Source of article The Jury Room - Keene Trial Consulting.
Today we have some recent research examining what happens when prestigious companies are sued for employment discrimination. A good reputation is something most organizations strive for, but in employment litigation, a good reputation can be a double-edged sword.
This research was completed at the Kellogg School of Northwestern University and the researchers found some contradictory findings on the effect of prestige for companies sued for employment discrimination. The researchers generated a list of low and high status companies from Fortune’s Most Admirable Companies list between 1998 and 2008 and gave them a score between 0 and 10. They also examined the companies reputations in diversity and employee relations to generate a list of high status and low status companies. The researchers identified 519 employment discrimination cases against these companies that went to a jury (with 238 resulting in a liability verdict and a damages award to the Plaintiff employee).
As they examined these cases, they found three distinct characteristics:
Halo Effect: High status companies received a sort of “halo effect” that the researchers said was associated with jurors giving the company the benefit of a doubt. Overall, jurors were 14% less likely to find high status companies liable when compared to low status firms. Juror perspectives changed if the high status company was found liable and then jurors became angry and punished high status firms severely (when they did find them liable).
Halo Tax: If the high status company was found liable for employment discrimination, jurors punished them more severely than they punished low status companies. The researchers call this a “halo tax” and described victims of high status firms as being awarded 3x more in punitive damages than were victims of the low status firms. The researchers say this likely happens because high status corporations are held to a higher standard and if found liable, they are punished for their hypocrisy.
Home Court Advantage: When firms are headquartered in the state where the trial is happening—they are less likely to be found liable. The researchers call this a “home court advantage”.
There are other findings too that are odd or at least interesting and you may want to read the entire article (which you can find here). For example, the researchers report that when a trial involves racial discrimination and the Plaintiff is female—there is a lower punitive damage award.
The researchers also comment that a high prestige company has an automatic advantage unless the Plaintiff employee has solid evidence to overcome the “intangible benefits of status and prestige that benefit the company over” the Plaintiff. From a litigation advocacy perspective, this article gives you much to consider as you prepare either as Defense or Plaintiff representative.
McDonnell, Mary-Hunter and King, Brayden, Order in the Court: The Influence of Firm Status and Reputation on the Outcomes of Employment Discrimination Suits (January 6, 2017). Available at SSRN: https://ssrn.com/abstract=2373974 or http://dx.doi.org/10.2139/ssrn.2373974
