“Race” to the Bottom Line: A $3.39 Million Verdict for Saying the Quiet Part Out Loud

If you ever find yourself wondering whether your company’s leadership can quietly instruct HR to hire only white people and get away with it, the Eleventh Circuit just answered that question with a resounding no…and a $3.39 million price tag.

In Faulk v. Dimerco Express USA Corp., decided April 7, 2026, the U.S. Court of Appeals for the Eleventh Circuit upheld a jury verdict awarding the plaintiff five figures in lost wages, six in emotional distress damages ($300K), and $3 million in punitive damages after the company rescinded his job offer because he is Black.

The court also left intact more than $406,000 in attorney's fees and costs.

The Facts Are Truly Breathtaking

In 2018, “Herb” interviewed for the presidency of the company’s U.S. operations. The management plan he submitted to get the job included proposals to hire “Caucasian Sales & Marketing Manager/VP” across offices and to “leverage” those hires to assist local branches. He got the promotion.

(Spoiler: the management plan aged poorly.)

Once in charge, Herb made his preferences operational. He told his HR manager, “Renee,” that he preferred white applicants because “it is easier to get a Caucasian person through the door to obtain sales . . . than it was any other race.”

Renee’s own supervisor confirmed that Herb wanted only White men under 40 in account executive roles.

I’m not making this up. How could I?

By October 2019, the policy had become so entrenched that Renee presented a slide deck to the HR team identifying “Ideal Sales Candidates” as “American and Caucasian (preferred) ethnicity,” which she attributed directly to Herb.

Next, Enter the Candidate They Should Have Just Hired

In August 2019, the plaintiff, a Black man with a bachelor’s and a master’s degree in business administration, applied for an account executive position at company’s Atlanta office. Renee and the Atlanta branch manager offered him the job at $90,000 per year, pending a background check.

That background check turned up a 2014 misdemeanor conviction for disorderly conduct. When she received that report, the manager emailed Renee, copying Herb, and attached a screenshot of the background check report, which identified the plaintiff as “Black.”

Herb responded, “That’s ok, let’s hire him.”

Kidding! Herb instructed Renee (HR) to rescind the offer.

The Double Standard That Didn't Even Bother With a Quiet Part

Two months later, the employer’s Dallas office hired “Tanner,” a white dude, as an account executive.

His background check revealed not one, not two, but FOUR misdemeanor convictions from one incident.

HR called Tanner and gave him a chance to explain, and, surprise! Herb approved the hire.

When HR asked Herb why the company would hire someone with a worse record than the plaintiff, Herb responded that he wanted to hire only whites.

No ambiguity. No subtext. No plausible deniability. Just the plain statement, out loud, to a member of his own HR team who was already uncomfortable enough to be keeping receipts.

Compliance Saw the Iceberg Ahead and Suggested a Fresh Coat of Paint

HR pushed back. In January 2020, she emailed Herb and told him “it’s discriminating to search for [a] candidate based on race.” Herb did not take this well. He sent HR’s email to the director of administration and compliance and attached a proposed reply stating that the company “is focusing on [the] Caucasian Market.”

And it gets worse.

The compliance director’s response deserves its own chapter in a compliance training manual titled What Not to Do. She told Herb that if he put a racial preference in writing, “both you and the company are guilty of discrimination and if we ever get a legal complaint, these emails will result in a guilty verdict and large damage award.”

Instead of investigating or shutting down Herb’s racial bias, she “strongly suggested he reword the message” in response to HR.

Read that again. She did not tell him to stop discriminating. She told him to stop writing about it.

HR resigned in March 2020.

The Lawsuit (You Saw This Coming)

In June 2020, HR connected with plaintiff on LinkedIn, and in 2021, HR told plaintiff what happened: that the company rescinded his offer, the company hired a white man with a worse record, and that the president “didn't want to hire any other race.”

The plaintiff filed a Section 1981 claim, the federal statute that guarantees all persons the same right to make and enforce contracts regardless of race.

A jury found that the company refused to hire the plaintiff because of his race and awarded him $90,000 in lost wages, $150,000 in past emotional distress, $150,000 in future emotional distress, and $3 million in punitive damages.

The Appeal: The Employer Swings and Misses

The company threw everything it had at the Eleventh Circuit.

But to make a long story short, the Eleventh Circuit affirmed the lower court’s ruling. On the compensatory damages, the court held that the plaintiff’s testimony about his emotional distress supported the $300,000 award and found the company’s conduct “exceedingly reprehensible” to support the punitive damages award.

It determined that the company employed a racially discriminatory hiring plan despite repeated warnings that the plan was illegal, and when confronted, leadership sought to hide the practice rather than change it.

The Title VII Cap Doesn’t Apply

Making a final play, the company asked the court to cap punitive damages at $100,000, the limit that applies to employers of the company’s size under Title VII of the Civil Rights Act of 1964 (Title VII).

The court was not buying it. Congress chose not to impose caps on claims brought under Section 1981, and the Eleventh Circuit was not about to do Congress’s job for it.

This is a critical point for employers. Section 1981 has no damages cap and no administrative exhaustion requirement. An employee who can bring a race discrimination claim under Section 1981 can bypass the Title VII machinery entirely and go straight to a jury with unlimited punitive damages exposure.

Four Takeaways To Tape to Your Break Room Wall Or Post to the Company Intranet

🏢 1. The tone is set at the top. When discriminatory directives come from the top, they infect everything downstream. Herb’s racial preferences became slides, hiring criteria, and ultimately a $3.39 million verdict. Leadership training on anti-discrimination obligations is not optional, and it needs to reach the C-suite, not just frontline managers.

🚨 2. Compliance means stopping the conduct, not just hiding the evidence. The compliance director’s response to Herb’s discriminatory email was to suggest he reword it and not to tell him to stop discriminating! The Eleventh Circuit specifically cited the company’s decision to conceal rather than correct the practice as evidence of intentional malice. Compliance officers and in-house counsel must have the authority and backbone to shut down illegal practices, not just manage the optics.

⚖️ 3. Inconsistent application of neutral policies is Exhibit A in a discrimination case. The company rescinded the plaintiff’s offer over one misdemeanor conviction but hired a white applicant with four. If you have a background check policy, apply it the same way to every candidate. The moment you start making exceptions along racial lines, you have handed the plaintiff’s lawyer a gift-wrapped trial exhibit.

💰 4. Section 1981 has no damages cap—plan accordingly. Title VII caps punitive damages based on employer size, with the smallest employers facing a $50,000 limit and the largest facing $300,000. Section 1981 has no such cap. If you are a small or mid-sized employer and you think your exposure is limited, think again. A Section 1981 claim can produce a multi-million dollar verdict, and the Eleventh Circuit just confirmed it will uphold one.

The bottom line is this: if your hiring practices can’t survive a jury reading your executives’ emails out loud, it’s time to fix the practices—not the emails.