Former Senior Trader on International Equities Desk Receives $29.2 Million Jury Verdict in Sex Discrimination Case
A federal jury in New York awarded $29.2 million in damages last week to a former senior trader on the Asian equities desk of UBS who was terminated after approximately two years on the job, in what is believed to be one of the largest verdicts awarded to an individual plaintiff in an employment discrimination case. See Zubulake v. UBS Warburg LLC, Case No. 02-1243 (SAS) (S.D.N.Y. Apr. 6, 2005).
Jury Quickly Returned Multi-Million Dollar Verdict
After a two-week trial, the jury of six women and two men deliberated for only two days before finding UBS liable and awarding $9.1 million in compensatory damages – $2.2 million in back pay and $6.9 million in front pay (the latter representing roughly ten years of projected compensation based on the $650,000 the plaintiff earned in total compensation in her final year of employment with UBS). After a brief hearing on the question of punitive damages, the jury deliberated for only thirty more minutes before awarding $20.1 million in punitive damages. UBS has indicated that it will seek to set aside the verdict and/or reduce the damage award, which it views as excessive.
The plaintiff’s attorneys have defended the appropriateness of the front pay award, claiming that UBS’s actions have significantly hindered the plaintiff’s prospects for future employment. The plaintiff’s attorneys also have defended the size of the punitive damages award, which they believe the jury arrived at by tripling the size of the compensatory damage award, as sending a necessary (and constitutionally permissible) message to financial services firms regarding their treatment of women in trading positions.
Plaintiff Alleged Pattern of Sexist Remarks, Isolation, and Exclusion
The plaintiff joined UBS as a director on its Asian equities desk in August 1999. She was the only woman on the Asian equities desk and one of a small percentage of women in the firm’s trading area. She alleged that she was subjected to sexist remarks in the workplace, excluded from work-related outings designed around more traditionally male interests, and further isolated by having her workstation located in a remote section of the trading floor. She also contended that she was passed over for a promotion to a management-level position and that the individual who received that job proceeded to ridicule and belittle her. The plaintiff eventually was fired in October 2001 for insubordination, less than 2 months after filing a charge of discrimination with the EEOC.
Trial Court Made Several Important Evidentiary Rulings Leading Up to Trial
Even before the trial began, UBS found itself struggling to overcome a series of adverse discovery rulings by the Court. In particular, the Court had sanctioned UBS for failing to prevent certain employees from deleting individual e-mail messages after the commencement of the litigation. Significantly, the Court ruled that it was not enough for UBS’s counsel simply to issue instructions to preserve electronic information as part of a general retention notice. Rather, the Court ruled that a company’s lawyers must take and periodically repeat “affirmative steps” to insure that electronic information (including e-mail) is preserved, such as communicating directly with the company’s “key players” and identifying and securing relevant backup tapes. Evidence that some potentially relevant e-mails either had been deleted or not produced in a timely fashion led the Court to award the plaintiff certain fees and costs, and also to issue a negative inference instruction to the jury about the content of the deleted e-mails, which result the Court opined was consistent with forthcoming amendments to the Federal Rules of Civil Procedure regarding electronic discovery.
In another notable discovery ruling, the Court did allow UBS to introduce evidence that, over the course of her twenty-year career in the securities industry, the plaintiff had worked for ten different firms. UBS argued that the plaintiff’s extremely active employment history was relevant to show that the plaintiff should have had no difficulty finding suitable replacement employment following her termination and, thus, awarding front pay and back pay was inappropriate. The plaintiff opposed the admission of evidence regarding her past employment as irrelevant and also as having the potential to create the unfairly prejudicial impression with the jury that she was a difficult employee who had trouble remaining in a position for any length of time. Weighing the competing interests, the Court allowed UBS to offer evidence about the plaintiff’s general employment history but not about unfavorable performance reviews the plaintiff had received from past employers.
How This Case May Impact Your Business
Coming on the heels of a $54 million settlement of sex discrimination charges between Morgan Stanley and the EEOC (which we examined in a previous eUpdate) and the even more recent filing of a putative class action sex discrimination lawsuit against Smith Barney (see sidebar), this verdict confirms the increasing scrutiny on the treatment of and opportunities for women in the financial services industry.
For more information regarding this case and its potential impact on your business and employment practices, please contact Melissa Raphan (612.343.7907 or raphan.Melissa@dorsey.com), Michael Iwan (612.340.5613 or iwan.michael@dorsey.com), or any of the other attorneys in our Labor & Employment Practice Group.