Employer Must Pay $3.5 Million In Punitive Damages For Failing To Take Sufficient Action To Investigate And Stop Harassment

In a recent opinion from the 7th Circuit Court of Appeals, which covers Illinois, Indiana and Wisconsin federal courts, a $3.5 million jury award was affirmed for an employee who alleged his employer did not do enough to stop anonymous harassment and threats he received at work.

The case, Otto v. Chrysler Group, LLC, (August 23, 2012), involved claims under federal anti-discrimination laws. According to the appellate court’s decision, Chrysler’s head of human resources at the plant where the plaintiff worked learned of the anonymous harassment, including death threats, directed at the plaintiff and met with two groups of employees to remind them that harassment was unacceptable. Additionally, a procedure was implemented to document the harassment, efforts were made to discover who was at the plant during the periods when the incidents likely occurred, and a handwriting analyst was retained and used. Unfortunately, the harasser or harassers were never caught. At trial, a jury found that these efforts by Chrysler were insufficient given the severity of the harassment. In determining the damages due to the plaintiff, the jury found that the company did not act “promptly and adequately” to stop the harassment and that, in fact, the company acted “with reckless indifference” to the employee’s rights. The appellate court agreed with the jury and explained that Chrysler should have installed surveillance cameras and interviewed the employees listed by the plaintiff as potential witnesses.

The lesson for employers of any size is that when harassment or discrimination allegations are made by an employee, they must be investigated promptly and thoroughly and if the conduct continues, further action must be taken.

Contact employment attorneys Margaret A. Gisch or Laura A. Balson to discuss how these issues apply to your company.