Employer to Pay Punitive Damages for Firing Saleswoman with Cancer

May 6, 2021
woman with cancer

A California appeals court affirmed the award of $500,000 in punitive damages to the children of an employee who was fired after being diagnosed with cancer.

The employee had sued her former employer for firing her in violation of public policy, but she died during the first trial. The trial court then substituted her three children as plaintiffs in the lawsuit and, in a second trial, found that the employer fired the employee due to her medical condition and awarded her $15,000 in economic damages—to compensate her for money she had lost to the employer's conduct—and $500,000 in punitive damages, which are meant to punish the employer for egregious conduct.

The employer appealed, arguing that the punitive damage award was excessive.

The employee worked as a sales representative for the employer. In October 2012, she learned she had cancer and took a three-month medical leave for surgery. She returned to work full time in January 2013. Beginning in February 2013, she underwent chemotherapy once every three weeks. By August 2013, she had completed chemotherapy but still had follow-up medical appointments about twice a month. In November 2013, the company fired her for performance-related reasons, but the employee believed she was terminated because she had cancer.

When the employee was fired, her personnel file did not include any written performance warnings or disciplinary actions. In 2011, 2012 and 2013, she was the highest-producing salesperson in the Los Angeles office. When she was fired, she had higher sales numbers than the other two sales representatives in the same office.

E-mails between the employee and her supervisor showed that before she took her medical leave, he praised her work and was agreeable when she asked for time off.

After the employee returned from medical leave, her supervisor made negative comments to her and the other employees about her taking time for medical appointments. He would roll his eyes and breathe heavily as if frustrated. The supervisor began to complain about the employee's behavior, particularly that she took a morning coffee break, which had not caused a problem before her medical leave. He began treating her differently than the other two sales representatives. For example, he kept asking her for more detail on her call logs.

The employee felt significant stress because of the supervisor's behavior and sought assistance from the company's HR department. The HR manager, however, told her that she should not "bump heads" with her supervisor.

The actual paperwork produced by the employer for the termination stated that the employee was fired for "insufficient job performance." The supervisor, however, gave varying reasons for the termination throughout the trial and failed to show any documentation that the employee's job performance had declined. He also denied knowing that the employee had cancer, but other evidence introduced at trial contradicted this assertion.

Damage Award Is Not Excessive

The appeals court first noted that the process clause of the Fourteenth Amendment to the U.S. Constitution prevents state courts from awarding punitive damages that are grossly excessive or arbitrary.

Courts reviewing punitive damages should look at the degree of reprehensibility of the defendant's misconduct as well as any disparity between the actual harm suffered by the plaintiff and the punitive damages award, the appellate court said.

The employer claimed that the damages were excessive because its conduct was not particularly reprehensible and because the punitive damages were 33.3 times the amount of the economic damages award.

The court, however, noted that, under California law, the employee's death meant that certain types of damages—such as damages for emotional distress—were not available in the lawsuit.

If such damages had been awarded, the discrepancy between the two types of damages awarded would not have been so large, the court said.

And, the appeals court continued, the most important factor in reviewing a punitive damages award is the degree of reprehensibility of a defendant's conduct. The trial court found the employer's conduct to be "despicable and reprehensible," the appeals court said, noting that it found a "medium high degree" of reprehensibility.

Falsely telling a hardworking, competent employee that she is being fired for poor performance would affect the employee's emotional well-being, the appeals court noted. The conduct is particularly callous when the person is suffering from cancer.

In addition, the employee's degree of financial vulnerability when she was terminated supported a high assessment of reprehensibility, the court said.

And the supervisor's changing stories as to why the employee was fired and failure to produce records supporting his story supported a finding that the employer's conduct was reprehensible, the court concluded.  

The court upheld the lower court's damages award.

Rubio v. CIA Wheel Group, Calif. Ct. App., No. B300021 (April 15, 2021).

Professional Pointer: While most federal employment laws—such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act—put a cap on the amount of punitive damages that can be awarded, California employment laws do not have such caps. The amount can generally be limited only by due process considerations.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md. 



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