Reuters
2022.08.03 02:09

Court nixes 'shocking' $6 mln distress award for former IBM manager

Firing stemmed from his concerns about race bias -sales manager

  • Firing stemmed from his concerns about race bias -sales manager

  • He did not suffer enough distress to merit $6M award -panel

  • Majority did uphold $5 mln award for economic damages

By Daniel Wiessner

(Reuters) - A U.S. appeals court has ruled that a $6 million pain and suffering award for a former IBM Corp sales manager who claimed he was fired for calling out bias against a Black salesman was “shockingly excessive,” while upholding a slightly smaller award for economic damages.

The 9th U.S. Circuit Court of Appeals in a 2-1 ruling here

on Monday said Scott Kingston, who claims he refused supervisors’ demands to cap the salesman’s commissions, had not shown that his firing caused him sufficient anguish to justify the jury award that IBM had appealed.

But the majority rejected the company’s bid to toss out a $5 million award for economic damages, saying Kingston had proven that his concerns about potential race discrimination played a role in his firing.

“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 court said in an unsigned opinion.

IBM, which is represented by Jones Day, did not immediately respond to a request for comment on Tuesday.

Matthew Lee, a lawyer for Kingston, said he was pleased that the 9th Circuit “saw through IBM’s dissembling, smoke and mirrors.”

“We’re all fortunate, even IBM, to have people like Scott around to stand up against toxic corporate culture like this,” Lee said in an email.

Kingston sued IBM in Seattle federal court in 2019, alleging violations of Washington state law. He said he had been fired a year earlier for refusing to lower a seven-figure commission owed to a Black salesman.

Kingston said he told a supervisor that capping the salesman’s commission “might have been racial discrimination” because a white salesman had just received his full commission of more than $1 million.

IBM said that Kingston was fired for improperly approving a commission for another salesman.

Washington law, like federal antidiscrimination law, prohibits retaliation against workers who oppose discrimination in the workplace.

In dissent on Monday, 9th Circuit Judge Sandra Ikuta said IBM should not have been held liable at all. Kingston failed to show that the managers responsible for firing him knew about his concerns involving the sales commissions, Ikuta said.

The 9th Circuit sent the case back to the district court to hold a new trial on non-economic damages.

The panel included Circuit Judge Eric Miller and 6th Circuit Judge Ronald Gilman, who sat by designation.

The case is Kingston v. IBM Corp, 9th U.S. Circuit Court of Appeals, No. 21-35548.

For Kingston: Mark Sigmon and Matthew Lee of Milberg Coleman Bryson Phillips Grossman

For IBM: Anthony Dick of Jones Day

(NOTE: This article has been updated to include a statement from Matthew Lee.)

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