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Governor Doyle Signs Senate Bill 20 Authorizing Circuit Courts to Award Compensatory and Punitive Damages

June 09, 2009

Governor Doyle signed three bills, including Senate Bill 20, into law on Monday, June 8, 2009. The new law created by the Governor's signature on S.B. 20 authorizes Wisconsin Circuit Courts "to order a person who engages in discrimination in employment, unfair honesty testing, or unfair genetic testing to pay compensatory and punitive damages." These damages may be awarded in addition to any damages awarded in an administrative action in front of the Wisconsin Equal Rights Division, not to mention any damages sought or awarded in a federal court action.

Here are some highlights of the new law:

- If an Administrative Law Judge determines that discrimination occurred after a Hearing on the Merits, the Equal Rights Division (ERD) will mail the decision along with a notice to the complainant that he or she may bring an action in circuit court to recover compensatory and punitive damages as well as the time limitations for doing so.

- Proceedings in front of the ERD must conclude prior to the filing of any such lawsuit in a circuit court. Thereafter, any civil action must be commenced within 60 days of the date of mailing of the final decision by the ERD or its appellate body, the Labor and Industry Review Commission, to the complainant.

- The Department of Workforce Development itself is also authorized to file such an action to recover compensatory and punitive damages plus reasonable costs and attorney fees incurred in the action, which is more likely to occur in cases of class-based discrimination as opposed to individual cases.

- If a petition for judicial review of the findings and order of the Labor and Industry Review Commission concerning the same violation is active in circuit court at the same time as an action by the Department of Workforce Development or a complainant seeking compensatory and punitive damages, the circuit court is authorized to consolidate the two actions.

- Compensatory and punitive damages may be sought in addition to any back pay remedy or other amount awarded under existing Wisconsin law. Such damages may be awarded by a judge or by a jury, which sets up the right to a jury trial on this issue.

- Compensatory damages include future economic losses and for pain and suffering, emotional distress, mental anguish, loss of enjoyment of life and other noneconomic losses.

- Punitive damages may be awarded but are subject to the existing limitations on such awards under Wisconsin law, §895.043, WIS. STAT. Under this provision, to be entitled to such an award, the plaintiff must show "the defendant acted maliciously toward the plaintiff or in an intentional disregard of the rights of the plaintiff." §895.043(3), WIS. STAT. Assuming the plaintiff makes a prima facie showing for the allowance of punitive damages, "[t]he plaintiff may introduce evidence of the wealth of a defendant" and request a special verdict form on the question of punitive damages. §895.043(4)(a) - (b), WIS. STATS.

- The combined compensatory and punitive damages that may be awarded under the new law are capped based on the number of employees working for the employer in each of 20 or more calendar weeks in the current or preceding year:

  • If the employer employed 100 or less employees during this period, damages are capped at $50,000.
  • If the employer employed more than 100 but fewer than 201 employees during this period, damages are capped at $100,000.
  • If the employer employed more than 200 but fewer than 501 employees during this period, damages are capped at $200,000.
  • If the employer employed more than 500 employees during this period, damages are capped at $300,000.

- Entities that are exempt from coverage under this law include "any local government unit, as defined in s. 19.42(7u), or [...] any employer, labor organization, or employment agency employing fewer than 15 individuals for each working day in each of 20 or more calendar weeks in the current or proceeding year."

- The change brought about by the new law will go into effect the 2nd day after publication of the 2009 - 2011 biennial budget act, which is still under debate in the Wisconsin legislature.

In short, employers and human resource professionals need to be prepared for this new change in Wisconsin law, which likely will lengthen the time between a complainant's initial filing and a final resolution of a harassment, discrimination and retaliation cases filed under the Wisconsin Fair Employment Act.

Contacting counsel early in the process may be a key in dealing with the new law. An early analysis of whether settlement is the best and most cost effective option should be performed. Alternatively, if an employment action is to be defended, laying the groundwork for the defense early on will yield greater success down the road and perhaps lessen the overall costs of achieving that success.

Clients with questions regarding employment litigation and the successful defense of employment claims filed in federal court, the Wisconsin Equal Rights Division or the Equal Employment Opportunity Commission should contact Daniel J. Finerty (dfinerty@gklaw.com) at (414) 287-9262 or any member of the Godfrey & Kahn, S.C. Labor and Employment Law Team.

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