Patricia Baty was hired by Willamette Industries, a Kansas City corrugated box plant, in October, and coworkers immediately began making sexual comments to her. She reported these incidents to her supervisor. Thereafter, the supervisor's brother, who was also a supervisor, put his arm around Baty's waist, grabbed her breast, and invited her to have drinks at a local bar. When she complained to her supervisor, he said his brother "got a little overzealous." Over the next several months, Baty reported ongoing sexual comments to various supervisors to no avail. In June and July, graffiti relating to her sexual prowess began appearing in the men's room. In July, the regional personnel manager, Jim Mertes, investigated anonymous complaints of sexual harassment and concluded that no sexual harassment had occurred. He also conducted a 45-minute sexual harassment training seminar for managers and another for employees. Baty was terminated in November as a result of cost-cutting measures necessitated by a worldwide paper shortage.
However, a budget approved three days before her termination projected an increase in production, and no other employees were terminated because of the paper shortage. Baty brought suit for sexual harassment and also claimed that she had been terminated in retaliation for her complaints about sexual harassment. The jury awarded her $40,000 in back pay, $146,000 in front pay, $145,000 in compensatory damages, and $1,000,000 in punitive damages. The district court judge reduced the damages to $38,063 in back pay and $22,420 in front pay, and capped the consequential and punitive damages on both claims at $300,000.
Baty appealed, contending that her sexual harassment claim should be capped at $300,000 and her retaliation claim should be capped at $300,000, for a total of $600,000, according to the EEOC's interpretation of the statute. The employer disagreed.
Under the standards set forth in Kolstad v. American Dental Ass'n, should punitive damages have been assessed against the employer? Was it proper for the court to cap the consequential and punitive damages at $300,000? Decide. [Baty v. Willamette Industries, Inc., 122 F.2d 1232 (10th Cir.)]