Did Lab Have to Swallow Bitter Pill of $10 million Punitive Damages Award?

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An employer can get sued for failing to reasonably accommodate an employee with a disability. But did you know that courts may award punitive damages to a worker who wins her lawsuit? A case involving an employee for a clinical laboratory testing company addresses how severe an employer’s conduct has to be to trigger such an award.

Business was going downhill for the company. So, it decided it would have its employees engage in more face-to-face time with clients and in public speaking. The changes rubbed one employee the wrong way. The executive director for laboratory operations told PPD that she had social anxiety disorder and panic attacks. In January, she and PPD started to talk about possible accommodations, such as a surrogate to do her presentations. She requested additional accommodations in February.

Seemingly exasperated by the director’s requests, HR administrators began talking about "delicately working [the director] out.” They also decided to change her job goals. They added a goal to eliminate all lab issues – a goal which, not surprisingly, was impossible to meet. They also talked about the possibility that the director would “self select” – that is, quit on her own. They became suddenly concerned about closely documenting criticism of her job performance. In addition, they asked her to quit.

The head of HR later testified that, at the time she and the higher ups talked about working the director out, they were still involved in the interactive process so it would have been unfair to try and terminate her. She stated that working her “out,” however, referred to the fact that the director was working remotely at that time.

The director sued, claiming PPD discriminated by failing to reasonably accommodate her under the ADA. The trial court agreed, and awarded her, among other things, $10 million in punitive damages. PPD challenged the award.

The court explained that the ADA permits punitive damages when an employer discriminates with malice or reckless indifference. To succeed, the employee must prove the employer:

1. Intentionally discriminated against her; and
2. Discriminated in the face of a perceived risk that its actions would violate federal law.

Was the director entitled to the $10 million?

A. Yes. There was sufficient evidence that the company pressured her to quit rather than accommodate her and the HR chief admitted they were obligated to continue with the interactive process.

B. Yes. She would have been unable to perform her job even with reasonable accommodations.

If you selected A, you agreed with the court in Menninger v. PPD Development, L.P., No. 23-2030 (1st Cir. 07/24/25), which concluded that PPD acted maliciously when it:

• Tried to force her to quit;
• Tried to manufacture grounds to fire her; and
• Set impossible job goals.

The HR chief’s testimony also indicated that PPD knew that it was likely violating the law. “In light of this puzzling testimony … the jury might reasonably have concluded that PPD did not, in fact, believe that it could lawfully terminate [the Director] upon receiving her second request for accommodations,” the court said.

The court upheld the punitive damages award.

Simply Research subscribers have access to the full text of the decision.

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