Connecticut Supreme Court
Connecticut Supreme Court

In a decision that will be officially released next week, the Connecticut Supreme Court has, at last, ruled that punitive damages are not an available remedy for state law employment discrimination claims.

You may recall that I discussed the Appellate Court’s decision that had originally found the same thing back in 2015.  The case, Tomick v. United Parcel Services, has been one I’ve also discussed in other places too.

The decision itself is one for the lawyers to get. The court was more interested in dealing with issues of “statutory construction over which [the court] exercise[s] plenary review.”

So, the court started with the statute itself. It states that a court “may grant a complainant… such legal and equitable relief which it deems appropriate including, but not limited to, temporary or permanent injunctive relief, attorney’s fees and court costs… ”

Notably, the court says that this language could be considered ambiguous, so the court had to dig a little deeper.  Ultimately, the court says that “To construe this language as encompassing punitive damages without expressly stating as much, as the plaintiff advocates, would be inconsistent with our approach to the statutory construction in [a prior case], in which we required, at least as a default rule, express statutory authorization for statutory punitive damages as a form of relief.”

From there, it’s a fairly easy path forward for the court.  It notes that the legislature used the term “punitive damages” in other human rights statutes, so it knew how to craft such language and remedies.  For example, public accommodation discrimination has punitive damages as a possible remedy.

Ultimately, the court says it is not for it to read punitive damages into the statute.

But it suggests one final avenue: The General Assembly.  “Had the legislature intended for § 46a-104 to provide for statutory punitive damages, it could have amended the state statute to reflect the changes to its federal counterpart, and remains free to do so.”

However, given the split in the state senate and other pressing state business, it seems unlikely we’ll see this change for a while.

What does this mean for employers? Well, it means that state law discrimination claims became worth a little less than they used to — though the Appellate Court’s decision had been factored in for a while now.  It doesn’t mean that such claims are dead — but it does mean that employees bringing claims will have one more reason to try to pursue the claim in federal court, than state court.

 

Not every case can be a U.S. Supreme Court case filled with sweeping pronouncements on employment law.

Blowing the whistle on a notable court decision

Indeed, many times the law develops through under-reported cases that you’ll never hear about.  The pronouncements may not be sweeping on those cases, but those cases help clarify a point that had been left uncertain before then and may open the door to other arguments as well.

Take the case of Commissioner of Mental Health and Addiction Services v. Saeedi, a Connecticut Appellate decision (download here) that will be officially released on July 9th.

Its ostensibly a whistleblower case under Conn. Gen. Stat. Sec. 4-61dd, where — as part of the damages awarded to the whistleblower — the CHRO ordered agency personnel to undergo professional ethics training and to alter the personnel file of the employee.

But the court was asked to look at something greater: Under the state’s whistleblower statute, where the CHRO has the power to award “any other damages”, does that include equitable (or non-monetary) relief?

The Appellate Court, in reviewing the language of the statute and the legislative history, concluded “no”.  Thus, the ordering of training was improper under the statute. But notably, the court said that because the CHRO was empowered to order reinstatement, the altering of the personnel file was appropriate to achieve that result.

That conclusion is not entirely surprising.

But the Appellate Court goes on a bit further in language that employers may see again in the future and that opens the door a crack to arguments about whether the CHRO can award other relief (perhaps even emotional distress damages) in discrimination cases.  (For background, I’ve talked about the CHRO’s attempt to include emotional distress damages as part of the award of damages.)

Continue Reading Appellate Court Limits Relief for Whistleblowers But Opens the Door in Discrimination Cases

A case out of the Second Circuit Court of Appeals (of which, Connecticut is part of) addresses an interesting question:

When a jury  finds that sexual harassment has been perpetuated by a single employee, is injunctive (non-monetary) relief required to be issued by the District Court?

The EEOC argued yes and argued that remedies such as preventing the harassing employee from returning to the workplace were appropriate. 

Um, there’s a problem in Aisle 3.

The Second Circuit agreed in part, saying that ordinarily a termination of a lone harasser should be enough. But the court said that given the egrigious facts of this particular case, something more should’ve been done to protect the female employees from potential future harassment.

The case, EEOC v. KarenKim, Inc. (d/b/a Paul’s Big M Grocery), can be downloaded here. 

There’s a lot of facts to the case, but this summary, by the Outten & Golden Employment Law Blog, captures some of the salient points:

KarenKim is a grocery store whose employees largely consist of teenage female employees. The company is owned and managed by Karen Connors. In 2001, she hired Allen Manwaring as the store manager. In 2006, Connors and Manwaring became romantically involved and had a son together.

At trial, a number of current and former employees testified about Manwaring’s sexual harassment of the female employees, which consisted of verbal and physical harassment. Some of his verbal comments included making comments of a sexual nature to employees and compliments about parts of their body. He told one employee that if he was her boyfriend, he would never “let her out of his sheets” and that “if he was 10 years younger, he would be on top of her.” He also physically harassed the women by touching and massaging them in inappropriate ways and on a daily basis. He would brush up against them to deliberately touch their breasts, put his crotch against their buttocks, breath on their necks, hug them, and squeeze their hips.

Oy.

