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SAN FRANCISCO — A federal appeals court unanimously upheld a verdict awarding a black employee $1 million in punitive damages after he experienced repeated racial harassment on the job at a cardboard company near Seattle. 

Three judges on a U.S. 9th Circuit Court of Appeals panel affirmed that Troy Swinton was owed the punitive damages because he was the subject of repeated jokes by co-workers that used “a continuing stream of racial slurs,” Judge Margaret McKeown wrote Wednesday. 

Out of 140 employees at Potomac Corp., 30 miles north of Seattle, Swinton was the only black employee when he worked in the shipping department for seven months before quitting. 

McKeown said Swinton was forced to listen to offensive remarks made in front him while his supervisor stood by without intervening. 

McKeown also said testimony from a trial in U.S. District Court in Seattle “underscored the ubiquity of the racist atmosphere” at the company. 

The Seattle jury awarded Swinton $5,612 in back pay, $30,000 for emotional distress and $1 million in punitive damages. Law experts said it’s one of the largest awards ever for racial harassment based only on offensive language. 

“Although much of what happened here was characterized by management as ’jokes,’ neither the discrimination nor the jury verdict is a laughing matter,” McKeown wrote. 

Circuit Judges William A. Fletcher and Johnnie B. Rawlinson joined her opinion. 

In Potomac’s appeal, it said U.S. District Judge Jack E. Tanner showed bias toward the plaintiff during the questioning of a plant manager. The appeals panel said Tanner’s questions did not reveal anything of consequence. 

Potomac’s lawyer, Richard Winter, said it was “difficult to try the case” before an ”80-year-old black judge,” referring to Tanner. “He was visibly distressed by the evidence of the N-word.” 

Winter said the company has not decided whether to request another hearing before a larger 9th Circuit panel. 

The U.S. Supreme Court ruled in 1999 that a company cannot be required to pay punitive damages for managers who discriminate against employees if the company has made “good faith efforts” to comply with the Civil Rights Act of 1991. 

Potomac argued it should be immune from paying punitive damages because it had written policies forbidding workplace harassment. 

The federal appeals court rejected that contention, citing decisions from other appeals courts that held companies liable for punitive damages even when low-level supervisors do not respond to harassment complaints. 

“Despite testimony that offensive racial language was ubiquitous, there is nothing to indicate that anyone in the company did anything to combat this problem until officially informed by a state agency that Swinton was charging racial harassment,” McKeown wrote.