The Wisconsin State Senate and Assembly recently passed an amendment to the Wisconsin Fair Employment Law (WFEL) that has the potential to open the door to increased litigation and penalties for Wisconsin employers.

Background

Qualifying Wisconsin employers (employers with 50 or more employees) are subject to penalties for discrimination in violation of the WFEL. Currently, an employee alleging a violation of the WFEL may file a complaint with the Wisconsin Department of Workforce Development (DWD). If a hearing examiner finds a violation, that examiner can order the employer to take remedial action, including paying the employee back pay, front pay, interest, attorney’s fees and/or granting reinstatement. Unlike Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, or other similar federal statutes, the WFEL does not currently allow the DWD to order the payment of compensatory or punitive damages.

The amendment, passed by both chambers of the Wisconsin Legislature, would change the WFEL to permit the employee to file a lawsuit in state court to recover compensatory and punitive damages. In fact, the language of the current bill appears to require a state court to impose at least some amount compensatory and punitive damages if it finds in favor of the employee:

[T]he circuit court shall order the defendant to pay to the person discriminated against or subjected to unfair honesty testing or unfair genetic testing compensatory damages, and punitive damages under s. 895.043, in an amount that the circuit court or jury finds appropriate, plus reasonable costs and attorney fees incurred in the action. Those damages are in addition to any back pay or other amounts awarded under s. 111.39. (Wis. Stats. Sec. 111.397(2)(a)). (Emphasis added).

The amendment includes caps on damages that mirror the caps under Title VII. An employer with 50 to 100 employees would be subject to an award of compensatory/punitive damages up to $50,000; 101 to 200 employees up to $100,000; 201 to 500 employees up to $200,000; and 500 or more employees up to $300,000. These damage amounts would be in addition to any penalties the employer is already required to pay, like back pay, front pay or attorneys’ fees.

The amendment has been passed by both houses and is currently awaiting the governor’s signature to become law. All available evidence suggests that Gov. Jim Doyle will sign the amendment. Once signed, the new law will become effective on (a) the day after publication, or (b) the second day after publication of the 2009-2011 biennial budget act, whichever is later.

Analysis

The impact of this amendment on Wisconsin employers could be substantial. Because plaintiffs will now have the right to compensatory and punitive damages under the WFEL, Wisconsin employers could see an increase in the number of discrimination claims tried in the circuit courts. The end result may be increased costs to Wisconsin employers in the form of increased litigation, and more substantial damage penalties in cases where employees are successful. Skilled guidance in this area is essential. Wisconsin employers can speak with a Drinker Biddle labor and employment professional to address any questions that may arise.