Starceski v. Westinghouse ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
5-3-1995
Starceski v Westinghouse
Precedential or Non-Precedential:
Docket 94-3182
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
Nos. 94-3182 & 94-3208
___________
JOHN D. STARCESKI,
Appellant at No. 94-3208
v.
WESTINGHOUSE ELECTRIC CORPORATION,
Appellant at No. 94-3182
___________
Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Action No. 91-cv-00454)
___________
Argued: October 25, 1994
PRESENT: STAPLETON, HUTCHINSON and GARTH, Circuit Judges
(Filed: May 3, 1995)
____________
Joseph A. Vater, Jr. Esquire (Argued)
Beth Ann Slagle, Esquire
Meyer, Unkovic & Scott
1300 Oliver Building
Pittsburgh, PA 15222
Attorneys for John D. Starceski
Louise Q. Symons, Esquire (Argued)
Westinghouse Electric Corporation
Law Department
11 Stanwix Street
6 Gateway Center
Pittsburgh, PA 15222
Attorney for Westinghouse Electric Corporation
____________
____________
OPINION OF THE COURT
____________
HUTCHINSON, Circuit Judge.
Appellant/cross-appellee Westinghouse Electric
Corporation ("Westinghouse") appeals an order of the United
States District Court for the Western District of Pennsylvania
denying Westinghouse's post-trial motion for judgment
notwithstanding the verdict,1 a new trial or a remittitur of
damages on appellee/cross-appellant John D. Starceski's
("Starceski") claim for violations of the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C.A. § 621 et seq. (West 1985 &
Supp. 1994). Starceski cross-appeals other parts of the same
order that denied his motions for pre-judgment interest and
reinstatement.
We will affirm the district court's denial of
Westinghouse's post-trial motions. The record is not critically
deficient of evidence from which a jury might have reasonably
found that Westinghouse discriminated against Starceski because
of age, nor does it appear that the district court abused its
discretion in refusing Westinghouse's motions for a new trial or
1
. The motion for judgment n.o.v. is now one of three motions
called a motion for "judgment as a matter of law." See Fed. R.
Civ. P. 50(a). The other two correspond to the motion for a
directed verdict at the close of plaintiff's case (in some
systems once called a motion for an involuntary non-suit) and the
motion for a directed verdict at the close of all evidence. See
Fed. R. Civ. P. 50(a)-(b), as amended in 1991.
remittitur. We also reject Westinghouse's objections to the
district court's Price Waterhouse "mixed-motives" instruction and
its challenge to the jury's finding it willfully discriminated
against Starceski.
On Starceski's cross-appeal from the denial of his
motions for pre-judgment interest and reinstatement, we will
vacate the district court's order denying Starceski's motion for
pre-judgment interest and remand for the purpose of calculating
the interest due and adding it to his judgment; but we will
affirm the district court's refusal to grant him reinstatement.
An award of pre-judgment interest together with an award of
liquidated damages is not a double recovery. The two serve
different purposes and work together to facilitate the ADEA's
"make-whole" purpose. Finally, we hold that the district court
did not err in concluding that reinstatement is inappropriate
under the circumstances.
I. Statement of Facts and Procedural History
In April 1989, Westinghouse terminated Starceski from
his senior engineer position after thirty-six years of service.
When terminated, Starceski was about one month short of his
sixty-fourth birthday.
Starceski worked for Westinghouse from 1951 to 1953 and
from 1956 to March 1981 as an engineer in its Bettis Atomic Power
Laboratory.2 In March 1981, Westinghouse transferred him to its
2
. From about 1954 to 1956, Starceski worked for Sikorski
Aircraft.
Nuclear Services Division ("NSD"). There he was responsible,
among other things, for the design, building and upgrading of
tools to repair reactor components in nuclear power plants. In
early 1985, Starceski began reporting to Richard Saul, a
first-level supervisor, whom Westinghouse terminated in February
1989. Starceski thereafter reported directly to Ali Jaafar, the
second-level manager who had been Saul's supervisor.
In late 1988, Jaafar received a directive to reduce his
staff by about eighteen people during the following year. Saul
testified that, in an October 1988 staff meeting, Jaafar directed
the first-level managers to transfer work from older to younger
employees and to rank employees by their value to the group.
According to Saul, Jaafar also instructed him to "doctor"
Starceski's evaluation to reflect poor performance. Starceski
stated that once these orders were given, he was not given any
new assignments and work was also taken away from other older
colleagues, sometimes immediately after being assigned to them.
In March 1989, Starceski and five other engineers were
informed that their services were no longer needed. Five of
these six were in ADEA's protected age group. Their average age
was fifty-one. The average age of the remaining engineers in the
department was thirty-nine. The youngest member of the six was
ultimately retained by Westinghouse, along with others who ranked
lower than Starceski in performance according to Saul's
evaluation.
On March 13, 1991, Starceski filed this action against
Westinghouse alleging that it terminated him on the basis of age
in violation of the ADEA. Westinghouse stipulated that
Starceski's job performance was not a factor in his layoff, but
contended that it was part of a reduction in force and a lack of
work for persons with Starceski's skills. The district court
initially granted Westinghouse's motion for summary judgment, but
Starceski appealed to this Court, and we reversed and remanded
the case for trial. Starceski v. Westinghouse Electric Corp.,
No. 92-3552 (3d Cir. April 19, 1993).
On February 11, 1994, a jury returned a general verdict
awarding Starceski compensatory damages of $267,268.55.
Immediately after the jury's verdict was announced, counsel for
Starceski requested reinstatement. The district court denied
this request. It then charged the jury on willfulness. The jury
found that Westinghouse had willfully discriminated against
Starceski on the basis of age. This doubled Starceski's
compensatory damages giving him an award totalling $651,910.68
after counsel fees and costs were added.
Post-trial, Starceski asked for the addition of
pre-judgment interest and reinstatement. Westinghouse, on the
other hand, filed a motion it called a "motion for judgment
n.o.v."3 or, in the alternative, a new trial or remittitur. The
district court denied Westinghouse's motions and Starceski's
request for pre-judgment interest and reinstatement. This timely
appeal and cross-appeal followed.
3
. We will hereafter refer to this motion as a motion for
judgment as a matter of law. See supra n.1.
II. Jurisdiction and Standard of Review
The district court had subject matter jurisdiction over
this case under the ADEA, 29 U.S.C.A. § 621 et seq. We have
appellate jurisdiction under 28 U.S.C.A. § 1291 (West 1993).
In reviewing a district court's ruling on a post-trial
motion for judgment as a matter of law, this Court applies the
same standard as the district court. Lightning Lube, Inc. v.
Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993) (citations
omitted); Rotondo v. Keene Corp., 956 F.2d 436, 438 (3d Cir.
1992). We view the record in the light most favorable to the
verdict winner, and affirm the denial "'unless the record "is
critically deficient of that minimum quantum of evidence from
which a jury might reasonably afford relief."'" Rotondo, 956
F.2d at 438 (quoting Dawson v. Chrysler Corp., 630 F.2d 950, 959
(3d Cir. 1980), cert. denied, 450 U.S. 959 and Denneny v. Siegel,
407 F.2d 433, 439 (3d Cir. 1969)); Keith v. Truck Stops Corp. of
America, 909 F.2d 743, 744-45 (3d Cir. 1990) (citations omitted);
Link v. Mercedes-Benz of North America, Inc., 788 F.2d 918, 921
(3d Cir. 1986). In other words, the court must determine whether
a reasonable jury could have found for the prevailing party.
