In March 2024, the US District Court for the Eastern District of Texas in the matter of Yarbrough v. Glow Networks, Inc. overturned a $70 million employment discrimination verdict and ordered a new trial for two claims relating to only two specific Plaintiffs.  How did this happen?

In December 2019, fourteen former employees of Glow Networks, Inc. (“Glow”), 13 of whom are Black, filed suit against their former employer for racial discrimination in the workplace. All Plaintiffs but one alleged racial discrimination based on tangible actions and/or a hostile work environment. Some Plaintiffs, including the single Caucasian Plaintiff who was a team lead, also claimed they were retaliated against for reported and opposing racial discrimination. The Black employees alleged they were denied promotions, terminated, received unequal pay, punished for conduct that Glow ignored in other employees, and forced to work under video surveillance while others were not.

Plaintiffs asserted their claims under 42 U.S.C. 1981 (Section 1981) which prohibits racial discrimination in the workplace. Section 1981 also prevents employers from requiring employees “to work in a discriminatorily hostile or abusive work environment.” However, all of Plaintiffs’ hostile work environment claims were dismissed prior to trial after the trial court ruled there was no evidence that Plaintiffs were intentionally subjected to harassment because of their race which affected a term, condition, or privilege of their employment.

By the time of trial, 10 Plaintiffs remained. After a 10-day trial, a jury awarded each of the 10 Plaintiffs $7 million, consisting of $2 million in past pain and suffering, $1 million in future pain and suffering, and $4 million in punitive damages. The jury awarded a total of $70 million against Glow. Had the Plaintiffs asserted their claims under Title VII, the total damages awarded against Glow would have been capped at $3 million. Section 1981 allowed the Plaintiffs to recover an additional $67 million from Glow.

Following trial, the Plaintiffs filed a Motion to Enter Judgment, asking the Court to award $7 million to each Plaintiff along with prejudgment interest in the amount of $275.97 per day, post-judgment interest, and costs of Court. Glow did not oppose the Motion but stated its intention to file post-trial motions. The Court awarded each Plaintiff damages in the amount of $7 million, pre- and post-judgment interest, and costs of court. However, the Court awarded prejudgment interest at a higher rate of $273.97 per day based on the Texas Finance Code rules for calculating prejudgment interest.

After the Court entered Final Judgment for the Plaintiffs, Glow filed a Motion for Judgement as a Matter of Law alleging insufficient evidence or, in the Alternative, Motion for New Trial. In a slip opinion dated March 1, 2024, Judge Jordan, the presiding Judge for the Sherman division of the US District Court for the Eastern District of Texas, granted Glow’s Motion for Judgment as to all but two retaliatory discharge claims relating to two specific Plaintiffs.  As to the remaining Plaintiffs, the Court found that that insufficient evidence supported the jury’s finding that Glow discriminated against them or fired them on the basis of race.

Regarding the two Plaintiffs who retaliatory discharge claims survived Glow’s post-trial motions, the Court found that the sufficient evidence supported the finding that Plaintiffs were fired because of their race.  However, the Court also found that the “great weight of evidence,” a lesser standard, did not support the jury’s verdict.  Although there was some proximity between the time the two Plaintiffs filed complaints with Glow about racial discrimination and the time they were terminated, the Court also pointed out the poor performance reviews each Plaintiff received, including one Plaintiff being caught on video playing Candy Crush while on company time and the other threatening a Glow employee.  The Court found that these infractions provided evidence that Glow’s motivation in firing Plaintiffs was not racially motivated.  The Court ordered a new trial for those two Plaintiffs’ retaliatory discharge claims, issuing judgment for Glow on all remaining claims and all remaining Plaintiffs.

The result in Yarbrough is a further extension of a trend in Texas where judges on post-trial motions or courts of appeals are significantly reducing the size of nuclear verdicts and in some cases erasing jury awards altogether. The attorneys in our Austin and Dallas offices are available to answer and questions you may have about construction or employment matters in Texas.  Please contact us at info@gstexlaw.com.

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