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Employee won discrimination case? Understand bias laws’ cap on punitive damages

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in Discrimination and Harassment,Human Resources

Employees who win discrimination cases are sometimes entitled to punitive damages if their employer’s actions were egregious. But those damages are capped based on the employer’s size.

Now the 5th Circuit Court of Appeals has clarified that the cap applies to all claims brought by the same party, even if she wins on several claims.

Recent case: Carleen Black sold pharmaceuticals and sued after she was fired for allegedly not attending a meeting. Her lawsuit claims the real reason was that she had reported sexual harassment and complained about unequal pay.

A jury apparently believed Black and awarded her $3,450,000 in back pay, compensatory damages and punitive damages. Of that, almost $3 million was for punitive damages. When the court reduced the punitive damages to $200,000, Black appealed, arguing that because she won on three claims, she should get $600,000 in punitive damages, not a mere $200,000.

The 5th Circuit Court of Appeals agreed with several other circuits, concluding that the punitive damage cap applies to each party, not to each claim that party wins. Therefore, Black wasn’t entitled to more than $200,000. (Black v. Pan American Laboratories, No. 09-51092, 5th Cir., 2011)

Final note: In many cases, employers end up also paying the employee’s legal fees. And that can be far more than the cap on damages. Don’t let the lawyers be the big winners. Do everything you can to prevent sexual harassment and other forms of discrimination.

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