Compensatory Remedies under Title VII

Many employees, who have filed a formal complaint/taken legal action alleging disparate treatment, often wonder about the remedies that are available to them under the law. While each case is different, there are general guidelines regarding financial liability (compensatory and punitive).

Definitions: Compensatory damages refer to damages that are recovered in payment for injury or economic loss. Punitive damages are damages that are added due to malicious or grossly negligent action. Punitive damages may be awarded in a lawsuit as a punishment and example to others for malicious, evil or particularly fraudulent acts. Injunctive relief refers to a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. Injunctive relief is not a judgment for money. It is sometimes part of a lawsuit for damages and/or contract performance. (Source: www.law.com)

In a disparate treatment case, the statute (Title VII) allows the following remedies (as applicable): injunctive relief, reinstatement, front pay (until or in lieu of reinstatement), back pay, attorney’s fees and costs, compensatory damages for any past or future out-of-pocket losses and any emotional harm, and punitive damages if the employer acted with malice or with reckless indifference to the individual’s federally protected rights. Punitive damages are unavailable against a federal, state, or local government employer.

The law places caps on the sum of compensatory and punitive damages for which an employer may be liable. The caps are based on the size of the employer’s workforce:

Employers with 15 - 100 employees: up to $50,000
Employers with 101 - 200 employees: up to $100,000
Employers with 201 - 500 employees: up to $200,000
Employers with 501 or more employees: up to $300,000

The caps apply to the sum of: punitive damages, and compensatory damages for emotional harm and future pecuniary losses. The caps do not apply to back pay and interest on back pay, front pay, or past pecuniary losses.

In a “mixed motives” case, in which an employment decision was motivated in part by race but the employer proves it also was motivated in part by a nondiscriminatory reason that would have resulted in the same decision by itself, Title VII still is violated but the remedies available are limited. The law allows declaratory relief, injunctive relief, and attorney’s fees and costs, but not reinstatement, hiring, back pay, or compensatory or punitive damages.

In an “after-acquired evidence” case, in which an employment decision was motivated by race but the employer proves that it subsequently discovered evidence of the applicant’s or employee’s wrongdoing that would have led to a similar decision on legitimate grounds even absent discrimination, Title VII still is violated. However, the remedies available are limited as follows: back pay is generally limited to the period from the date of the unlawful employment action to the date that the misconduct was discovered, compensatory damages are typically excluded for out-of-pocket losses incurred after the date that the evidence of wrongdoing was discovered, and reinstatement (or instatement) and front pay are not available. Other remedies, including compensatory damages for emotional harm and punitive damages, are not affected.

In a disparate impact case, in which a policy or practice has a significant disparate impact but cannot be justified by job-relatedness and business necessity, the employee is entitled to injunctive relief, reinstatement, front pay (until or in lieu of reinstatement), back pay, and attorney’s fees and costs. Compensatory damages and punitive damages are not available in disparate impact cases.

For further information on compensatory and punitive damages, see Enforcement Guidance: Compensatory and Punitive Damages Available Under §102 of the Civil Rights Act of 1991 (1992), available at http://www.eeoc.gov/policy/docs/damages.html.

For a fuller discussion of after-acquired evidence, see Enforcement Guidance on After-Acquired Evidence and McKennon v. Nashville Banner Publishing Co. (1995), available at http://www.eeoc.gov/policy/docs/mckennon.html.

Source: http://www.eeoc.gov/policy/docs/race-color.html