Here’s a particularly painful example of why companies need to do everything they can to avoid discrimination lawsuits.
United Parcel Service was sued by Kim Muniz, who said the delivery giant had discriminated against her when she was demoted from her position as division manager. A jury found for Muniz and awarded her about $27,000 — about $10k in lost earnings, $7,300 in medical expenses and just under $10k for her “economic loss.”
That’s not the bad part. Muniz sued for attorneys’ fees — and a federal court awarded her almost $700,000. In other words, Muniz was awarded legal fees that were more than 25 times the damages approved by the jury.
It could have been even worse. Muniz originally asked for $1.3 million in fees, along with a “lodestar” punitive multiplier of 1.5 — bringing the total claim to more than $1.9 million.
Demoted two levels
As you might imagine, there are a lot of twists and turns in the Muniz case. Muniz was demoted two levels — from division manager to supervisor — after she allegedly didn’t fulfill the terms of a performance improvement plan. She basically threw the book at UPS, claiming discrimination based on age and gender, and also alleged retaliation and negligent supervision and training.
But most of those claims were either dismissed in summary judgment or voluntarily withdrawn by Muniz.
So only one claim went to trial: the gender discrimination charge, where the company got off comparatively easy with the $27,000 award.
Things got stickier from there.
Court trims bill, but …
The trial court wasn’t about to fork over the $1.9 million Muniz demanded. The judge ruled that Muniz attorney’s hourly charges were too high, and reduced them. What’s more, the court said the attorneys hadn’t proven they’d worked the number of hours they billed for, and reduced the total hours by 20%.
UPS had argued that many of the hours billed were concerned with charges that were later dismissed or dropped — and pointed out that Muniz had achieved only limited success in her legal action against the company. Because of these factors, the court reduced the total by another 10%.
But that still left the bill at $696,162.78. And an appeals court upheld the lower court’s ruling.
The case is Muniz v. United Parcel Service.
Insult to injury
This case is a prime example of how a company can navigate an employee’s bias lawsuit without suffering too much damage — and then get nailed for legal expenses that far outstrip the cost of losing the case.
It’s yet another strong argument for making sure everyone in management is trained in — and acutely aware of the potential costs of — the intricacies of workplace discrimination.