Effective July 1, the Virginia Values Act fundamentally re-writes the Virginia Human Rights Act (VHRA)—with significant practical consequences for employers large and small.  Publicity surrounding the Act has focused on its addition of sexual orientation and gender identity to VDHA’s list of protected characteristics.  Such changes add Virginia to the ranks of 21 other jurisdictions (and the first in the South) to expressly protect members of the LBGTQ community from discriminatory employment practices.

Less newsworthy, but more broadly consequential in impact, are changes to VHRA’s basic structural coverage and remedies provisions.  The amended law vastly expands the scope of covered employers and recoverable remedies—not just to employees claiming discrimination on the basis of sexual orientation and gender identity—but to employees alleging employment discrimination in all forms.

FOR SMALL EMPLOYERSSignificant Exposure to Employment Discrimination Claims for the First Time

At present, VHRA applies only to small employers not already covered by the federal anti-discrimination laws.  It prohibits employers of 6-14 people from discharging any employee on the basis of race, color, religion, national origin, sex, and pregnancy.  And it bars employers of 6-19 employees from discharging on the basis of age.

VHRA has had little impact on small employers as a practical matter, however.  Although employees unlawfully terminated for a discriminatory reason technically have a private right of action in state court, the available remedies are so limited as to make even the most meritorious cases hardly worth pursuing.  A successful plaintiff can recover only a maximum of 12 months in back pay.  No compensatory or punitive damages are available—no matter the egregiousness of the facts.  And attorneys’ fees are capped at 25% of any back pay recovered—eliminating incentive for plaintiffs’ counsel to pursue a VHRA case, given the fact-specific and labor-intensive nature of employment discrimination litigation.

Effective July 1st, the law will allow aggrieved employees to recover unlimited compensatory damages, punitive damages, injunctive relief including reinstatement, and attorney’s fees without restriction.  The significance of these changes cannot be overstated, as employment discrimination claims against small employers will now be financially worth pursuing, both for aggrieved employees and plaintiffs’ lawyers.

There is one VHRA limitation the Values Act did not change:   Small employers remain subject to suit only for discriminatory termination of employment. There remains no right or remedy for discriminatory failure to hire, demotion, or the broad range of other adverse actions prohibited by federal law for larger employers.

FOR LARGER EMPLOYERSMajor Changes – Increased Exposure and New Set of Playing Rules

For larger employers governed by the federal antidiscrimination laws, pre-Values Act VHRA does not apply at all.  Employers with 15 or more employees are governed solely by Title VII (race, national origin, sex discrimination claims) and the Americans with Disabilities Act, and employers with 20 or more employees are governed exclusively by the Age Discrimination in Employment Act.  Claims under these statutes are pursued in federal court, and compensatory damages are available, but capped at $300,000.

The Virginia Values Act amends VHRA to create a separate, parallel state law cause of action for employment discrimination claims where federal law previously provided the exclusive rights and remedies.  This means Virginia employers formerly subject only to the federal anti-discrimination laws now face a new game entirely.  Not only may aggrieved employees seek uncapped compensatory damages under state law for employment discrimination claims, but unique procedural rules make Virginia state courts a very attractive alternative forum for pursuing these claims.

In federal court, the lion’s share of employment discrimination claims are resolved before trial—many on defense motions for summary judgment based in whole or in part on unfavorable deposition testimony by employee-plaintiffs.   Summary judgment practice in Virginia State Courts—in contrast— is exceedingly limited and may be granted solely on Complaint allegations and formal plaintiff admissions.  Unlike in federal court, the rules preclude consideration of deposition testimony.  This makes it significantly more likely that a claim will reach a jury, if not settled, and may increase substantially the settlement value of routine single-plaintiff employment discrimination claims.

FOR ALL BUT THE SMALLEST EMPLOYERS: New Pregnancy and Childbirth Accommodations Required

Also effective July 1, a separate amendment to the VHRA adds new requirements and protections related to pregnancy for all employers with five or more employees.  Such employers must “make reasonable accommodation to the known limitations” of a person related to pregnancy, childbirth, and related conditions, including lactation.  Accommodations are required unless an employer can prove “undue hardship”—a difficult standard to satisfy.  The new law will also prohibit employers from retaliating against employees for requesting or using a pregnancy-related accommodation.

In addition, employers must comply with posting and notification requirements.  Covered employers must post a notice explaining the prohibition against unlawful discrimination on the basis of pregnancy, childbirth, and related medical conditions, as well as employees’ rights to reasonable accommodations.  This information must be included in any employee handbook, directly provided to new employees at hire, and provided again to any employee within 20 days of the employee providing notice that she is pregnant.

We encourage business owners to contact Sarah Ratner (sarah.ratner@ratnerplc.com; 804.665.1043) for assistance with navigating these significant changes to Virginia law.

Ratner Law