Following a five-day trial, and nine hours of deliberation, a federal jury in Pennsylvania has awarded more than $6 million to a former Teva Pharmaceuticals employee. Middlebrooks v. Teva Pharmaceuticals USA, Inc., No. 2:17-cv-00412 (E.D. Pa. Nov. 19, 2018). The employee claimed that the company discriminated against him on the basis of his age in violation of the Age Discrimination in Employment Act (ADEA) and on the basis of his national origin in violation of Title VII of the Civil Rights Act and retaliated against him for lodging internal complaints.
Stephen Middlebrooks, who was 58-years-old at the time of his termination and a United States national, alleged that his younger, Israeli manager, Nir Aharoni, told him the company intended to make certain employment decisions based on age – a practice which, Aharoni purportedly said, was commonplace in Israel, where Teva is headquartered. Middlebrooks further alleged that Aharoni demonstrated bias against American employees. He claimed, for example, that Aharoni remarked that Americans had “narrow-minded perceptions of Israelis.”
Middlebrooks alleged that, after he complained about the foregoing conduct, Aharoni (a) gave him the worst performance rating he had received in his 15-year tenure, and (b) denied him an equity award on grounds that Teva only gave such awards to employees with long-term futures at the company.
According to Middlebrooks, HR investigated his complaints and concluded that Aharoni had not engaged in discriminatory conduct. HR, however, recommended that members of Aharoni’s team – against whom Mr. Middlebrooks had also made complaints – receive “cultural sensitivity training.” Middlebrooks alleged that he was never advised whether this recommendation was implemented and that, shortly after HR concluded its investigation, he was placed on a performance improvement plan (PIP) for the first time during his career at Teva. Soon thereafter, Middlebrooks alleged, he filed a Charge with the Equal Employment Opportunity Commission. In response, Aharoni allegedly extended the duration of the PIP and, when that extended period concluded, terminated Middlebrooks’ employment.
Teva has submitted post trial motions. The company likely will challenge the jury’s award of $5 million in punitive damages. (The jury also awarded $1.16 million in compensatory damages.) Under Title VII, punitive damages are capped at $300,000 for employers with more than 500 employees. According to reporting, Middlebrooks’ counsel is taking the position that, notwithstanding the Title VII cap, the full punitive damage award is recoverable on Middlebrooks’ ADEA claim. The Third Circuit Court of Appeals has not yet weighed in on the issue, but a number of district courts in that circuit have held that punitive damages are not recoverable in any amount under the ADEA.
The jury verdict provides an important lesson for employers with operations in multiple countries – or just in multiple states or cities. Employment laws vary from country to country, from state to state, and at the local level. Managers supervising employees in more than one location should be trained on compliance with the pertinent employment laws in each such location.