Ruling in harassment case sets precedent

Saturday, November 8, 2008 | 2:34 p.m. CST; updated 5:07 p.m. CST, Saturday, November 8, 2008

KANSAS CITY — A state appeals court awarded $3.75 million in punitive damages in a sexual harassment case that set a precedent under the Missouri Human Rights Act.

The ruling from the Missouri Court of Appeals in Kansas City was unusual because the court substituted its own punitive reward amount for one determined by a trial judge.

In 2006, a Jackson County jury ordered auto parts supplier TNT Logistics of North America Inc. to pay assembly line scanner Kendra Lynn $6.75 million in punitive damages for sexual harassment. A judge ruled that was excessive and reduced the amount to $450,000.

TNT argued on appeal that even $450,000 was too much and that Lynn deserved no more than $250,000.

The appeals court ruling on Friday said $6.75 million was excessive but that $450,000 — let alone $250,000 — was not sufficient.

"This court feels that $450,000 was too low to attain the purposes of punitive damages, as is the $250,000 proposed by TNT in its cross-appeal, and, accordingly, rejects both those amounts," a three-judge panel of the court ruled.

The court ordered TNT to pay Lynn $3.75 million, noting that the company "did nothing to correct the actions of its supervisor that created a workplace that was hostile and rife with sexual harassment."

Lynn has 15 days to accept the $3.75 million award. Otherwise, a new trial will be held to determine punitive damages.

Kirk D. Holman, one of Lynn's attorneys, said he was "very excited" about the court's decision and suggested that Lynn would accept the $3.75 million.

Lynn alleged in her 2004 lawsuit that her shift supervisor, Michael Gill, had repeatedly made lewd, vulgar and sexually graphic comments to her. She said after she complained she was transferred to a shift that began at 2 a.m. Then, after working at TNT as an assembly line scanner for 16 months and earning positive evaluations, Lynn was fired in January 2004.

Evidence showed that Gill was never interviewed or disciplined and that TNT had backdated records to try to conceal its handling of Lynn's complaints. The company began offering sexual harassment training to employees at its four Kansas City plants only after Lynn was fired.

After the five-day trial, a Jackson County jury in January 2006 awarded Lynn compensatory damages of $50,000 and $6.75 million in punitive damages. It found for TNT on her wrongful termination claim.

Gill was originally named as a defendant, but was dismissed after reaching a confidential out-of-court agreement with Lynn, according to Holman.

After the trial, TNT argued that the punitive award was excessive. Jackson County Circuit Judge Kelly Moorhouse agreed and subsequently reduced the punitive award to $450,000. The appeals court on Friday said Moorhouse should have given Lynn the choice of a new trial.

Lynn's case was thought to be the first filed under the Missouri Human Rights Act that went to a jury. Generally, sex discrimination and harassment cases had been brought under federal anti-discrimination laws in federal court. But in 2003 the Missouri Supreme Court allowed such actions to be tried before a jury in state court.

Federal anti-discrimination laws cap damages against large companies like TNT at $300,000. But the Missouri Human Rights Act didn't cap damages when Lynn sued — although the Missouri Legislature has since limited punitive damages to $500,000 or five times the amount of compensatory damages, whichever is greater.

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