The Price of Discrimination Is Getting Cheaper Each Year

January 5, 2022
By: Charles Lamberton

I have always thought it contradictory that we proclaim strong national policies against intentional discrimination in the workplace but then cap the damages available to victims of discrimination. If we are serious about our commitment to preventing discrimination at work, we must abolish existing statutory caps on compensatory and punitive damages.

Under the maximum statutory cap now in place, a victim of employment discrimination cannot recover more than $300,000 in compensatory and punitive damages. Only employers with 500 or more employees are subject to this maximum cap. Smaller employers enjoy caps substantially lower.

A jury is never told of the damages cap. A jury may find that $1 Million is the appropriate amount of compensatory and punitive damages, only to see a judge slash its award down to the statutory cap. Worse, the caps were set in 1991 and were not indexed to inflation. $300,000 awarded in 1991 is only about $177,000 in today’s dollars. For an award in 2013 to have the same value as a $300,000 award in 1991, it would need to be about $500,000. Congress, by failing to index caps to inflation, has been steadily lowering the price of discrimination in the United States, and has been handing out coupons making it cheaper and cheaper for employers to discriminate with each passing year.

The cap on punitive damages makes the least sense of all. Punitive damages exist to deter employers from discriminating and to punish them when they do. The amount of punitive damages that can serve these goals varies directly with an employer’s size and wealth. In 2012 alone, Exxon Mobil made $45 Billion in profit. That’s $45 Million multiplied by a million. Will a company that wealthy care about a $300,000 punitive damages award?

If we truly care about ending discrimination in the workplace, Congress must stop coddling U.S. employers and allow juries to penalize discrimination when it has been proven in a court of law.