High Court Excludes Front Pay from Title VII Damages Cap

On June 4, 2001, the U.S. Supreme Court decided that amounts awarded as “front pay” to discrimination plaintiffs are not subject to the limitations on damages contained in the Civil Rights Act of 1991. Pollard v. DuPont, 2001 U.S. LEXIS 4123 (June 4, 2001).

In the 1991 Act, which amended Title VII of the Civil Rights Act of 1964, Congress authorized federal courts to award compensatory damages (such as damages for emotional distress), as well as punitive damages, to victims of unlawful discrimination or harassment. The 1991 amendments also imposed a cap on such damages; the amount of the cap varies depending on the size of the defendant employer and ranges from $50,000 (for employers with between 15 and 100 employees) up to $300,000 (for employers with more than 500 employees).

Back pay — the amount of wages lost by the plaintiff between the date of the discriminatory act and the court judgment — is not subject to the statutory damages limitation. In the Pollard case, the Supreme Court was faced with the question whether “front pay” is likewise excluded from the damages cap. Front pay represents amounts the plaintiff may earn in the future, extending beyond the date of the court’s judgment, and is often awarded in cases involving unlawful discharges where the usual remedy of reinstatement is not practicable (such as where the position previously held by the plaintiff subsequently has been eliminated for non-discriminatory reasons).

A unanimous Supreme Court ruled in Pollard that front pay is not subject to the cap on damages. As a result, while a discrimination plaintiff’s recovery of compensatory and punitive damages is limited to between $50,000 and $300,000 (depending on the size of the employer’s workforce), the potential recovery of front pay (as well as back pay and attorney’s fees) is unlimited. The ruling was a victory for civil liberties and worker’s rights advocates, who argued that the statutory cap is arbitrary and that subjecting front pay awards to the cap would benefit employers at the expense of discrimination victims. The decision was a defeat for the business community, which argued that front-pay awards are often arbitrary, speculative, and out of proportion to the worker’s actual losses.