iIn February 2023, Judge Kenneth M. Hoyt, a federal district judge in the Southern District of Texas, ordered FedEx Corporate Services, Inc. to pay a historic $366 million in damages, with 4.69% postjudgment interest, for violating Jennifer Harris’s rights under Section 1981 and Title VII of the 1964 Civil Rights Act. This final judgment confirmed the October 25, 2022, jury verdict in favor of Ms. Harris; however, FedEx has filed a notice of appeal to the Fifth Circuit. Ms. Harris sued FedEx for alleged violations of the Civil Rights Act of 1866, 42 U.S.C. § 1981, and Title VII, 42 U.S.C. 2000e, on claims that she was terminated from her employment based on her race and in retaliation for reporting alleged acts of race discrimination. This case, Harris v. FedEx Corp., 4:21-cv-01651, serves as a reminder that workers who suspect that their employers are violating their civil rights should seek legal counsel and illustrates the potential upside of anchoring race discrimination and retaliation claims in Section 1981 because of the availability of uncapped damages.
Facts of the Case
Ms. Harris, a Black woman, began working at FedEx in 2007 in an entry-level sales position and was a rising star at the company. Over the next decade, Ms. Harris worked her way through the ranks, achieving six promotions before becoming District Sales Manager for Field Sales because of her excellent performance.
However, in 2019, Ms. Harris began to have issues with her supervisor, Managing Director Michelle Lamb. On March 8, 2019, Ms. Lamb asked Ms. Harris to take a demotion to a role that Ms. Harris had previously excelled in, which led Ms. Harris to file an internal complaint alleging race discrimination. Then, on June 26, Ms. Lamb issued Ms. Harris a “Letter of Counseling” for unacceptable performance, which Ms. Harris alleged lacked a documented discussion as required by FedEx’s policies. Ms. Harris claimed that the alleged performance issues arose because Ms. Lamb sabotaged her commission structures by changing Ms. Harris’s goals or moving her accounts around to negatively affect her sales. Again, Ms. Harris filed an internal complaint alleging race discrimination.
When Ms. Lamb did not assign a customer in Ms. Harris’s district to Ms. Harris, Ms. Harris filed a third complaint on August 23. Shortly thereafter, Ms. Lamb gave Ms. Harris another written warning. In January 2020, FedEx terminated Ms. Harris. At some point before she was terminated, Ms. Harris filed a formal complaint with the Equal Employment Opportunity Commission (EEOC).
During conversations and meetings about Ms. Lamb’s purported concerns with her performance, Ms. Harris learned that her revenue performance was greater than at least one of her white peers, a fact that helped her later defeat summary judgment on her termination claim. As Judge Hoyt explained in denying summary judgment for FedEx, the fact that “the plaintiff's termination was based solely on her failure to meet the defendant's revenue goal, when others not of her race but in similar positions were not terminated when they did not meet their revenue goals, raises the inference that race could have been factor in the plaintiff's termination.” Harris v. FedEx Corp., No. 4:21-CV-01651, 2022 WL 4003876, at *3 (S.D. Tex. Aug. 31, 2022).
Case History and Legal Claims in the Employment Discrimination and Retaliation Case
Ironically, FedEx could have avoided such a large judgment if it had agreed to settle Ms. Harris’s claims before litigation. As is typical in employment cases, Ms. Harris had first offered to settle with FedEx privately and out of court. In fact, Ms. Harris had offered to settle her claims for $1.5 million, but according to Ms. Harris’s attorney, FedEx refused to provide a counteroffer or to engage in mediation. As a result, Ms. Harris filed a complaint in the Southern District of Texas in May 2021.
Ms. Harris brought two claims, one under Section 1981, which prohibits racial discrimination in contracts, including employment, and retaliation, see 42 U.S.C. § 1981, and one under Title VII, which prohibits an employer from discriminating against “any individual with respect to [that individual’s] compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin” or retaliating against an employee for opposing an unlawful employment practice under Title VII. See 42 U.S.C. § 2000e et seq. Specifically, Ms. Harris alleged that FedEx terminated her because of her race and retaliated against her because she reported and opposed race discrimination.
