EEOC v. Service Temps Inc., No. 11-10262 (5th Cir. Apr. 26, 2012)

By Paul Mollica

Here’s yet another jury verdict in favor of a worker, in a seldom-seen case of a frustrated job seeker barred from applying for a job on account of deafness. The Fifth Circuit affirms liability under the Americans with Disabilities Act, injunctive relief and the award of damages: $14,400 in back pay, $20,000 in compensatory damages for emotional pain and suffering, and $68,800 in punitive damages.

EEOC v. Service Temps Inc., No. 11-10262 (5th Cir. Apr. 26, 2012): The claimant, named Moncada, sought to apply through an agency to work as a stock clerk for a cosmetics company. As the court describes:

“Deaf from birth, Moncada arranged for a sign language interpreter to meet her at the job site to translate as she applied for the position. Carl Ray, an account manager for Smith, met Moncada the job site and told her she could not apply for the position because she is deaf, that the warehouse environment would be too dangerous for her. Moncadatempted to explain that she had no trouble communicating while working in warehouses in the past, but Ray persisted, advising her that she could not apply.”

The Fifth Circuit affirmed the jury verdict in this case over a host of challenges:

1. The defendant agency Smith claimed that it was not within the “affecting commerce” language of Title VII, because it was supposedly a local operation, but the panel found that Smith forfeited that argument in its pre-trial stipulation: “In the joint pretrial order, the parties agreed that Smith had advertised the stock clerk position to which Moncadapplied on the Texas Workforce Commission’s ‘Work in Texas’ website. That site provides resources for individuals, both Texans and out-of-staters, who seek work in Texas. Smith’s advertising on an open website with the potential, or even intent, to draw residents of other states to Texas in search of employment is enough to clear the ‘very low’ bar that defines economic activity affecting interstate commerce.”

2.  The Fifth Circuit affirmed (over an abuse of discretion standard) the district court’s determination that Smith forfeited a defense against the EEOC of failure-to-conciliate by first failing to allege it in the original answer, then (after being allowed to file an new answer) waiting unreasonably long to amend. The court holds that a failure-to-conciliate defense is a “condition precedent” which must be plead with particularity under Fed. R. Civ. P. 9(c), noting a split with other circuits on this question.

3.  The Fifth Circuit upholds the preclusive sanction against the EEOC for failure to disclose damage calculations under Fed. R. Civ. P. 26(a)(1)(A)(iii), but also holds that Smith was not entitled to a greater sanction.

4.  The court upholds the punitive damage award over objections to the jury instruction, and over a plain-error objection to the weight of evidence. It holds that the individual at Smith who refused to allow Moncada to apply (Ray) was an “manager” of the company for purposes of imputing fault: “Smith’s highest-ranking employee, Joe Roberts, testified that Ray was the account manager when Moncada sought employment. Roberts also testified that account managers have the authority to make hiring decisions and are the immediate supervisors for employees working for Smith’s clients. From Roberts’s testimony, the jury could reasonably have found that Ray had the authority to hire and supervise employees and was therefore acting in a managerial capacity.” Finally, the court rejects a further remittitur of the award (the trial judge reduced a $150,000 award to $68,800 – twice the actual damage).

5. Finally, the court upholds a two-year injunction against further violations, finding that injunctive relief is mandatory under Title VII unless the employer establishes “by clear and convincing evidence that there is no reasonable probability that it will violate the ADA in the future.”