It is more important than ever that employers conduct internal investigations of workplace complaints and take appropriate action when there is cause to do so. Proper investigations and thorough pre-litigation assessments can help employers minimize exposure to unfavorable jury verdicts and awards.

A case from the U.S. District Court for the Southern District of New York, in which the court upheld a jury verdict in a race discrimination case and assessed damages of $880,000 against the defendants, illustrates how expensive a failure to investigate workplace complaints thoroughly and take corrective action can be.

In Rosas v. Balter Sales Co., Inc., et al., No. 12-CV-6557 (S.D.N.Y. June 29, 2018), the plaintiff brought claims for discriminatory termination, hostile work environment, and retaliation under Title VII, along with a state law claim for battery. After an eight-day trial, the jury found in the plaintiff’s favor on all four claims and the district court upheld the verdict on all four claims. The jury awarded the plaintiff $800,000 in compensatory damages and $1.4 million in punitive damages. The district court remitted the award to $180,000 in compensatory damages and $700,000 in punitive damages.

The plaintiff, a Hispanic employee, worked for Balter Sales as a truck driver. At trial, he presented evidence of numerous incidents of race-based harassment by the company’s Vice President and co-owner. This included using racial slurs, mocking the plaintiff’s Latin accent, and complaining about difficulty understanding the plaintiff’s “Latin accent.” The plaintiff also presented evidence that another supervisor subjected him to unwanted physical contact and sexual advances. Plaintiff testified that despite his multiple complaints to his supervisors, the defendants failed to take steps to remedy the situation.

The company terminated the plaintiff after 15 months of employment, alleging that he stole merchandise. After his termination, the plaintiff testified that he informed the company that he intended to hire a lawyer. The company then filed criminal charges against the plaintiff.

After the plaintiff was arrested, kept in a holding cell, and criminally charged with theft, the company found the merchandise. The plaintiff presented evidence that, when the Vice President was informed that the merchandise had been found, he “blew it off.”

The court ruled the evidence allowed a reasonable jury to find for the plaintiff. Moreover, the court rule that “the temporal connection between Plaintiff’s complaints and his firing, could allow a reasonable jury to conclude that the theft allegations were merely pretext for the discriminatory termination of Plaintiff’s employment.”

As this case illustrates, an employee’s workplace complaints can lead to expensive litigation against an employer that fails to conduct an appropriate investigation before taking an adverse employment action.