Court Watch
March 19, 2000


A Court of Appeals recently issued an opinion emphasizing more than ever the need for employers to provide their managers and supervisors training in the area of employment discrimination. In EEOC v. WalMart Stores, Inc., the Tenth Circuit held that an employer's failure to provide its supervisors training on the Americans With Disabilities Act ("ADA") meant that the employer could not establish a defense against a claim for punitive damages under that statute.

In Kolstad v. American Dental Association, a case on which we previously reported, the Supreme Court held that an employer can be liable for punitive damages under civil rights statutes when it engages in discriminatory conduct "with malice or reckless indifference to the federally protected rights of an aggrieved individual." Nonetheless, the Kolstad court held that if the employer can demonstrate that the actions of its managerial employees were contrary to the employer's good faith efforts to comply with federal anti-discrimination laws, the employer can avoid liability for punitive damages. In WalMart, the Tenth Circuit elaborated on this holding.

The facts in WalMart were as follows: WalMart hired Eduardo Amaro with the knowledge that he was hearing impaired and required an interpreter for certain situations, including meetings and training.  During his employment, Amaro left a mandatory training session because the videotape used in the session was not closed-captioned and there was no interpreter present. Amaro's  supervisor ordered him to return to the session, suggesting that a co-worker "finger spell" for him.  Amaro rejected the suggestion because the co-worker was not a certified interpreter. After the supervisor reported the matter to the store manager the next day, Amaro was transferred from the receiving department to maintenance to work as a janitor. Amaro refused the transfer and claimed to management that he was assigned to a "dead-end job because he refused to attend the video session."  Thereafter, WalMart terminated Amaro's employment.

The Tenth Circuit noted that WalMart had adopted a written policy against discrimination. Yet the Court held that this was not enough to escape liability  for punitive damages. The supervisor who ordered Amaro to return to the session testified that she was not made aware of any law requiring reasonable accommodation and that she had received no training about disability discrimination. Similarly, the personnel manager responsible for training at the store where Amaro worked testified she received no training in employment discrimination nor in the requirements of the ADA. In fact, she testified that she never discussed the ADA with any employees under her supervision.

According to the Court, this evidence demonstrated "a broad failure on WalMart's part to educate its employees, especially its supervisors, about the requirements of the ADA and to prevent discrimination in the workplace." Accordingly, the Court held that WalMart could not avail itself of the Kolstad affirmative defense against liability for punitive damages.

The decision in WalMart is clear. Merely having an anti-discrimination policy in the workplace will not be enough to avoid an award of punitive damages. Similarly, with respect to the ADA, an employer who merely has a policy that states that it will consider and make reasonable accommodations to allow disabled employees to perform the essential functions of their jobs will not be able to escape liability for punitive damages in the event that an employment action is challenged under the ADA.

To escape such liability, these policies must be communicated clearly to managers and supervisors. Further, employers must provide training to all levels of management, and  in  particular,  front line supervisors. Too often those with day-to-day decision making responsibility and whose employment actions most directly trigger a lawsuit or a charge of discrimination are left out of the training process. This is not only unfortunate, but as the WalMart decision illustrates, can be costly.

When considering whether an employer has taken affirmative steps to comply with federal anti- discrimination laws, the court will go beyond the employer's policy and determine what, if any, training, instruction, guidance, etc., the employer has provided its managers and  supervisors. If the employer has provided its managers and supervisors training and guidance on these federal anti-discrimination laws, the employer will likely be able to avail itself of the affirmative defense against a claim of punitive damages by an individual who filed a lawsuit under these laws. If, however, there is a stated policy against discrimination but no training or guidance to back up that policy, then the employer can expect a court to reject such a defense and thus the possibility of a large punitive damages award can exist. In short, a few dollars on the front end in training can mean all the difference in what can potentially be a high dollar litigation case.