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The End of Caps? Equal Remedies Act Debated in Congress

4/25/2008
Kara M. Maciel

In August 2007, Senator Edward Kennedy (D-MA), chairman of the Senate Committee on Health, Education, Labor and Pensions, introduced the Equal Remedies Act to eliminate the $50,000-to-$300,000 caps on compensatory and punitive damages for intentional violations of Title VII. In January 2008, the Equal Remedies Act was reintroduced as a section of the Civil Rights Act of 2008. Senator Kennedy is one of 19 Democrats to introduce the Senate version of the bill; Representative John Lewis (D-GA) is one of 26 Democrats to introduce the House version. No Republicans in Congress have endorsed either version of the bill.

Under current laws, individuals can sue to recover compensatory and punitive damages for intentional employment discrimination, but only up to certain specified monetary limits. The law limits damages to between $50,000 and $300,000, depending on the size of the employer, for cases in which discrimination is based on race, color, sex, religion, or national origin. But employees who are subject to discrimination because of their race or national origin can also sue for damages under 42 U.S.C. § 1981, which has no cap on damages.

Senator Kennedy argues that the current difference between Title VII and Section 1981 in terms of caps on damages makes no sense. Supporters of the legislation contend that it is difficult to argue that discrimination based on race and national origin are worse than that based on, for example, sex or religious discrimination. In support of this position, Senator Kennedy cited the case of a woman who sued her employer (Equifax Credit Information Services) for sexual harassment. The woman won her case and a jury award of $1 million in punitive damages. But, as a result of the current cap on damages, the court lowered her award to $300,000. "The caps serve no justifiable purpose," Kennedy argues. The Equal Remedies Act would "end the glaring inequality" in current federal anti-discrimination laws, Kennedy added.

If enacted into law, the Equal Remedies Act would expose employers to potential infinite liability and almost assuredly would increase the volume of lawsuits, clogging an already flooded judiciary. Either possibility is sufficient to keep any corporate officer or shareholder awake at night; a combination of the two situations could be devastating to the legal system.

For more information on the Equal Remedies Act of 2007 (now part of the Civil Rights Act of 2008) – or for assistance in contacting elected officials regarding the bill – please contact Kara M. Maciel (202.861.5328 or kmaciel@ebglaw.com).

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