Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—5th Cir.: SkyWest denied new trial on compensatory damages in sexual harassment case, (Jul 10, 2026)

By Todd Harrison, J.D.

In an issue of first impression for the circuit, the court held that a plaintiff is not required to mitigate damages for emotional distress.

Affirming a district court’s judgment in favor of the EEOC in a sexual harassment case filed on behalf of a former SkyWest employee, the Fifth Circuit, among other things, determined that there was no duty for plaintiffs to mitigate damages for emotional distress. Although Section 1981 contains a separate provision requiring plaintiffs to mitigate damages when it comes to backpay, there is no such provision with regard to emotional damages, which the court regarded as a signal of Congressional intent to exclude a duty a mitigate for these types of compensatory damages. Further, the court rejected SkyWest’s argument that the duty to mitigate emotional damages was such a well-established common law principle that it must presume Congress had meant for it to apply (EEOC v. SkyWest Airlines, Inc., No. 25-10491 (5th Cir. July 9, 2026)).

The employee in this case is a woman who worked as a parts clerk for SkyWest Airlines, eventually transferring to a position at the Dallas-Fort Worth International Airport.

Sexual harassment. While working at the airport, the employee was subjected to demeaning sexual comments from her coworkers, including a maintenance supervisor. She reported the comments to her supervisor, who seemed “annoyed” and told her they would “see how it goes” because if he took any action, it would only make things worse for the employee.

Things get worse. Nevertheless, the comments continued and the harassment escalated. This caused the employee extreme emotional distress, resulting in physical symptoms such as diarrhea, vomiting, and headaches. She began to engage in self-harm, slashing her arms with a box cutter. She had made plans to commit suicide before her husband intervened.

After taking medical leave, the employee returned to work. The situation remained unchanged, and she estimated that one day she heard the word “rape” from her coworkers approximately 40 times, leading her to write a letter to SkyWest asking to be placed on part-time status because of the “salacious” work environment. She followed up with her supervisor who professed ignorance of the situation and later threatened to fire her when she failed to show up for a scheduled shift.

Investigation. Subsequently, the employee complained to HR. She was put on administrative leave while an HR representative conducted an investigation. As part of a normal investigation, HR would interview every witness. However, in this case the HR representative made a random selection of people to interview. Witnesses described “sex talk” but the HR representative made no effort to follow up on what this meant. The maintenance supervisor told the representative that he had heard such talk and would participate in it, but would have stopped it if it had gone too far.

At the end of the investigation, some employees were ordered to undergo additional training and some received written warnings. Neither the employee’s supervisor nor the maintenance supervisor received any form of discipline.

Early retirement. While the employee was on administrative leave, the COVID-19 pandemic forced SkyWest to offer early retirement to several employees. The employee waited as long as she could to hear from HR following its investigation, ultimately taking the early retirement offer on the last possible day because no one had been fired and she feared the environment would remain unchanged.

Lawsuit. After the employee had taken early retirement, the EEOC sued SkyWest under Title VII based on the sexual harassment. After trial, the jury concluded the employee was harassed based on her sex and SkyWest had failed to take prompt remedial action. However, it found that SkyWest had not retaliated against the employee. The jury then awarded her compensatory and punitive damages. SkyWest moved for a new trial, or at least a new trial on compensatory damages, and for judgment as a matter of law on punitive damages. The district court denied these motions, leading to this appeal.

Evidentiary grounds. First, SkyWest requested a new trial on evidentiary grounds. Specifically, it argued text messages had been erroneously admitted. The messages contained conversations wherein the employee discussed the alleged harassment and her feelings regarding it with others, including her husband and friends. SkyWest contended the messages were improper hearsay. The court did not agree, finding the messages were admissible as either a present sense impression or as statements regarding a mental or physical condition.

With regard to present sense impression, the employee had testified that her text messages were “instant, realtime” communications describing events as they happened. Thus, these messages were admissible as present sense impressions, explained the court.

As to whether some of the statements involved a mental or physical condition, the court found that they did, in fact, touch on such concerns, noting that “A statement of the declarant’s then-existing state of mind (such as motive, intent, or plan) or emotional, sensory, or physical condition (such as mental feeling, pain, or bodily health)” is admissible. Fed. R. Evid. 803(3). The court also explained that a declarant’s state of mind must still be a relevant issue to allow such statements to be admitted, and that whether the employee subjectively perceived the harassment as abusive was an element of her claim and was therefore relevant to her case. Thus, the text messages were admissible and, even if some were not, they pertained to only part of the total evidence against SkyWest and so any error was not so prejudicial to affect a substantial right.

