§1.9 X. Briefly On Damages And Fee Shifting

• Jurisdiction: New York

X. Briefly on Damages and Fee Shifting

At one time, there was a distinct difference in the kinds of damages available to prevailing New York employment plaintiffs in discrimination, harassment and retaliation actions, and the difference was based on whether the claims were asserted under federal laws or state laws.²⁰³ Particularly, under federal law, successful employee plaintiffs may recover compensatory and punitive damages, and attorneys' fees, although punitive damages are only available against private entities and individuals, not governments or municipalities (with punitives also not available under the ADEA),²⁰⁴ and with federal courts limiting an award of punitive damages to those cases where plaintiff demonstrates intentional discrimination and malice or reckless indifference, or where discrimination happens "in the face of a perceived risk that [defendant's] actions w[ould] violate federal law."²⁰⁵

Title VII authorizes punitive damages only when a plaintiff makes two showings. First, the plaintiff must show that the employer "engaged in unlawful intentional discrimination (not an employment practice that is unlawful because of its disparate impact). . . ." Second, the plaintiff must show that the employer engaged in the discriminatory practice "with malice or with reckless indifference to the federally protected rights of an aggrieved individual.". . . That is, "an employer must at least discriminate in the face of a perceived risk that its actions will violate federal law[.]"

When a plaintiff relies on vicarious liability to hold an employer liable for punitive damages under Title VII, as [plaintiff] did, he must do so under traditional principles of agency law. Agency law provides only four ways an employer can be held vicariously liable for punitive damages based on the act of an employee: (1) when the employer authorizes the employee's tortious act; (2) when an employee is unfit and the employer acts recklessly in employing the employee; (3) when the employee served in a managerial capacity and was acting within the scope of employment; or (4) when the employer or managerial agent of the employer ratified or approved the act. ²⁰⁶

In addition, pursuant to federal law, damages awards for successful plaintiffs are capped (including under Title VII and Section 1981). According to EEOC guidance:

Limits On Compensatory & Punitive Damages

There are limits on the amount of compensatory and punitive damages a person can recover. These limits vary depending on the size of the employer:

For employers with 15-100 employees, the limit is $50,000.

For employers with 101-200 employees, the limit is $100,000.

For employers with 201-500 employees, the limit is $200,000.

For employers with more than 500 employees, the limit is $300,000. ²⁰⁷

The same is also set forth pursuant to federal statutory language, specifically stated in the text of 42 U.S.C. § 1981a:

Limitations

The sum of the amount of compensatory damages awarded under this section for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, and the amount of punitive damages awarded under this section, shall not exceed, for each complaining party—

(A) in the case of a respondent who has more than 14 and fewer than 101 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $50,000;

(B) in the case of a respondent who has more than 100 and fewer than 201 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $100,000; and

(C) in the case of a respondent who has more than 200 and fewer than 501 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $200,000; and

(D) in the case of a respondent who has more than 500 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $300,000. ²⁰⁸

If damages awarded by a jury exceed the cap, courts will reduce the award to at least the cap (although courts might not grant remittitur beyond any reduction to the level of the cap, such as when extreme mental anguish is proven, or where the award is not grossly disproportionate to the evidence of damages in the case).²⁰⁹

Under the former New York State law, by contrast, successful employee plaintiffs could recover compensatory damages, but not punitive damages, and attorneys' fees in only select actions at the discretion of the tribunal (for instance, in employment, as of January 2016, for...