New Virginia Anti-Discrimination Law Increases the Risk of Claims in State Court

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On April 11, 2020, Virginia Governor Ralph Northam signed into law the Virginia Values Act (VVA), which will subject employers with more than five employees to state claims for discrimination with increased damages. The new law, which goes into effect July 1, 2020, also adds gender identity and sexual orientation to the list of classes protected under the Virginia Human Rights Act (VHRA).

Prior to the passage of the VVA, the VHRA only applied to employers with more than 5 and up to 14 employees (or up to 20 employees for age discrimination claims). Employers with more than the state thresholds were only subject to federal discrimination laws. The VVA removes the cap on the number of employees, making every employer in Virginia with more than five employees now subject to the VHRA for claims of unlawful discrimination, including the new claims for gender identity and sexual orientation discrimination.

Additionally, the VVA repealed the damages provisions of the VHRA that limited a prevailing employee to 12 months of back pay and attorney’s fees capped at 25% of the back pay award. The VVA does not have a cap on compensatory damages but does have a cap on punitive damages. These changes will result in state law claims that allow for greater damages than those permitted under the federal anti-discrimination laws that have caps based upon an employer's size.

The VVA represents a very significant change for Virginia employment discrimination litigation and will likely result in far more cases being filed in state court. Unlike in federal court, where claims without merit or factual disputes can be more easily dismissed on summary judgment prior to trial, Virginia state court litigation is less conducive to successful pre-trial motion practice. As such, unless they are settled, state court claims are more likely to proceed to trial. The practical outcome of the VVA will be increased litigation costs and potential higher damage awards and will provide employee plaintiffs with far more leverage in negotiating resolution of alleged discrimination claims.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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