The US Supreme Court today hears a case, which could have a big impact on the size of damages, paid by US employers in employment discrimination lawsuits. The court agreed to hear the case, Carole Kolstad vs. the American Dental Association (ADA), to clarify what kind of employer conduct will give rise to punitive damages – damages awarded to punish and deter an offender – in lawsuits involving sex discrimination. However, law employment experts said that the suit was also likely to have a knock-on effect on race, age and other employment discrimination suits brought under Title VII of the 1991 Civil Rights Act.
The case involves a female lawyer employed as a lobbyist for the ADA, a professional trade association. A jury found that Ms Kolstad was denied promotion because of intentional sex discrimination. The issue before the court is not whether this is so, but whether such discrimination must be ‘egregious’ before punitive damages are awarded.
Title VII permits such damages where there was ‘malice or … reckless indifference to the federally protected rights of an individual’.
But in Ms Kolstad’s case an Appeals Court found that the ADA’s conduct was neither ‘egregious’ nor ‘truly outrageous’ enough to merit punitive damages.
At the moment there is confusion over the standard of conduct necessary to attract punitive damages, with the various circuit court applying differing standards to define ‘reckless indifference’. If the Supreme Court upholds the Appeals Court’s decision in Kolstad – that the conduct did not meat this standard of ‘egregious’ – this would set a new standard nationwide that could limit the size of both jury awards and pre-trial settlements.
‘ OUR CONCERN IS THAT PUNITIVE DAMAGES WOULD BECOME THE NORM’
Conversely, if Ms Kolstad wins, jury awards and settlements could shoot up. Her lawyers argue in their brief that ‘egregious’ is too high a standard, and that employees need only show that their employers knew or should have known their conduct was probably unlawful in order to have claims for punitive damages put before a jury.
‘If adopted, this standard would subject employers to punitive damages virtually every time an employee engages in intentional discrimination against another,’ the US Chamber of Commerce argued in a brief filed to support the ADA. ‘Our concern is that punitive damages would become the norm, not the exception, whereas the law clearly intends them to be the exception,’ says Stephen Bokat of the National Chamber Litigation Center, which has also backed the ADA.
According to Jury Verdict Research, which tracks jury awards, 40% of verdicts in gender discrimination cases in the last 6 years have included punitive damages. The law caps damages at $50,000 – 30,000 per plaintiff, depending on the size of the employer.
A lower court jury awarded Ms Kolstad back pay after a male employee in the same office was, according to her lawyer’s brief, ‘preselected’ for a promotion for which he was less qualified than she was.
“Financial Times” World business newspaper.
Discrimination is unfair treatment or denial of normal privileges to people because of their race, age, sex, nationality or religion. In this case, the US appeal judges were asked to decide if the unfair treatment had been so bad as to warrant an extremely stiff penalty (punitive damages), which should deter others from similar behaviour. Note that each US state administers its own justice system but the system of appeals is from trial court to Appeals Court and then the Supreme Court, which is the highest appeal court in the US.
Ex. 4.Use an appropriate word or phrase from the box to complete each sentence.
limit punitive damages egregious circuit judge Act lawsuit
settlement jury brief cap appeal federal rights
1.The amount of money awarded to a victim has a ……………… .
2.The courts are in session at different times during the year in different places, so that the …………. can work in a variety of places.
3.When Parliament votes to pass a Bill it becomes an ……………. .
4.There is no ………. on the liability of owners in a private partnership.
5.Many people think there should be a specialist ………. for complex fraud cases.
6.American citizens should study their ………. so that they know what laws protect them from abuse.
7.Damages set very high in order to deter others are called ……. .
8.A special term for very bad behaviour in the US is ………… behaviour.
9.Every court decision may be sent for ……….. if circumstances justify it.
10.An out-of-court …………. id desirable if possible.
11.Anyone can bring a …………. against someone else if they feel they have suffered a wrong that cannot be settled easily.
12.A barrister cannot work in a court without a ………. from a solicitor.
Ex. 5.Match the opposites.
1. lawful a illegal
2. clarify b female
3. legal c unlawful
4. malice d one-off
5. preselection e confession
6. male f confuse
7. punitive g token
8. knock-on effect h kind intentions
9. discriminate against i fair job promotion procedures
10. denial j act fairly
Ex. 6.Complete these sentences with prepositions from the box.
up under against on to at
1.If she wins this case, awards and settlements could shoot …….. .
2.The suits are brought …………. Title VII of the 1991 Civil Rights Act.
3.There may be a knock- …….. effect: other types of discrimination suits will be affected.
4.The decision will have a major impact ……. employers nation-wide.
5.Some companies may be subject …….. enormous claims.
6.The law caps damages ……… a certain sum of money, depending ……… the size of the company.
7.According ………. the researchers, juries often award punitive damages in cases where there has been discrimination ………. women in the workplace.
8.What kind of conduct could give a rise ………… punitive damages?
Ex. 7.Use an appropriate word or phrase from the box to complete each sentence.
however on the other hand if whereas should conversely might
1.The court could decide to award punitive damages for any justified complaint ………. , if that happened, companies would soon go bankrupt.
2.On the one hand, the lower court may decide in favour of the plaintiff; …….. the appeal court may decide differently.
3.The verdict may be to limit all types of damages ……….., the verdict may be to award the maximum possible to deter others.
4.………… they had not complained about the award, there would not have been an appeal.
5.A successful outcome for the company involved would be a limitation on the damages, ……….
a worst-case scenario would be that they have to pay punitive damages.
6.……….. the worst come to the worst, the ADA …………. find themselves paying Ms Kolstad punitive damages – and others too, if they file suit!