Newman v. Exxon Corp., 722 F. Supp. 1146, 1147 (D. Del. 1989),
aff'd, 904 F.2d 695 (3d Cir. 1990).
In reviewing a district court's denial of a motion for
a new trial or remittitur, we ask generally whether the district
court abused its discretion, but if the court's denial of the
motion is based on application of a legal precept, our review is
plenary and, in addition, any findings of fact on which the
court's exercise of discretion depends are reviewed for clear
error. See Rotondo, 956 F.2d at 438 (citing Link, 788 F.2d at
921).
III. Discussion
Westinghouse raises several challenges to the district
court's denial of its post-trial motions. It asserts that
(1) the district court improperly gave the jury a so-called
"mixed-motives" instruction, see Price Waterhouse v. Hopkins, 490
U.S. 228 (1989); (2) the district court erred in upholding the
jury's finding that Westinghouse had failed to sustain its Price
Waterhouse burden of proving that Starceski would have been
terminated regardless of his age; (3) there was insufficient
evidence to uphold the jury's finding of a willful ADEA
violation; and (4) a remittitur was necessary because there was
insufficient evidence to support the jury's damages award.
On his cross-appeal, Starceski argues that the district
court should have granted his motion for pre-judgment interest
and reinstatement. We will first discuss Westinghouse's
arguments and then Starceski's cross-appeal.
A. Pretext and "Mixed-Motives"
Before submitting the case to the jury, the district
court determined that Starceski provided sufficient direct
evidence to support a claim of age-based disparate treatment
requiring a Price Waterhouse, or so-called "mixed-motives"
instruction, rather than a McDonnell Douglas/Burdine, 411 U.S.
792 (1973) and 450 U.S. 248 (1981), pretext instruction.4
Westinghouse contends that the decision of the district court to
charge the jury on "mixed-motives" was not in accord with the law
and, because of its timing, substantially prejudiced
Westinghouse. We disagree.
4
. The difference between the burden-shifting framework of a
McDonnell Douglas/Burdine pretext case and a Price Waterhouse
"mixed-motives" employment discrimination case has been the
subject of much comment since St. Mary's Honor Center v. Hicks,
113 S. Ct. 2742 (1993) (itself a pretext case) and the Civil
Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, which
codified Price Waterhouse's "mixed-motives" standard at 42
U.S.C.A. § 2000e-2(m) (West 1994). See Mardell v. Harleysville
Life Ins. Co., 31 F.3d 1221, 1224-25 (3d Cir. 1994). We review
the problem briefly. An employment discrimination case may be
advanced on either a pretext or "mixed-motives" theory. In a
pretext case, once the employee has made a prima facie showing of
discrimination, the burden of going forward shifts to the
employer who must articulate a legitimate, nondiscriminatory
reason for the adverse employment decision. McDonnell Douglas,
411 U.S. at 802; Burdine, 450 U.S. at 253. If the employer does
produce evidence showing a legitimate, nondiscriminatory reason
for the discharge, the burden of production shifts back to the
employee who must show that the employer's proffered explanation
is incredible. Burdine, 450 U.S. at 254-55; Armbruster v. Unisys
Corp., 32 F.3d 768, 778 (3d Cir. 1994); Fuentes v. Perskie, 32
F.3d 759, 763 (3d Cir. 1994) (quoting McDonnell Douglas, 411 U.S.
at 802). At all times the burden of proof or risk of
non-persuasion, including the burden of proving "but for"
causation or causation in fact, remains on the employee.
Burdine, 450 U.S. at 253; Hicks, 113 S. Ct. at 2749. In a
"mixed-motives" or Price Waterhouse case, the employee must
produce direct evidence of discrimination, i.e., more direct
evidence than is required for the McDonnell Douglas/Burdine prima
facie case. Mardell, 31 F.3d at 1225 n.6; Armbruster, 32 F.3d at
778. If the employee does produce direct evidence of
discriminatory animus, the employer must then produce evidence
sufficient to show that it would have made the same decision if
illegal bias had played no role in the employment decision.
Price Waterhouse, 490 U.S. at 244-45; Mardell, 31 F.3d at 1225
n.6. In short, direct proof of discriminatory animus leaves the
employer only an affirmative defense on the question of "but for"
cause or cause in fact.
In Griffiths v. CIGNA Corp., 988 F.2d 457, 470 (3d
Cir.) (quotation omitted), cert. denied, 114 S. Ct. 186 (1993),
overruled on other grounds, Miller v. CIGNA Corp., No. 93-1773,
1995 WL 21907 (3d Cir. 1995) (in banc), we stated that a charge
on a "mixed-motives" theory of employment discrimination requires
"conduct or statements by persons involved in the decisionmaking
process that may be viewed as directly reflecting the alleged
discriminatory attitude."5 See also Ezold v. Wolf, Block,
Schorr and Solis-Cohen, 983 F.2d 509, 522 (3d Cir. 1992), cert.
denied, 114 S. Ct. 88 (1993). More recently, in Armbruster v.
Unisys Corp., 32 F.3d 768 (3d Cir. 1994), we made the following
observations concerning the difference between a McDonnell
Douglas/Burdine pretext case and a Price Waterhouse
"mixed-motives" case:
[I]n a [mixed-motives] case unaffected by the
Civil Rights Act of 1991, the evidence the
plaintiff produces is so revealing of
discriminatory animus that it is not
necessary to rely on any presumption from the
prima facie case [as is necessary in a
pretext action] to shift the burden of
production. Both the burden of production
and the risk of non-persuasion are shifted to
the defendant who . . . must persuade the
factfinder that[,] even if discrimination was
a motivating factor in the adverse employment
decision, it would have made the same
employment decision regardless of its
discriminatory animus.
5
. In Miller, supra, we rejected the statement in Griffiths that
an employee advancing a McDonnell Douglas/Burdine pretext theory
must show that invidious discrimination is the "sole cause" of
his employer's adverse action. Miller, 1995 WL 21907, at *22
n.8. However, we relied upon Griffiths's description of the type
of evidence that is needed to show a Price Waterhouse
"mixed-motives" case. Miller, 1995 WL 21907, at *11 n.9.
Id. at 778 (citing Price Waterhouse, 490 U.S. at 244-46 and
Griffiths, 988 F.2d at 469-70 and n.12) (emphasis added). See
also Miller, 1995 WL 21907, at *7. In her concurrence in Price
Waterhouse, Justice O'Connor offered guidance on the type of
evidence needed to make out a "mixed-motives" case. She
reasoned:
[S]tray remarks in the workplace, while
perhaps probative of [a discriminatory
animus], cannot justify requiring the
employer to prove that its [employment]
decisions were based on legitimate criteria.
Nor can statements by nondecisionmakers, or
statements by decisionmakers unrelated to the
decisional process itself, suffice to satisfy
the plaintiff's burden in this regard; . . .
What is required is . . . direct evidence
that decisionmakers placed substantial
negative reliance on an illegitimate
criterion in reaching their decision.
Price Waterhouse, 490 U.S. at 277 (O'Connor, J., concurring)
(emphasis added) (internal citation omitted); Armbruster, 32 F.3d
at 778.
