Author: J. Cunyon Gordon and Monica Ghosh, Chicago Lawyers' Committee for Civil Rights Under Law, Inc.
Last updated: November 2015
If the court finds that the defendant has intentionally engaged in or is intentionally engaging in an unlawful employment practice, the court may enjoin the defendant from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, including, but not limited to, reinstatement or hiring of employees, with or without back pay, or any other equitable relief the court deems appropriate. 42 U.S.C. § 2000e-5(g)(1). Reinstatement may not be denied merely because the employer is hostile to the employee as a result of the lawsuit. Bruso v. United Airlines, Inc. 239 F.3d 848 (7th Cir. 2001); Hicks v. Forest Preserve Dist. of Cook County, Ill., 677 F.3d 781, 792 (7th Cir. 2012) .
Compensatory and punitive damages are available in disparate treatment cases, but not in disparate impact cases. 42 U.S.C. § 1981a. Punitive damages are not available against state, local, or federal governmental employees. 42 U.S.C. § 1981a(b)(1).
Compensatory damages may be awarded for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. 42 U.S.C. 1981a(b). Medical evidence is not necessary to show emotional distress. Picket v. Sheridan Health Ctr., 610 F.3d 434, 446 (7th Cir. 2010); Farfaras v. Citizens Bank, 433 F.3d 558 (7th Cir. 2006).
Punitive damages may be awarded when the defendant is found to have engaged in discriminatory practices with malice or with reckless indifference. 42 U.S.C. § 1981a(b)(1). See, e.g., EEOC v. AutoZone, 707 F.3d 824, 835 (7th Cir. 2013); May v. Chrysler Group LLC, 716 F.3d 963, 974 (7th Cir. 2012). The question of whether an employer has acted with malice or reckless indifference ultimately focuses on the actor's state of mind, not the actor's conduct. An employer's conduct need not be independently “egregious” to satisfy § 1981(a)'s requirements for a punitive damages award, although evidence of egregious behavior may provide a valuable means by which an employee can show the “malice” or “reckless indifference” needed to qualify for such an award. See May v. Chrysler Group LLC, 716 F.3d 974;. Kolstad v. Am. Dental Ass’n., 527 U.S. 526, 119 S.Ct. 2118 (1999).
The “malice” or “reckless indifference” necessary to impose punitive damages pertain to the employer's knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination. An employer is not vicariously liable for discriminatory employment decisions of managerial agents where these decisions are contrary to the employer's good faith efforts to comply with Title VII. See id.
The Seventh Circuit has stated the test for punitive damages as: (1) the employer knows of the anti-discrimination laws (or lies to cover up discrimination); (2) the discriminators acted with managerial authority; and (3) the employer failed to adequately implement its own anti-discrimination policies (no good faith). EEOC v. AutoZone, 707 F.3D 824, 835 (7TH Cir. 2013); Lampley Learning Curve Toys v. Onyx Acceptance Corp., 340 F.3d 478, 482 (7th Cir. 2003). In the context of sexual harassment, there is no good faith if the employer shrugs off complaints of harassment, does not put its anti-harassment policy in writing and does not provide ready access to the policy. Hertzberg v. SRAM Corp., 261 F.3d 651 (7th Cir. 2001); Gentry v. Export Packaging Co., 238 F.3d 842 (7th Cir. 2001) (punitive damages allowed when company knows that touchings are illegal and sees it happening). In the context of retaliation, punitives have been awarded when the employer creates two documents explaining why it discharged plaintiff, one truthfully disclosing a retaliatory motive and the other giving a pretextual motive. Fine v. Ryan Int’l Airlines, 305 F.3d 746 (7th Cir. 2002). Punitive damages may be awarded even when back pay and compensatory damages are not. Hertzberg v. SRAM Corp., 261 F.3d 651, 656; Timm v. Progressive Steel Treating, Inc., 137 F.3d 1008 (7th Cir. 1998). See also Neuros Co. Ltd. v. Kturbo, Inc., 698 F.3d 514, 520 (7th Cir. 2012)("The proper focus od analysis of the ratio itself is the adequacy of the combined award of compensatory and punitive damages to motivate the prosecution of a meritorious claim. If the compensatory damages are slight, a single-digit ratio is likely to be insufficient."); Alexander v. City of Milwaukee, 474 F.3d 437 (7th Cir. 2007)(holding the ratio between punitive damages and compensatory damages may be high when the compensatory damages are relatively low).
