September 30, 2008

New Law Review Article on Punitive Damages in Employment Litigation

Joseph Seiner of the University of South Carolina School of Law has posted an article on SSRN entitled, "The Failure of Punitive Damages in Employment Discrimination Cases: A Call for Change." Here is an excerpt from the abstract:

This paper explores the basic foundations of punitive damages in the American judicial system, and examines the goals of providing this form of relief in employment discrimination cases. While public perception suggests that punitive damages have been instrumental in helping to eradicate employment discrimination, the numerical data paint a different picture. After analyzing this data, this paper suggests one alternative way of better achieving the original deterrent purpose behind the addition of punitive damages to Title VII. The paper proposes a three-part framework for analyzing all cases of intentional discrimination and recommends adopting a new scheme for remedial relief under Title VII. The paper then explores the implications of adopting the proposed approach and examines how the proposal fits within the contours of the academic scholarship. The paper concludes by urging that the Congressional intent of deterring unlawful discrimination can more properly be achieved through the proposed form of relief.
It is refreshing to see a punitive damages law review article that contains empirical data. For all the academic writing in this area, there seems to be a dearth of research into the hard data.

The solution proposed in Prof. Seiner's article is to replace punitive damages in employment discrimination cases with "liquidated damages" equal to double the amount of the plaintiff's actual harm. Liquidated damages would be available in any case of intentional discrimination, without the showing of malice or reckless indifference that Title VII currently requires for punitive damages. Professor Seiner says this would provide for greater deterrence by allowing awards in excess of the current $300,000 cap that Title VII places on punitive damages (which has not been adjusted for inflation in 15 years). He also, notes, however, that the proposal would benefit employers in some cases, because under the current system employers are sometimes subjected to punitive awards that are disproportionate to the plaintiff's actual harm in cases where the actual harm is small. In any event, the defendant would still be able to defeat a claim for liquidated damages by making a showing of good faith.

Unlike a lot of academic proposals for reforming punitive damages litigation, this is one that Congress might conceivably enact. But such a proposal would only be enacted if Congress perceived a need for additional deterrence in employment discrimination cases and thought civil damages were the best way to achieve that deterrence. Obviously, those are issues that would generate significant debate.

Hat tip: Workplace Prof Blog