Employee’s emotional distress damages slashed by 1st Circuit

A hotel executive who claimed that he was the victim of a retaliatory termination, but provided no evidence that he suffered any physical infirmity as a result of his firing, could not recover more than $200,000 in emotional distress damages, the 1st U.S. Circuit Court of Appeals has decided.

A jury awarded the executive $1 million for his emotional distress; the trial judge cut that amount in half.

On appeal, the 1st Circuit found that a further remittitur was warranted.

“[T]he evidence of emotional distress is so thin that the remitted award of $500,000 seems vastly out of proportion,” Judge Bruce M. Selya wrote for the unanimous court. “[T]he plaintiff did not introduce any evidence that he received medical treatment, counseling, or other similar attention for his despondency.”

The 39-page decision is Trainor v. HEI Hospitality, LLC, et al..

The plaintiff was represented on appeal by Gary M. Feldman of Davis, Malm & D’Agostine in Boston. He declined to comment on the case. Lynn A. Kappelman of Seyfarth Shaw in Boston, who argued on behalf of the employer, could not be reached before deadline.

Million-dollar award

Boston employment attorney John F. Tocci said the 1st Circuit was justified in further mitigating the emotional distress damages.

“Certainly that million-dollar award was well beyond what we consider standard for someone who received no professional counseling of any kind,” he said. “I would have liked to have seen the testimony by the plaintiff and his wife, because for the jury to have come back with that, it must have been very compelling.”

Tocci added that the remittitur was not surprising given that the 1st Circuit is not a particularly “employee-friendly” court.

Dahlia C. Rudavsky, who represents employees as part of her practice at Messing, Rudavsky & Weliky in Boston, concurred, noting that the 1st Circuit has been known to cut emotional distress damages.

Rudavsky said the decision reiterates “well-established principles that plaintiffs’ lawyers have to recite over and over” with regard to attorneys’ fees, front pay and multiple damages.

“You don’t have to win on every claim for the fees to be included,” Rudavsky said of the panel’s decision to uphold the fee award despite the fact that the plaintiff failed in his age discrimination bid.

Rudavsky said she was also pleased that the court refused to bar front pay simply because multiple damages had been applied.

“This could be the clearest statement we have on that,” she said.

Jackson Lewis employment attorney Robert H. Morsilli, who practices in Boston and Providence, R.I., said that the ruling is equally instructive in its message to employers facing retaliation claims.

The plaintiff in the case was fired within hours of filing his bias complaint. The defendant’s quick response “solidifies the fact that employers need to very careful with retaliation claims,” Morsilli said.

“A lot of times I think there is a natural inclination to act hastily, but sometimes, from the employer’s perspective, the more thought-out approach is likely to be more successful,” he said.

Hiring and firing

Plaintiff-appellee Lawrence Trainor, then 59, joined defendant HEI Hospitality in 2006 as senior vice president for acquisitions and transitions. By fall 2008, however, there were rumors about a possible restructuring of the executive team.

In November, the defendant’s chief operating officer, Ted Darnall, offered the plaintiff a choice: Relocate to Norwalk or assume the general manager’s position at a hotel located in Cambridge. On Dec. 20, Chief Executive Officer Gary Mendell furnished a written offer that included a stipulation that the offer be accepted in writing by Jan. 2, 2009.

The plaintiff filed a charge of age discrimination with the Massachusetts Commission Against Discrimination on Jan. 2. Three hours later, Mendell fired the plaintiff via email.

After exhausting his administrative remedies, the plaintiff filed suit in U.S. District Court alleging that the defendant had both discriminated and retaliated against him in violation of Massachusetts law and the federal Age Discrimination in Employment Act.

A jury returned a special verdict in which it found the defendant liable for retaliation — but not for age discrimination — and awarded the plaintiff $500,000 in back pay, $750,000 in front pay and $1 million for emotional distress.

Since the jury determined that the defendant had knowingly violated state law, Judge Denise J. Casper entered an order doubling the plaintiff’s damages, but later decided to remit to $500,000 the emotional distress award.

‘Grossly excessive’ damages

Despite the fact that Casper cut the award of emotional distress damages in half, the defendant maintained that even the reduced amount was grossly excessive.

The 1st Circuit found that the plaintiff did suffer emotionally by reason of his firing.

“Both he and his wife vouchsafed that the abrupt termination of his relationship with HEI changed him as a person; he became withdrawn and lost interest in activities that formerly gave him pleasure,” Selya said.

“His wife added that, up until his firing, he had always enjoyed his work in the hotel industry and found his job rewarding,” Selya wrote. “Moreover, the damming of his income stream forced him to deplete his retirement savings, and he became greatly concerned about his family’s financial security.”

Selya said the court did not mean to “minimize the toll that the loss of a job can take, even apart from serious health concerns.”

The 1st Circuit noted, however, the lack of medical attention required by the plaintiff.

“While evidence from a physician or other mental health professional is not a sine qua non to an award of damages for emotional distress, the absence of such evidence is relevant in assessing the amount of such an award. Here, moreover, the plaintiff proffered no evidence that he suffered any physical infirmity as a result of his ouster,” Selya said, pointing out that the only relevant evidence was anecdotal and, to some extent, self-serving.

Selya said the 1st Circuit adheres to the “maximum recovery rule,” which permits the court to direct a remittitur geared to the maximum recovery for which there is evidentiary support.

“After a careful review of the record and a compendium of analogous cases, we conclude that the upper limit of the universe of reasonable outcomes — the plaintiff’s maximum recovery — is $200,000,” Selya said.