New Law Allows Employees to Seek Compensatory and Punitive Damages in Wisconsin Discrimination Cases

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June 11, 2009

On Monday, June 8, 2009, Governor Doyle signed 2009 Wisconsin Act 20 (“the Act”), which amends the Wisconsin Fair Employment Act (“WFEA”) by permitting employees in employment discrimination, unfair genetic testing, and unfair honesty testing cases to seek and be awarded compensatory and punitive damages. Before this law, employees in Wisconsin were only entitled to attorneys’ fees, back pay, front pay, or reinstatement.
What is the procedure for seeking these damages? An employee is still required to file his/her initial discrimination claim with the Department of Workforce Development and obtain a finding of probable cause that discrimination has occurred. This will lead to an administrative hearing. If the administrative hearing results in a finding that discrimination occurred, and after the parties’ right to appeal to the Labor and Industry Review Commission is exhausted, then the employee has 60 days to file an action with a circuit court seeking compensatory and punitive damages. The employee is allowed a jury trial if desired.
What are compensatory and punitive damages? Compensatory damages include future economic losses, pain and suffering, emotional distress, mental anguish, medical expenses, loss of enjoyment of life, and other non-economic losses. Punitive damages are intended to “punish” the employer for bad behavior. For an award of punitive damages, the employee will need to establish that the employer acted maliciously toward the employee or in an intentional disregard of the rights of the employee. Wis. Stat. 895.043(3)
What are the maximum compensatory and punitive damages that can be awarded? The combined compensatory and punitive damages that may be awarded under the Act are capped based on the number of employees working for the employer:

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

How does this affect small employers? The Act does not apply to employers that employ less than 15 individuals. The Act also does not apply to any local government unit.
When does the Act become effective? This simple question does not have a simple answer. The Act states that its “Effective Date” is: the day after its publication (which is June 23, 2009) OR two days after the date the 2009-2011 budget is published (which probably will not be until July), WHICHEVER IS LATER. So, unless the budget is signed earlier than anticipated, the Act will likely be effective sometime in July of 2009. Is the Act retroactive for pending claims? No. The Act is not effective until the Effective Date. To see a copy of The Act, click here.
If you have questions regarding the above, please contact Sara Ackermann, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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