Democrats and Republicans within the House Committee on Education and the Workforce have recently expressed bipartisan interest in raising or eliminating the statutory caps on damages for claims brought under Title VII and the ADA. While the plan is still in its very early stages, any revisions to statutory damages caps would have significant implications for employers.

Currently, under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA), the combined amount of compensatory and punitive damages an individual may be awarded is subject to a statutory cap of:

  • $50,000 for employers with 15 to 100 employees.
  • $100,000 for employers with 101 to 200 employees.
  • $200,000 for employers with 201 to 500 employees.
  • $300,000 for employers with more than 500 employees.

Compensatory damages compensate plaintiffs for emotional distress, pain and suffering, as well as the out-of-pocket expenses incurred by plaintiffs, such as moving expenses, job search expenses, and medical expenses. Punitive damages, on the other hand, are awarded to punish an employer when its conduct is found to be especially malicious or reckless.

These statutory caps applicable to compensatory and punitive damage awards were added to Title VII and the ADA pursuant to the Civil Rights Act of 1991. The caps have not been raised since the enactment of the 1991 Act. Indeed, Congress has not once increased the caps for inflation for the past three decades.

There have been multiple attempts to repeal the caps, but all have failed. The first attempt, the Equal Remedies Act of 1991, was proposed by the late Senator Edward Kennedy five days after President Bush signed the Civil Rights Act of 1991, but it died in the Senate. Senator Kennedy also proposed the last attempt at repeal in 2008, with the bill enjoying nineteen cosponsors, including then-Senators Barack Obama and Hillary Clinton. The 2008 bill also failed to make it to a floor vote and no similar legislation has been proposed in Congress since.

Nevertheless, we are seeing a growing momentum to revisit the statutory caps on damages under the Civil Rights Act of 1991. Numerous scholars have objected to the statutory caps for a variety of reasons, including the caps’ alleged negative impact on deterrence, inconsistency across civil rights statutes, and constitutional concerns about arbitrariness and the role of juries. Earlier this year, EEOC general counsel Karla Gilbride critiqued the statutory caps and referred to such caps as “outdated,” “deeply unfair and deeply inequitable,” and “morally unacceptable.” And now, House lawmakers are once again discussing raising or eliminating the statutory caps.

Why the statutory caps on damages matter

Statutory caps on compensatory and punitive damages may significantly decrease the compensation a plaintiff receives from a jury. For example, the Fifth Circuit recently knocked down a blockbuster $366 million race bias verdict against FedEx to just under $249,000 citing the statutory caps. In another recent example, a Nebraska federal court reduced a jury award of $36 million in punitive damages and $75,000 in compensatory damages to a combined award of $300,000 in a disability discrimination case brought by a deaf truck driver under the ADA.

What this mean to you

While there is no formal House bill proposed to raise or eliminate the damages caps, the House’s discussion to revisit the damages caps indicates a growing momentum that employers should be aware of. Employers should continue to carefully ensure their compliance with Title VII and the ADA and conduct regular audits of their anti-discrimination and anti-harassment practices.