Wisconsin Increases Financial Exposure to Employers for Employment Discrimination Claims

June 19th, 2009

Under a new law, Wisconsin judges will be able to force Wisconsin employers to pay compensatory and punitive damages to employees who win discrimination claims before the Equal Rights Division. Prior to this law, employees could only obtain "make whole relief," which is generally limited to back pay, front pay, and attorneys' fees. The new law will expand the types of damages that may be recovered to include emotional distress, loss of enjoyment of life, and loss of future earning capacity, among others.

The law will, quite simply, make it much more costly for employers to defend claims of discrimination brought under Wisconsin law. The entitlement to and the amount of compensatory and punitive damages will not be determined by the Equal Rights Division, the body that makes the underlying determination of discrimination. Instead, the parties will be forced to go into state court and begin new litigation solely on the issue of compensatory and punitive damages. Some of the evidence relevant to the issue of discrimination will need to be re-presented in this new forum, resulting in a duplication of effort. Thus, not only are employers now potentially subject to increased damage awards, they will also have to pay more in legal fees to oppose employees' claims for such awards.

Fortunately, not all employers are covered by the law. The law does not apply to employers with fewer than 15 employees employed for each working day in each of 20 or more calendar weeks in the current or preceding year. Additionally, the amount of compensatory and punitive damages that may be awarded against employers that are covered is capped, based on the number of employees. The caps are as follows:

  • $50,000 for an employer with fewer than 100 employees;
  • $100,000 for an employer with between 100 and 200 employees;
  • $200,000 for an employer with between 200 and 500 employees; and
  • $300,000 for an employer with more than 500 employees.

Overall, the new law will result in an increased cost to covered employers by exposing them to additional damages and forcing them into a second round of litigation on the issue of damages. The increased cost is likely to cause many employers sued under Wisconsin discrimination laws to give greater consideration as to whether and, if so, when, to settle discrimination claims, even those claims that may seem relatively weak. The potential for increased damages should also prompt employers to act preemptively by ensuring that they have adequate policies and training in place to prevent harassment and discrimination, measures which may help avoid litigation in the first instance.

If you would like assistance with drafting anti-harassment and anti-discrimination policies or with training, or would like information about any other employment-related matter, please contact Meg Vergeront.

Filed Under: Business Law

Note: The SR Short Report is published by Stafford Rosenbaum. The SR Short Report is provided for informational purpose only and should not be construed as legal advice or an opinion on specific situations. The legal issues raised by a particular situation may differ from those addressed in the publication. We encourage you to contact one of the Stafford Rosenbaum attorneys before making a legal decision.