Eliminating the Need for Caps on Title VII Damage Awards: The Shield of Kolstad v. American Dental Association

After recounting the legislative history of the Civil Rights Act of 1991, this article reconsiders the legislative compromise that allowed in this Act for capped compensatory and punitive damages as remedies for Title VII violations. This reconsideration is made in light of the Court’s decision in Kolstad v. American Dental Association, granting employers protection from a punitive damage remedy if they can demonstrate a good faith effort to comply with the Act. The article argues that this holding obviates the need for damage cap protection of innocent employers. It does so by enabling employers to shield themselves from the threat of punitive damages through the adoption and implementation of reasonable anti-discrimination policies. Kolstad, if properly interpreted, exposes only those controlling owners and managers whose operations no reasonable member of Congress would want to defend as worthy of protection from the threat of even a financially devastating verdict. The article also acknowledges and analyzes lower court decisions that have interpreted Kolstad narrowly to allow punitive damages against reasonable employers by ignoring the distinctions the Court drew between the standards for employer liability for compensatory damages and those for employer liability for punitive damages. In part because of these decisions, the article suggests a clarifying codification of Kolstad as part of a legislative compromise to eliminate the Title VII caps