Senate Bill 165/Assembly Bill 310 – Cause of Action in Court and Punitive Damages for Wisconsin Fair Employment Act Cases

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February 26, 2008

We wish to alert you to the following pending Wisconsin legislation.
I. BACKGROUND.
A federal law, Title VII of the U.S. Code (Title VII), permits discrimination claims to be brought in federal court. Under Title VII, punitive damages can be awarded against an employer in some circumstances. Small Wisconsin employers (under 15 employees) are not subject to Title VII claims.
 
Wisconsin’s Fair Employment Act (WFEA) applies to all employers regardless of size. Under the current WFEA, if the Department of Workforce Development (DWD) finds that an employer has discriminated against a job applicant or employee on one of the protected grounds (i.e., age, race, creed, color, disability, marital status, sex, national origin, ancestry, arrest or conviction record, membership in the national guard or military reserves, or use or nonuse of a lawful product during nonwork hours), the DWD may order the employer to take such action as will effectuate the purpose of the WFEA. Remedies for a violation may include reinstating the job applicant or employee, paying back pay for not more than two years before the filing of the complaint, costs, and attorney fees. The current WFEA does not, however, authorize the DWD to order the payment of punitive damages or any other penalties.
II. 2007-2008 SESSION LEGISLATION.
Proposed Wisconsin legislation, SB 165/AB310, would create a dual process that would require employers to defend themselves in front of the DWD in an administrative proceeding and the courts for a determination of punitive damages. The legislation would also authorize the DWD or a person who has been discriminated against on any of the protected grounds to bring action in circuit court to recover damages. Under the legislation, if a circuit court finds that a defendant has committed an act of discrimination, the circuit court must order the defendant to pay to the person discriminated against compensatory and punitive damages in an amount that the circuit court finds appropriate. The State Senate amended SB 165 to limit the punitive damages allowed to be collected from a low of $50,000 for smaller businesses, with a sliding scale up to a maximum of $300,000 for larger businesses. The court must also order the defendant to pay to the court an assessment equal to 10 percent of the amount of compensatory and punitive damages ordered. Assessments collected under the legislation would be transmitted to the state treasurer, deposited in the general fund, and credited to an appropriation account of DWD. The DWD must then use the assessments for the administration of Wisconsin’s Fair Employment Act. The legislation also directs the Secretary of the DWD to appoint a committee to study: the issue of wage disparities between men and women; the issues of wage disparities between minority group members and nonminority group members; and to recommend solutions and policy alternatives, including proposed legislation, to eliminate and prevent those wage disparities. The committee must consist of representatives of business and industry, organized labor, organizations, and employees of institutions of higher education or research institutions who have experience and expertise in the collection and analysis of data concerning wage disparities.
If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.

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