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Title VII Caps Damage Awards per Plaintiff, not per Claim

A female employee sued her employer under Title VII of the 1964 Civil Rights Act (Title VII) after being fired, asserting three separate claims: (1) sex discrimination in setting of sales quotas, (2) retaliation for making complaints about discriminatory treatment on the basis of her sex, and (3) discriminatory termination. The jury found in favor of the employee on all three claims and awarded $200,000 in compensatory damages on each claim, $150,000 in back pay for both her retaliation and termination claims, and $2.4 million in punitive damages, for a total of $3.45 million in damages. The district court applied the U.S. Supreme Court’s prohibition on double recovery in back pay to her termination and retaliation claims and reduced the back pay award from $600,000 to $150,000. The district court then applied Title VII’s damages cap, which limited the amount for compensatory and punitive damages and reduced the employee’s award from $2.4 million to $200,000. On appeal the employee sought $200,000 in damages on each of her successful Title VII claims because they were “separate, distinct, and independent causes of action,” which could have been filed separately. The U.S. Court of Appeals for the Fifth Circuit upheld the trial court’s reduction of the damages award based on the Civil Rights Act of 1991, which amended Title VII to allow jury trials and compensatory and punitive damages. The statutory language provides that a “complaining party” may recover compensatory and punitive damages under Title VII, and the amount awarded “shall not exceed, for each complaining party” a designated amount based upon the size of the employer. The compensatory and punitive damages cap on the employer here was $200,000. In light of this case, when assessing whether to settle or litigate discrimination complaints, employers need to be mindful that Title VII caps damages per plaintiff, not per claim. Additionally, employers need to be cognizant of the fact that its number of employees determines the amount of the Title VII damages cap.