In applying this standard to Starceski's case, we are
drawn at once to the testimony of Saul, who was once Starceski's
first-level manager at Westinghouse. Saul testified that Jaafar,
a second-level manager responsible for the layoff decision
affecting Starceski, gave orders to him and other supervisors
under himin preparation for a work force reduction directed
by higher managementto consider age in the assignment of
work. Saul specifically testified that Jaafar, at a meeting
concerning the impending reduction, told the first-level managers
to transfer work from older to younger employees. Saul also
testified that he discussed Jaafar's comments with other managers
after the meeting and they took Jaafar's statements as an order
to set up older employees for termination in the impending work
force reduction. Saul said "it was actually a fact that the
older engineers or the senior people [were] going to be let go in
'89." Joint Appendix ("App.") at 446. Saul also testified that
Jaafar instructed him to "doctor" Starceski's performance
appraisals so that they would reflect poor performance. These
directives from Jaafar to Saul and other first-level managers are
precisely the kind of evidence that is needed to indicate "that
[the] decisionmakers [involved here] placed substantial negative
reliance on an illegitimate criterion [i.e., age] in reaching
their [termination] decision." Price Waterhouse, 490 U.S. at 277(O'Connor, J., concurring); Hook v. Ernst & Young, 28 F.3d 366,
375 (3d Cir. 1994) (citing Tyler v. Bethlehem Steel Corp., 958
F.2d 1176, 1186-87 (2d Cir.), cert. denied, 113 S. Ct. 82(1992)).6
In Hook, we quoted with approval the following passage
from the Second Circuit's opinion in Ostrowski v. Atlantic Mutual
Insurance Companies:
6
. To be sure, the jury was faced with conflicting testimony as
to whether Jaafar gave these directives. We are obliged,
however, to view the evidence and review the record in the light
most favorable to Starceski, the verdict winner. We must
therefore assume that Jaafar gave these orders. See Radabaugh v.
Zip Feed Mills, Inc., 997 F.2d 444, 450 (8th Cir. 1993) (citation
omitted).
"[P]urely statistical evidence would not
warrant [a Price Waterhouse 'mixed-motives']
charge; nor would evidence merely of the
plaintiff's qualification for and
availability of a given position; nor would
'stray' remarks in the workplace by persons
who are not involved in the pertinent
decisionmaking process. . . . If however,
the plaintiff's nonstatistical evidence is
directly tied to the forbidden animus, for
example[,] policy documents or statements of
a person involved in the decisionmaking
process that reflect a discriminatory or
retaliatory animus of the type complained of
in the suit, that plaintiff is entitled to a
burden-shifting instruction."
28 F.2d at 374 (quoting Ostrowski, 968 F.2d 171, 182 (2d Cir.
1992)); see also Glover v. McDonnell Douglas Corp., 981 F.2d 388,
394 (8th Cir. 1992) (statements demonstrating that a work force
reduction was "designed, in part, to eliminate older employees,"
entitled plaintiff to a mixed-motives charge), vacated on other
grounds, 114 S. Ct. 42 (1993). Because Starceski introduced
evidence of this type, the district court did not err in giving
the jury a "mixed-motives" instruction. Cf. Hook, 28 F.3d at 375(finding sexual comments by plaintiff's supervisor insufficient
for a "mixed-motives" charge because they had nothing to do with
plaintiff's job performance and were unrelated to the adverse
decision process challenged in the case).
We disagree, however, with the sweeping statement of
the court of appeals in Glover that:
[a]s a general rule, we [sh]ould expect that
all successfully prosecuted age
discrimination cases involving a reduction in
force would involve mixed-motives because the
plaintiff would be alleging the employer had
both a legitimate reason (the economic need
to reduce the workforce) and an illegitimate
reason (to terminate an employee based on his
or her age).
Glover, 981 F.2d at 394. This statement, which could force every
case into the Price Waterhouse framework, strikes us as an
unfortunate consequence of the use of the phrase "mixed-motives"
to capture the Price Waterhouse rationale.
We believe, on the other hand, that the distinction
between a Price Waterhouse and a McDonnell Douglas/Burdine case
lies in the kind of proof the employee produces on the issue of
bias. In the former, direct evidence of discriminatory animus
leads not only to a ready logical inference of bias, but also to
a rational presumption that the person expressing bias acted on
it. As Chief Justice Vinson put it in, Avery v. Georgia, 345
U.S. 559, 562 (1953), he who has a mind to discriminate is likely
to do so. A pretext case is different. It depends on
circumstantial evidence allowing the factfinder to infer that the
falsity of the employer's explanation shows bias. The inference
from Saul's testimony that bias against older employees played a
substantial part in the selection of those employees who would be
discharged is direct and inescapable. The district court did not
err when it gave the jury a Price Waterhouse instruction.
Westinghouse, however, contends that, even if there was
sufficient evidence to warrant a Price Waterhouse instruction, it
should not have been given here because the district court abused
its discretion when it allowed Starceski, after all the evidence
was in, to change his theory of recovery from pretext under
McDonnell Douglas/Burdine to "mixed-motives" under Price
Waterhouse. Westinghouse argues that the district court should
have made a decision or forced an election on pretext or
"mixed-motives" at the beginning of the case and that its failure
to do so was so prejudicial that Westinghouse is entitled to a
new trial. This contention lacks merit.7 In Armbruster we said:
an employee [need not] elect to proceed on
either a pretext or a Price Waterhouse theory
at trial. Rather, we think that an employee
may present his case under both theories and
the district court must then decide whether
one or both theories properly apply at some
point in the proceedings prior to instructing
the jury. See, e.g., Price Waterhouse, 490
U.S. at 247 n. 12, 109 S.Ct. at 1788 n. 12;
id. at 278, 109 S.Ct. at 1805 (O'Connor, J.,
concurring); Griffiths, 988 F.2d at 472; see
also Ostrowski, 968 F.2d at 185.
32 F.3d at 782 n.17 (emphasis added). See also Radabaugh, 994
F.2d at 448 ("Whether a case is a pretext case or mixed-motives
case is a question for the court once all the evidence has been
received."); Ostrowski, 968 F.2d at 186 ("jury [should] be
instructed on the law, including the possibility of
burden-shifting, before it begins its factfinding").8
Accordingly, we hold that the district court's decision
to give the jury a "mixed-motives" instruction, made shortly
7
. Starceski contends that Westinghouse waived this objection.
We reject that argument. We believe Westinghouse's objection to
the charge was sufficient to preserve this issue.
8
. As a practical matter, the proofs required to defend this
case under either a pretext or "mixed-motives" theory differed
little. The effect is a shift in the burden, not the substance
of the proofs. See supra n.4.
before the case went to the jury, does not entitle Westinghouse
to a new trial.
B. Westinghouse's Price Waterhouse Affirmative Defense
Having found that age played a role in Westinghouse's
decision to discharge Starceski, Price Waterhouse then required
the jury to decide whether Westinghouse sustained its burden of
proving by a preponderance of the evidence that it would have
terminated Starceski even if it had not discriminated. Hook, 28
F.3d at 368. In other words, the risk of non-persuasion, as well
as the burden of production, was now on Westinghouse to prove
that it would have fired Starceski anyway, without regard to his
age.
Westinghouse stipulated that Starceski was not
terminated because of poor job performance, the usual defense in
this kind of a case, but argued instead that there was no work at
Westinghouse which Starceski could do. Starceski, however, had
produced evidence tending to show Westinghouse still had work he
could do when it terminated him. The jury believed Starceski.
It found that Westinghouse did not meet its burden of proving
that the company would have discharged Starceski even if it had
not considered his age. After reviewing the evidence presented
at trial, we cannot say that it does not rationally support this
finding. Evidence will support a jury verdict "if reasonable
persons could differ as to the conclusions to be drawn from it."
Gilkerson v. Toastmaster, Inc., 770 F.2d 133, 136 (8th Cir. 1985)
(citations omitted).9 Westinghouse, therefore, is not entitled
to either judgment as a matter of law or a new trial on the issue
of unlawful age discrimination.
