Fifth Circuit: Title VII Plaintiffs Not Required to Mitigate Damages for Emotional Distress

Title VII plaintiffs are not required to mitigate damages for emotional distress, the Fifth U.S. Circuit Court of Appeals recently held, joining the majority of federal courts to consider the issue.

A female employee of SkyWest Airlines, Sarah Budd was subjected to demeaning sexual comments from her coworkers. A maintenance supervisor asked if she “liked whips and chains and leathers,” and made similar comments and sexual jokes towards Budd.

At one point, he suggested “tak[ing] her and sell[ing] her out there [so they could] make some money off of her.” Other employees followed the lead, and made comments about sex positions, using lube and rape.

Budd reported the comments to her supervisor, who seemed annoyed and told her if he took any action, it would “just put a larger target” on her back.

The comments continued and the harassment escalated. Budd suffered extreme emotional distress. She reported the behavior again and human resources conducted an investigation, but randomly selected interviewees, did not follow up when witnesses described “sex talk” and took no disciplinary action.

Budd took early retirement and then filed charges with the Equal Employment Opportunity Commission, which filed suit on her behalf.

After trial, the jury concluded that Budd was harassed based on her sex and that SkyWest failed to take prompt remedial action, but that SkyWest did not retaliate against Budd. Jurors awarded her compensatory and punitive damages.

SkyWest appealed, but the federal appellate panel affirmed the denial of a motion for a new trial as well as the damage awards.

The Fifth Circuit rejected SkyWest’s argument that the district court erred by admitting text message conversations where Budd discussed the harassment and her feelings regarding it with others, including her husband and friends, characterizing the texts as improper hearsay.

But the court found that the messages were admissible as either a present sense impression or as statements regarding a mental or physical condition, as Budd testified that they were “instant, realtime” communications describing events as they happened.

Nor was the court persuaded by SkyWest’s contention that Budd could have taken steps to mitigate her mental and emotional damages by seeking therapy or taking medication, and that the district court erred by not instructing the jury to limit her damages.

The court concluded that Title VII plaintiffs are not required to mitigate damages for emotional distress for two reasons.

“First, based on the statutory scheme Congress adopted, there is no textual requirement that a plaintiff must mitigate compensatory damages at all,” the court wrote. “The fact that the statute includes a mitigation requirement for backpay, but not for compensatory damages, signals Congressional intent to exclude a duty to mitigate for compensatory damages.”

Second, “even if a plaintiff must mitigate some compensatory damages, that rule would not apply to emotional distress because there was no well-established common law principle that plaintiffs must mitigate damages for it,” the court said.

The duty to mitigate damages generally is firmly established in the common law, the court acknowledged, while some courts have held that mitigation for emotional damages is not required, and others have come to the opposite conclusion.

“This demonstrates that ‘courts have shown some hesitancy in applying a duty to mitigate pain and suffering,’” the court explained. “‘The lack of authority and analysis results in large differences in’ whether courts apply the mitigation defense to emotional distress. This satisfies us that the common law principle is not well-established now, let alone when the provision granting compensatory damages was adopted in 1991.”

Finally, the majority of federal courts considering the issue have held that Title VII plaintiffs have no duty to mitigate damages for emotional distress, the Fifth Circuit said, including the Second Circuit and district courts in Colorado, Nebraska and Oregon.

The court also affirmed the jury’s award of punitive damages. There was evidence to support the finding that SkyWest acted with malice or reckless indifference towards Budd and the jury was free to conclude that the good faith defense did not apply based on deficits in the investigation that was conducted.

To read the opinion in Equal Employment Opportunity Commission v. SkyWest Airlines, Inc., click .

Why it matters: In a victory for employees, the Fifth Circuit disagreed with the employer that Title VII plaintiffs have a duty to mitigate their losses for emotional distress damages, joining the Second Circuit as well as other federal courts.