Legislative Update: Wisconsin Legislature Repeals Punitive and Compensatory Damages under the Wisconsin Fair Employment Act.

WDC Journal Edition: Summer 2012
By: Andrew Cook, Hamilton Consulting Group, LLC

Introduction

In the 2009-10 Wisconsin legislative session, then-Governor Jim Doyle signed into law 2009 Wisconsin Act 20, which, for the first time under Wisconsin’s Fair Employment Act, allowed circuit courts to award punitive and compensatory damages in cases of employment discrimination, unfair genetic testing, and unfair honesty testing.

On April 5, 2012, Governor Scott Walker signed into law Senate Bill 202, which repealed the punitive and compensatory damages provisions that had been enacted under 2009 Wisconsin Act 20.[i] The law signed by Governor Walker is 2011 Wisconsin Act 219.[ii]

This article discusses the short history of punitive and compensatory damages under the WFEA, reasons why employers supported the repeal, and discusses the ensuing reaction to the repeal of the damages provisions.



I. Background of the Wisconsin Fair Employment Act

The Wisconsin Fair Employment Act (WFEA)[iii] prohibits employment discrimination based on age, ancestry, arrest record, conviction record, creed, color, disability, marital status, military service, national origin, race, sex, or use or nonuse of legal products during non-work hours off the employer’s premises.[iv] Before 2009 Wisconsin Act 20 went into effect, if the Department of Workforce Development (DWD) determined that an employer refused to hire an individual, terminated an individual’s employment, or discriminated against an individual in promotion, in compensation, or in terms, conditions, or privileges of employment based on any of the above criteria, DWD could order any of the following remedies: 1) reinstatement of the employee; 2) back pay for not more than two years before the filing of the complaint; and 3) require the employer to pay the employee’s costs and attorney fees.[v] This is currently the law following repeal of 2009 Wisconsin Act 20.



II. 2009 Wisconsin Act 20: Punitive and Compensatory Damages under the WFEA

After 2009 Wisconsin Act 20 went into effect, if DWD determined that an employer had discriminated against the employee, that employee could then commence a separate civil action in the circuit court against the employer (if the employer had 15 or more employees) seeking an additional award of: 1) punitive and compensatory damages; and 2) the employee’s additional costs and attorney fees in the civil action.[vi]

Under 2009 Wisconsin Act 20, limits on total compensatory damages (future economic losses, loss of enjoyment of life, emotional distress, pain and suffering, mental anguish, and other noneconomic damages) and punitive damages were determined by the size of the employer’s business in the following amounts:

  • $50,000 for employers that have 15 to 100 employees;
  • $100,000 for employers with 101 to 200 employees;
  • $200,000 for employers with 201 to 500 employees; and
  • $300,000 for employers with more than 500 employees.[vii]

Under 2009 Wisconsin Act 20, these limits on punitive and compensatory damages were indexed to the consumer price index and thus would have increased over time.[viii] Supporters of 2009 Act 20 stated that its purpose was to “strengthen the enforcement of anti-discrimination laws by establishing penalties for employers found guilty of discriminating against workers of any protected class, including age, race, veteran status, in addition to gender.”[ix]

III. The 2011-12 Wisconsin Legislature Repealed 2009 Wisconsin Act 20’s Allowance for the Recovery of Punitive and Compensatory Damages under the WFEA.

In 2011, Senate Bill 202[x] and Assembly Bill 289[xi] were introduced by Senator Glenn Grothman (R-West Bend) and Representative Michele Litjens (R-Oshkosh). Both identical bills sought to repeal 2009 Wisconsin Act 20’s provision allowing for the recovery of punitive and compensatory damages under the WFEA. Senate Bill 202 was the bill that eventually passed both houses and was signed into law as 2011 Wisconsin Act 219.

Business groups, which opposed the recovery of punitive and compensatory damages under the WFEA that had been allowed by 2009 Wisconsin Act 20, fully supported 2011 Wisconsin Act 219.[xii] Those groups argued that 2009 Wisconsin Act 20’s punitive and compensatory damages allowances were much higher and more onerous than most other states that allow for these same types of damages and therefore made Wisconsin a less attractive place for businesses. Moreover, employers argued that the WFEA has many more protected classes than federal law, specifically including protection for convicted felons. Employers argued that it is unfair and unsound public policy to be on the hook for potential punitive and compensatory damages for simply failing to hire a convicted felon.

Supporters of 2011 Wisconsin Act 219 also explained that, after enactment of 2009 Wisconsin Act 20, Wisconsin employers would be forced to defend WFEA claims before the DWD, and against simultaneously cross-filed claims under federal laws based on the same facts and alleged types of claims before federal agencies, followed by state or federal court under federal law.[xiii] Furthermore, after enactment of 2009 Act 20, Wisconsin employers argued that they would also be forced to not only defend WFEA claims in the administrative hearing process before the DWD, but also then have to re-litigate the same cases in circuit court in a full jury trial (or in a new trial to the court) in defense of potential punitive and compensatory damages, along with additional costs and attorney fees.[xiv]

Finally, supporters of 2011 Wisconsin Act 219 argued that the availability of punitive and compensatory damages under 2009 Wisconsin Act 20 was duplicative, unnecessary and unduly burdensome on Wisconsin employers as federal employment laws already provided the same potential remedies.[xv]

For example, potential punitive and compensatory damages are already available under Title VII of the Civil Rights Act of 1964 (employers with 15 or more employees) and Americans with Disabilities Act of 1990 (employers with 15 or more employees).

IV. Considerable Opposition to 2011 Act 219

Proponents of 2009 Wisconsin Act 20 vigorously opposed 2011 Wisconsin Act 219’s repeal of the available recovery of punitive and compensatory damages. They argued that the 2009 law was new and that it should have been given more time to determine whether it was working.

Another argument advanced, especially in the months leading up to the recent recall election, was that the bill was part of a “war on women.” Supporters of 2009 Wisconsin Act 20 dubbed the new punitive and compensatory damages law as the “Equal Pay Act.” They argued that by repealing punitive and compensatory damages, women no longer would be able to get “equal pay for equal work.”

This became a hot campaign issue during the 2012 recall elections. Opponents of the new law repealing punitive and compensatory damages used the bill against those legislators who voted for it in campaign advertisements and in op-eds.[xvi] It was also used in advertisements against Governor Walker.[xvii] The issue gained such national attention that Lilly Ledbetter, the plaintiff in the controversial United States Supreme Court case, Ledbetter v. Goodyear Tire & Rubber Co.,[xviii] flew to Madison to hold a press conference during the elections to highlight the repeal of the law.

Interestingly, the non-partisan Milwaukee Journal Sentinel’s PolitiFact Wisconsin studied many of the arguments made against the repeal of the law and found that they were not entirely fact-based. On numerous occasions, PolitFact rated statements by opponents of 2011 Wisconsin Act 219 as “false.”[xix] For example, one politician received a “false” rating for saying that the new law took away “equal pay for women.” Madison television reporter Jessica Arp of WISC-TV (Channel 3) also labeled this statement in the same campaign ad as “misleading.”[xx]

Conclusion

2011 Wisconsin Act 219 is now officially law and punitive and compensatory damages are no longer available under the WFEA. However, with the controversy surrounding this law, it is highly likely that a bill will be introduced in the next legislative session seeking to reinstate punitive and compensatory damages. As is always the case in Madison these days, stay tuned.


[i] http://docs.legis.wisconsin.gov/2009/related/acts/20.pdf

[ii] http://docs.legis.wisconsin.gov/2011/related/acts/219.pdf

[iii] Wis. Stat. §§ 111.31 – 111.395.

[iv] Wis. Stat. § 111.321.

[v] Wis. Stat. § 111.39.

[vi] Wis. Stat. § 111.397(1)(a), which was repealed by 2011 Wisconsin Act 219.

[vii] Wis. Stat. § 111.397(2)(a)1. – 4., which was repealed by 2011 Wisconsin Act 219.

[viii] Wis. Stat. § 111.397(2)(d)2., which was repealed by 2011 Wisconsin Act 219.

[ix] http://wispolitics.com/1006/120216_Sinicki.pdf

[x] http://docs.legis.wisconsin.gov/2011/proposals/sb202

[xi] http://docs.legis.wisconsin.gov/2011/proposals/ab289

[xii] http://www.wisciviljusticecouncil.org/wwcms/wp-content/uploads/2011/10/11Sept_wcjc-Act20-punitive-compens atory-damages-factsheet.pdf

[xiii] Id.

[xiv] Id.

[xv] Id.

[xvi] http://www.jsonline.com/news/opinion/wisconsins-working-women-deserve-fairness-je5ghl7-152758235.html

[xvii] http://www.barrettforwisconsin.com/media/press-releases/2012-04-new-barrett-ad-takes-on-walkers-war-on-women; http://www.youtube.com/watch?v=SAr3EyHX50s

[xviii] 550 U.S. 618 (2007).

[xix] http://www.politifact.com/wisconsin/statements/2012/may/17/tom-barrett/wisconsin-recall-challenger-tom-barrett-says-gov-s/

[xx] http://www.youtube.com/watch?v=h7dQJ_YBkvE