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There are three areas in which a factfinder in an employment sex discrimination case could find intentional discrimination, but the defendant would nonetheless not be liable for punitive damages. First, if the theory of discrimination advanced by the plaintiff is sufficiently novel or poorly recognized, the employer could reasonably believe that its actions are legal even though discriminatory. Second, the employer could believe it has a valid bona fide occupational qualification defense to its discriminatory conduct. Third, in some (presumably rare) situations, the employer could actually be unaware of Title VII's prohibition against discrimination. Common to all of these exceptions is that they occur when the employer is aware of the specific discriminatory conduct at issue, but nonetheless reasonably believes that conduct is lawful. Under such circumstances, an employer may not be liable for punitive damages.
Plaintiff employee complained to defendant employer about sexual discrimination. Subsequently, plaintiff was denied promotions and excluded from important meetings. She filed suit alleging violations of Title VII and Washington state law and a jury awarded her compensatory and punitive damages for retaliation as well as attorneys' fees. Defendant appealed.
Under the circumstances, did the trial court correctly award punitive damages in favor of the plaintiff employee?
The court affirmed the trial court's decision in all respects except on the issue of punitive damages. It vacated the punitive damage award and remanded for the trial court's application of the Kolstad test. The court held that punitive damages could not stand if: (1) the theory of discrimination advanced by plaintiff was sufficiently novel or poorly recognized, and defendant could reasonably have believed that its action was legal even though discriminatory; (2) defendant believed it had a valid bona fide occupational qualification defense to its discriminatory conduct; or (3) defendant could have actually been unaware of Title VII's prohibition against discrimination.