We develop a model linking maximum damage awards available to
plaintiffs in wrongful termination lawsuits, workers' propensity to sue as a function of
experience, and returns to
experience. Using Equal Employment Opportunity Commission data on protected-worker
discrimination complaints and labor market data from the Current Population Survey,
we examine how returns to experience changed around the passage of the
Civil Rights Act of 1991. We show that employers' reactions to employment protections may induce
redistributive effects. Furthermore, these effects operate not merely
across groups of differing protected status, but also within
groups of identical protected status.