Compensatory and punitive damages are added together and the sum is subject to caps in Title VII cases. The sum amount of compensatory and punitive damages awarded for each complaining party shall not exceed, (A) in the case of a respondent who has more than 14 and fewer than 101 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $50,000; (B) in the case of a respondent who has more than 100 and fewer than 201 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $100,000; (C) in the case of a respondent who has more than 200 and fewer than 501 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $200,000; and (D) in the case of a respondent who has more than 500 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $300,000. 42 U.S.C. § 1981a(b)(3). Back pay and front pay do not count toward these caps. Pollard v. E.I.DuPont de Nemours & Co., 532 U.S. 843, 852 (2001); Barton v. Zimmer, Inc., 662 F. 3d 448, 454 (7th Cir. 2011); Pals v. Schepel Buick & GMC Truck, Inc., 220 F.3d 495 (7th Cir. 2000).
Both front pay and lost future earnings awards are Title VII remedies. Front pay, an equitable remedy, is a substitute for reinstatement when reinstatement is not possible. An award of lost future earnings compensates the victim for intangible nonpecuniary loss (an injury to professional standing or an injury to character and reputation). An award of lost future earnings is a common-law tort remedy and a plaintiff must show that his injuries have caused a diminution in his ability to earn a living. The two awards compensate the plaintiff for different injuries and are not duplicative. Williams v. Pharmacia, 137 F.3d 944 (7th Cir. 1998). In calculating front pay, the plaintiff must show the amount of the proposed award, the anticipated length of putative employment and apply an appropriate discount rate. Bruso v. United Airlines, Inc., 239 F.3d 848 (7th Cir. 2001). Front pay is not subject to the caps on Title VII compensatory damages. Pollard v. E.I. Dupont de Nemours & Co., 532 U.S. 843 (2001); Barton v. Zimmer, Inc., 662 F.3d 448 at 454.
In Title VII cases, the court, in its discretion, may allow a prevailing party a reasonable attorney's fee and reasonable expert witness fees. 42 U.S.C. § 2000e-5(k). In § 1981 cases, the court, in its discretion, may allow the prevailing party a reasonable attorney's fee and may include expert fees as part of the attorney's fee. 42 U.S.C. § 1988(b-c).
Although the language of the statute does not distinguish between prevailing plaintiffs and prevailing defendants, in a Title VII case, attorney's fees are only awarded to prevailing defendants upon a finding that the plaintiff's action was "frivolous, unreasonable or groundless" or that the plaintiff continued to litigate after it clearly became so. Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978); Cooney v. Casady, 735 F.3d 514,521 (7th Cir. 2013).
Although the language of the statute does not distinguish between prevailing plaintiffs and prevailing defendants, in a § 1981 case, the prevailing defendant is only entitled to attorney's fees if the court finds that the plaintiff's action was "vexatious, frivolous, or brought to harass or embarrass the defendant." Hensley v. Eckerhart, 461 U.S. 424, 429, n.2 (1983); Fox v. Vice, 131 S.Ct. 2205, 2211 (2011)(when prevailing attorneys performed work on both mertorious and frivolous claims, fees provision applies only to work performed on the frivolous claims). "A plaintiff 'prevails' when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Southworth V. Board of the Univ. of Wisc. System, 376 F.3d 757, 766 (7th Cir. 2004)(citing Farrar v. Hobby, 506 U.S. 13, 111 (1992)).
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