$350,000.
In reviewing the jury's award, the district court properly weighed
the relevant aggravating and mitigating factors. The majority contends
that the district court failed to consider any mitigating circumstances.
In fact, after weighing the evidence, the district court concluded that
there were none to consider. The majority points to two mitigating
factors: that Wal-Mart had a corporate policy against discrimination and
that no one outside the Warsaw store was made aware of the incidents
occurring there. The district court explicitly recognized that Wal-Mart
had a written "open-door" policy. The mere existence of a policy carries
very little weight, however, when Wal-Mart failed to train any of its
supervisors about the policy. Moreover, the fact that no one outside of
the Warsaw store was aware of the conduct is further evidence that the
open-door policy was not followed and that the proper channels of
communications were closed tight. Wal-Mart's trial strategy--minimizing
and denying the alleged harassment and
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relying on the policy to excuse any harassment--as well as its failure to
take any affirmative actions against either Mais or Brewer obviously
backfired with the jury. Such behavior may well have indicated a greater
need for a severe punitive award to compel Wal-Mart to take stronger steps
to fulfill its legal obligations toward its employees. See Hurley v.
Atlantic City Police Dept., 933 F. Supp. 396, 422 (D. N.J. 1996). Thus,
I do not believe that the district court abused its discretion in
concluding that there were no mitigating factors worth consideration.
The majority also states that the district court should have further
reduced the award because the defendants' conduct was not the most
egregious type of sexual harassment. Although it is true that the conduct
did not involve serious sexual assault, physical touching, quid pro quo
harassment, or retaliation, the district court found it significant that
the only attempt Wal-Mart made to address Kimzey's complaints was to offer
her alternative positions that carried different benefits and hours from
her receiving job. This response essentially punished the wrong party and
condoned the illegal behavior. I agree with the district court that Wal-
Mart's response to Kimzey's complaints elevated the seriousness of the
conduct and, in my view, bordered on retaliation.
As the majority recognizes, a great number of aggravating
circumstances were present in this case, including management participation
in the harassment, the company's failure to train supervisors regarding the
sexual harassment policy, and the resultant failure of on-site managers to
carry it out. The majority also notes that Wal-Mart's size warrants
consideration; yet in my view, the $4.65 million remittitur does not
reflect serious consideration of Wal-Mart's total assets. At trial, the
evidence demonstrated that in 1995, Wal-Mart had net assets of $32 billion.
The majority's reduced award constitutes less than two one-thousands of one
percent of Wal-Mart's net worth. Such a minuscule penalty hardly
represents more than a slap on the hand for a company of Wal-Mart's size.
In purely economic terms, it
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would be far more beneficial for Wal-Mart to pay out this size award than
to implement a company-wide training program on sexual harassment. The
majority's punitive award does not send out a strong message to large
companies that sexual harassment will not be tolerated by our court. I
cannot agree to the punitive award assessed by the majority.
In addition to my concern with the size of the award, I do not agree
with the manner in which it is imposed. Although remittitur is a proper
remedy for an excessive verdict, the preferred method is to vacate the
award and remand for a new trial on punitive damages unless the plaintiff
agrees to a reduced award. See Morrill v. Becton, Dickinson & Co., 747
F.2d 1217, 1225 (8th Cir. 1984); Lee v. Edwards, 101 F.3d 805, 813 (2d Cir.
1996); Continental Trend Resources, Inc. v. Oxy USA, Inc., 101 F.3d 634,
643 (10th Cir. 1996); Atlas Food Sys. & Serv., Inc. v. Crane Nat'l Vendors,
Inc., 99 F.3d 587 (4th Cir. 1996); 11 Wright, Miller, & Kane, Federal
Practice and Procedure: Civil 2d § 2820 (1995).
Accordingly, I would vacate the district court's punitive award and
remand for a new trial unless Kimzey agrees to an award of $2,000,000.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT
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