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Courts Clarify Damages Caps Under Federal Employment Discrimination Statutes

By E. Fredrick Preis, Jr. and and Joseph R. Hugg
August 31, 2011

Recent decisions by federal Courts of Appeals in the First and Fifth Circuits shed light on two issues critical to the question every employer asks after being served with an employment discrimination lawsuit: “What's the worst that can happen?”

As originally enacted, Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on gender, religion, national origin, race, and color, allowed plaintiffs to recover only for lost wages (i.e., back pay and front pay) starting two years before the date the plaintiff filed a charge with the EEOC. However, plaintiffs have been able to recover much more since 1991. Specifically, a 1991 amendment to the Civil Rights Act expanded the scope of damages recoverable under Title VII and other employment discrimination statutes (such as the Americans with Disabilities Act (“ADA”) and, now, the Genetic Information Nondiscrimination Act of 2008 (“GINA”)) if a plaintiff proves intentional discrimination. A successful plaintiff may now recover compensatory damages, such as emotional distress, and punitive damages. Although a plaintiff may now recover more than just lost wages, the good news is that the total amount of compensatory and punitive damages awardable is limited by statutory limits or “caps,” which depend on the number of individuals employed by the company that was found liable for unlawful discrimination.

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