Teen Steak ‘n Shake Worker’s Sexual Harassment Jury Award Upheld

(Bloomberg Law) -- Steak n' Shake Inc. must pay a teen server who was sexually harassed by older male workers $50,000 in punitive damages, the Sixth Circuit ruled Friday, rejecting the company's contention that the award was constitutionally excessive because she only won $1,308 in actual damages.

The unpublished ruling also rejected the Equal Employment Opportunity Commission's argument that the punitive damages awarded to Hannah Corbin necessarily didn't raise constitutional due process concerns because it was lower than the $300,000 maximum damages a company the size of Steak n' Shake Inc. can be liable for under Title VII of the 1964 Civil Rights Act. The EEOC filed an amicus brief supporting Corbin in the case.

The EEOC pointed to decisions by the Second, Fifth, Seventh, and Ninth circuits to support its view that resort to the factors the U.S. Supreme Court established for testing the constitutionality of punitive damages isn't required when an award is lower than Title VII's damages cap, the U.S. Court of Appeals for the Sixth Circuit said.

But the Title VII limits only address the size of an award, not its proportionality to an underlying award of actual damages, Judge Bernice Bouie Donald said.

The guideposts the justices established in BMW of North America Inc. v. Gore, on the other hand, “ensure that punitive damages are only awarded in the most egregious cases” and “play a key role in determining whether the punitive damages award is both reasonable and proportionate to the harm suffered,” Donald said.

The $50,000 award to Corbin was justified in light of the degree of reprehensibility of the workplace abuse the jury found she suffered, the Sixth Circuit said.

The trial evidence showed Corbin was slapped on the buttocks, touched, and targeted with sexually derogatory comments, the court said. There was also evidence Steak ‘n Shake didn't address the harassment even though it was repeatedly made aware of it and some managers witnessed it, the court said.

The ratio of punitive damages to the harm Corbin sustained also wasn't unduly high and larger punitive awards have been approved in comparable cases, Donald said.

The court also rejected the company's appeals over the admission of “me too” evidence from Corbin's friend and co-worker, and the exclusion of statements Steak n' Shake collected when it ultimately investigated Corbin's allegations.

Corbin lost her bids to revive her retaliation claim and increase her attorneys' fees award.

She failed to show she didn't initiate the termination of her employment or that the trial judge erred in awarding her attorneys $92,978 instead of the $547,361 they requested, Donald said.

Judges Jeffrey S. Sutton and David W. McKeague joined the opinion.

Spitz Law Firm LLC represented Corbin. Ogletree Deakins Nash Smoak & Stewart PC represented Steak ‘n Shake. EEOC attorneys in Washington represented the commission.

The case is Corbin v. Steak ‘N Shake, Inc., 6th Cir., No. 20-03519, unpublished 7/2/21.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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