IV. Was Westinghouse's ADEA Violation Willful?
Westinghouse next contends that the district court
erred in upholding the jury's finding of willfulness.
Willfulness is significant because the ADEA provides double
damages when the employer's discriminatory conduct is willful.
29 U.S.C.A. § 626(b). The double recovery is punitive and is
intended to deter willful conduct. Trans-World Airlines, Inc. v.
Thurston, 469 U.S. 111, 125 (1985).
An ADEA violation is willful if the employer either
"knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the ADEA." Hazen Paper Co. v. Biggins,
113 S. Ct. 1701, 1710 (1993). In Hazen Paper, the Supreme Court
rejected any requirement of "direct" evidence of discrimination,
"outrageous" conduct by the employer10 or proof that age was the
9
. We have considered Westinghouse's argument that certain time
sheets, identifying work that Starceski could have performed when
it terminated him, were improperly admitted into evidence under
the business records exception to the hearsay rule but conclude
this argument lacks merit. A proper foundation was laid for the
admission of these documents and they were properly admitted
under Rule 803(6) of the Federal Rules of Evidence, which permits
the admission of documents prepared in the ordinary course of
business, even if the individual who prepared them does not
testify about their contents. See Fed. R. Evid. 803(6).
10
. This rejection of the "outrageous" standard effectively
overrules our decisions in Lockhart v. Westinghouse Credit Corp.,
879 F.2d 43, 57-58 (3d Cir. 1989) and Dreyer v. Arco Chemical
predominant rather than a determinative factor in the employment
decision. Id.; Sanchez v. Puerto Rico Oil Co., 37 F.3d 712, 722
n.9 (1st Cir. 1994). In addressing willfulness after Hazen
Paper, the Court of Appeals for the Eighth Circuit reasoned that
the "question is not whether the evidence used to establish
willfulness is different from and additional to the evidence used
to establish a violation of the ADEA, but whether the
evidenceadditional or otherwisesatisfies the distinct
standard used for establishing willfulness." Brown v. Stites
Concrete, Inc., 994 F.2d 553, 560 (8th Cir. 1993).
In the instant case, the district court reasoned:
[T]he evidence was undisputed that Mr.
Ali Jaafar was defendant's management
personnel with final decisionmaking authority
over plaintiff's layoff. Plaintiff's
evidence, through his then supervisor, Mr.
Dick Saul, was that several months prior to
the planned layoff, Mr. Jaafar told Mr. Saul
to set up the "senior" engineers in
plaintiff's department for permanent layoff.
Mr. Saul testified that the clear meaning of
Mr. Jaafar's instructions was that the older
engineers in plaintiff's department were to
be specifically targeted for permanent
layoff. Mr. Saul further testified that
thereafter, Mr. Jaafar directed him to
artificially lower plaintiff's performance
evaluation.
Starceski v. Westinghouse, No. 91-0454, slip op. at 5 (W.D. Pa.
March 14, 1994).11 We again acknowledge the conflicting
(..continued)
Co., 801 F.2d 651, 658 (3d Cir. 1986), cert. denied, 480 U.S. 906(1987).
11
. The record also shows that five of the six individuals
selected for layoff were in the protected age group, and
testimony on whether Jaafar gave these orders, but state again
that we are obliged to view the evidence in the light most
favorable to Starceski, the verdict winner. See Radabaugh, 997
F.2d at 450. Looking at the record in this way, Westinghouse's
position that the violation resulted from no more than accident,
inadvertence or ordinary negligence is factually incorrect. See
Sanchez, 37 F.3d at 721-22.12 On this record, a jury acting
reasonably could find that Westinghouse either "knew or showed
reckless disregard" for its statutory duty to avoid
discriminating against Starceski because of his age.13
(..continued)
Starceski was the oldest. The average age of those laid off was
fifty-one. The average age of those retained was thirty-nine.
12
. We reject Westinghouse's argument that Jaafar's intent
cannot be imputed to it. Jaafar was a second level manager and
was the final decision maker on the selection of people for
termination. Therefore, his intent is imputed to the company
both for the purpose of determining whether the Act was violated
and for the purpose of determining whether that violation was
willful. See Crawford v. West Jersey Health Systems, 847
F. Supp. 1232, 1236 (D.N.J. 1994) (test for determining agency is
whether "the alleged agent has 'participated in the decision-
making process that forms the basis of the discrimination'")
(quoting Hamilton v. Rodgers, 791 F.2d 439, 443 (5th Cir. 1986)).
We also reject Westinghouse's contention that the district
court erred in admitting a list of employees in Starceski's
department, which was prepared at the request of the EEOC and
contained the employees' ages and indicated who had been selected
for layoff, but then excluding the EEOC determination that
Starceski's administrative charge lacked probable cause.
Admission of the EEOC decision on probable cause and its file is
entrusted to the discretion of the district court. Walton v.
Eaton Corp., 563 F.2d 66, 75 (3d Cir. 1977) (upholding the trial
court's refusal to admit portions of the EEOC file). We cannot
say that the district court abused its discretion here.
13
. The dissenting opinion contends that Jaafar's statements
were insufficient to show that Westinghouse acted willfully. In
doing so, the dissenting opinion in footnote 2 disclaims any need
to consider whether Jaafar's "conduct could be attributed to
Accordingly, we will affirm the district court's denial of
Westinghouse's motion for judgment as a matter of law or a new
trial on willfulness.
(..continued)
Westinghouse." It concludes that a jury finding that Jaafar may
have discriminated is not proof that Westinghouse knew or
approved Jaafar's act. In this respect, the dissenting opinion
fails to give Starceski, as the verdict winner, the benefit of
all inferences that reasonably can be drawn from the evidence.
One such inference from Saul's testimony about Jaafar's remarks
is that Westinghouse knew of or showed reckless disregard for its
duties under the ADEA. Under the usual standards governing the
interpretation of a verdict speaking generally to any issue, we
should assume the jury so found. Thus, our analysis does not
disturb the two-tier rule as the dissenting opinion suggests.
V. Remittitur
Finally, Westinghouse contends the jury's verdict
should be reduced because (1) Starceski testified he was not able
to work in 1993 because of an emotional disability; and (2) there
was an insufficient basis in the record to make a precise
determination of lost pension benefits.
An ADEA claimant is entitled to be made whole for
losses sustained as a result of a wrongful termination.
Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975); Maxfield v.
Sinclair Int'l, 766 F.2d 788, 796 (3d Cir. 1985), cert. denied,
474 U.S. 1057 (1986). An ADEA claimant, however, is generally
not entitled to a recovery in excess of make-whole damages. Id.A remittitur is in order when a trial judge concludes that a jury
verdict is "clearly unsupported" by the evidence and exceeds the
amount needed to make the plaintiff whole, i.e., to remedy the
effect of the employer's discrimination. Spence v. Board of
Educ. of Christina School Dist., 806 F.2d 1198, 1201 (3d Cir.
1986); Brunnemann v. Terra Int'l, Inc., 975 F.2d 175, 178 (5th
Cir. 1992) (A remittitur may be granted if a jury's award is
"excessive or so large as to appear contrary to right reason.").
The trial judge's decision to grant or withhold a remittitur
cannot be disturbed absent a manifest abuse of discretion.
Spence, 806 F.2d at 1201 (citing Murray v. Fairbanks Morse, 610
F.2d 149 (3d Cir. 1979) and Edynak v. Atlantic Shipping, Inc.
