Overview of Damages Caps
Title VII of the Civil Rights Act of 1964 imposes limits on the amount of compensatory and punitive damages that can be awarded in cases of intentional discrimination in employment. These caps are determined by the number of employees an employer has during the current or preceding calendar year.
Damage Caps Based on Employer Size
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15 to 100 employees: Maximum damages of $50,000.
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101 to 200 employees: Maximum damages of $100,000.
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201 to 500 employees: Maximum damages of $200,000.
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More than 500 employees: Maximum damages of $300,000
Types of Damages Covered
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Compensatory Damages: These are intended to compensate victims for out-of-pocket expenses caused by discrimination, such as job search costs and emotional distress.
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Punitive Damages: These are awarded to punish employers for especially malicious or reckless acts of discrimination
Legislative Context
The caps were established by the Civil Rights Act of 1991 and have not been adjusted for inflation since then. There have been multiple attempts to repeal or raise these caps, but none have succeeded. Recent discussions in Congress indicate a growing momentum to revisit these statutory caps, with some lawmakers advocating for their elimination or increase due to concerns about their fairness and effectiveness in deterring discrimination
In a recent case, a jury awarded a sexual harassment plaintiff $831,028. The employer tried to knock that down to $181,028 using a Title VII damages cap. A federal appeals court found that the employer had waived its ability to bring this argument.
The employee worked at a Miami car dealership for about four months. During that time, the manager and colleagues harassed her near-constantly, calling her "hot for an 18-year-old," forcing her to use her looks to sell cars, and speaking to her in degrading tones. A manager proposed she hand out business cards in a bikini. The harassment turned physical. She quit and sued under Title VII and the Florida Civil Rights Act (FCRA).
The jury awarded $81,028 in compensatory damages and $750,000 in punitive damages. The employer moved post-trial to reduce the award, arguing Title VII's $50,000 cap for employers with fewer than 101 employees applied. The district court agreed and reduced the total to $181,028. The Eleventh Circuit reversed.
Here's why: Title VII's employee-headcount cap is an affirmative defense, not an automatic protection. To use it, defense counsel must plead it in the answer, list employee headcount as a disputed fact in the pretrial stipulation, and submit jury instructions on it.
The dealership did none of those things. The manager testified at trial that the dealership had about twenty employees, but the jury never had the opportunity to make a finding on that number. By the time the employer tried to invoke the cap after the verdict, it was too late. The reinstated award: $481,028.
Three procedural must happen before trial or the cap is gone. The employer must plead the cap in its Answer, it must list employee headcount as a disputed fact in the pretrial stipulation, and it must submit jury instructions on the employee headcount damages cap.
The Court recognized that, in any event, there is a statutory cap of $300,000 for compensatory and punitive damages combined, citing 42 U.S.C. § 1981a(b)(3).
