The United States Supreme Court recently made employment litigationpotentially much more expensive for employers. In a unanimous decision, theCourt held that "front pay" is not covered by the damages cap in TitleVII and Americans with Disabilities Act (ADA) cases. The damages cap was a part of the 1991 Civil Rights Act, which, for the firsttime, gave parties the right to a jury trial in Title VII and ADA cases. Themaximum amount of compensatory and punitive damages that may be imposed rangesfrom $50,000 for the smallest employers to $300,000 for employers with more than500 employees. If front pay were included in the cap, as the employer argued,the potential financial liability in Title VII and ADA cases would be limited toback pay and benefits lost, an amount of damages within the cap, and attorneyfees. Now, front pay must be added as well. Front pay is an amount to compensate for pay lost between the date of thejudgment and reinstatement, or an amount in lieu of reinstatement which can runfor months or years into the future. If the court, for example, orders anemployee reinstated and there is no suitable position open, front pay can coverthe period from the judgment until there is an opening. Most common is thesituation where there are hard feelings or other reasons why reinstatement wouldnot work; front pay is awarded as a substitute. The Supreme Court did not consider when front pay is an appropriate remedy,leaving that question for another day. However, there are considerationsavailable for employers, especially when the employee is no longer working forthe defendant employer. It is settled law that a former employee who turns downan unconditional offer of reinstatement cannot be awarded any pay after the dateof the rejected offer. In appropriate situations, such an unconditional offer ofreinstatement can cut off both front pay and a portion of back pay liability. If the employee fulfills his or her obligation to mitigate damages andobtains another job, the liability for...
Front Pay Uncapped: A New Risk
|Author:||Ms Mary Ann Oakley|
|Profession:||Holland & Knight LLP|
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