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Ask Leslie: Why Are Some Sexual Harassment Verdicts So High? I Thought Damages Were Capped

By Leslie Zieren, The McCalmon Group, Inc.

Dear Leslie:

 

I know damages are capped under Title VII according to the number of employees an employer has, so why do I see news reports of multi-million-dollar damage awards in sexual harassment cases?

 

Signed: Joe

 

Dear Joe:

One explanation is that the new reports are written right after a jury renders a verdict. There are many post-verdict motions the parties can file, which may not make the news, that can determine whether the final judgment entered by the court reflects the verdict or not, depending on the law.

You are correct that there are limits on the total amount of damages recoverable (whether compensatory or punitive or both) under the federal law, Title VII of the Civil Rights Act of 1964:

  • For employers with 15 to 100 employees, the limit is $50,000;
  • For employers with 101 to 200 employees, the limit is $100,000;
  • For employers with 201 to 500 employees, the limit is $200,000; and
  • For employers with more than 500 employees, the limit is $300,000.


Usually a jury is not informed in its instructions from the judge that there are caps, so they may render a million-dollar verdict, but after the post-verdict motions are filed and ruled upon by the judge, the actual judgment amount will not exceed one of the capped amounts above, depending on the size of the employer.

Here is another explanation: many cases allege both federal and state law claims. Many states have anti-discrimination and harassment laws with no caps on damages. Pennsylvania's state law, for example, allows for unlimited emotional distress damages, but no punitive damages. Suppose, in a sexual harassment case brought under both federal and state law, a jury awards $1,500,000 in punitive damages and $2,000,000 in emotional distress damages. If the employer has 150 employees, under Title VII, the actual award will be reduced by the judge to $100,000 total.

However, it is possible the judge could decide to allocate the emotional distress damages ($2,000,000) to the state law emotional distress claim (no cap) and the punitive award to the federal claim (capped at $100,000) and enter judgment against that Pennsylvania employer for $2,100,000. This damage allocation method has been approved by an appeals court.
 

Jack McCalmon and Leslie Zieren are attorneys with more than 50 years combined experience assisting employers in lowering their risk, including answering questions, like the one above, through the McCalmon Group's Best Practices Help Line. The Best Practice Help Line is a service of The McCalmon Group, Inc. Your organization may have access to The Best Practice Help Line or a similar service from another provider at no cost to you or at a discount. For questions about The Best Practice Help Line or what similar services are available to you via this Platform, call 888.712.7667.

If you have a question that you would like Jack McCalmon or Leslie Zieren to consider for this column, please submit it to ask@mccalmon.com. Please note that The McCalmon Group cannot guarantee that your question will be answered. Answers are based on generally accepted risk management best practices. They are not, and should not be considered, legal advice. If you need an answer immediately or desire legal advice, please call your local legal counsel.

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