CIE. Chambon Maclovia S.A., 562 F.2d 215 (3d Cir. 1977)). This
deferential standard is corollary to the recognition that the
trial judge "is in the best position to evaluate the evidence
presented and determine whether or not the jury has come to a
rationally based conclusion." Id. (citing Murray, 610 F.2d at
152-53).
In this case, the jury returned a general verdict. The
law "presumes the existence of fact findings implied from the
jury's having reached that verdict." Railroad Dynamics, Inc. v.
A. Stucki Co., 727 F.2d 1506, 1516 (Fed Cir.), cert. denied, 469
U.S. 871 (1984). The district court considered how the jury
could have rationally arrived at its damage award, reasoning:
The award clearly reflects that the jury
awarded plaintiff the $223,616.60 he claimed
in lost wages and saving plan
contributions. . . . The jury then added
plaintiff's claim for lost pension
contributions in the amount of
$51,766.95. . . . The jury obviously
rejected, and therefore subtracted,
plaintiff's claim for "unreimbursed expenses"
for 1989 and 1990 in the amounts of $3,649
and $4,466 respectively [for a total of
$267,268.55.]
Starceski, No. 91-0454, slip op. at 6-7.
We have recognized that "[t]rial courts and the parties
themselves invariably lack perfect hindsight to forecast what
would have happened had there been no unlawful acts." Rodriquez
v. Taylor, 569 F.2d 1231, 1238 (3d Cir. 1977), cert. denied, 436
U.S. 913 (1978); International Broth. of Teamsters v. United
States, 431 U.S. 324, 372 (1977) ("process of recreating the past
will necessarily involve a degree of approximation and
imprecision"). We have concluded, however, that this "risk of
lack of certainty with respect to projections of lost income must
be borne by the wrongdoer, not the victim." Goss v. Exxon Office
Systems Co., 747 F.2d 885, 889 (3d Cir. 1984) (citing Story
Parchment Co. v. Paterson Paper Co., 282 U.S. 555 (1931)); Mason
v. Association for Independent Growth, 817 F. Supp. 550, 555
(E.D. Pa. 1993) (same).
Westinghouse, however, contends that Starceski had
family obligations and concerns that precluded him from working
during 1993, and that the record does not provide any basis for
the calculation of lost pension benefits. Thus, to the extent
the damage award includes recovery for these injuries,
Westinghouse asks that it be reduced. "[A]s a general rule, [an
employment discrimination plaintiff] will not be allowed back pay
during any periods of disability" and "an employer who has
discriminated need not reimburse the plaintiff for salary loss
attributable to the plaintiff and unrelated to the employment
discrimination." Mason, 817 F. Supp. at 554. In Starceski's
case, Westinghouse had the burden of establishing a failure to
mitigate, see Robinson v. Southeastern Pennsylvania Transp.
Authority, Red Arrow Div., 982 F.2d 892, 897 (3d Cir. 1993), and
it failed to persuade the jurors that Starceski was unable to
continue working at Westinghouse in 1993 as a result of his
family problems.
Westinghouse also contends that Starceski's proof
relating to his pension benefits fails because he did not take
into account the effect of a plan modification. We also reject
this argument. Though Westinghouse may have modified its pension
program during the course of this dispute, it never produced any
documents showing the effect of the modifications on Starceski's
pension. In the absence of evidence concerning the effect of the
changes the jury was free to draw its own inferences from
Starceski's evidence concerning the benefits he was entitled to
under the original plan. See E.E.O.C. v. Kallir, Philips, Ross,
Inc., 420 F. Supp. 919, 923 (S.D.N.Y. 1976), aff'd without
opinion, 559 F.2d 1203 (2d Cir.), cert. denied, 434 U.S. 920(1977).
The district court did not abuse its discretion when it
denied Westinghouse's motion for remittitur. The damages awarded
Starceski were neither excessive as a matter of law nor "clearly
unsupported" by the record. See Brunnemann, 975 F.2d at 178 ("A
verdict is excessive as a matter of law if shown to exceed 'any
rational appraisal or estimate of the damages that could be based
upon the evidence before the jury.'") (quotation omitted). We
therefore affirm the district court's denial of Westinghouse's
motion for a remittitur of damages.
Having considered all of Westinghouse's challenges to
the denial of its post-trial motions, we turn to Starceski's
cross-appeal.
VI. Starceski's Cross-Appeal
Starceski asserts that the district erred in denying
his motion for pre-judgment interest and reinstatement. For the
reasons discussed below, we will vacate the district court's
denial of pre-judgment interest, but affirm its refusal to grant
reinstatement.
A. Pre-Judgment Interest
The district court reasoned that an award of
pre-judgment interest is precluded in an ADEA case when
liquidated damages are awarded for willfulness "because the
purpose of liquidated damages [like pre-judgment interest]
is . . . to compensate plaintiff for the loss of the use of his
funds up to trial, [making] an award for both liquidated damages
and prejudgment interest . . . double compensation for the same
loss." Starceski, No. 91-0454, slip op. at 8.
As the district court recognized, this Court has not
yet decided whether pre-judgment interest may be awarded along
with liquidated damages. The courts of appeals that have decided
this issue are divided. Compare Criswell v. Western Airlines,
Inc., 709 F.2d 544, 556-57 (9th Cir. 1983) (liquidated damages
and pre-judgment interest serve different functions in making
ADEA plaintiffs whole), aff'd on other grounds, 472 U.S. 400(1985); Reichman v. Bonsignore, Brignati & Mazzotta, P.C., 818
F.2d 278, 281-82 (2d Cir. 1987) (same); Lindsey v. American Cast
Iron Pipe Co., 810 F.2d 1094, 1102 (11th Cir. 1987) (same); with
Powers v. Grinnell Corp., 915 F.2d 34, 41 (1st Cir. 1990) (an
award of liquidated damages precludes recovery of pre-judgment
interest as that would constitute double recovery); Hamilton v.
1st Source Bank, 895 F.2d 159, 165-66 (4th Cir. 1990) (same);
Burns v. Texas City Refining, Inc., 890 F.2d 747, 752-53 (5th
Cir. 1989) (same); Coston v. Plitt Theatres, Inc., 831 F.2d 1321,
1336-37 (7th Cir. 1987) (same), vacated on other grounds, 486
U.S. 1020 (1988); Rose v. National Cash Register Corp., 703 F.2d
225, 230 (6th Cir.) (same), cert. denied, 464 U.S. 939 (1983);
Gibson v. Mohawk Rubber Co., 695 F.2d 1093, 1102 (8th Cir. 1982)
(same); Blim v. Western Elec. Co., Inc., 731 F.2d 1473, 1479-80
(10th Cir.), cert. denied, 469 U.S. 874 (1984).
This circuit split is a consequence of two competing
theories concerning Congress's purpose in providing liquidated
damages for willful violations of the ADEA. We think the Supreme
Court's decision in Thurston, 469 U.S. at 125, guides us in
answering this question. There it stated that liquidated damages
are punitive in nature and designed to deter willful conduct. If
awards of pre-judgment interest are compensatory, and liquidated
damages are punitive, a concomitant grant of both is appropriate
because pre-judgment interest serves the statutory goal of making
Starceski whole, i.e., it compensates him for the discriminatory
wrong that he has suffered, while liquidated damages would punish
Westinghouse, the wrongdoer, for its willful violation of the
ADEA. Accordingly, we reject the reasoning of those courts that
believe Congress intended to incorporate into the ADEA all of the
damage provisions of the Fair Labor Standards Act ("FLSA"),
including its prohibition of concomitant awards for pre-judgment
interest and liquidated damages. See Brooklyn Sav. Bank v.
