March 7, 2012 – The Wisconsin Legislature on Feb. 22 passed a bill that eliminates compensatory and punitive damages awards for violations of Wisconsin’s Fair Employment Act (WFEA).

Senate Bill 202, expected to be signed into law by Gov. Scott Walker shortly, reverses existing law (2009 Wisconsin Act 20), which 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 where a final determination has not been reached by the Labor and Industry Review Commission (LIRC) or the Department of Workforce Development (DWD).

Current law under Act 20

Before the 2009 changes to the WFEA, a person alleging employment discrimination, unfair honesty, or unfair genetic testing could file a complaint with the DWD for employment reinstatement, back pay, and costs and attorneys’ fees.

Under Act 20, passed under former Gov. Jim Doyle, in addition to the remedies above, a person who prevailed in a claim filed before the DWD based on discrimination, unfair honesty, or unfair genetic testing has the right to bring an action in circuit court to recover compensatory and punitive damages, after the completion of all administrative proceedings before DWD and LIRC concerning the violation.

Under Act 20, if the circuit court confirms that an employer committed the alleged act, the circuit court is required to order the employer to pay to the employee compensatory and punitive damages in an amount that the circuit court found appropriate, subject to certain limitations:

• $50,000 for employers of less than 100;
• $100,000 for employers of more than 100 but fewer than 201 employees;
• $200,000 for employers of 200 but fewer than 501 employees; and
• $300,000 if the employer employs more than 500 employees.

SB 202 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. If bill is signed into law, the DWD may still award to such an employee back pay, costs, attorneys’ fees, and employment reinstatement (or front pay).

Wisconsin women are still entitled to equal pay

There has been significant media attention devoted to the repeal of compensatory and punitive damages under the WFEA. This is because the original Doyle law was called “The Equal Pay Enforcement Act,” a reference to equal pay for women.

The Act’s name was meant to encourage more women to seek equal pay through filing discrimination complaints. The recent media attention largely implies that the Walker administration has impaired the ability for women to receive equal pay in Wisconsin.

Discrimination claims for equal pay are still actionable under the WFEA. The repeal has no impact on whether a woman may file a discrimination claim based on unequal pay.

However, like all forms of discrimination, compensatory and punitive damages are no longer available for WFEA claims. Back pay, which compensates a woman if she prevails in an equal pay claim for the difference between what the woman was paid and what she should have been paid, is still available for some period of time for WFEA claims (going back at least 300 days before the filing of a complaint).

Women may also file a federal claim (after filing a claim with the Equal Employment Opportunity Commission and receiving a right to sue letter), which would provide the same remedies for compensatory and punitive damages allowable under Act 20.

There are no known court cases where an employee received compensatory or punitive damages following a finding of discrimination. So Act 20, at most, influenced settlements after an employer lost before the DWD on a discrimination claim.

Some employees who prevailed before the DWD may have filed federal actions to have their discrimination claims and damages decided by a jury, as opposed to having the circuit court determine the amount of compensatory or punitive damages.

Prior to the Act 20, Wisconsin employers had many incentives not to engage in illegal discrimination, including the potential for a large attorneys’ fee award in favor of the employee, or a federal court action.

Now that Wisconsin has returned to the way it was prior to 2009, Wisconsin employers will still want to steer clear of violating the WFEA and federal discrimination laws.

Bottom line

Employees who decide to pursue their claims administratively will not have the ability to recover compensatory and punitive damages under the WFEA.

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 in many federal employment cases.

Administrative claims under the WFEA are not subject to summary judgment and must go to a hearing on the merits of the complaint if probable cause is found.

On balance, the repeal of the compensatory and punitive damages is a win for innocent Wisconsin employers, although employers who engage in most forms of illegal discrimination will most likely suffer the same fate as before in front of a federal jury.

About the Author

Saul C. Glazer, U.W. 1990, is partner at Axley Brynelson LLP, Madison. His practice includes labor and employment law. Reach him at (608) 260-2473 or sglazer@axley.com.