Continue Reading What Remedy Is Appropriate When a Jury Concludes Sexual Harassment Occurred?

Suppose a former employee has breached your company’s covenant not to compete after she left employment.  Are you, the employer, entitled to get the non-compete period extended as a remedy for the breach?

Great question. And one that differs depending on the state.

A federal court in Connecticut (Aladdin Capital Holdings, LLC v. Donoyan) looked at the different paths that various state courts use to analyze the issue. In a decision released last week, it found:

  • First, some courts have reasoned that a court has broad and inherent power to extend the duration of a restrictive covenant as an equitable remedy for breach.
  • Second, some courts have suggested that the duration of a restrictive covenant may only be extended as a remedy for breach if the parties included language in their restrictive covenant contemplating such a remedy.
  • Third, some courts have reasoned that the contractually-specified duration of a restrictive covenant may never be extended by a court as a remedy for breach.
The Federal Courthouse in New Haven

So, what’s the proper result in Connecticut?

Well, in this case, the court rejected the employer’s argument for an extension. In doing so, it concluded that the ending of the restrictive covenant time period ends the matter.  In fact, the court concluded “The Court finds no evidence that the Connecticut Supreme Court would follow the decisions of other states’ high courts that have held that trial courts have broad equitable power to extend even an expired restrictive covenant as a remedy for breach.”

But all is not hope for employers in Connecticut.  The court did suggest that the result might be different if  “the restrictive covenant contains language that expressly permits extension of the restrictive covenant.”  In that type of situation, the court might then possess the power to extend the duration of the non-compete.

What’s the Takeaway for Employers?

If you use non-compete agreements or other types of restrictive covenants, consider adding a provision that expressly permits an extension of the restrictive covenant if the employee breaches the agreement.  That way, you may have an additional type of remedy besides seeking monetary damages.

In addition, employers may want to review their existing agreements to see if that language is present and consider amending them at an appropriate time to add this provision if necessary.

A few months ago, I reported on the District Court’s decision in Amara v. CIGNA, an important class-action case on ERISA retirement benefits and on alleged misrepresentations made by the Company about retirement benefits.  Over the last few months, then, the court was asked to consider the issue of what is appropriate relief from the decision. 

Late Friday, Judge Mark Kravitz issued his decision on what the appropriate remedy should be from his decision. But then, sua sponte (a nice Latin phrase meaning, in essence, "on my own"), the Court decided to stay its own judgment on the appropriate relief.  What does that mean? In essence, the court threw up its hands and conceded that the issues of damages and liability were so "unclear" that there was no good way to predict that the decision would even be upheld on appeal:

The Court also recognizes that the benefits awarded by this opinion are substantial, and that the law on which they are based is anything but settled. In light of the complexity of the issues and the weighty interests at stake, as well as the possibility that some or all of this opinion and the Liability Decision may be reversed on appeal, the Court believes that a stay is appropriate…..

The lack of clear guidance in the law and the unusual factual circumstances present in this case have convinced the Court that the outcome of any appeal is far from certain, and the Court believes a stay is therefore both appropriate and necessary.

So what relief did the court propose? Well, the language the court uses (see you if you can make sense of it) shows that it is reluctant to impose draconian consequences on CIGNA and instead proposes a bit of a compromise: 

In light of CIGNA’s statements in those publications that all early retirement benefits would be protected and CIGNA’s failure to warn of wear away, the Court orders and enjoins the CIGNA Plan to reform its records to reflect that all class members must now receive "A+B" benefits; that is, all class members must receive their accrued benefits under Part A, in the form in which those benefits were available under Part A, and in addition their accrued benefits under Part B [the new formula], in whatever form those benefits are available under Part B.

While I have not been following the case closely, the Court rejected various claims made by the Plaintiffs and declined to impose even harsher penalties on CIGNA.  But the Court declined to let CIGNA off completely either, indicating that some sort of financial burden must be imposed on CIGNA for misrepresentations the court found in its earlier decision 

Under A+B, an employee would receive all of her Part A benefits in the form those benefits were previously offered under Part A, plus all the benefits she accrued under Part B, in whatever form those benefits are offered. Because there is no attempt to transition Part A benefits into the Part B accrual formula, there is no need for an opening account balance and thus no question of whether early retirement benefits are a part of that. …   
The Court recognizes that a return to Part A would result in a larger recovery for Plaintiffs.
That fact alone, however, is insufficient to render A+B inadequate, especially in light of [expert] testimony regarding the substantial effect on class members’ benefits as a result of wear away and the lack of any evidence in the trial record to support Plaintiffs’ current complaints. For all of these reasons, then, the Court rejects both parties’ objections to the A+B remedy, which the Court believes is a meaningful, substantial, and appropriate remedy.

The decision is a technical one and frankly, incredibly complex.  For employers looking for guidance on this issue, they should tread very carefully.   As the Court notes time and again, the issues involved are far from settled and that an employer who takes action in the area, will do so with substantial risks for the foreseeable future.

For members of the Amara class, the decision means many more months of waiting for a resolution of the issue. Because of the complexity, I would be surprised to get a decision from the Second Circuit before the end of the year.  Class members can keep up with the lawsuit at a website created by the Plaintiffs’ attorneys