O'Neil, 324 U.S. 697, 715 (1945) (FLSA plaintiff cannot recover
both liquidated damages and pre-judgment interest because the
former serve "as compensation for delay in payment of sums due
under the Act").14
Rather, we are persuaded by the reasoning of the courts
of appeals for the second, ninth and eleventh circuits, who rely
on Thurston, supra, to permit awards of both liquidated damages
and pre-judgment interest.15 After Thurston, this Court held
14
. The ADEA incorporates the FLSA's liquidated damages
provision, but adds a requirement of "willful" conduct.
29 U.S.C.A. § 626(b). For a general discussion of the
legislative history showing Congress's selective incorporation of
FLSA provisions into the ADEA, see Sperling v. Hoffman-LaRoche,
Inc., 24 F.3d 463 (3d Cir. 1994).
15
. Although the courts of appeals for the sixth, eighth and
tenth circuits have determined that an ADEA plaintiff cannot
recover both liquidated damages and pre-judgment interest, these
courts rendered their decisions before Thurston and, as of yet,
have not revisited this issue in light of Thurston's statement
that liquidated damages are punitive in nature. See, e.g., Smith
v. World Ins. Co., 38 F.3d 1456, 1467 n.5 (8th Cir. 1994)
(question not properly before the Court because party appealing
agreed with district court that after Thurston liquidated damages
were not a bar to pre-judgment interest, casting doubt on the
circuit's decision in Gibson). The Court of Appeals for the
Eleventh Circuit, one of those that had originally decided an
ADEA plaintiff could not recover both liquidated damages and
pre-judgment interest, overruled its prior decision after
Thurston, reasoning:
The Thurston decision . . . confirms the
Ninth Circuit's approach in Criswell and
undermines the assumptions of the other
circuits' decisions, including ours in
O'Donnell. See Bonura v. Chase Manhattan
Bank, N.A., 629 F.Supp. 353, 363-66 (S.D.N.Y.
1986) (Thurston clarifies "that prejudgment
interest does not provide a double recovery
to victims of age discrimination who have
proven their entitlement to liquidated
damages as well as back-pay.").
Lindsey, 810 F.2d at 1102 n.7.
that liquidated damages are punitive in nature. See Turner v.
Schering-Plough Corp., 901 F.2d 335, 346 (3d Cir. 1990); Blum v.
Witco Chemical Corp., 829 F.2d 367, 382 (3d Cir. 1987); Rickel v.
C.I.R., 900 F.2d 655, 666 (3d Cir. 1990). We have also
recognized that the purpose of an award of pre-judgment interest
is "'to reimburse the claimant for the loss of the use of its
investment or its funds from the time of the loss until judgment
is entered.'" Berndt v. Kaiser Aluminum & Chemical Sales, Inc.,
789 F.2d 253, 259 (3d Cir. 1986) (quoting Arco Pipeline Co. v. SS
Trade Star, 693 F.2d 280, 281 (3d Cir. 1982)). We are unable to
reconcile Thurston's statement that liquidated damages are
punitive with a denial of pre-judgment interest designed to
compensate for loss of the time value of money. Thus, we are not
persuaded by the reasoning of those courts of appeals which
believe that Congress's incorporation of some of the FLSA's
damage provisions into the ADEA was meant to preclude an award of
damages for both willfulness and pre-judgment interest.16 Given
this view of the law and the fact that Westinghouse points to no
unusual circumstances in favor of a discretionary denial of
pre-judgment interest, we will reverse the district court's
denial of Starceski's motion for pre-judgment interest and remand
for a quantification of the pre-judgment interest due him. See
Green v. USX Corp., 843 F.2d 1511, 1530 & n.16 (3d Cir. 1988).
16
. The difficulty with the FLSA incorporation argument is
compounded by the ADEA requirement of willfulness, which is not
found in the FLSA.
B. Reinstatement
Starceski also contends that the district court erred
in denying his request for reinstatement. We have held that the
decision to grant reinstatement or its alternative, front pay, is
within the sound discretion of the district court. Maxfield v.
Sinclair Int'l, 766 F.2d 788, 796 (3d Cir. 1985) ("Since
reinstatement is an equitable remedy, it is the district court
that should decide whether reinstatement is feasible."), cert.
denied, 474 U.S. 1057 (1986).
In determining whether to grant either reinstatement or
front pay, we have suggested that district courts should take
into consideration the ADEA's purpose to make aggrieved
plaintiffs whole "by restoring them to the position they would
have been in had the discrimination never occurred." Id.Although reinstatement "is the preferred remedy to avoid future
lost earnings" because it is consistent with the ADEA's
make-whole philosophy, we have concluded that reinstatement is
not feasible in cases where there "may be no position available
at the time of judgment or the relationship between the parties
may have been so damaged by animosity that reinstatement is
impracticable." Id.Here, we initially note that Starceski failed to object
when the trial judge instructed the jury on front pay, even
though he intended to make a motion for reinstatement.17
17
. Neither party raised as an issue on appeal the use of a
general verdict. In that verdict, the jury awarded compensatory
damages of $267,268.55, an amount that appears to include at
least some element of front pay.
Starceski is not entitled to both reinstatement and front pay.
In any event, the district court found that reinstatement was not
a viable option due to the lack of available positions and given
the animosity between the parties. We cannot say that finding is
clearly erroneous. Moreover, on this record, we see no abuse of
discretion in the district court's decision to deny Starceski the
remedy of reinstatement. "The district court was in a much better
position [than us] to determine whether or not reinstatement was
feasible based on the testimony and evidence at trial."
Brunnemann, 975 F.2d at 180. Accordingly, we will affirm the
district court's denial of Starceski's motion for reinstatement.
VII. Conclusion
On Westinghouse's appeal, we will affirm the district
court's order denying Westinghouse's post-trial motions for
judgment as a matter of law or a new trial, as well as its denial
of a remittitur.
On Starceski's cross-appeal, we will affirm the
district court's denial of reinstatement but vacate its order
denying pre-judgment interest and remand this case to the
district court for the addition of pre-judgment interest due
Starceski to the judgment in his favor. Each party shall bear
its own costs.
Starceski v. Westinghouse Electric Corp., Nos. 94-3182 & 94-3208
GARTH, Circuit Judge, concurring and dissenting,
I agree with the court that the jury verdict finding
Westinghouse liable for an ADEA violation should be sustained. I
cannot agree, however, that the same conduct charged to
Westinghouse and found to violate the ADEA, without more,
justified a finding that Westinghouse was willful in its
violation of the ADEA, resulting in the imposition of a
liquidated damages award. The court's holding today leads
ineluctably to the conclusion that every ADEA disparate treatment
violation will also constitute a willful violation that permits a
liquidated damages award.
I cannot agree with such a holding and I accordingly
dissent from so much of the majority's opinion as affirms the
award of liquidated damages against Westinghouse.18
I.
The ADEA provides for liquidated damages of twice the
backpay award when an employer's violation of the ADEA is
"willful." 29 U.S.C. § 626(b). Congress added this penalty as
18
. For purposes of clarity, I not only concur in the court's
affirmance of the jury verdict as to the ADEA violation, but I
agree as well that we should uphold the district court's rulings
which denied Starceski reinstatement and which denied remittitur.
Because my reading of the record and of Hazen Paper Co. v.
