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Damages Caps on Intentional Discrimination in Employment
For employers with fifteen or more employees, Title VII of the Civil Rights Act (Title VII), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA) impose federal statutory caps on certain compensatory and punitive damages in cases of intentional discrimination in employment. State statutory and common law claims might not impose caps and plaintiffs may be able to recover under multiple theories in their jurisdiction.
Kristen Gallagher, Co-Chair of McDonald Carano’s Employment & Labor Law Practice, answers the five most frequently asked questions about the federal caps in an article she published in the September issue of Communique’, the official publication of Clark County Bar Association. Kristen’s article is provided below and available as a PDF here.
1. Will damages caps be increased or eliminated?
The caps have not increased since enactment of the Civil Rights Act of 1991. The amount and/or existence of caps are currently under scrutiny. On May 8, 2024, Representative Suzanne Bonamici and others introduced the Equal Remedies Act of 2024. The bill proposes to amend Title VII by eliminating caps on punitive and compensatory damages. Additionally, the bill proposes amending the Age Discrimination in Employment Act (ADEA) to provide for remedies consistent with those available under Title VII because the ADEA provides for remedies available under the Fair Labor Standards Act (FLSA).
2. What damages are capped?
Title VII, the ADA, and GINA impose caps on certain compensatory and punitive damages. 42 U.S.C. §§1981a(a)(1), 2000ff-6(a)(3). Section 1981a, governing damages in cases of intentional discrimination in employment, specifies caps for these three statutes that apply to damages for:
- Future (but not past) pecuniary losses.
- Emotional pain, suffering, inconvenience, and mental anguish.
- Loss of enjoyment of life.
- Other non-pecuniary losses.
- Punitive damages.
There is no monetary damages cap for race discrimination claims under 42 U.S.C. §1981 (often referred to as “Section 1981”); however, other limitations may apply to claims asserted under Section 1981.
3. How are damages caps assessed and applied?
Caps are based on the number of employees. Caps applicable to Title VII, ADA, and GINA apply per complaining party, not per claim.
- 15 to 100 employees: $50,000
- 101 to 200 employees: $100,000
- 201 to 500 employees: $200,000
- More than 500 employees: $300,000
4. Can a plaintiff aggregate an employer’s multiple facilities to access a higher cap?
42 U.S.C. §1981a is silent about how to identify the employer. A Plaintiff often seeks to aggregate an employer’s multiple facilities and consider them a single employer for purposes of counting employees so a higher cap applies. While a court cannot inform a jury of the caps applied to combined compensatory and punitive damages (42 U.S.C. §1981a(c)(2)), if a jury awards damages in excess of the cap, the court then reduces the award in conformity with the applicable cap.
5. Are back pay and front pay capped under federal law?
Back pay and front pay are not capped; however, there are various bases to defeat or reduce these categories of damages.
- Back pay is generally awarded for the period of time between the discriminatory conduct and a judgment or other event remedying the discrimination. An employer can try to reduce or defeat a back pay award based on (1) an employee’s failure to mitigate damages, (2) after-acquired evidence of employee misconduct, or (3) an employer’s unconditional offer of reinstatement that the employee rejected. Back pay is reduced by interim earnings or amounts the individual with reasonable diligence could have earned. There may be special circumstances that could reduce a back pay award, such as (1) an award that places a plaintiff in a better position than if the plaintiff remained in the position and the discrimination did not occur, (2) the employer filed for bankruptcy, or (2) the employee was planning to voluntarily terminate employment to open their own business. Other offsets or deductions from a back pay award may be available to employers, including interim earnings, post-termination benefits, or collateral source payments, which varies by jurisdiction.
- Front pay has generally been limited by courts based on the circumstances of the case. While plaintiffs are expected to mitigate damages by finding appropriate comparable employment, estimating front pay is not exact and can result in differing outcomes. Generally, courts typically award front pay for one to two years, however, some front pay awards have represented 25 years of lost wages. Cases that award higher front pay damages are fact dependent, but involve situations like a niche profession where the plaintiff has difficulty finding a comparable position, plaintiff is nearing retirement, expert testimony established difficulty in finding a similar position, or circumstances of the case resulted in a serious medical condition that made it difficult for the plaintiff to mitigate their damages.
About McDonald Carano
In 2024, McDonald Carano celebrated its 75ᵗʰ Anniversary of serving Nevada’s legal, business, government, and civic communities. More than 60 lawyers and government affairs professionals serve Nevada, national, and international clients from our offices in Reno, Las Vegas, and Carson City. McDonald Carano provides transactional, litigation, regulatory, and government affairs services to startups, corporations, private companies, trade associations, nonprofits, public entities, high-net-worth individuals, and family offices throughout Nevada. We are deeply committed to supporting local communities by volunteering our time, resources, and services, including pro bono legal services, to nonprofit organizations, charitable foundations, and public service entities. We are proud to be your Nevada law firm since 1949.
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