Senate Bill 20 – Increase of Fair Employment Act Compensatory and Punitive Damages

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February 4, 2009

We wish to alert you to a pending Wisconsin Senate Bill which could have a devastating impact on employers if it becomes law. The Wisconsin Fair Employment Act (WFEA) protects employees and job applicants from discrimination on certain protected grounds, such as age, sex, race, disability, marital status, arrest or conviction record, etc. Under the current WFEA, the Department of Workforce Development (DWD) may order an employer to reinstate an employee, provide back pay to the employee for not more than two years before the filing of the complaint, and pay the employee’s costs and attorney’s fees if the DWD finds that the employee was illegally discriminated against. Current law does not, however, authorize the DWD to order the payment of compensatory or punitive damages, or any other surcharges or penalties. Senate Bill 20 is currently pending before the Wisconsin State Senate Judiciary Committee. As proposed, Senate Bill 20 would permit the DWD, or any person who has been discriminated against in promotion, compensation, or the terms, conditions, or privileges of employment on the basis of any of the protected grounds, to bring an action in circuit court after the DWD administrative review has been completed to recover increased damages caused by discrimination. Pursuant to Senate Bill 20, if the circuit court finds that an employer has committed an act of discrimination, the circuit court must order the employer to: (1) pay to the person that was discriminated against compensatory and punitive damages in an amount that the circuit court finds appropriate; and (2) pay the circuit court an assessment equal to 10% of the amount of compensatory and punitive damages ordered. Assessments that are collected must be transmitted to the State Treasurer and deposited in the general fund. Thereafter, they are credited to a DWD account. DWD must then use the assessments for administration of Wisconsin s Fair Employment Act. In sum, if adopted by the Legislature, Senate Bill 20 would greatly increase the damages that an employer would be exposed to based upon discrimination claims. Damages could include compensatory damages (e.g., emotional distress) and punitive damages. There does not appear to be any limit on these types of damages for purposes of the discrimination laws as proposed by Senate Bill 20. 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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