Ms. Harris’s initial complaint alleged only violations of Section 1981; however, Ms. Harris later amended her complaint to include Title VII claims. FedEx moved for summary judgment, which Judge Hoyt denied in a decision signed on August 31, 2022.
Ms. Harris’s case proceeded to a seven-day trial in October. On October 25, 2022, the jury rendered a significant verdict for Ms. Harris. While the jury found that Ms. Harris had not proved by a preponderance of the evidence that FedEx would not have terminated her but for her race, it found that FedEx retaliated against her because of her racial discrimination claim and that FedEx had failed to act in good faith regarding Ms. Harris’s discrimination and retaliation claims after she reported discrimination. The jury awarded Ms. Harris $120,000 for past compensatory damages, $1,040,000 for future compensatory damages, and $365 million for punitive damages.
After the jury verdict, FedEx moved in the alternative for judgment as a matter of law, to alter or amend verdict, or for a new trial. Judge Hoyt denied FedEx’s motions and entered a final judgment on February 2. FedEx has maintained that it does not expect to pay the full $366 million verdict, citing the Supreme Court’s decision in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), which limited punitive damages under the Due Process Clause. FedEx has appealed to the Fifth Circuit.
Takeaways for Employees Facing Discrimination or Retaliation in the Workplace
The case offers several reminders and lessons for workers who believe they have been discriminated or retaliated against at their workplace.
First, employees and former employees who suspect that they were victims of workplace discrimination should contact an employment lawyer. Every worker deserves, and is entitled to, a workplace free of discrimination and retaliation. In this case, because Ms. Harris believed she was subject to unlawful, discriminatory treatment, she retained Brian P. Sanford, who was able to win a significant jury verdict for his client. Unfortunately, because of the tragic prevalence of anti-Black racism in our society, there is evidence that a significant amount of workplace-based racial discrimination goes underreported and unchallenged—one Gallup poll indicates that 25% of Black workers nationwide report experiencing discrimination at work. Moreover, employees who speak out about disparate treatment risk retaliation—an EEOC report stated that 75% of employees who spoke out against workplace mistreatment faced some form of retaliation. However, workers subject to discrimination and retaliation can consult with an employment attorney to weigh the options to vindicate their civil rights.
Second, this case highlights the fact that retaliation claims are often easier to prove and easier for juries to understand than underlying discrimination claims.
Third, employees who believe that they are either being discriminated against or retaliated against should make lawful efforts to secure facts relevant to their claims. In this case, during meetings with her supervisor Ms. Lamb, Ms. Harris noted that her revenue performance was greater than at least one of her white peers who was not terminated. This critical piece of evidence helped her defeat FedEx’s motion for summary judgment and likely aided her at trial, too.
Fourth, and at a more technical level, the case illustrates the benefits of anchoring a race discrimination or retaliation claim in Section 1981, as well as in Title VII. Section 1981 and Title VII often prohibit similar conduct, but the statutes provide divergent remedies. Unfortunately, Title VII places damages caps on the amount that employees can receive in compensatory and punitive damages, which range from $50,000 to $300,000. However, because Ms. Harris asserted a Section 1981 claim, she was able to claim uncapped damages, including punitive damages. In this case, Ms. Harris was able to win over $1 million in uncapped compensatory damages and, even more significantly, $365 million in punitive damages. Furthermore, while Title VII’s administrative processes can be useful, Section 1981 offers significant upside. In addition to uncapped damages, Section 1981 also offers plaintiffs a longer statute of limitations, as well as broader coverage—Section 1981 applies to independent contractors and workplaces with fewer than 15 employees, unlike Title VII.
Finally, it takes enormous bravery for a plaintiff like Ms. Harris to come forward and litigate her claims in a public forum, where plaintiffs are subject to disparagement by their former employers. As Ms. Harris’s attorney said, civil rights laws “don't get enforced unless someone is brave enough to bring it and can be brave enough to withstand all the obstacles and the onslaught and what FedEx does to you."
