Tennessee Caps on Damages for Sexual Harassment Cases

Tennessee sexual harassment cases that are brought against an employer are governed by the Tennessee Human Rights Act. The underlying basis for claims against an employer for sexual harassment fall under the provision in T.C.A. § 4-21-401 that provides that it is a discriminatory practice for an employer to “fail or refuse to hire or discharge any person or otherwise to discriminate against an individual with respect to compensation, terms, conditions or privileges of employment because of such individual’s race, creed, color, religion, sex, age or national origin…”.  Sexual harassment cases fall within this section and I have previously discussed the Tennessee law standard for a sexual harassment case in my prior blog post here.

It is important to note that there are specific caps on damages for Tennessee sexual harassment claims (as well as other discriminatory causes of action brought against employers under the Tennessee Human Rights Act). Specifically, this statute provides the following in T.C.A. § 4-21-313:

(a) For any cause of action arising under § 4-21-401, § 8-50-103, or § 50-1-304, the sum of the amount of compensatory damages awarded for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, shall not exceed, for each complaining party:

(1) In the case of a cause of action arising under § 50-1-304 and an employer who has less than eight (8) employees at the time the cause of action arose, twenty-five thousand dollars ($25,000);

(2) In the case of an employer who has eight (8) or more but fewer than fifteen (15) employees at the time the cause of action arose, twenty-five thousand dollars ($25,000);

(3) In the case of an employer who has more than fourteen (14) and fewer than one hundred one (101) employees at the time the cause of action arose, fifty thousand dollars ($50,000);

(4) In the case of an employer who has more than one hundred (100) and fewer than two hundred one (201) employees at the time the cause of action arose, one hundred thousand dollars ($100,000);

(5) In the case of an employer who has more than two hundred (200) and fewer than five hundred one (501) employees at the time the cause of action arose, two hundred thousand dollars ($200,000); and

(6) In the case of an employer who has more than five hundred (500) employees at the time the cause of action arose, three hundred thousand dollars ($300,000).

(b) The limitations in subsection (a) shall not apply to backpay, interest on backpay, front pay, or any equitable relief.

As a result, you can see that the limitation on damages for certain types of damages, including “compensatory damages awarded for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses” are determined based on the number of the employees at the employer. However, these limits do not apply to amounts for backpay, interest on backpay, front pay or any other equitable relief. In other words, sometimes when an employee is terminated, for sexual harassment or based on other discrimination, they are entitled to back pay and front pay awards, due to their actual loss of wages. This is not included in the caps provided in the statute. However, damages for other claims resulting from the sexual harassment or discrimination are limited by the numbers in this statute.

The damages referenced in this statute are not the only potential causes of action that are available in sexual harassment cases, however.  There are other causes of action in Tennessee that do not have these caps that could apply to a specific Tennessee sexual harassment situation, depending on how severe the circumstances are. Specifically, many times, intentional infliction of emotional distress claims are brought against an employer, which can result in damages that are not limited by the caps in this specific statute. However, those claims are limited by the tort reform caps, which I have blogged about here.

As a result, whenever considering a Tennessee sexual harassment case or discrimination case under the Tennessee Human Rights Act, these caps on damages must be reviewed and calculated.  They potentially limit the award that can be obtained by an employee under certain circumstances.