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Discrimination in Employment and Punitive Damages Award Upheld by California Court

Disability discrimination in California workplaces is unlawful under both the Americans with Disabilities Act and the Fair Employment and Housing Act. When employers engage in unlawful discrimination based on an employee's disability, the employee can file a lawsuit to recover damages. In Contreras-Velazquez v. Family Health Centers of San Diego, Inc., Cal. Ct. App. Case No. D075577, the appeals court considered whether a plaintiff was precluded from relitigating a portion of a claim because of a special verdict finding by a previous jury and whether the court's reduction of a punitive damages award was proper.[1]

Factual and Procedural Background

Rosario Contreras-Velazquez was employed as a patient services representative and medical records clerk at Family Health Centers of San Diego from 2003 to 2006. She left her job in 2006 but was subsequently rehired in 2008. In 2012, Velazquez suffered an injury to her right upper arm caused by repetitive stress. She had to undergo surgery on her upper arm, but the surgery was not successful.

After returning to work, Velazquez was transferred to a new position as an appointment technician in Dec. 2013. In this role, she had to use a headset and repeatedly click a right-handed mouse for six to eight hours per day. After several days of work, Velazquez suffered pain in her arm and reported her medical condition to her supervisor. She requested a roller mouse or a left-handed mouse and was given a roller mouse that did not work correctly. After one-and-one-half weeks of beginning her new job, she was told by her supervisor to stop coming to work. Her supervisor directed her to see a doctor and provide a report before returning to her job.

Velazquez saw her doctor the next day, and he prepared a report for her. The doctor's report recommended that any use of her right upper arm should be limited and that she should not perform repetitive tasks with her wrist or hand with a keyboard for any more than 10 minutes per hour. The report also said she should not be required to complete overhead lifting or any pulling or pushing with her right upper arm. The doctor also stated that Family Health should contact him because what they were having her do at work was going to continue to exacerbate her injuries.

Velazquez submitted the report to her supervisor a few days later and talked to a human resources professional. the HR staff told her not to report to work and to continue seeing her doctor. Velazquez did not report to work for three months and saw her doctor once each month, providing a report after each visit to her employer.

Family Health never contacted Velazquez's doctor to talk about potential accommodations they could offer. An HR professional searched online to try to find any positions they could move Velazquez into but was unable to identify a suitable role. In April 2014, Family Health fired Velazquez. Velazquez asked in two separate phone calls if there were any positions that she could work in but was told they could not accommodate her disability and were terminating her.

Velazquez filed a lawsuit against Family Health under the Fair Employment and Housing Act or FEHA. She alleged six causes of action, including disparate treatment based on her disability, failure to provide reasonable accommodations, failure to engage in an interactive process, creation of a hostile work environment, retaliation, failure to prevent illegal discrimination, and wrongful termination.

The case went to a jury trial. The jury returned a verdict in Family Health's favor on all seven counts. The court then entered judgment in Family Health's favor, and Velazquez filed a motion for a new trial. She argued that the evidence was not sufficient to support the jury's verdict. In a supplemental brief, Velazquez limited her request for a new trial to the causes of action for reasonable accommodation, the interactive process, and failing to prevent discrimination. The court granted Velazquez's motion for a new trial limited to those three causes of action, finding that the weight of the evidence presented to the jury ran counter to the jury's verdict.

Family Health appealed the court's order for a new trial, arguing there was not substantial evidence to support the trial court's reasoning. The appeals court found that there was substantial evidence presented that Velazquez could have been provided with reasonable accommodations to perform her job. It also found that Family Health stopped engaging in the interactive process when Velaquez suffered injuries performing the appointment technician job and affirmed the trial court's order for a new partial trial.

On remand, Family health filed a motion for summary judgment, arguing that Velazquez was precluded from arguing that she could perform her job with a reasonable accommodation because the first jury had found that Family Health was not liable for disparate treatment. The trial court denied the summary judgment motion, finding that whether Velazquez could perform her job with a reasonable accommodation had not been finally determined, so collateral estoppel did not apply.

