• In Khatabi v. Car Auto Holdings LLC, the Eleventh Circuit recently held that an auto dealership failed to plead the statutory damages cap under Title VII of the Civil Rights Act of 1964, so it waived its right to the cap.
• The Eleventh Circuit reversed a federal district court’s ruling that applied the statutory damages cap to the sexual harassment claim.
• Sexual harassment claims cannot be sent to arbitration, so they are more likely to result in a jury trial.

Under Title VII, the employee-headcount damages cap is $50,000 for employers with 15 to 100 employees; $100,000 for employers with 101 to 200 employees; $200,000 for employers with 201 to 500 employees; and $300,000 for employers with more than 500 employees.

The Eleventh Circuit held that the statutory damages cap is a waivable affirmative defense in a Title VII case. However, in this case, Car Auto Holdings, a car dealership in Miami, failed to preserve the application of the cap in its pleadings—or even raise it at any time before the trial—and was therefore not entitled to it.

Under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFFA), employers cannot compel arbitration of a sexual assault or sexual harassment claim. In the Eleventh Circuit (a jurisdiction composed of federal courts in Alabama, Florida, and Georgia), if a Title VII case goes to a trial before a jury, the potential punitive damages in a jury verdict can be as much as $300,000, unless the applicable...

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