Background
Malak Khatabi sued Car Auto Holdings LLC and its manager Carlos Rios for sex discrimination under Title VII and the Florida Civil Rights Act. A jury awarded her over eight hundred thousand dollars in damages. The district court later reduced the award to one hundred eighty-one thousand dollars, applying a fifty thousand dollar cap under Title VII for small employers and limiting punitive damages under state law. The court also vacated the judgment against the individual manager.
The court’s reasoning
The court held that the employee headcount cap under Title VII is an affirmative defense that must be pleaded to be preserved. Because the dealership failed to plead the cap or include employee count as a fact issue in the pretrial stipulation, it waived the defense. The court further explained that where a jury does not allocate damages between federal and state statutes, the plaintiff is entitled to the sum of the maximums available under each, provided the total does not exceed the combined limits. The court also affirmed that the district court had jurisdiction to correct the legal error regarding individual liability under Rule sixty b.
What it means going forward
Employers must affirmatively plead the Title VII employee headcount cap in their answers to preserve the defense. Plaintiffs suing under parallel federal and state statutes may recover the combined statutory maximums if the jury does not apportion the award.
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