Minnesota Is Still Better Than Wisconsin

I truly appreciate it when anyone reads this blog, whether they agree with me or not.  And I especially appreciate receiving feedback about the issues I’ve raised.  To that end, my cousin, Scott Welsh, who is a Wisconsin business owner (shameless plug for his real estate firm here) and fantastic human being, shot me a note giving me a ribbing on facebook for my recent post about the Wisconsin Assembly’s vote to repeal the right to recover compensatory and punitive damages for employees who are the victims of employment discrimination.  His comment stated: 

        “I know….”us” big bad employer’s in Wisconsin have it made???”

I presume Scott was likely speaking on behalf of many Wisconsin business owners who aren’t my friends on facebook.  I also presume he withheld a number of expletives from his note because we were in each others’ weddings.   

I should also include this disclaimer: In addition to being a lawyer, I am also an employer.  So if this post comes off as biased in favor of employers, please accept my apologies.

Anyway, Scott has a new champion in my friend Bart “T-Bomb” Torvik over at the Gillette-Torvik Blog, who is himself an attorney practicing in Illinois (just like Abe Lincoln!).  I should note that it is an undisputed fact that Mr. Torvik is a rabid fan/supporter/martyr of and for Wisconsin.  I’m not sure if that means he was sampled in this study or not. 

T-Bomb has taken my recent Wisconsin v. Minnesota post, and his co-blogger Adam Gillette, to task by arguing, among other things, (1) that the Wisconsin Fair Employment Act (WFEA), which currently provides compensatory and punitive damages for victims of workplace discrimination, costs employers more and stifles job creation because it creates an additional level of administrative hearings, and (2) that employees can simply go to federal court because federal law provides the same remedies as the likely to be repealed WFEA.  T-Bomb’s blog post can be found here.  T-Bomb does an admirable job defending my cousin Scott, but I have a few bones to pick with his analysis.

Currently, an employee may file a complaint of workplace discrimination with Wisconsin’s Department of Workforce Development (DWD).  The DWD has the power to investigate the claim, hold hearings and award an employee back pay, reinstatement, costs and attorneys’ fees upon a finding that the employer engaged in discrimination.  Repealing the WFEA in the manner proposed will not take away any of these administrative proceedings or remedies.  Instead, under current law, after an employee has already proved discrimination once at a hearing in the DWD, she has to then go to state court and again prove discrimination in order to recover compensatory and punitive damages.  It is the right to go to state court to recover these damages that is in danger of being repealed.

I can’t dispute that the proposed legislation would reduce the attorneys’ fees and costs (in addition to the potential damages) an employer may incur defending against a claim.  But if reducing the cost of the proceedings is truly the goal here, then what the Assembly really should do is give the DWD the power to award compensatory and punitive damages after a hearing and finding of discrimination, rather than make the employee and employer go through two seperate proceedings.  That would do away with the additional procedural cost of having to litigate the claim twice while requiring only those employers who are guilty of discrimination to pay more in damages.  Win-win.

One could also argue that an employer could avoid unwanted attorneys fees and costs by not discriminating against the employee in the first place.

I also want address T-Bomb’s argument that anti-discrimination laws cost employers money.  Of course they do.  But taking that argument to its logical conclusion means we should do away with all anti-discrimination legislation because they cost employers money and may, theoretically, result in less employees being hired.  I know there are probably people out there who think that may be a good thing.  My guess is that they have never met or do not really know someone who has been the victim of discrimination.  Moreover, while it has had its ups and downs, I think the American economy has done quite well since 1964 when Title VII, the first federal anti-discrimination statute, was enacted into law.  At the same time, minorities, women and others have received substantial benefits at work and in society at large because of these anti-discrimination statutes. 

I also take issue with the whole premise that reducing the damages paid by employers that have been proven guilty of discrimination will create jobs.  First, there is no guarantee that the employer who is relieved of paying compensatory and punitive damages is going to run out, create a new job and hire a new employee with that “savings.”  Second, are these the employers we want creating jobs?  Remember, these are folks who have already been found guilty of workplace discrimination.  My guess is that working for an employer who discriminates against its employees is much more demoralizing than working for an employer who does not discriminate in the workplace. 

This management study argues that high employee morale leads to an increase in productivity and other significant benefits while low employee morale leads to a decrease in productivity, employee turnover, and other significant costs to the employer.  So by letting guilty employers keep some of that cash, Wisconsin is encouraging the creation of jobs that will necessarily be less productive than if those funds were used elsewhere.  No wonder they are drinking so much in Wisconsin!  My guess is that providing compensation to that employee who proved she was the victim of discrimination to compensate her for her emotional distress would raise her morale and make her more productive which would truly benefit Wisconsin.

And T-Bomb’s co-blogger Adam Gillette points out that neither T-Bomb nor the propaganda he links to from the Wisconsin Civil Justice Council, Inc. (Ironic name, isn’t it?) in his post provide any data supporting the falicy that fewer anti-discrimination laws and penalties results in more jobs. 

T-Bomb next argues that employees aren’t really harmed by this proposed legislation because federal law provides a recovery for compensatory and punitive damages in federal court.  That is true, but if the goal is to reduce litigation costs, the evidence shows federal court costs as much, if not more, than the procedures under the WFEA.

First, federal law mandates that, just like in Wisconsin, employees go through an administrative process at the Equal Employment Opportunity Commission (EEOC) before bringing suit.  After that administrative procedure, the employee then must bring a lawsuit in federal court to recover any compensation.  Thus, the federal system also requires both an administrative and judicial step to resolve these claims.  No cost savings there.

Moreover, the costs of litigation in federal court tend to be higher than in state court for all parties.  And don’t forget (because I know you knew this), the federal courthouses in Wisconsin are located in Milwaukee and Madison.  Conversely, state courts are located in every county throughout the state. Typically, both the employee and employer reside in the same or adjoining counties.  It would appear that for a large segment of Wisconsin’s population, the travel and litigation costs associated with a state court action are arguably much less than those in federal court.  Thus, there does not seem to be evidence to prove that litigating in federal court is any cheaper, and in fact may be much more expensive, than under the WFEA.

In sum, it does not appear that repealing the WFEA will result in the job creation or economic benefits argued by its proponents.  Nor will it reduce the cost of litigation.  Instead, this proposed legislation prevents employees who have been discriminated against from recovering damages in the most economical and geographically convenient venue, state court.

Because this is the Minnesota Employment Law Blog, I should also briefly compare Minnesota’s anti-discrimination law to Wisconsin, which is really, for our readers, the true test of who wins this border battle.  The Minnesota Human Rights Act provides broader protection against discrimination than both Wisconsin and federal law.  It also allows the employee the choice of bringing a lawsuit in court right away or submitting the claim administratively to the Minnesota Department of Human Rights.  Employees can recover back pay, front pay, reinstatement, unlimited conpensatory damages, punitive damages up to $25,000 and their attorneys’ fees and costs if they are successful.  In some cases, the court can award an employee up to three times their actual damages.  By this measure, Minnesota is by far a better environment for employees than Wisconsin.  Hense the title of this post.  T-Bomb can’t quarrel with these facts.

And one final note.  I went to school at the University of Iowa, so this blog has a strong policy against Iowa bashing.  Go Hawks!

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