When the U.S. Supreme Court clarified the standard for punitive damages in employment discrimination suits two weeks ago in Kolstad v. American Dental Association, No. 98-208, it handed plaintiffs a victory with one hand and took it away with the other.

The good news for plaintiffs came when the Court rejected an egregiousness standard for employer conduct followed by some appellate circuits. Whether an employer’s discriminatory conduct is egregious is not determinative, the Court said, explaining that what is determinative is the employer’s knowledge that its discriminatory conduct may violate federal law.