Wisconsin Set To Empty The Pot Of Money For Discrimination Victims
In the last few years, Wisconsin has become a battleground between labor sympathizers and pro-business Republican politicians. And those on the former side are about to face another loss. Under pressure from business leaders, the State Assembly passed a bill to eliminate compensatory and punitive damages in workplace discrimination claims. Gov. Scott Walker is expected to sign this into law in the next couple of weeks.
When employees in Wisconsin face discrimination at work, they can pursue a claim on the state level through the Wisconsin Department of Workforce Development or on the federal level through the Equal Employment Opportunity Commission. The former is usually much speedier, and far less daunting. But until 2009, you couldn't get the compensation for mental anguish or punitive damages that's divvied out under federal law.
But 2½ years ago, the then-Democrat controlled legislature and Democratic governor passed a bill that allowed employees who won their case with the Department of Workforce Development to pursue a civil action to get extra compensatory and punitive damages of up to $50,000, if the employer has 15 to 100 employees, and up to $300,000 if the employer has over 500 employees. Now this bill is set to be repealed.
A Burden On Business
"It was unduly burdensome to Wisconsin employers," Bill Smith, the Wisconsin director of the National Federation of Independent Business, and president of the Wisconsin Civil Justice Council, told AOL Jobs. "We're not leaving victims of discrimination without any remedies. We're just removing some of the incentives for employees to pile it on."
It's unclear whether any employee has pursued this kind of civil action, or received a payout in the last 2½ years. According to a 2010 state ranking by Pacific Research Institute, a free-market think tank, Wisconsin is the 16th worst state in the union in terms of anti-business laws on the books but the ninth most pro-business, when it came to the actual outcomes of lawsuits.
But Smith believes the very possibility of such a lawsuit is costly enough. He cites a study, conducted by his organization, which found that over a fifth of small businesses spend more time on potential liability problems than introducing new technologies. "It takes a bit out of the cash flow of that business," says Smith, "and puts it in the pockets of lawyers."
Backfiring On Business
But many Wisconsin employment lawyers believe the repeal makes it much harder for employees to get meaningful compensation. "It's possible that the back-pay component is significant, but usually it's not," explains Dixon Gaahnz of Wisconsin law firm Lawton & Cates, who has practiced employment law for 17 years. "You can have an employer who acts in the most egregious manner, and there's nothing under Wisconsin law that gives the employee any real protection.
"No one's going to use the Wisconsin system," he adds. "They're going to file it under Title VII in federal court."
Under Title VII of the Civil Rights Act, employees can receive compensatory and punitive damages, sometimes to the tune of millions. For this reason, Nola Hitchcock Cross of the Cross Law Firm, who has worked on these cases in Wisconsin for 37 years, believes the repeal will backfire on businesses.
"It ends up being a lose, lose, lose," she says. "It's a lose for the company, because they pay more for their attorney and their plaintiff's attorney. And it's a lose for the employee, because it takes years longer."
The Equal Employment Opportunity Commission is already overstretched with complaints. In 2011, the federal body received a record number of charges, grazing the 100,000 mark.
Their Day In Court
Others believe the repeal won't send masses of Wisconsin employees into federal court. "Federal court is very intimidating and daunting for claimants," says Gaahnz. "You have to sue somebody, as opposed to going under the [Department of Workforce Development], where you don't even need a lawyer."
"Are [businesses] being rational in trying to reduce the range of remedies that employees can get? Yes, I suppose," says Cynthia Estlund, an New York University Law School professor who specializes in employment law. "But whether that's a good idea from the perspective of the people of Wisconsin, that's another story."
"It's terrible when you take away someone's ability to just have their day in court," says Gaahnz. "They just want to say, 'They fired me because I'm black and I don't think that's fair.' You've got to have that ability to do that."
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