Mitigation of emotional damages. Next, the court addressed SkyWest’s argument that it was entitled to a new trial on damages because the district court failed to instruct the jury to limit compensatory damages for noneconomic losses, such as emotional distress, based on the employee’s failure to mitigate those damages. It contended that the employee could have taken steps to mitigate her emotional damages by seeking therapy or taking medication.

Issue of first impression. A successful Title VII plaintiff “may recover compensatory” damages, including for noneconomic loss. 42 U.S.C. § 1981a(a)(1), (b)(3). These damages, however, do not include backpay, which is covered by a different provision that explicitly excludes the amount a plaintiff could have made “with reasonable diligence” to mitigate losses. Thus, the question before the court was whether the requirement that a plaintiff mitigate losses for backpay also applies to compensatory damages, or at least to damages for emotional distress. The court noted that this appeared to be an issue of first impression for the Fifth Circuit.

Statutory text. Turning to the statutory text, the court noted the fact that the statute includes a mitigation requirement for backpay, but not for compensatory damages, signaled Congressional intent to exclude a duty to mitigate for compensatory damages.

Relying heavily on EEOC v. SDI of Mineola, Tex., LLC, 631 F. Supp. 3d 418 (E.D. Tex. 2022), SkyWest argued that since the provision providing for compensatory damages was added in 1991, after the provision requiring mitigation for backpay, it was reasonable to assume that Congress would not have needed to insert a mitigation provision into the statute. The court disagreed, explaining that atextual judicial supplementation is particularly inappropriate where, as here, Congress has indicated that it knows how to adopt the omitted language.

Without more, the court found no reason to graft an absent provision—present elsewhere—onto a statute where Congress opted not to place such a provision.

Common law principles. SkyWest next argued that the duty to mitigate emotional damages was such a well-established common law principle that the court must presume Congress meant for it to apply. The court remained unmoved, noting that while the duty to mitigate damages generally is firmly established in the common law, the duty to mitigate emotional damages specifically is not.

Some courts have held that mitigation of emotional damages is not required, while others have reached the opposite conclusion, observed the court here. Such lack of authority and analysis results in large differences when it comes to whether courts apply a mitigation defense to emotional damages. This satisfied the Fifth Circuit that the common law principle was not well-established now, let alone when the provision granting compensatory damages was adopted in 1991.

SkyWest, again relying heavily on SDI, contended that the principle of mitigation of damages generally is firmly rooted in common law. However, the court found this defined the common law principle “far too broadly.” The question, explained the court, was not whether well-established common law principles created a duty to mitigate damages, but whether that duty extended to emotional distress. The court held that it did not.

Noting that the majority of federal courts answering this question have held that Title VII plaintiffs have no duty to mitigate damages for emotional distress, the Fifth Circuit joined the majority and rejected SDI’s approach, finding no duty to mitigate emotional distress in the statutory text and no contrary common law principle that existed when the provision was adopted. Thus, the district court did not err in refusing to give SkyWest’s proposed jury instruction.

Punitive damages. Finally, SkyWest argued that, because the jury found it did not retaliate against the employee, the evidence was insufficient to support punitive damages and it sought judgment as a matter of law. In response, the EEOC argued that the evidence supported a finding that the two supervisors and the HR representative acted with malice or reckless indifference sufficient to justify the punitive damages award. The district court concluded that the evidence was sufficient to support the finding that at least the maintenance supervisor acted with malice or reckless indifference and did not analyze the evidence with regard to the other two. The court here agreed.

There was ample evidence that the maintenance supervisor not only knew about, but actively participated in, the severe harassment directed toward the employee. The jury also heard evidence that he and other employees received sexual harassment training on a regular basis. This was sufficient to support the jury’s finding.

Good faith. In an effort to escape liability on the question of punitive damages, SkyWest asserted a good faith defense, pointing to its anti-discrimination policy. However, the parties disputed whether the policy was sufficiently enforced via the HR representative’s investigation. Although SkyWest contended that the HR representative was unable to corroborate most of the employee’s story, the jury was free to conclude that the deficits in her investigation “reflected a feeble attempt to uncover the truth,” said the court.

At a minimum, there was sufficient evidence that the maintenance supervisor acted with malice or reckless indifference and that the HR representative’s investigation was insufficient to meet the good-faith exception, concluded the court. Accordingly, the judgment of the district court was affirmed.

The case is No. 25-10491.

Judge: Graves, J., Jr.

Attorneys: James Driscoll-MacEachron for the EEOC. Edith K. Thomas (Zipin Amster & Greenberg) for Sarah Budd. John Roger Mann (Gordon Rees Scully Mansukhani) for SkyWest Airlines, Inc.

Companies: SkyWest Airlines, Inc.

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