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No More Compensatory and Punitive Damages for WFEA Violations

By Saul C. Glazer

The Wisconsin Assembly passed a bill on February 21 eliminating compensatory and punitive damages awards for violations of Wisconsin’s Fair Employment Act (WFEA). This bill was passed by the Wisconsin Senate in November 2011 and is expected to be signed into law by Governor Scott Walker shortly.

This law reverses a 2009 law from the Doyle administration that mirrored Title VII of the Civil Rights Act of 1964 and provided for compensatory and punitive damages up to $300,000. The new law will apply to all future complaints as well as all pending complaints in which a final determination has not been reached by the Labor and Industry Review Commission (LIRC) or the Department of Workforce Development (DWD).

Outgoing law
Under the 2009 law, a person alleging discrimination in employment, unfair honesty testing, or unfair genetic testing may file a complaint with the DWD seeking action that will effectuate the purpose of the WFEA, including reinstating the employee, providing back pay, and paying costs and attorneys’ fees.

In addition, the WFEA permits the DWD or a person who has been discriminated against or subjected to unfair honesty or genetic testing to file an action in circuit court to recover compensatory and punitive damages after the completion of all administrative proceedings before the DWD and LIRC concerning the violation.

If the circuit court finds an employer has committed an act of discrimination or unfair honesty or genetic testing, it must order the employer to pay the employee compensatory and punitive damages in an amount the court finds appropriate, subject to certain limitations:

  1. If the employer employs 100 or fewer employees — $50,000.
  2. If the employer employs more than 100 but fewer than 201 employees — $100,000.
  3. If the employer employs more than 200 but fewer than 501 employees — $200,000.
  4. If the employer employs more than 500 employees — $300,000.

Incoming law

The new law will eliminate the awarding of compensatory and punitive damages to persons who have been discriminated against in employment or subjected to unfair honesty or genetic testing. Once the bill is signed into law, the DWD may still award such an employee back pay, costs, attorneys’ fees, and reinstatement (or front pay).

Bottom line
This law is good news for Wisconsin employers. Employees who decide to pursue their claims administratively won’t have the ability to recover compensatory and punitive damages. Depending on the underlying claims, some employees may choose to pursue cases in federal court. However, employers have the benefit of being able to avail themselves of summary judgment (dismissal before trial) in many federal employment cases. Administrative claims under the WFEA aren’t subject to summary judgment and must go to a hearing on the merits of the complaint if probable cause has been found.

Saul C. Glazer is a partner at Axley Brynelson, LLP and editor of the Wisconsin Employment Law Letter. He can be reached at (608) 260-2473.

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