Biggins, 113 S. Ct. 1701 (1993), causes me to conclude that no
liquidated damages should have been awarded against Westinghouse,
I would vacate the award of liquidated damages and remand for a
determination of prejudgment interest.
a deterrent to knowing misconduct by employers. 113 Cong. Rec.
2199 (1967) (comments of Senator Javits).
Unfortunately, the term "willful" has eluded easy or
precise definition. The difficulties which have attended the
effort to define willfulness have resulted in numerous and
sometimes conflicting decisions on the meaning and application of
§ 626(b). See 2 Howard C. Eglitt, Age Discrimination § 8.30 (2d
ed. 1993). Nonetheless, while the courts of appeals have adopted
different standards at different times, the courts have
consistently adhered to two principles to resolve disputes under
§ 626(b).
First, courts have consistently acknowledged that
Congress intended only some violations of the ADEA to be willful.
Second, courts have been careful not to punish good
faith efforts by employers to comply with the Act.
Today's decision by the majority ignores both of those
principles.
This appeal represents this court's first
interpretation of willfulness since Hazen Paper v. Biggins, 113
S. Ct. 1701 (1993). Hazen represents the Supreme Court's latest
restatement of the standard for willful violations. The
majority's disregard of the two established principles of
interpretation under the ADEA, which I have identified, is
therefore all the more troubling.
Before I discuss those principles and the majority's
failure to apply these principles in its analysis of the
Starceski record, I should explain that I have no quarrel with
the court's statement that willfulness exists when an employer
"knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the ADEA." Hazen, 113 S. Ct. at 1710.
Rather, I strongly disagree with the majority's application of
this standard in the present appeal -- an application that makes
every ADEA violation a willful violation and ignores the good
faith attempts of an employer to comply with its statutory
duties.
II.
The Supreme Court and the courts of appeals have
repeatedly recognized that Congress did not intend every
violation of the ADEA to be a willful violation. In Trans World
Airlines, Inc. v. Thurston, 469 U.S. 111 (1985), the Supreme
Court rejected Thurston's argument that a violation was willful
whenever the employer knew the ADEA was "in the picture" because
that standard would eliminate the distinction between ordinary
and willful violations.
[T]he broad standard proposed by [Thurston]
would result in an award of double damages in
almost every case. As employers are required
to post ADEA notices, it would be virtually
impossible for an employer to show that he
was unaware of the Act and its potential
applicability. Both the legislative history
and the structure of the statute show that
Congress intended a two-tiered liability
scheme. We decline to interpret the
liquidated damages provision of ADEA § 7(b)
in a manner that frustrates this intent.
Id. at 128 (footnote omitted). Rather than adopt Thurston's
standard, the Court concluded that willfulness may be proved when
the employer "knew or showed reckless disregard for the matter of
whether its conduct was prohibited by the ADEA." Id. at 126
(quoting Air Line Pilots Ass'n v. Tran World Airlines, 713 F.2d
940, 956 (2d Cir. 1983). As the Supreme Court explained in
Hazen, the principle adopted in Thurston, which it labeled the
two-tiered liability principle, distinguishes between ordinary
and willful violations:
The two-tiered liability principle was simply
one interpretive tool among several that we
used in Thurston to decide what Congress
meant by the word "willful," and in any event
we continue to believe that the "knowledge or
reckless disregard" standard will create two
tiers of liability across the range of ADEA
cases. It is not true that an employer who
knowingly relies on age in reaching its
decision invariably commits a knowing or
reckless violation of the ADEA.
Hazen, 113 S. Ct. at 1709.
Three years after Thurston, the Supreme Court had an
opportunity to reconsider the principle of two-tiered liability
in McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988), a case
involving the statute of limitations under the FLSA. The FLSA
provides for a three year statute of limitations following
willful violations as compared to the ordinary two year statute
of limitations. 29 U.S.C. § 255(a). The Court refused to
abandon either the knowledge or reckless disregard standard or
the principle that some but not all violations will be willful.
"The fact that Congress did not simply extend the limitations
period to three years, but instead adopted a two-tiered statute
of limitations, makes it obvious that Congress intended to draw a
significant distinction between ordinary violations and willful
violations." 486 U.S. at 132. A lower standard would
"obliterate[] any distinction between willful and nonwillful
violations" by adopting a more lenient standard. Id. at 132-33.
The Supreme Court in Hazen cautioned against abandoning
the principle of two-tiered liability. Willful violations only
extend to knowing or reckless violations of the ADEA, whether
they result from formal or informal policies. 113 S. Ct. at
1709. The Court repeated that "Congress aimed to create a `two-
tiered liability scheme,' under which some but not all ADEA
violations would give rise to liquidated damages." Id. at 1708
(quoting Thurston, 469 U.S. at 127). Further, the Court took
pains to demonstrate why the Thurston standard does not result in
liquidated damages in every case. Id. at 1709.
III.
The principle of two-tiered liability has not stood
alone as an interpretive guide to the meaning of § 626(b) of the
ADEA. Courts have also been guided by a desire to encourage good
faith attempts at compliance with the ADEA.
In Thurston, the Court stressed this when it held that
TWA had not acted willfully, despite the adoption of a policy
which explicitly disadvantaged older workers, when the airline
believed the policy was a permissible bona fide occupational
qualification (BFOQ). The Court concluded that "[i]t is
reasonable to believe that the [company and its lawyers], in
focusing on the larger overall problem, simply overlooked the
challenged aspect of the new plan." 469 U.S. at 130. Thus,
TWA's violation did not warrant liquidated damages. A company is
not liable for liquidated damages when it "act[s] reasonably and
in good faith in attempting to determine whether [its] plan would
violate the ADEA." Id. at 129.
The Court in Hazen also acknowledged the importance of
a company's good faith efforts to comply with the law. "If an
employer incorrectly but in good faith and nonrecklessly believes
that the statute permits a particular age-based decision, then
liquidated damages should not be imposed." 113 S. Ct. at 1709.
The relevance of an employer's good faith has been
repeatedly recognized by the courts of appeals. See, e.g.,
Schrad v. Federal Pacific Electric Co., 851 F.2d 152, 158 (6th
Cir. 1988); Gilliam v. Amtex, Inc., 820 F.2d 1387, 1390 (4th Cir.
1987); Whitfield v. City of Knoxville, 756 F.2d 455, 463 (6th
Cir. 1985).
IV.
Despite courts' consistent use of these principles to
guide the interpretation of § 626(b), the majority here fails to
acknowledge or apply either. This failure unfortunately is not
harmless because here the majority's conclusion that Starceski is
entitled to liquidated damages does violence to both.
A.
If we adopt the majority's view of willfulness, every
successful disparate treatment case under the ADEA will also be
treated as a willful violation. According to the court, the
evidence that establishes willfulness is the testimony that
Jaafar, Starceski's supervisor, told Saul that Jaafar intended to
discharge senior engineers and directed Saul to lower certain
employee's performance evaluations. While Westinghouse contends
that Jaafar's statement referred to the company's job category
"Senior Engineer A" and not to older employees, the jury could
certainly have believed Starceski's assertion that Jaafar was
actually referring to older engineers. Hence, the jury had
grounds to decide that Jaafar, a Westinghouse supervisor,
intentionally discharged Starceski because of his age -- a
violation of the ADEA.19
19
. I deliberately do not address the issue of whether
Jaafar's conduct could be attributed to Westinghouse. I do not
do so because, even if we assume that Jaafar was speaking for
Westinghouse, Jaafar's statements do not demonstrate that
Westinghouse either knew or showed reckless disregard for its
duties under the ADEA. Even though the jury may have found that
Jaafar may have discriminated against Starceski on the basis of
Starceski's age, that finding does not constitute proof that
Jaafar or Westinghouse knew that Jaafar's choices in selecting
employees for discharge violated the Act, even if Jaafar was
generally aware of the Act. See Brown v. Stites Concrete, Inc.,
994 F.2d 553, 560 (8th Cir. 1993) (en banc) ("[I]t is a willful
violation as opposed to voluntary conduct in general that is
required."); Coston v. Plitt Theatres, Inc., 860 F.2d 834, 837
7th Cir. 1988) ("the term 'knew' . . . refers to the fact that
the employer knew he was violating the ADEA, not to the fact that
he was aware of the Act."). Further evidence of willfulness is
necessary.
