Supreme Court Provides Good Faith Employers with Punitive Damages Defense

On June 22, 1999, the U.S. Supreme Court ruled that a plaintiff who proves intentional discrimination may collect punitive damages without showing egregious conduct by the employer. At the same time, the Supreme Court provided certain employers with a significant defense to punitive damages awards. The Supreme Court held that an employer may not be liable for punitive damages for discriminatory employment decisions of managers where those decisions are contrary to the employer's good faith efforts to comply with employment discrimination statutes. In order to take advantage of the defense, employers must show good faith compliance efforts. For example, the Court encouraged employers to create and implement broad anti-discrimination programs, including strong policies and continued training and education of employees.

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