How do you turn a run-of-the-mill termination for poor performance into an $800,000 liability? We find the answer in the Sears Roebuck catalog.
Former Sears employee Gunnar Steward sued for age discrimination after his termination for performance reasons. The facts of the case are relatively unremarkable. In fact, the evidence supporting Steward’s discrimination claim was weak enough that a judge dismissed the case once, before it was reinstated by the Court of Appeals.
Instead of settling the case, Sears decided to take the case to trial and lost. The jury awarded Steward $240,985 ($92,985 in back pay and $148,000 in front pay). Sears then successfully obtained a trial court ruling setting aside the verdict and ordering a new trial. However, on appeal, the Third Circuit Court of Appeals reinstated the verdict. Now, after the dust has settled, Sears must pay not only the $240,000 jury award but also $560,000 in attorney’s fees. Steward’s attorneys were awarded nearly $425,000 for their work in the trial court and an additional $136,000 for the appeal.
This case demonstrates that employment discrimination cases are risky, not only because of the damages a jury might award (consider the recent sexual orientation case in Washington that resulted in a verdict of $4.4 million), but also because a successful employee will almost always collect attorney’s fees, which can be substantial. Employers beware!
