$2,656,315.50 Jury Verdict in Retaliatory Discharge Case Reduced by Illinois Appellate Court

On September 26, 2017 (in an unpublished Rule 23 opinion), the Illinois Appellate Court, First District, ruled that a 2.5 Million Dollar punitive damages award in an Illinois workers' compensation retaliatory discharge lawsuit was unconstitutional under federal due process standards, and reduced the punitive damages award to $1,406,839.50 based on a 9:1 ratio of punitive damages to compensatory damages.  Francek v. Dominick's Finer Foods, LLC, et al., 2017 IL App (1st) 162574-U.  Following a jury trial in a retaliatory discharge case, the circuit court entered judgment on the jury verdict in favor of the plaintiff and against his former employer in the total amount of $2,656,315.50.  The plaintiff claimed that he was discharged in retaliation for filing claims under the Illinois Workers' Compensation Act.  The jury returned a verdict in the amount of $156,315.50 in compensatory damages, $2,500,000 in punitive damages, plus court costs.  The compensatory damages were itemized as follows: (1) $31,315.50 for psychological treatment and counseling; (2) $75,000 for emotional and/or psychological damages; and (3) $50,000 for emotional and/or psychological damages reasonably certain to be experienced.

The appellate court decided the issue of whether the award of punitive damages was unconstitutional under federal due process standards.  Under Illinois law, punitive damages are appropriate in cases of workers' compensation retaliatory discharge.  The purpose of punitive damages is to punish the offender and to deter that party and others from committing similar acts of wrongdoing in the future.  Punitive damages may be awarded when the retaliatory discharge was committed with fraud, actual malice, or oppression, or when the defendant has acted willfully, or with such gross negligence as to indicate a wanton disregard of the rights of others.  Without punitive damages, there would be little deterrent preventing employers from terminating employees in retaliation for exercising their rights under the Workers' Compensation Act.  In this case, the jury could find that the defendants' actions showed a pattern of willful and wanton disregard of the plaintiff's rights as an injured employee, including his protection against discharge for exercising rights under the Act.  However, due process prohibits the imposition of grossly excessive or arbitrary punishments because it serves no legitimate purpose and constitutes an arbitrary deprivation of property.  In determining whether a punitive damages jury award violates due process, three factors are considered: (1) the degree of reprehensibility of the conduct; (2) the disparity between the harm or potential harm that the plaintiff suffered and the amount of punitive damages awarded; and (3) the difference between the punitive damages awarded and the civil penalties authorized or imposed in similar cases.  The appellate court found that although the defendants' conduct was sufficiently reprehensible to justify an award of punitive damages, the 16:1 ratio of punitive to compensatory damages violates due process.  The appellate court concluded that an award of punitive damages in an amount not to exceed $1,406,839.50, a ratio of 9:1, would be constitutional.