Sixth Circuit Affirms $50K Punitive Damages Award for TN Employer’s Retaliation Against Undocumented Worker
In a case that has yo-yo’d between a federal district court (W.D. Tenn.) and the Sixth Circuit Court of Appeals, the latter affirmed, in relevant part, a decision by the former that had awarded an undocumented injured worker backpay, plus $1,000 in compensatory damages and $50,000 in punitive damages based upon the former employer’s retaliation against the worker for hiring an attorney to pursue a workers’ compensation claim [Torres v. Precision Indus., 2021 U.S. App. LEXIS 11932 (6th Cir. Apr. 22, 2021)]. Acknowledging that the worker had not been authorized to work in the United States at the time of the injury, and that the former employer could not be required to pay lost wages that the alien was not allowed to earn, the Sixth Circuit panel noted that the worker had received such authorization several months after the injury. The Sixth Circuit held that the district court, therefore, appropriately awarded the worker backpay for the period in which he was authorized to work, plus non-economic and punitive damages.
Background
On May 17, 2012, the worker injured his back while working for the employer, reporting the injury the following day to the safety manager. He was briefly treated at a medical clinic and he returned to work without getting a medical release. In August, he saw a specialist in Memphis. He subsequently recorded an August 2012 conversation with the safety manager about the medical bills, including one for an MRI. The safety manager said that the worker had not notified the employer about the situation, that she (i.e., the manager) could not “turn this into workers’ comp,” and further stated, “There won’t be a workers’ comp claim on this.” The safety manager subsequently indicated the claim was closed without verification from the workers’ compensation insurance company.
The worker was born in Mexico and arrived in the United States illegally in 1997. He worked for the defendant employer for approximately one and one-half years before his termination, having purchased a Social Security number on the streets of North Carolina for $120. Before his firing, the worker had received excellent reviews as to his work.
The Profanity-Laced Phone Call
In early September 2012, the worker met with and retained an attorney to pursue his claim. The following day, the employer’s safety manager received a call from the attorney inquiring about the claim. The safety manager went to a supervisor and the two decided to speak to the worker about the call. The worker surreptitiously recorded the encounter. In it, the safety manager reportedly threatened to “knock the hell out of” the employee and the supervisor said:
Now that you got a f—king lawyer involved. Good luck on that son of a bitch … I’m going to show you a lot of g-d-amn loyalty if that’s the way you f—king do things …. When Terry finds out about this s–t, you’re in a world of hurt.”
The worker was formally fired a few minutes later. The termination slip indicated the reason for the termination was “Lack of Work.”
Retaliatory Discharge Action
The worker sued his former employer, alleging the company had fired him for seeking benefits under Tennessee’s Workers’ Compensation Law [Tenn. Code Ann. § 50-6-101 et seq]. The district court held a bench trial, during which the employer argued that it had not retaliated against the worker and that, even if it had, federal immigration law (IRCA) preempted any remedy because the worker had not been authorized to work in the United States. At the end of trial, the district court granted judgment to the employer on the preemption ground without making any factual findings as to the state law claim [see Torres v. Precision Indus., 2018 U.S. Dist. LEXIS 120410 (W.D. Tenn. July 19, 2018)]. Torres appealed.
First Decision by Sixth Circuit
The Sixth Circuit reversed [Torres v. Precision Indus., 938 F.3d 752 (6th Cir. 2019)], the district court’s decision holding that the retaliatory discharge provision of the Tennessee Workers’ Compensation Act was preempted by the Immigration Reform and Control Act of 1986 (“IRCA”) “skipped past the question whether state law had been violated in the first place” [for my September 2019 discussion of the Sixth Circuit’s decision, click here].
District Court’s Decision on Remand
On remand, the federal district court held that the employer had violated state employment law regarding retaliatory discharge [Torres v. Precision Indus., 437 F. Supp. 3d 623 (W.D. Tenn. 2020); for my January 2020 discussion of the District Court’s decision, click here]. Quoting Larson’s Workers’ Compensation Law, the district court brushed aside the employer’s contention that it had terminated the employee because of his status as an illegal immigrant. The district court found that the plaintiff was entitled to $45,708.42 in backpay, and that the award was not preempted by federal law. Plaintiff was also entitled to $1,000 in compensatory damages and $50,000 in punitive damages, for a total award of $96,708.42. Again, the employer appealed to the 6th Circuit.
Second Decision by Sixth Circuit
The Sixth Circuit affirmed in relevant part. The Court reasoned that although IRCA preempted backpay awards for lost wages that an alien was not entitled to receive, it did not preempt backpay for wages that the alien would have lawfully earned. Nor did it preempt compensatory and punitive damage awards unrelated to an employee’s immigration status. Here, the plaintiff obtained authorization to work in the United States several months after he was fired for filing the workers’ compensation claim.
The Sixth Circuit acknowledged that under Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002), an award of backpay when a worker was ineligible to earn wages would subvert the purpose of IRCA by forcing an employer to pay lost wages that the alien was not entitled to receive in the first place. That did not mean, however, that IRCA preempted the entirety of the plaintiff’s backpay award. Hoffman’s concern disappears when, as here, the plaintiff obtained authorization to work in the United States. After obtaining authorization to work, the plaintiff was entitled to work (and did); he could remain in the United States legally (and did); and he could mitigate damages without triggering new IRCA violations (and did).
Court Modified Backpay Award
With those principles in mind, the Sixth Circuit affirmed the bulk of the plaintiff’s backpay award. The Court noted that in its order, the district court indicated that it awarded backpay only for the period in which the plaintiff was authorized to work. Upon examination, however, it was clear that the backpay award also included a two-month period in which the plaintiff remained unauthorized. Accordingly, the Sixth Circuit modified the damage award to exclude backpay that accrued during that time [$4,160 for two months].
Non-Economic and Punitive Damages
The Sixth Circuit noted that the district court awarded the plaintiff $1,000 in compensatory damages for emotional distress, crediting his testimony that “he felt stressed, depressed, and frustrated … due to the nature of his termination and his interactions with [the employer’s representatives]” [R. 84, Pg. ID 1399]. The district court also awarded the plaintiff $50,000 in punitive damages. It found the conduct of the employer’s representatives to be “intentional and malicious” and identified a need to deter employers from engaging in similar conduct.
The Sixth Circuit stressed that the district court had not based such damages on anything relating to the plaintiff’s immigration status. Although IRCA broadly regulated immigration, it did not prohibit all damages arising under the States’ various employment laws. The Court indicated that non-backpay damages flowed directly from the employer’s illegal act under Tennessee law, and they did not require the employer to violate IRCA by paying “wages that could not lawfully have been earned” [Hoffman, 535 U.S. at 149]. Thus, awarding compensatory and punitive damages did not interfere with IRCA’s regulation of employment and Hoffman’s preclusion of backpay for unauthorized workers. So those damages could stand.