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Jury’s noneconomic damages award excessive: Appeals court

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IBM

A federal appeals court on Monday vacated a $6 million noneconomic damages jury award given to a former International Business Machines Corp. employee in a wrongful termination and retaliation case, stating it was “shockingly excessive.”

Scott Kingston, an IBM manager, filed suit against the company in September 2019 charging he was fired after he did not cap his sales representatives’  sales commission payments and tried to prevent IBM from discriminating against a Black IBM representative by not paying him a large commission, when it had previously approved such a payment to a white sales representative under the same circumstances, according to the complaint in Scott Kingston v. International Business Machines Corp., a New York Corporation, which was filed in U.S. District Court in Seattle.

A jury awarded Mr. Kingston about $5 million in economic and $6 million in noneconomic damages, according to the ruling by the 9th U.S. Circuit Court of Appeals in San Francisco.

The appeals court partially affirmed the lower court, holding a jury could infer from the evidence that Mr. Kingston had opposed employer misconduct and that his opposition activity was known to decision-makers and a “substantial factor” in its decision to terminate him.

But on the noneconomic damages award, it said, “Although we do not question that Kingston suffered psychological distress because of his termination, his distress does not appear to have been significantly greater than what anyone might suffer from being fired.”

The $6 million “also far exceeds the amounts that Washington court have upheld in similar cases,” it said, in instructing the district court to reduce the noneconomic damages award “to an amount supported by the record and consistent with Washington law.”

A dissenting opinion did not directly address the $6 million award, but held there is no evidence that the decision-makers who terminated Mr. Kingston knew that he “opposed racism and the improper withholding of wages.”

Attorneys in the case did not respond to requests for comment.