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Eleventh Circuit Sustains Award To Employer In Whistleblower Case

In a warning to plaintiffs’ counsel who seek emotional distress damages for alleged whistleblower retaliation under Florida law, the Eleventh Circuit in Smith v. Psychiatric Solutions, Inc., 750 F.3d 1253 (11th Cir. May 6, 2014) has created a Hobson’s choice: forcing plaintiff-employees either to forego potential emotional distress damages available under state law or risk paying prevailing party attorneys’ fees and costs to the defendant.

Eleventh Circuit Court of Appeals

Plaintiff Leslie Smith sued her former employer and its owners for retaliation under Section 806 of SOX and the Florida Whistle-Blower Act (“FWA”).   While SOX contains an employee prevailing party provision and no specific emotional distress remedy, the WFA authorizes a court to award fees and costs to the prevailing party and provides for emotional distress damages.  Because Smith could not establish a prima facie case under either statute, the district court granted her former employer summary judgment; and, after summary judgment was upheld on appeal, the district court awarded prevailing party attorneys’ fees to Smith’s former employer under the FWA.

The question on appeal was whether a prevailing party employer may recover attorneys’ fees when SOX does not authorize an award of fees to a prevailing party defendant.  In affirming the attorneys’ fees award, the Eleventh Circuit rejected the employee’s arguments that: (i) SOX and the FWA were in conflict; and, (ii) therefore, the latter was preempted.  In so doing, the Eleventh Circuit concluded that there was no conflict because SOX “neither authorizes a defendant to recover attorneys’ fees nor prevents a defendant from recovering fees that are elsewhere authorized.”  Therefore, SOX’s attorney fee provision did not preempt the FWA provision.

Although the Eleventh Circuit noted that an employee’s attorneys’ fee risk can be eliminated by foregoing an FWA claim, the Court did not comment on the fact that there was a consequence for the elimination of the risk.  Some courts have not allowed for the recovery of emotional distress damages under SOX because emotional distress is not included within the list of recoverable compensatory damages under SOX.  Thus, in Florida, the employee’s leverage of seeking uncapped emotional distress damages under the FWA is something employees will need to forego if they are risk adverse to paying attorneys’ fees if their case is deemed meritless.

© 2022 Proskauer Rose LLP. National Law Review, Volume IV, Number 191
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About this Author

Allan H Weitzman, Proskauer Rose Law Firm, Labor Employment Attorney
Partner

Allan H. Weitzman, named by Best Lawyers as “Lawyer of the Year 2013” in Employment Law – Management in the Miami area, is a Partner in the Labor &  Employment Law Department and head of the labor and employment team in the Boca Raton office. He also is co-head of the Employment Law Counseling & Training, Non-Compete & Trade Secrets and Accessibility & Accommodations Groups, as well as a member of the International Labor & Employment Group.

561-995-4760
Steven J Pearlman, Labor Employment Law Firm, Proskauer Law firm
Partner

Steven Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm's Whistleblowing & Retaliation Group, resident in the Chicago office. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination and harassment, wage-and-hour laws and breaches of restrictive covenants (e.g., non-competition agreements). He has successfully tried cases to verdict before judges and juries in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S....

312-962-3545
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