Over opposition from employer representatives, Gov. Jim Doyle just signed into law 2009 Wisconsin Act 20, which significantly expands the damages available to employees pursuing claims under the Wisconsin Fair Employment Act (WFEA) – the state law that prohibits discrimination in employment.
The result of that expansion is not only a likely increase in the number of claims that will be brought against employers under the WFEA, but an increase to employers in the cost and risk of defending such claims.
Under the WFEA, complaints are filed with the Department of Workforce Development’s Equal Rights Division (ERD) and are initially heard by an administrative law judge (ALJ). The ALJ’s decision may be appealed to the Labor and Industry Review Commission (LIRC), a three-person administrative body in Madison appointed by the Governor, which is authorized to make its own findings regarding liability and remedies based on the evidence introduced at hearing. Prior to the recent change in law, employees’ remedies were generally limited to recovery of back pay, reinstatement, and attorneys’ fees.
However, as a result of the changes to the WFEA, employees will now be able to pursue compensatory and punitive damages by filing an action in circuit court following a finding of liability in the administrative proceeding. Employees will thus be able to recover damages for pain and suffering and emotional distress, and in proving the appropriate amount of punitive damage will be allowed to "introduce evidence of the wealth of a defendant."
Further, the new law allows for employees to choose to have a jury decide the amount of these additional damages – presumably after being told the employer discriminated against the employee.
Those damages are subject to the following limitations:
- Not applicable to employers with fewer than 15 employees (or local governmental units).
- For employers with between 15 and 100 workers, compensatory/punitive damages are capped at $50,000.
- For employers with 101 to 200 employees, they are capped at $100,000.
- For employers with between 201 and 500 employees, they are capped at $200,000.
- For employers with 501 or more employees, they are capped at $300,000.
Although the damages and caps parallel those under several federal civil rights statutes, a key thing for Wisconsin employers to be aware of is that the WFEA offers broader protections to employees. For example, the WFEA allows employees to sue for discrimination based on arrest and conviction record, sexual orientation and marital status, while federal law does not. Further, the changes will likely result in an increase in the number of claims pursued under the WFEA because its law and procedures are more favorable to employees.
Ultimately, the expanded remedies and ability of employees to have a jury decide them is not only likely to increase the number of claims pursued under the WFEA, but also to result in a significant increase to employers in the cost of litigating and resolving such claims.
The new law will become effective two days after the state budget passes, likely this summer.
Of course, employers should always work to ensure discrimination does not occur and that they are prepared to defend claims that may arise. However, the changes to the WFEA make it especially important for employers to ensure that they have appropriate policies and practices in place to reduce the risk of claims and to aid in their defense. Additional efforts now in the review and appropriate documentation of hiring, firing and other personnel decisions will go a long way towards limiting the negative impact for businesses later.
Sean Scullen is a partner in the labor and employment group in Quarles & Brady LLP’s Milwaukee office. He can be reached at (414) 277-5421 or sean.scullen@quarles.com.
