Federal judges are required to reduce jury verdicts in discrimination cases brought under Title VII of the Civil Rights Act (Title VII) and the Americans with Disabilities Act (ADA) if a jury awards more than is permitted under federal caps. But a bill now pending in Congress, the Equal Remedies Act of 2024, would end that practice. The bill’s sponsors contend that the slashing of large jury verdicts has effectively reduced the cost of discrimination. The Equal Employment Opportunity Commission concurs, arguing that the caps have taken power away from juries to correct bad behavior by large employers.
Consider these examples:
- A Nebraska federal court jury awarded more than $36 million to an applicant who claimed he was denied a truck driver position due to a disability in violation of the ADA. The verdict included $36 million in punitive damages and $75,000 in compensatory damages in addition to economic damages. Under federal law, the truck driver will never see the vast majority of this award because the $36,075,000 for the combined punitive and compensatory damages will be reduced to $300,000 even if upheld on appeal. Equal Emp’t Opportunity Comm’n v. Drivers Mgmt., 8:18-CV-462 (D. Neb. Jan. 10, 2024).
- An Oklahoma federal court jury awarded more than $1.1 million to a professor who alleged sex discrimination and retaliation under Title VII, claiming she was denied tenure because she is transgender. Her $1,165,000 verdict was reduced to $360,040.77 ($300,000 in punitive damages with the remainder for back pay). Tudor v. SE. Okla. State Univ., 13 F.4th 1019 (10th Cir. 2021).
By contrast, the Appellate Division in New Jersey upheld a state trial court verdict of $10 million for punitive damages to a senior corrections officer who sued the State of New Jersey for failing to accommodate her disabilities under the New Jersey Law Against Discrimination, a state discrimination law. If this claim had been brought under the federal law analog, it would have been reduced to the $300,000 cap, illustrating the markedly different potential outcomes under state and federal laws.
The reason these cases are treated so differently is that federal court jury awards under Title VII and the ADA are subject to statutory caps that limit the amount of punitive and compensatory damages.
The caps vary by size of employer and currently stand at:
- $50,000 for 15–100 employees
- $100,000 for 101–200 employees
- $200,000 for 201–500 employees
- $300,000 for 500 employees or more
With the Equal Remedies Act of 2024, several members of the House of Representatives are seeking to eliminate these caps. Introduced on May 8, 2024 by Rep. Suzanne Bonamici of Oregon, along with seven co-sponsors as of today’s date, the bill seeks to eliminate the damage caps on compensatory and punitive damages under Title VII and the ADA. In addition, the bill seeks to align damages under the Age Discrimination in Employment Act (ADEA) with the framework for damages under Title VII and the ADA.
The ADEA currently only provides for monetary loss, which can be doubled if the plaintiff proves “willful” discrimination, but does not allow for compensatory and punitive damages, which would change if this bill passes.
Prior Failed Attempts
This is not the first time that members of Congress have tried to address this perceived inequity as the current caps have not changed since they were codified in 1991.
The Equal Remedies Act of 1991 was introduced in the Senate almost immediately after passage of the Civil Rights Act of 1991 (which amended the Civil Rights Act of 1964 and established damages for intentional discrimination in employment, but with damages caps). But that initial effort to eliminate the caps quickly lost momentum.
In furtherance of the civil rights initiatives of the Obama administration, Democratic members of Congress made another attempt to remove the damage caps as part of the proposed Civil Rights Act of 2008, a bill sponsored by Representative John Lewis. The bill also failed, despite having 33 sponsors (all Democrats). No attempts have been made since then to contend with the damage caps until the recent bill.
Why Now?
Now, 16 years later, the Equal Remedies Act of 2024 has been introduced in the House. Does this bill have any chance of passage? The bill currently only has seven co-sponsors, and no bipartisan support, which suggests passage is unlikely in the waning months of the 118th Congress. However, the re-introduction of the bill signals renewed interest in making this subject a priority now and into the next Congress.
Representative Bonamici, the main sponsor, stated that her reason for pushing the bill is that damage caps have been the same since 1991, “effectively meaning that employment discrimination has gotten cheaper every year for more than three decades!” Equal Remedies Act of 2024, United States Representative Suzanne Bonamici, 1st District of Oregon (https://bonamici.house.gov/sites/evo-subsites/bonamici.house.gov/files/evo-media-document/Equal_Remedies_Act_of_2024.pdf). She also acknowledged that juries around the country have awarded compensatory and punitive damages that are higher than the caps, leading to awards having to be cut down, sometimes by millions of dollars.
In response to the reduced verdict in the Drivers Management case noted above, EEOC General Counsel Karla Gilbride noted that the cap is not “even one percent of the jury’s intended award.” Nebraska Court Orders Trucking Company to Pay Deaf Driver Punitive Damages, Lost Wages After Jury Awarded Millions, EEOC Press Release (Jan. 12, 2024). She opined that the caps on punitive damages “take away juries’ power to deter large employers from engaging in intentional discrimination against workers.”
Given the different treatment of damage awards under federal and state law, the damage caps often impact whether a plaintiff will even pursue a case under federal law. When claims are available under both federal and state statutes which prohibit the same conduct—discrimination and retaliation on the basis of certain protected characteristics—plaintiffs often elect to proceed only under state law, eschewing the federal law counterpart, as the state law is perceived as more advantageous given the availability of uncapped damages in many states.
We will need to wait and see whether the eye-catching verdict reductions, the discrepancies of damages awards under federal and state law and the advocacy for change by the federal agency tasked with investigating complaints of discrimination and retaliation will be enough to gain momentum to push this bill through in an election year. If it does not happen this year, we anticipate the issue will be revisited as more and more federal jury verdicts are reduced by the statutory caps while state law verdicts on claims addressing similar conduct stand.
Heather R. Boshak, Partner, and Kelly L. McNaughton, Associate, at Fox Rothschild.
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