The jury returned a verdict in Velazquez's favor on all three causes of action. In addition to compensatory damages, the jury also ordered Family Health to pay $5 million in punitive damages for a total verdict of $5,915,645. Family Health filed a motion for a judgment notwithstanding the verdict, arguing that the punitive damages were excessive in violation of Family Health's due process rights. The judge granted the motion in part, ordering the punitive damages award to be reduced to twice the compensatory damages amount or $1,831,290. Velazquez was also awarded $1.1 million in court costs and attorney's fees.

Family Health filed an appeal, arguing that some of the first jury's findings estopped Velazquez from winning at the second trial because of preclusion. It also argued that the court erred by reducing the punitive damages to a 2:1 ratio and said that the punitive damages should instead have been reduced to an amount equal to the compensatory damages award. Velazquez cross-appealed, asking the appeals court to reinstate the punitive damages award of $5 million.

Issues: 1)Was the court required to grant the summary judgment motion by issue preclusion? 2)Was the reduction of punitive damages to a 2:1 ratio proper?

Family Health argued that the first jury's special verdict finding that Family Health did not engage in disparate treatment based on Velazquez's disability precluded her from pursuing trial on the reasonable accommodations, interactive process, and failure to prevent discrimination causes of action. Velazquez pointed out that she did not seek a retrial on the disparate treatment claim and was not precluded from a retrial on the three causes of action. Family Health also argued that the court should have reduced the punitive damages award to an amount equal to Velazquez's compensatory damages instead of a 2:1 ratio. Velazquez argued the court should not have reduced the punitive damages at all and should have awarded $5 million in punitive damages.

Rules: 1) Issues that have been decided in previous proceedings are precluded from relitigation. 2) The due process clause of the Fourteenth Amendment prohibits awards of punitive damages that are grossly excessive.

Family Health argued that since the first jury had found that Family Health had not engaged in disparate treatment of Velazquez based on her disability, she was precluded from arguing that the company failed to provide reasonable accommodations, engage in the interactive process, or prevent unlawful discrimination. It also argued that any award of punitive damages exceeding Velazquez's compensatory damages was grossly excessive in violation of the company's due process rights. Velazquez argued that just because different causes of action might share a single element did not mean that she was precluded from prevailing on her partial trial for the three causes of action she pursued. She also argued that the jury's original punitive damages award of $5 million was not grossly excessive or arbitrary and that the court should not have reduced that award at all.

Analysis

Workers with disabilities are protected under both the ADA and FEHA against disability discrimination at work.[2] Employees who have disabilities must ask for accommodations for their disabilities if they need them. Employers must then provide reasonable accommodations as long as they do not pose an undue hardship.[3] In Velazquez's case, the court found that the company could have provided Velazquez with a properly functioning roller mouse to accommodate her injury but failed to do so.

Family Health argued that Velazquez should not have been allowed to retry her three causes of action because of issue preclusion. It argued that the first jury's special verdict findings were enough to show that the issue had already been argued and decided and could not be relitigated. However, the appeals court found that the argument lacked merit because Velazquez had not had the opportunity to appeal the jury's special verdict findings before they were made, and her rights to appeal meant that the issue had not been finally decided. Instead, the case was remanded for a new trial on the three causes of action requested by Velazquez. Since she still could have appealed, the court found that the trial court's denial of the collateral estoppel argument was proper.

The court then reviewed the reduction of the punitive damages award. The appeals court found that the trial court accurately assessed that many of Family Health's actions were negligent instead of evidence of malice. The court found that the reduction of the punitive damages award to a 2:1 ratio was proper and did not find that it was excessive as claimed by Family Health.

Conclusion

The appeals court affirmed the decisions by the trial court and upheld the verdict. It also affirmed the court's decision to reduce the punitive damages award to a 2:1 ratio.

Talk to an Experienced Los Angeles Employment Discrimination Attorney

If you have suffered discrimination at work based on your protected characteristics, you may be entitled to pursue damages through a discrimination lawsuit. Contact an employment discrimination lawyer at Steven M. Sweat A.P.C. by calling 866.966.5240 to request a free consultation.

Sources

[1] Contreras-Velazquez v. Family Health Centers of San Diego, Inc.

[2] Disability Discrimination

[3] Reasonable Accommodation Employment Disability Claim Limited by California Court

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