SUPREME COURT OF ALABAMA REVERSES $1.2M VERDICT IN CASE ALLEGING RETALIATORY DISCHARGE PURSUANT TO ALABAMA CODE §25-5-11.1

Guyoungtech USA, Inc. v. Dees, 2014 Ala. Lexis 83 (Released June 6, 2014)

In this case, which was tried in Conecuh County, Alabama, the 30 year old female Plaintiff alleged that she was terminated by her employer in retaliation for having made a claim for worker’s compensation benefits, in violation of Alabama Code §25-5-11.1. The employer, an auto parts manufacturer that supplied parts to Hyundai, defended the termination, claiming that the Plaintiff was laid off as part of a general reduction in work force, as Hyundai had reduced its orders by 50%. The employer denied that the Plaintiff’s separation from employment was in any way related to her claim for worker’s compensation benefits.

The evidence at trial was undisputed in that the Plaintiff suffered an on the job injury when she fell and injured her wrist. After undergoing treatment for some period of time, her treating physician released her to return to work with restrictions, which effectively limited her to use of one arm. The day after she returned to work she was notified that she was being laid off. The lay-off occurred on April 6, 2011, and the employer introduced evidence at trial showing that between November, 2010 and May 2011 it had reduced its work force through lay-offs and attrition from 300 employees to 212.

At the conclusion of the trial the jury returned a verdict in favor of the employee, awarding $1,000,000.00 in compensatory damages and $2,500,000.00 in punitive damages. The employer filed post-trial motions requesting a new trial and other relief, and those were denied, but the trial court did remit the awards to $300,000.00 in compensatory damages and $900,000.00 in punitive damages.

On appeal, the Supreme Court reversed the jury verdict and remanded the case for a new trial. Because the Supreme Court concluded that there was conflicting, but sufficient, evidence from which the jury could have concluded that the termination was in fact in violation of Alabama Code §25-5-11.1, it could not reverse the finding of liability. The reversal of the jury verdict was based on error which the court found with regard to both a lack of evidence supporting any award of compensatory damages, as well as error in admitting into evidence a mortality table without any expert evidence of permanent injury to the Plaintiff. Without there being sufficient evidence to support an award of compensatory damages, there could not have been an award of punitive damages and, therefore, a new trial was ordered.

With regard to the award of compensatory damages, the Plaintiff claimed damages as the result of lost future earnings as well as mental anguish due to her alleged termination. However, the Plaintiff admitted that she had not made any effort to seek new employment since her separation. Moreover, the employee was informed of her separation by letter from the employer, which stated that she was being laid off as part of a reduction in work force and, therefore, there was no “stigma” of an alleged termination that would have impacted her ability to seek other employment. The court held that without evidence that she had attempted to seek new employment, and further without any evidence that the alleged termination had caused her an inability to seek new employment, there was insufficient evidence upon which the jury could have awarded compensatory damages for her alleged loss of future earnings.

Likewise, with regard to her claim that she had suffered mental anguish, the evidence presented by the Plaintiff was all subjective. The Plaintiff testified about the worry she suffered with regard to providing for her family as well as the worry she had with regard to how it might impact her marriage, or how it might impact her ability to find another job. However, the Plaintiff did not produce any expert testimony showing that she had suffered any permanent mental injury of any nature.

Over objection by the employer the court introduced into evidence a mortality table. The Supreme Court found that admission of the mortality table, in the absence of any expert testimony proving a permanent injury (both with regard to lost wages and mental anguish), was in error, as it would only confuse the jury and prejudice the Defendant. Therefore, the court also found that any award of compensatory damages which was attributable to mental anguish was without any evidentiary support.

Finally, with regard to punitive damages, the court noted that before punitive damages can be awarded, the jury must first find that the Plaintiff is entitled to compensatory damages. Based on the error noted with regard to the award of compensatory damages, there could be no award of punitive damages and, therefore, a new trial was ordered with respect to punitive damages as well.

Finally, also of significance is the fact that the trial court allowed the Plaintiff to put on evidence of practices by the employer relating to how it reported injuries of other employees. The Plaintiff alleged that the employer had intentionally not reported other employee’s injuries so as to reduce its worker’s compensation costs. However, the evidence was undisputed that the employer had properly reported the Plaintiff’s on the job injury and that she had received the worker’s compensation benefits she was entitled to.

The Supreme Court held that introduction of the evidence relating to the employer’s business practices, which had absolutely no impact on the Plaintiff, was improper for the purpose of awarding punitive damages. In other words, punitive damages are intended to punish the Defendant for conduct that has damaged the Plaintiff. Since this evidence did not relate to any conduct causing injury or damage to the Plaintiff, it was impermissible and was further grounds for a new trial.

In conclusion, this opinion offers very good guidance as to what evidence is required in order to support an award of both compensatory and punitive damages in a retaliatory discharge action. It also offers very good guidance as to what evidence is not permissible when it comes to a claim of both future lost earnings and mental anguish.

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