Verdicts & Settlements

Pay bias litigation made the news recently when a North Carolina federal judge approved a $45 million settlement of class action claims brought by former and current female managers who alleged that Family Dollar paid them less than it paid comparable male managers. Ending a case that began over a decade ago, the deal required that Family Dollar would not only make the large settlement payment but also review its manager compensation framework with labor experts. Alleging that Family Dollar’s corporate policies and high-level management decisions were discriminatory, the class plaintiffs brought claims under the Equal Pay Act in addition to making claims for disparate impact and treatment under Title VII of the Civil Rights Act. This issue is not going away; other recent press accounts have noted that female doctors earned significantly less than their male peers do (and that the gap was most pronounced in Charleston, South Carolina!).

In a case alleging sexual harassment by a researcher against a research assistant, the trial court ordered more than 300k in attorneys’ fees after the jury awarded a mere $1 in damages to the plaintiff. Jenkins v. The University of Minnesota et al., No. 13-CV-1548 (D. Minn. Oct. 13, 2017). The court awarded attorneys’ fees because it found that nonmonetary considerations significantly affected the case.

On August 24, 2017 we reported that former communications director for the Iowa Senate Republican Caucus, Kristen Anderson, was awarded $2.2 million in damages by a jury that found Anderson had been fired in retaliation for complaining about sexual harassment and a hostile work environment.

We recently presented on the topic of settlement and severance agreements as part of Nexsen Pruet’s Employment Law Certificate Series: Building Workplaces That Win.

A plaintiff has been awarded $4.45 million for an age discrimination, disability discrimination, and retaliation action he filed under state law in a court in Iowa against his former employer. Gregory Hawkins v. Grinnell Regional Medical Center, et al., No. 08791 LALA002281. The award included $220,009 in back pay, $2 million in emotional distress damages, and $2.28 million for future emotional distress damages.

Last month, a federal court in Texas approved a settlement between the U.S. Equal Employment Opportunity Commission and Bass Pro Outdoor World LLC in a lawsuit filed by the EEOC that alleged widespread hiring discrimination and retaliation.

In Sharp v. Commissioner,1 the United States Tax Court once again demonstrated the importance of carefully crafting settlement agreements and reaffirmed that emotional distress damages are taxable income to the recipient.

On August 30, 2013, the IRS reiterated its longstanding positions on the proper tax treatment of litigation settlements with current or former employees. In its Chief Counsel Advice (CCA) Memorandum 20133501F, the IRS presented and answered three questions: