Supreme Court Holds Damage Cap In Civil Rights Act Does Not Apply To “Front Pay”

Employees who file lawsuits under the Civil Rights Act alleging employment discrimination on the basis of sex traditionally have been entitled to such remedies as injunctions, reinstatement, back pay, lost benefits, and attorney’s fees. In the Civil Rights Act of 1991, Congress expanded the remedies available to these employees by permitting, for the first time, the recovery of compensatory and punitive damages. See 42 U.S.C. §1981a(a)(1). The amount of compensatory damages awarded under §1981a for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses,” and the amount of punitive damages awarded under §1981a may not exceed a cap set forth in §1981a(b)(3). The statutory cap is based on the number of individuals employed by the employer.

At issue before the Supreme Court in a recent case involving the DuPont Corporation was whether the damages cap in the Civil Rights Act of 1991 applies to so-called “front-pay” – damages awarded for lost compensation during the period between a court judgment and reinstatement, or in lieu of reinstatement. For instance, when an appropriate position for the employee is not immediately available without displacing an incumbent employee, courts have ordered reinstatement upon the opening of such a position and have ordered front pay to be paid until reinstatement occurs. In cases in which reinstatement is not viable because of continuing hostility between the plaintiff and the employer or its workers, or because of psychological injuries suffered by the plaintiff as a result of the discrimination, courts have ordered front pay as a substitute for reinstatement.

The Court found that front pay is not an element of compensatory damages within the meaning of §1981a, and that the statutory cap on damages is inapplicable to front pay. In a rare unanimous opinion in the area of labor law, the Court noted that “in the abstract, front pay could be considered compensation for ‘future pecuniary losses,’ in which case it would be subject to the statutory cap. The term ‘compensatory damages … for future pecuniary losses’ is not defined in the statute, and, out of context, its ordinary meaning could include all payments for monetary losses after the date of judgment.”

Notwithstanding the temptation to interpret “compensatory damages” as including front pay, the Court held that “we do not analyze one term of §1981a in isolation. When §1981a is read as a whole, the better interpretation is that front pay is not within the meaning of compensatory damages in §1981a(b)(3), and thus front pay is excluded from the statutory cap.”

The Court observed that “in the Civil Rights Act of 1991, Congress determined that victims of employment discrimination were entitled to additional remedies. Congress expressly found that ‘additional remedies under Federal law are needed to deter unlawful harassment and intentional discrimination in the workplace,’ without giving any indication that it wished to curtail previously available remedies. Congress therefore made clear through the plain language of the statute that the remedies newly authorized under §1981a were in addition to the relief authorized by the preexisting statute. Section 1981a(a)(1) provides that, in intentional discrimination cases brought under Title VII, ‘the complaining party may recover compensatory and punitive damages as allowed in subsection (b) of [§1981a], in addition to any relief authorized by section 706(g) of the Civil Rights Act of 1964, from the respondent.’ And §1981a(b)(2) states that ‘[c]ompensatory damages awarded under [§1981a] shall not include back pay, interest on back pay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964.’ According to these statutory provisions, if front pay was a type of relief authorized under §706(g), it is excluded from the meaning of compensatory damages under §1981a.”

The Court concluded that the original language of the Civil Rights Act “authorizing back pay awards was modeled after the same language in the National Labor Relations Act (NLRA). This provision in the NLRA had been construed to allow awards of back pay up to the date of reinstatement, even if reinstatement occurred after judgment. Accordingly, back pay awards made for the period between the date of judgment and the date of reinstatement, which today are called front pay awards under Title VII, were authorized under §706(g). As to front pay awards that are made in lieu of reinstatement, we construe §706(g) as authorizing these awards as well. We see no logical difference between front pay awards made when there eventually is reinstatement and those made when there is not.”

Pollard v. E.I. du Pont de Nemours & Co., ____ U.S. ____, (June 4, 2001).