July 2001

On June 4, 2001, the U.S. Supreme Court significantly increased the amount of potential damages an employee can receive in a discrimination case against his or her employer. Specifically, in Pollard v. E.I. DuPont De Nemours & Company, the highest court unanimously held that "front pay" (future wages for employees who have been unlawfully discriminated against and who are unable to be reinstated to their previous employment or find comparable work) is not considered "compensatory damages" and is, therefore, not subject to the compensatory damages "cap" under Title VII of the Civil Rights Act of 1964, as amended. This decision resolves conflicting decisions among the federal District and Circuit (appellate) courts.

In Pollard, Sharon Pollard sued her former employer under Title VII, alleging that she had been subjected to a hostile work environment based on her gender. Following a trial before the U.S. District Court, Pollard prevailed on her sexual harassment claim and was awarded $107,364 in "back pay" (wages lost by Pollard prior to judgment) and benefits, $252,997 in attorneys' fees and costs, and $300,000 in compensatory damages. $300,000 is the maximum compensatory damages award permitted under Title VII. That notwithstanding, the District Court opined that although it was bound by prior precedent to include Pollard's "front pay" in her $300,000 compensatory damages award, such an award was insufficient to fully compensate Pollard. As such, Pollard appealed. On appeal to the U.S. Court of Appeals for the Sixth Circuit, Pollard argued that "front pay" should not be considered part of compensatory damages (and, therefore, should not be "capped"), but rather serves as a replacement for the remedy of reinstatement where reinstatement is unavailable. The Court of Appeals rejected Pollard's appeal.

The U.S. Supreme Court, however, agreed with Pollard's argument for the following reasons. Initially, the Court conceded that reinstatement was not always a viable option, e.g., where there is continuing hostility between employer and employee, or where the employee has sustained psychological injury from the workplace discrimination. The Court noted, however, that where reinstatement is unavailable as a remedy, virtually all courts recognize that "front pay" is a substitute remedy authorized by Title VII. Importantly, Title VII also authorizes compensatory damages, but specifically states that compensatory damages are to be awarded "in addition to any other relief" specifically authorized by Title VII. The statute further states that compensatory damages do not include "back pay," interest on "back pay," or any other relief authorized by Title VII. Because "front pay" is a remedy authorized by Title VII, the Court concluded that, based on the foregoing provisions, "front pay" cannot be considered compensatory damages. Therefore, "front pay" is not subject to the $300,000 compensatory cap.

Although this decision was good for Pollard, it is dangerous to employers. Next to punitive damages, "front pay" awards are often the largest award in a discrimination lawsuit. If a plaintiff can demonstrate that he or she is unable to work a similar job, with similar pay, for many years following on-the-job harassment or discrimination, "front pay" will quickly add up and has even approached seven figures in some cases. Therefore, when analyzing your company's exposure in a case under Title VII, remember to think of potential damages that fall outside the statutory "cap," such as "back pay", the plaintiff's attorneys' fees and costs, and now--following Pollard--"front pay."