Wisconsin Increases Penalties for Employment Discrimination

Gov. Jim Doyle signed into law on June 8 a bill that significantly increases potential penalties for employers under the Wisconsin Fair Employment Act.

The new law permits a complainant or the Department of Workforce Development (DWD), after the completion of an administrative proceeding, to bring an action in circuit court to recover compensatory and punitive damages.

Upon a finding of discrimination, DWD must serve a certified copy of the findings on the complainant, with notice advising him or her of the right to bring an action in circuit court for compensatory and punitive damages. Such action must be brought within 60 days of the completion of the administrative proceeding. If either party appeals any of the findings, judicial review of these findings will be consolidated with the action for damages.

Fair Employment Act Background

Wisconsin's Fair Employment Act prohibits job discrimination on the basis of a wide variety of protected characteristics. These include age, race, creed, color, disability, marital status, sex, national origin, ancestry, sexual orientation, arrest record, conviction record, military service, and use or nonuse of lawful products off the employer's premises during non-work hours. The act also prohibits use of lie detector and genetic testing in the workplace.

A person alleging a violation of the act must file a complaint with the DWD and proceed though an administrative process. If the DWD determines there was a violation, it can order "such action as will effectuate the purpose" of the law, including reinstatement, backpay, attorneys' fees and costs. DWD is not authorized to award compensatory or punitive damages.

Damages Calculation

Under the new legislation, compensatory damages may be awarded to make the plaintiff whole for future economic losses, pain and suffering, emotional distress, and other non-economic losses. Punitive damages may be awarded only in cases where it has been proved that the defendant acted maliciously or with intentional disregard for the rights of the plaintiff. The total damages award, including both punitive and compensatory damages, is capped. The caps are currently identical to those imposed by federal Title VII. The amount of the cap depends upon the size of the employer:

• 15–100 employees: $50,000
• 101–200 employees: $100,000
• 201–500 employees: $200,000
• 501 or more employees: $300,000

The employee count does not appear to be limited to employees located in Wisconsin. These caps are to be adjusted annually to correspond to the Consumer Price Index.

Exceptions

Local governmental units are exempt from the provisions of this statute, as are employers with fewer than 15 employees.

Effective Date

These changes will apply only to acts of discrimination, unfair honesty testing or unfair genetic testing occurring after the effective date of the act. The law will become effective two days after the publication of Wisconsin's biennial budget act or on the day after publication of the act—whichever is later.