Feelings are Fair Game

July 24, 2018

In 2011, researchers released the results of a study on nurses who acted as whistleblowers or were bystanders in a whistleblowing incident at work. The alarming reports of depression, distress, panic attacks, anxiety and increased reliance on cigarettes and alcohol, underscores that reporting wrongdoing in the workplace can cause serious emotional distress. Nevertheless, those damages can be difficult to quantify and prove at trial. Two recent cases show that some judges and juries are beginning to understand the toll blowing the whistle can take on employees, but challenges remain.

In March, the Supreme Court of Pennsylvania upheld a $3.2 million verdict in favor of a whistleblower plaintiff. Half of that verdict-$1.6 million-was for emotional distress damages. In that case, the plaintiff was the Manager of Financial Systems and Reporting for the state’s turnpike authority, where he had worked for a decade. When he raised questions about the propriety of a particular contract award, the turnpike authority terminated him in what it claimed was a reduction in force. They walked him out of the building with all of his belongings in a cardboard box. At trial, the judge heard testimony from the plaintiff and his wife, who described the devastation and humiliation he felt after losing his job, the sleeplessness and tearfulness it caused, and the anguish and guilt he experienced when he told his father-in-law he “was no longer a provider for his daughter and his grandchildren.” The Supreme Court concluded that it was reasonable to infer that the plaintiff’s emotional distress was commensurate with the economic distress he suffered, and upheld the trial court’s award of $1.6 million for each category. Significantly, the opinion formally held for the first time that non-economic damages-like those for emotional distress and reputational harm-were available under the state’s whistleblower law.

Things did not go as well in a recent, similar case in New York. A former J.P. Morgan Chase private wealth manager sued the company for retaliation under Sarbanes-Oxley for terminating her employment after she raised questions about one of her client’s activities. A jury found for the plaintiff and awarded her $563,000 in back pay and $563,000 in emotional distress damages. The plaintiff testified that she suffered from extreme anxiety and sleeplessness and that she had to take Xanax and sleeping pills. Although the court acknowledged that emotional distress damages are available under the statute, the judge cut them down to a range between $20,000 and $50,000. In doing so, the judge noted that the plaintiff did not offer any medical testimony or documents about her emotional distress, and that a family tragedy seven months after the termination of her employment could have exacerbated or caused the symptoms she described in court. The judge held the jury’s decision to give the same amount of money-$563,000 for the economic and $563,000 for noneconomic damages -was evidence that the jury “acted out of passion” in favor of the plaintiff or had a “prejudice” against J.P. Morgan.

It’s tricky to prove emotional distress damages. As the cases cited above indicate, these damages require a very fact intensive inquiry.

There is no question that whistleblowing can be hard on an individual’s emotional health, but there remain questions around how much a person can recover for it. The initial awards in the Pennsylvania and New York cases show that factfinders understand that blowing the whistle can be especially traumatic and there is a remedy available to address it.

(*Prior results do not guarantee a similar outcome.)