The Jury Factor
In the U.S., large corporations are increasingly likely to be sued by employees, and class actions have raised the potential stakes ever higher. Amid all the litigation, many employers strive to avoid jury trials, but a recent study indicates that there isn't much difference - in terms of the size of awards granted - between juries and judges.
By some measures, the dangers of employment litigation have become more dire in recent years. For example, discrimination and harassment complaints filed with the U.S. Equal Employment Opportunity Commission have risen over the last couple of years, reaching 80,840 in 2001, the highest level since 1995. Moreover, violations of the Fair Labor Standards Act have recently resulted in huge awards and settlements. In one important case, administrative workers who sued for overtime pay were awarded $90 million. The case - which involved Farmers Insurance Exchange - is expected to wind up costing the company over $120 million in total liability. And this may be only the tip of the iceberg, since U.S. government data suggests that many other employers may be in violation of a federal statute requiring that their covered employees work no more than a 40-hour week without overtime pay.
Weighing the chance of huge awards, many companies do everything possible to avoid jury trials. U.S. juries have wielded growing authority over the past two decades, according to the cover story of the August 2001 American Bar Association Journal. They're increasingly using their power to demand societal changes that go beyond the scope of the case they are sitting on, claims DePaul University law professor Stephen Landsman, an expert on the jury's role in U.S. culture. "Juries are so unpredictable and cumbersome," he says. "Yet, when no one else has the courage to address the truly controversial issues and problems of our time, juries over and over have shown a willingness and ability to roll up their sleeves, study the facts and come to conclusions."
The article cites a 16-month study conducted by the Dallas Morning News and the Southern Methodist Law Review that identified more than 700 cases since 1990 in which jurors pronounced publicly that they intended their verdicts to have an influence beyond their particular cases. The study found fewer than 100 such cases between 1970 and 1990, and only 17 cases in the 70 years prior to 1970.
Yet, despite this trend toward activist juries, another recent study shows that the differences between what companies can expect from judges and from juries may be overrated. Judges and juries award punitive damages with about the same frequency and in about the same proportions, a recent study of 8,724 trials in 45 large courts across the United States found. Two Cornell law professors, Theodore Eisenberg and Martin T. Wells, and three analysts from the National Center for State Courts, an independent research group, conducted the research. It found that judges and juries each awarded punitive damages in about 4% of the cases in which plaintiffs won, despite the conventional wisdom that juries are far more likely to award punitive damages.
This research suggests that juries may be far less arbitrary in assessing punitive awards than is commonly believed, points out Neil Vidmar, an authority on jury issues at Duke Law School. The importance of the new study, Eisenberg emphasizes, is that it is based on a broad sample of actual cases in large U.S. cities. Juries decided 6,429 of the cases studied, and judges ruled in 2,295 of them. Seven of the 121 jury awards in the study were many times higher than the compensatory awards. When these extreme verdicts are omitted, the study shows, judges may actually grant higher punitive awards per dollar of compensatory awards than juries do. The research may make some employers question the "avoid jury trials at all costs" mindset.
For more on the ABA Journal article alluded to above, please see the following press release
http://www.abanet.org/media/aug01/jrnl0801.html
An article by William Glaberson, "A Study's Verdict: Jury Awards Are Not Out of Control," can be found in the August 6, 2001, issue of the New York Times. It discusses the Eisenberg study.
Another empirical study by Eisenberg details how unlikely employees are to win in employment discrimination cases and - even when employees win - how likely these decisions are to be overturned on appeal.
Below are some other interesting and related articles:
Bravin, Jess. "Study Finds U.S. Appeals Courts Are Tough on Job-Bias Plaintiffs." Wall Street Journal, July 16, 2001.
Triplett, Michael. "Study Shows High Reversal Rate When Plaintiffs' Victories Appealed by Employers." HR News, July 18, 2001.
"Workers' Victories Reversed at Appeals Level, Study Says." Bulletin to Management, October 18, 2001, p. 333.
By some measures, the dangers of employment litigation have become more dire in recent years. For example, discrimination and harassment complaints filed with the U.S. Equal Employment Opportunity Commission have risen over the last couple of years, reaching 80,840 in 2001, the highest level since 1995. Moreover, violations of the Fair Labor Standards Act have recently resulted in huge awards and settlements. In one important case, administrative workers who sued for overtime pay were awarded $90 million. The case - which involved Farmers Insurance Exchange - is expected to wind up costing the company over $120 million in total liability. And this may be only the tip of the iceberg, since U.S. government data suggests that many other employers may be in violation of a federal statute requiring that their covered employees work no more than a 40-hour week without overtime pay.
Weighing the chance of huge awards, many companies do everything possible to avoid jury trials. U.S. juries have wielded growing authority over the past two decades, according to the cover story of the August 2001 American Bar Association Journal. They're increasingly using their power to demand societal changes that go beyond the scope of the case they are sitting on, claims DePaul University law professor Stephen Landsman, an expert on the jury's role in U.S. culture. "Juries are so unpredictable and cumbersome," he says. "Yet, when no one else has the courage to address the truly controversial issues and problems of our time, juries over and over have shown a willingness and ability to roll up their sleeves, study the facts and come to conclusions."
The article cites a 16-month study conducted by the Dallas Morning News and the Southern Methodist Law Review that identified more than 700 cases since 1990 in which jurors pronounced publicly that they intended their verdicts to have an influence beyond their particular cases. The study found fewer than 100 such cases between 1970 and 1990, and only 17 cases in the 70 years prior to 1970.
Yet, despite this trend toward activist juries, another recent study shows that the differences between what companies can expect from judges and from juries may be overrated. Judges and juries award punitive damages with about the same frequency and in about the same proportions, a recent study of 8,724 trials in 45 large courts across the United States found. Two Cornell law professors, Theodore Eisenberg and Martin T. Wells, and three analysts from the National Center for State Courts, an independent research group, conducted the research. It found that judges and juries each awarded punitive damages in about 4% of the cases in which plaintiffs won, despite the conventional wisdom that juries are far more likely to award punitive damages.
This research suggests that juries may be far less arbitrary in assessing punitive awards than is commonly believed, points out Neil Vidmar, an authority on jury issues at Duke Law School. The importance of the new study, Eisenberg emphasizes, is that it is based on a broad sample of actual cases in large U.S. cities. Juries decided 6,429 of the cases studied, and judges ruled in 2,295 of them. Seven of the 121 jury awards in the study were many times higher than the compensatory awards. When these extreme verdicts are omitted, the study shows, judges may actually grant higher punitive awards per dollar of compensatory awards than juries do. The research may make some employers question the "avoid jury trials at all costs" mindset.
For more on the ABA Journal article alluded to above, please see the following press release
http://www.abanet.org/media/aug01/jrnl0801.html
An article by William Glaberson, "A Study's Verdict: Jury Awards Are Not Out of Control," can be found in the August 6, 2001, issue of the New York Times. It discusses the Eisenberg study.
Another empirical study by Eisenberg details how unlikely employees are to win in employment discrimination cases and - even when employees win - how likely these decisions are to be overturned on appeal.
Below are some other interesting and related articles:
Bravin, Jess. "Study Finds U.S. Appeals Courts Are Tough on Job-Bias Plaintiffs." Wall Street Journal, July 16, 2001.
Triplett, Michael. "Study Shows High Reversal Rate When Plaintiffs' Victories Appealed by Employers." HR News, July 18, 2001.
"Workers' Victories Reversed at Appeals Level, Study Says." Bulletin to Management, October 18, 2001, p. 333.