Harris v. FedEx Corp.

92 F.4th 286

Jennifer HARRIS, Plaintiff—Appellee, v. FEDEX CORPORATE SERVICES, INC., Defendant—Appellant.

No. 23-20035

United States Court of Appeals, Fifth Circuit

FILED February 1, 2024

Appeal from the United States District Court for the Southern District of Texas, USDC No. 4:21-CV-1651, Kenneth M. Hoyt, U.S. District Judge

Brian Paul Sanford (argued), Elizabeth J. Sanford, Brian P. Sanford, P.C., Dallas, TX, for Plaintiff-Appellee.

Barak J. Babcock, Christopher M. Ahearn, Federal Express Corporation, Legal Department, Memphis, TN, Kyle Douglas Hawkins (argued), Leah Faith Bower, Lehotsky Keller Cohn, L.L.P., Austin, TX, for Defendant-Appellant.

Dorothy Alicia Hickok, Esq., Faegre Drinker Biddle & Reath, L.L.P., Philadelphia, PA, Daniel Alexander Harrell, Esq., Faegre, Drinker, Biddle & Reath, L.L.P., Dallas, TX, William Neil Rambin, Neil Rambin Law, P.L.L.C., Dallas, TX, for Amicus Curiae Federation of Defense and Corporate Counsel.

Philip S. Goldberg, Shook, Hardy & Bacon, L.L.P., Washington, DC, for Amicus

Curiae International Association of Defense Counsel.

Maurice Baskin, Littler Mendelson, P.C., Washington, DC, for Amicus Curiae Airlines for America.

William R. Peterson, Catherine Lynn Eschbach, Morgan, Lewis & Bockius, L.L.P., Houston, TX, for Amicus Curiae U.S. Chamber of Commerce.

Raffi Melkonian, Wright, Close & Barger, L.L.P., Houston, TX, for Amicus Curiae Lawyers for Civil Justice.

Robert Stephen Peck, Center for Constitutional Litigation, P.C., Washington, DC, for Amicus Curiae American Association for Justice.

Tyler Bass Talbert, Scanes Yelverton Talbert, L.L.P., Waco, TX, for Amici Curiae National Employment Lawyers Association, Texas Employment Lawyers Association, National Institute of Workers' Rights.

Jason Smith, Law Offices of Jason Smith, Fort Worth, TX, for Amicus Curiae Texas State Conference of the NAACP.

Before Southwick, Engelhardt, and Wilson, Circuit Judges.

Cory T. Wilson, Circuit Judge:

This appeal arises from a $366,160,000 jury verdict in favor of Plaintiff-Appellee Jennifer Harris and against Defendant-Appellant FedEx Corporate Services, Inc. (FedEx) for retaliation claims under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2000e17. FedEx challenges the jury's verdict, the damages awarded, and the district court's denial of a new trial due to the court's admission of Harris's expert's flawed testimony.

As we will discuss, Harris's § 1981 claims were time-barred under her employment contract, so they fail as a matter of law. Otherwise, the evidence was sufficient to support the jury's verdict for Harris on her Title VII retaliation claim. But in view of Title VII's $300,000 cap on damages and the evidence presented at trial, we remit Harris's compensatory damages to $248,619.57, and conclude she was not entitled to punitive damages. Likewise, FedEx is not entitled to a new trial because of the court's evidentiary ruling.

I.

A.

FedEx hired Harris, an African American woman, in 2007 as an Account Executive in sales. Relevant to this appeal, her employment contract contained a "Limitation Provision," which provides that "[t]o the extent the law allows an employee to bring legal action against the Company, [Harris] agrees to bring that complaint within the time prescribed by law or 6 months from the date of the event forming the basis of [her] lawsuit, whichever expires first." Harris was successful at her job, and FedEx promoted her to District Sales Manager in 2017. Her new supervisor was Michelle Lamb, a white woman.

Harris's new position required her to lead a team of eight Account Executives responsible for making sales in the Houston area. FedEx partly measured Harris's success by her team's sales. She was initially successful in her new role, so much that FedEx recognized her with an award in 2018. However, according to FedEx, Harris's and her team's performance started declining in mid-2018. From October 2018 to February 2019, Harris and Lamb met more than ten times to discuss strategies to improve Harris's team's performance. Despite those meetings, FedEx alleges Harris's sales continued to lag other teams.

