Employee EEO Training Is Critical

By Larry Feheley

We have previously advised our clients that training employees in harassment and equal employment obligations is critical. If the training results in the avoidance of just one discrimination claim or lawsuit, it more than pays for itself. Beyond that, as we have noted, evidence of affirmative steps to train employees on these legal obligations can actually limit the award of damages in an employee claim. Last week the Seventh Circuit Court of Appeals issued a decision that dramatically underscores this point.

In Mathis v. Phillips Chevrolet, Inc., 2001 WL 1219252 (7th Cir. 2001), an applicant who was not hired sued the company for race and age discrimination. The case went to a jury, and the jury decided that the applicant had been discriminated against on the basis of his age. The jury awarded $50,000 in compensatory damages. However, the jury also awarded $50,000 in punitive (liquidated) damages. The company appealed the award of punitive damages.

The Appeals Court refused to reverse the punitive damages award. During the trial, one of the company's managers testified that he did not know that it was illegal to consider age in making hiring decisions. Another manager testified that his objective in hiring was to find "bright, young, and aggressive" individuals. Refusing to reduce or eliminate the punitive damages award, the Court of Appeals pointedly observed:

"... [L]eaving managers with hiring authority in ignorance of the basic features of the discrimination laws is an "extraordinary mistake" for a company to make, and a jury can find that such an extraordinary mistake amounts to reckless indifference. Phillips ... argues [that it] made a good faith attempt to comply with [the law]. However, [having a written non-discrimination policy] but then making no effort to train managers about the law shows that Phillips knew what the law required but was indifferent to whether its managers followed that law."

The clear message from the Court was that making no effort to train managers about the requirements of the EEO laws justifies an award of exemplary or punitive damages against a company. Two important lessons are clear: it's important to train employees, and equally important to document and preserve the evidence of your training efforts.