Discrimination plaintiffs can seek greater damages

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A new state law will allow plaintiffs to seek as much as $300,000 in compensatory and punitive damages in employment discrimination cases.

Supporters of Wis. Act 20 see the change as a welcome “bargaining chip” for employees who can now get remedies at the state level comparable to what they could recover in federal court.

But opponents worry the law will expose employers to increased liability.

Gov. Jim Doyle signed the measure on June 8. It is set to take effect after adoption of the 2009-11 budget.

New Option

Wisconsin Fair Employment Act claims filed in state court are initially reviewed by the Department of Workforce Development (DWD). If the claim is certified by DWD or the Labor and Industry Review Commission (LIRC), an employee is then able to seek compensatory and punitive damages in circuit court.

Plaintiffs’ attorney Janet L. Heins of Heins Law Office in Mequon noted that most employment claims filed in federal court are dismissed on summary judgment, and said the new law gives employees “a more realistic option” to seek damages at the state level beyond lost wages and attorney fees.

“Employers are always saying the sky is falling, but all this does is offer the potential for more in damages to employees on par with federal standards,” Heins said.

“It opens another avenue for damages that have not until today been available under state law,” agreed plaintiffs’ attorney Lynn M. Novotnak of Hawks Quindel Ehlke & Perry SC in Milwaukee.

A spokesperson for Rep. Christine Sinicki, D-Milwaukee, one of the bill’s sponsors, said that lawmakers passed the measure knowing state court is “more comfortable” for employees than federal court.

Heins said she has had cases where she had to decide between going to federal court, where there was a slim chance of success, or staying in the state system, despite the limited damages available.

“For those clients, it was always a question of whether we incur the costs going to federal court or try and max out what is available under the state system,” she said.

But Heins does not think the change would create a slew of new suits, since claims will still have to work their way through the administrative process before proceeding to circuit court.

“It’s [just] a question of which forum makes the most sense for a particular client,” Heins said.

‘Frankenstein Monster Procedure’

Employment defense lawyer Jonathan T. Swain questioned the wisdom of adding a “parallel process” to the one already available through federal court.

“The federal court does a very good job reviewing cases through normal pleading and summary judgment to separate the wheat from the chaff,” said Swain, who represents employers at Lindner & Marsack SC in Milwaukee.

According to Eric H. Rumbaugh of Michael Best & Friedrich LLP, the new law will put employers through a “Frankenstein monster procedure” and subject business to additional risk because liability and damages will be determined by different decision makers.

In federal court, both are typically determined by the same judge or jury, noted Rumbaugh.

But at state level, an administrative law judge would determine a company was liable and a jury would then decide the amount of punitive or compensatory damages.

“In a tough [federal] case, a jury will have time to deliberate and hear evidence,” Rumbaugh said. “Now, in the new procedure, they are only told that company XYZ was found guilty and asked how much money should the person get. That is inefficient and unfair.”

Defense lawyers say the law gives plaintiffs’ attorneys an unfair advantage.

“As a plaintiffs’ attorney, if you had a great case before, you almost always had to take it to federal court,” Rumbaugh said. “Now you can get the same remedies and a more lawyer-friendly process.”

Swain also worried that the change will lead to more hostile environment cases, with employees seeking punitive damages in situations where they have not lost their jobs, but have allegedly suffered emotional distress or mental anguish.

“This law tends to raise that possibility,” he said.

The spokesperson for Sinicki noted that the employers have the right to appeal any adverse rulings through LIRC or in circuit court.