In early March 2019, Lamb suggested Harris step down as a District Sales Manager. Harris was "blindsided" because "Lamb had not discussed any areas in which Harris needed to grow" in any of their prior meetings. Shortly thereafter, on March 11, Harris sent her first e-mail to a FedEx Vice President accusing Lamb of race discrimination. Human Resources (HR) advisor Michael Clark immediately opened an investigation, which he concluded on June 3. Clark interviewed six witnesses and completed a detailed analysis of each of Harris's allegations. He ultimately concluded that Harris's discrimination claims were unsubstantiated but recommended that Lamb be coached "to ensure she responds accordingly to all of her managers regarding work related questions."

FedEx policy did not allow Lamb to discipline Harris during an ongoing HR investigation. But on June 26, Lamb gave Harris a "Letter of Counseling for Unacceptable Performance." The letter required Harris to create a Performance Improvement Plan "highlighting the specific goals and activities [she] [would] focus[ ] on to improve [her] team's performance and accountability." It further advised Harris that "recurrent patterns of [her] performance [would] not be tolerated" and might result in her termination.

Two days later, Harris filed another internal complaint against Lamb, averring the letter was retaliation for her first discrimination complaint. Clark opened another investigation, which he concluded on September 6. He interviewed three witnesses and completed a detailed analysis of each of Harris's allegations. He again determined that Harris's claims were unsubstantiated, finding that "Lamb's decision to issue discipline to [Harris] was in line with the unacceptable performance that [Harris] and her direct reports continue to demonstrate."

On September 13, Lamb gave Harris a second "Letter of Warning," requiring Harris to submit another Performance Improvement Plan and advising her again that failure to improve her performance might result in her termination. A week later, Harris submitted a third internal complaint. Clark again opened an investigation, interviewed two witnesses, completed a detailed analysis of each of Harris's allegations, and concluded on December 31 that Harris's claims were unsubstantiated.

On January 7, 2020, Lamb submitted a Request for Termination to HR, citing Harris's continued poor performance and failure to meet the terms of her two Performance Improvement Plans. HR approved the request, and FedEx fired Harris, effective January 8.

B.

Harris filed suit in May 2021, sixteen months after FedEx fired her. She alleged race discrimination and retaliation under 42 U.S.C. § 1981. After months of discovery, FedEx moved for summary judgment, arguing inter alia that Harris's claims were time-barred by the six-month Limitation Provision in her contract. Harris responded and moved to amend her complaint to add claims for discrimination and retaliation under Title VII. The district court denied FedEx's motion and granted Harris leave to amend. It concluded that the Limitation Provision "cut[ ] against public policy and sidestep[ped] a federal administrative process designed to meet and defeat long-standing policies of bias and discrimination in the workplace." Thus, in October 2022, Harris's § 1981 claims proceeded to trial, along with her new Title VII claims.

At trial, FedEx presented evidence that it fired Harris because of her poor performance, not based on discrimination or in retaliation for her complaints. In response, Harris offered evidence of pretext to rebut FedEx's non-discriminatory and non-retaliatory reason. That evidence included (1) the temporal proximity between the filing of her internal complaints and FedEx's disciplinary actions; (2) that white employees had underperformed but had not been placed on a Performance Improvement Plan or terminated; (3) that the only other person who was fired had also filed a discrimination complaint; and (4) that Lamb told HR that she had "extreme concern with [Harris's] behavior" because Harris was "taking the approach of arguing with [Lamb] about many things" and "demonstrating an insubordinate attitude."

As her first trial witness, Harris called Coneisha Sherrod to testify as a "human resources expert." After the district court overruled FedEx's objections,¹ Sherrod testified that FedEx "didn't follow normal protocol and procedure, and that discrimination and retaliation did occur." But Sherrod admitted on cross-examination that her testimony was based only on her review of Harris's complaint, and she conceded that she did not have any knowledge of FedEx's HR policies and procedures.

After Harris presented her evidence, FedEx moved for judgment as a matter of law. It argued that Harris's § 1981 claims were time-barred by the Limitation Provision in her contract; her evidence was insufficient to support her discrimination and retaliation claims; and punitive damages were unwarranted because Harris had failed to prove malice or reckless indifference. The district court denied FedEx's motion. As with FedEx's motion for summary judgment, the district court determined that the Limitation Provision did not apply. But instead of relying on its former reasoning that the Limitation Provision "cut against public policy," it held that the Limitation Provision applied only to lawsuits "arising out of [Harris's] contract of employment." The district court also found that Harris presented sufficient evidence to support her discrimination and retaliation claims and to submit the issue of punitive damages to the jury.

FedEx presented its case; the parties gave their closing arguments; and the jury deliberated for two days. The jury returned a verdict on October 25, 2022, finding that FedEx had not discriminated against Harris, but that it...