2012] EMPLOYMENT DISCRIMINATION 475
Punitive damages are a powerful weapon. Imposed wisely and with
restraint, they have the potential to advance legitimate state interests.
Imposed indiscriminately, however, they have a devastating potential for
—Former Supreme Court Justice Sandra Day O’Connor1
Punitive damages have often captured the attention of the public,
particularly where the awards have provided substantial relief for the victims
involved.2 Title VII of the Civil Rights Act of 1964 (“Title VII”) was amended
in 1991 to include exemplary relief.3 Unfortunately, punitive damages were
added to the statute with no clear guidance on when this form of relief is
appropriate in workplace discrimination cases.4
More than a decade has passed since the Supreme Court provided its
clearest statement of how punitive damages should be analyzed under Title
VII. In Kolstad v. American Dental Ass’n, the Court looked to agency principles
to determine when an employer can be subject to exemplary relief.5 While
Kolstad resolved many questions for this area of the law, it also generated
significant confusion in the lower courts over the proper standard to apply
in workplace cases. Most notably, the decision does little to resolve the
question of what “malice or . . . reckless indifference”6 means under the
statute, and the courts have issued varied and conflicting opinions on this
The confusion in this area of the law has become more pronounced
after the Supreme Court’s recent decisions on punitive damages in Exxon
Shipping Co. v. Baker8 and Philip Morris USA v. Williams,9 which both arose
1. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 42 (1991) (O’Connor, J., dissenting). See
generally Developments in the Law: The Paths of Civil Litigation, 113 HARV. L. REV. 1752, 1784–85
(2000) (comparing the criticisms of punitive damages); Richard W. Murphy, Superbifurcation:
Making Room for State Prosecution in the Punitive Damages Process, 76 N.C. L. REV. 463, 467 (1998)
2. See generally Murphy, supra note 1, at 467 (discussing punitive damages); Developments
in the Law: The Paths of Civil Litigation, supra note 1, at 1783–88 (same).
3. Civil Rights Act of 1991, Pub. L. No. 102-166, § 102, 105 Stat. 1071, 1072–74
(codified at 42 U.S.C. § 1981a (2006)). This Article uses the t erms punitive damages and
exemplary damages interchangeably.
4. See id. See generally Joseph A. Seiner, The Fail ure of Punitive Damages in Employment
Discrimination Cases: A Call for Change, 50 WM. & MARY L. REV. 735 (2008) (discussing punitive
damages in employment discrimination cases).
5. Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 545 (1999).
6. 42 U.S.C. § 1981a(b)(1).
7. See infra Part III (discussing the various approaches of the lower courts when analyzing
punitive damages in the employment discrimination context).
8. Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008).
9. Philip Morris USA v. Williams, 549 U.S. 346 (2007).