Policies and Training Save Employer From Punitive Damages

Monday, January 26, 2015
Early this month the U.S. District Court for the District of Puerto Rico overturned a jury’s $3.5 million punitive damages award for claims brought under Title VII and Puerto Rico law, finding that the defendant employer had made good faith efforts to implement anti-discrimination and anti-retaliation policies. Wirshing v. Banco Santander de Puerto Rico, et al.(D.P.R. Jan. 7, 2015).

The Plaintiff alleged that her direct supervisor sexually harassed her, and that such harassment continued despite complaints she made to Human Resources. Wirshing also alleged that following her complaint, she was subjected to a campaign of retaliation, including threats that she would lose her job. A jury awarded her $351,018.34 in compensatory damages and $3.5 million in punitive damages.

The court upheld the compensatory damages award and vacated the punitive damages award. The court found that a punitive damages award was not warranted because defendant exercised good faith efforts to implement anti-discrimination and anti-retaliation policies.

The court noted that the ineffectiveness of Defendant’s policy cannot alone demonstrate a lack of good faith justifying an award of punitive damages. As evidence of defendant’s good faith efforts, the court found that defendant’s policies were given to new employees, republished annually, and refreshed through annual trainings. The court concluded that defendant did more than merely publish an official policy and passively implement it.
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