Punitive Damages, Due Process, and Employment Discrimination

Author:Joseph A. Seiner
Position:Associate professor at the University of South Carolina School of Law
Pages:473-519
SUMMARY

The Supreme Court has failed to provide any substantive guidance on when punitive damages are appropriate in employment discrimination cases since it issued its seminal decision in Kolstad v. American Dental Ass’n over twelve years ago. The Court has recently expanded its punitive damages jurisprudence in the high-profile decisions of Philip Morris USA v. Williams and Exxon Shipping Co. v. Baker. ... (see full summary)

 
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473
Punitive Damages, Due Process, and
Employment Discrimination
Joseph A. Seiner
The Supreme Court has failed to provide any substantive guid ance on when
punitive damages are appropriate in employment discrimination cases since
it issued its seminal decision in Kolstad v. American Dental Ass’n over
twelve years ago. The Court has recently expanded its punitive damages
jurisprudence in the high-profile decisions of Philip Morris USA v.
Williams and Exxon Shipping Co. v. Baker. While these cases
dramatically altered the way exemplary relief is analyzed in civil cases, the
extent to which these decisions apply in the workplace context remains
unclear. Surprisingly, there has been almost no academic literature to date
explaining how Philip Morris and Exxon impact punitive damages
claims brought by employment discrimination plaintiffs. This Article seeks to
fill that substantial void in the scholarship, looking specifically at the
potential due process implications.
Navigating the recent Supreme Court cases, this Article proposes a uniform
analytical framework for analyzing punitive damages in cases brought
under Title VII of the Civil Rights Act of 1964. The model proposed in this
Article provides a blueprint for courts and litigants when considering
whether punitive relief is appropriate in an employment discrimination case.
If adopted, the model set forth in this Article would resolve much of the
uncertainty that currently exists in the lower courts over how to apply the
remedial provisions of Title VII—as interpreted through the confusing
Kolstad decision—to employment discrimination claims. This Article
explains how this proposed framework would bring much more efficiency to
the judicial process and help define the future of workplace punitive
damages.
Associate professor at the University of Sout h Carolina School of Law. The author
would like to thank Charles Sullivan, Michael Zimmer, Sandra Sperino, Benjamin Gutman, and
Megan Seiner for their extremely helpful thoughts and comments on this paper. The author
would also like to thank the participants at the Fifth Annual Colloquium on Current
Scholarship in Labor & Employment Law (held at the Washington University School of Law
and the Saint Louis University School of Law) for their helpful feedback. This Article is
dedicated to Stephen J. Seiner, Alice A. Seiner, John E. Sweeney, Joan D. Sweeney, and
grandparents everywhere for all the love and support that they so selflessly provide. Any errors
in this Article are entirely my own.
474 IOWA LAW REVIEW [Vol. 97:473
I. INTRODUCTION ...................................................................................... 475
II. SUPREME COURT CASE LAW ................................................................... 478
III. KOLSTAD REFINED: THE CURRENT STATE OF THE LAW FOR
WORKPLACE PLAINTIFFS ........................................................................ 484
A. PURPOSE AND ROLE OF WORKPLACE PUNITIVE DAMAGES .................... 484
B. KOLSTAD REVISITED ........................................................................ 488
C. EXXON AND PHILIP MORRIS IN THE WORKPLACE CONTEXT.............. 490
D. CONFUSION IN THE COURTS .............................................................. 496
IV. A NEW MODEL ....................................................................................... 500
A. MANAGEMENT-LEVEL EMPLOYEE ...................................................... 502
B. MANAGER HAD KNOWLEDGE OF TITLE VII ........................................ 505
C. MANAGER ACTING WITHIN SCOPE OF EMPLOYMENT .......................... 508
D. GOOD-FAITH EFFORTS ...................................................................... 509
E. JUDGMENT AS A MATTER OF LAW ...................................................... 512
F. OTHER CONSIDERATIONS .................................................................. 514
G. SUMMARY OF PROPOSED FRAMEWORK ............................................... 515
V. LIMITATIONS OF PROPOSED MODEL ...................................................... 516
VI. IMPLICATIONS OF PROPOSED FRAMEWORK ............................................ 518
VII. CONCLUSION ......................................................................................... 519
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
harm.
—Former Supreme Court Justice Sandra Day O’Connor1
I. INTRODUCTION
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
issue.7
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)
(same).
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).

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