Workplace Bias Damages Expanded
Victims of workplace discrimination won the right Tuesday to obtain punitive damages from their employers, but only if top company officials were found responsible.
The mixed result came in the Supreme Court’s first test of the damages provisions in the Civil Rights Act of 1991.
Before that law was passed, workers who suffered race or sex discrimination could sue in federal court only to get their jobs back and receive back pay. After a long and heated battle, Congress agreed eight years ago to give these workers a right to a jury trial and a chance to win extra, punitive damages of as much $300,000 against a large firm.
But it remained unclear whether workers were entitled to ask for punitive damages in every case or only in the worst cases where there was malicious discrimination.
To clarify the issue, the justices took up the case of Carole Kolstad, a lawyer and lobbyist for the American Dental Assn. who was passed over for the group’s top job in Washington. Instead of recommending Kolstad for the job, the man who was stepping down recommended a younger man with lesser qualifications. The retiring executive had also made sexist comments in the office and referred to women as “bitches” and “battle-axes” during staff meetings.
A jury ruled for Kolstad and concluded that she had been a victim of sex discrimination. But the trial judge refused to allow the jury to award her punitive damages.
The U.S. Court of Appeals here agreed and ruled that punitive damages were to be considered only in “egregious” or “truly outrageous” cases of discrimination. The ruling came on a 6-5 vote, with Republican appointees forming the majority and Democratic appointees in dissent.
The high court reversed that ruling (Kolstad vs. ADA, 98-208) and said that workers need not show their case was especially “egregious” or unusual. Speaking for the court, Justice Sandra Day O’Connor wrote for a 7-2 majority that the law speaks of employers who show a “reckless indifference” to the rights of their workers. Those who do so can be forced to pay punitive damages.
Chief Justice William H. Rehnquist and Justice Clarence Thomas were the dissenters.
However, O’Connor went on to say in a separate 5-4 opinion in the same case that trial judges should consider whether the company itself, rather than an errant supervisor, is responsible for the discrimination.
If just a supervisor is to blame, it is not fair to make the company pay punitive damages, O’Connor said. Rehnquist, Thomas, and Justices Antonin Scalia and Anthony M. Kennedy joined joined O’Connor to make up the majority in that part of the ruling. The supervisor could not be sued under federal law.
This portion of the opinion delighted business lawyers.
The ruling is “a huge victory for employers,” said Paul Grossman, general counsel for the California Employment Law Council, which represents 60 of the state’s largest employers. “Most employers will be able to show that a supervisor’s conduct was contrary to their policies.”
O’Connor’s opinion suggests that employers with strong policies against workplace discrimination should be able to shield themselves from punitive verdicts. It will not, however, protect them from paying back pay or other compensatory damages to employees who suffer discrimination.
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Times staff writer Davan Maharaj in Los Angeles contributed to this story.
