On May 28, 2026, the Eleventh Circuit issued an opinion in Khatabi v. Car Auto Holdings, LLC, holding, in relevant part, that an employer waived its ability to request a damages cap under Title VII based on its smaller size because it failed to plead the size damages cap as an affirmative defense.
In the underlying case, an employee sued her former employer and former manager for sex discrimination under both Title VII and the Florida Civil Rights Act (FCRA). Notably, the employer testified at trial that it had around 22 employees. After trial, the jury awarded the employee $81,028 in compensatory damages and $750,000 in punitive damages. On motion, the trial court reduced the employee’s damages to $181,028 based on the punitive damages cap of $100,000 imposed under the FCRA and the $50,000 total damages cap imposed under Title VII for employers with fewer than 101 employees.
The Eleventh Circuit reversed, finding that (1) the damages caps under Title VII and the FCRA applied with a cumulative effect because the jury did not allocate damages between the two statutes and neither statute could impinge upon the other, and (2) that the employer waived the employee-headcount damages cap under Title VII because it did not plead the number of employees as an affirmative defense or otherwise raise it with sufficient notice to the employee that the employee count was at issue. Thus, the Eleventh Circuit concluded that the appropriate cap was $481,028, comprised of $81,028 in compensatory damages permitted under the FCRA, plus the $100,000 statutory cap on damages under the FCRA, and the $300,000 maximum cap on total damages under Title VII.
So, what’s the takeaway from this decision, which applies in the Eleventh Circuit (comprising Florida, Georgia and Alabama)? First, in employment cases involving multiple statutes with damages caps, employers should consider a verdict form that gives jurors the option to allocate damages between multiple statutes. Second, employers with fewer than 500 employees must ensure that employee headcount is pleaded as an affirmative defense (or otherwise placed at issue before trial) or risk waiving the lower damages caps under Title VII based on employee headcount.