With no provision for damages, the potential for recovering serious money was virtually nil. Thus, the odds of a plaintiff's bringing a lawsuit were diminished by the unavailability of lawyers willing to take the cases.
"If I'm a plaintiffs' lawyer sitting in my office, and you walk in and describe your case to me, the first thing on my mind is, 'Will I get a fee for it?" explains Martin Payson, a partner in a large employment-law firm in White Plains, N.Y. "Bear in mind that the individual is most likely out of work and probably can't afford my fee. Unless there is the possibility of a substantive recovery, it doesn't pay to take the case."
That changed dramatically when, under the 1991 act, plaintiffs in Title VII and ADA cases became entitled to compensatory and punitive damages, plus back pay and legal fees. In the political firefight that erupted over the legislation, business lobbyists extracted one break: the damage awards are capped under a sliding scale. For a company with more than 14 and fewer than 101 employees, the cap is $50,000. (It's worth noting that Title VII and the ADA don't apply to businesses with fewer than 15 people.) The awards top out at $300,000 for companies with more than 500 employees.
By piling on multiple tort claims, however, a plaintiff's lawyer can sidestep the caps. In a sexual-harassment case against a Miami businessman in Florida, for example, Fort Lauderdale lawyer Karen Coolman Amlong won approximately $1.5 million for her client. In addition to sexual harassment and sex discrimination, Amlong charged the man with battery, invasion of privacy, and intentional infliction of emotional distress. Moreover, under the laws of some states, such as California and New Jersey, there are no caps on damages.
In any case, the caps could soon be gone. The Equal Remedies Bill, which would abolish them, is pending on Capitol Hill, and it has strong support. "The caps enable companies to budget for discrimination," argues Ellen Vargyas, senior staff counsel at the National Women's Law Center, in Washington, D.C. "For a highly profitable firm with under 100 employees, $50,000 is nothing -- it's lunch money. We think plaintiffs should get whatever damages they can prove."
Besides damages, the 1991 act also gives plaintiffs the right to a trial by jury. That greatly raises the stakes for employers, because juries tend to empathize with plaintiffs. According to another study by Rand, plaintiffs win 70% of jury trials.
Plaintiffs' attorneys often object to the suggestion that juries might be biased against businesses. "If we don't trust juries, we don't trust democracy and we don't trust ourselves," insists New Jersey plaintiffs' lawyer Nancy Smith. "I have confidence in people's ability to do the right thing."
But not everyone is so sanguine about jurors' objectivity. Lynn Lloyd Laughlin is one skeptic. He practiced employment law for 20 years before founding Employment Dispute Resolution Inc. (EDR), an Atlanta outfit that seeks to resolve claims through binding arbitration. One reason companies become EDR's clients is that employers have a near-visceral fear of juries, especially in discrimination suits.
"The question is whether an employer or a manager can get a jury of his or her peers," Laughlin says. "Rarely do managers, let alone company owners, end up on juries. It's really a jury of the employee's peers."
That is very clear in age-discrimination cases, he adds. "Juries are notoriously sympathetic to age claimants. The average awards are running twice what they are for any other discrimination claim. The reason is that everyone on the jury either is in the protected class [40 or older] or hopes to be. And if the plaintiff looks like someone's mother, say, or grandfather, the plaintiff is halfway home."
Maybe juries favor plaintiffs. Maybe they don't. But either way, they are unpredictable, and that throws a wild card into the equation for accused managers trying to decide if they should fight a case to the finish or settle and be done with it. There aren't many options.
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The Cost of "Legalized Blackmail"
Unhappily for employers, the combination of jury trials and damage awards coincides with a third explosive ingredient -- an overcrowded legal profession. There are about 740,000 lawyers in the United States, and by some estimates, as many as a third of them are unemployed or underemployed.
"Out here, big law firms in San Francisco and Los Angeles are laying off 10% to 20% of their work forces, so there are a lot of hungry lawyers around," says William Smith, a plaintiffs' lawyer in Fresno, Calif. "You have lawyers who, five years ago, would not have listened to someone talk about a sex-harassment case. Now they do listen because they need the business."
The National Employment Lawyers Association, a San Francisco-based bar group for plaintiffs' lawyers, has about 1,900 members and is growing by about 50 a month. In addition, personal-injury lawyers, skilled at playing to juries, are pouring into the field in search of a big hit. Many accept cases on a contingency-fee basis; if they win, they usually take 33% to 45% of the award.
"This is now much less a field that lawyers go into to do good and much more a field that people get into to make money," says Miami lawyer du Fresne. Indeed, to thrive, lawyers representing discrimination claimants need not hit a punitive-damages jackpot. The mere threat of a lawsuit -- even just a letter on legal stationery -- can be enough to persuade companies to settle.
