Punitive damages are not the norm in civil suits—in fact, they're only supposed to be awarded in the most extreme cases, as a way for the jury to punish the defendant for his or her conduct and discourage others from doing something similar.
So what made a New Jersey jury award $50 million in punitive damages to a mid-level manager who lost his job with Lockheed Martin Corporation during a company-wide reduction in force effort?
The jury determined that Lockheed Martin acted either maliciously or in wanton and willful disregard of the 66-year-old employee's rights and discriminated against him based solely on his age.
While the reduction in force was company wide, the plaintiff was the oldest of six engineers in his unit and the only one let go in that round of layoffs. He was given no particular reason why he was chosen, and his job reviews had always been excellent. Eventually five other employees in his job classification were terminated, but they were all over the age of 50. Out of 12 lower-level employees who lost their jobs, eight were over the age of 50.
Lockheed Martin eventually replaced the defendant a year after the general layoffs—with a much younger employee.
In addition to the apparent age-based selection of employees for termination, the defendant was able to provide the jury with credible evidence that he'd been subjected to unfair treatment while he had been employed. He'd been paid less than younger employees and told that since older workers "have nowhere else to go" that they could be treated worse than younger employees. A younger employee is presumably more marketable, so he or she would be more likely to quit if treated badly.
While the employee's economic damages were judged to be only $520,000, he was awarded an equal amount for the company's willful violation of the Age Discrimination and Employment Act and another equal amount for pain and suffering. The big blow to Lockheed Martin came when the jury awarded $50 million in punitive damages under the New Jersey Law Against Discrimination.
Cases like these let employers know that age discrimination is not okay and necessary reduction in force actions can't be used as "cover" for ageism. If you believe you've been the victim of age discrimination, an attorney can help you learn more about your legal options.
Source: JDSupra Business Advisor, "New Jersey Jury Awards $51 Million in Age Discrimination Case: A Shocking Reminder for Employers to Tread Carefully," Vanessa Kelly, Feb. 06, 2017