However, the existence of an intent to act on the basis
of age, the sine qua non of an ADEA disparate treatment case,
cannot by itself also be the determinant of willfulness. Such a
rule extinguishes any distinction between an ordinary disparate
treatment case and a willful violation. Every ADEA plaintiff who
claims disparate treatment must prove that the employer
intentionally acted on the basis of the plaintiff's age. Hazen,
113 S. Ct. at 1706-07; St. Mary's Honor Center v. Hicks, 113 S.
Ct. 2742, 2748, 2751, 2756 (1993); Seman v. Coplay Cement Co., 26
F.3d 428, 432-33 (3d Cir. 1994); Colgan v. Fischer Scientific
Co., 935 F.2d 1407, 1417 (3d Cir. 1991). Disparate treatment
cases are far and away the largest proportion of ADEA cases
brought in the courts. Congress surely did not intend to permit
an award of liquidated damages in every one of these cases.
The resulting tension is not solved by the court's
statement that evidence of intent by itself is reasonable
evidence that Westinghouse "`knew or showed reckless disregard'
for its statutory duty to avoid discriminating against Starceski
because of his age." Maj. Op. Typescript at 19. This assertion
does not "draw a significant distinction between ordinary
violations and willful violations." McLaughlin, 486 U.S. at 132.
If, as the majority apparently believes, intent and
willfulness are the same under the ADEA, it is virtually
impossible for a defendant to defend against a claim of
willfulness apart from its defense against the plaintiff's
underlying ADEA claim. Moreover, it reduces the two-tiered
liability principle to a single-tiered determination that the
ADEA has been violated.
B.
Similarly, the majority ignores almost entirely
Westinghouse's proof of its good faith effort to avoid a
violation of age or race discrimination laws during its reduction
in force. The majority misconstrues Westinghouse's argument as
an attempt to show that the violation "resulted from no more than
accident, inadvertence or ordinary negligence." Maj. Op.
Typescript at 18. Westinghouse argues not that the violation was
accidental but that Westinghouse did not recklessly disregard its
duties under the Act as revealed by its review of its employment
decisions to prevent employment discrimination.
Contrary to the majority, I believe the record reflects
Westinghouse's reasonable, if unsuccessful, effort to prevent
discrimination. As Hazen and Thurston discuss, this good faith
effort makes a liquidated damages award inappropriate. "If an
employer incorrectly but in good faith and nonrecklessly believes
that the statute permits a particular age-based decision, then
liquidated damages should not be imposed." Hazen, 113 S. Ct. at
1709.
Once Westinghouse decided that it would need to lay off
some employees, Westinghouse counseled all of its managers to
choose employees based only on business reasons. App. 486. Once
the managers chose candidates for lay off, each manager was
required to give reasons for his or her decisions. App. 487.
Two human resources employees and the company's legal counsel
reviewed these justifications for possible discrimination. App.
487.
According to these company reports, Starceski was
chosen because the company lacked work in his division. App.
488. Westinghouse human resources personnel confirmed this
characterization with Mr. Jaafar's manager, Mr. Esposito. App.
490. Starceski does not dispute that a number of projects in
Westinghouse's Nuclear Services Division were terminated or being
wound up during the time period in which he was laid off. These
facts gave Westinghouse personnel more reason to credit Jaafar's
representation. Though Westinghouse did not investigate Jaafar's
and Esposito's statements further, the circumstances disclosed by
the record gave Westinghouse every reason to believe that the
sole reason for Starceski's discharge was the lack of work in his
department.
Given the importance of good faith to our prior
interpretations, willfulness is surely not demonstrated simply by
showing that Westinghouse informed its managers of the ADEA and
proof that an ADEA violation occurred. Thurston itself declined
to hold "that a violation of the Act is `willful' if the employer
simply knew of the potential applicability of the ADEA." 469
U.S. at 127; see also Sanchez v. Puerto Rico Oil Co., 37 F.3d
712, 721 (1st Cir. 1994) ("A finding of willfulness requires
something more than merely showing that an employer knew about
the ADEA and its potential applicability in the workplace.").
Nothing in this record leads to a conclusion that
Westinghouse recklessly disregarded the rights of its older
employees. Everything points to a conclusion that Westinghouse
"acted reasonably and in good faith in attempting to determine
whether [its] plan would violate the ADEA." Thurston, 469 U.S.
at 129. In Starceski's case unfortunately, its internal efforts
were unsuccessful.
Unlike the majority, however, I would not punish
Westinghouse twice for its failure, once through a backpay award
and again through a liquidated damages award. Such a policy does
nothing to encourage companies to scrutinize closely their
employment decisions and policies. While a company's inability
to protect perfectly against age discrimination is grounds to
award backpay and restitution so that an employee is fully
compensated, it does not warrant doubling the award.
V.
Willfulness, as defined by Thurston, focuses on a
company's knowledge of or reckless disregard for whether its
actions violate the ADEA. Sanchez, 37 F.3d at 721-22("Willfulness, then requires an element akin to reckless
disregard of, or deliberate indifference to, an employer's ADEA-
related obligations."); Brown v. Stites Concrete, Inc., 994 F.2d
553, 560 (8th Cir. 1993) (en banc) ("[I]t is a willful violation
of the law as opposed to voluntary conduct in general that is
required."); Benjamin v. United Merchants & Mfrs., Inc., 873 F.2d
41, 44 (2d Cir. 1989) (Willfulness occurs when employer has been
"indifferent to the requirements of the governing statute and
acted in a purposeful, deliberate, or calculated fashion.");
Coston v. Plitt Theatres, Inc., 860 F.2d 834, 837 (7th Cir. 1988)
("The term `knew' . . . refers to the fact that the employer knew
he was violating the ADEA, not to the fact that he was aware of
the Act."). Willfulness is not a matter of additional evidence
but a matter of additional misconduct. See Hazen, 113 S. Ct. at
1709; Kelly v. Mattlock, 903 F.2d 978, 982 (3d Cir. 1990).
An employer who pays no attention to its duties under
the Act does so at the risk of paying double the penalty for any
resulting violations. An employer who goes forward with an
employment decision when it knows that its actions illegally
discriminate against older workers likewise risks the imposition
of liquidated damages. When awarded under these circumstances,
liquidated damages serve as a necessary and beneficial deterrent
to ADEA violations. Thurston, 469 U.S. at 125-26.
On the other hand, an employer's or a supervisor's
intentional use of age in an employment decision, while
completely adequate grounds for an ordinary ADEA award, does not
by itself suffice to find that the employer knowingly pursued an
unlawful course of conduct or recklessly disregarded its
statutory duties. To so hold is to eliminate the ADEA's two-
tiered liability scheme and to overlook Westinghouse's good faith
efforts to prevent an ADEA violation.
Because I fear that today's decision by the court
operates to merge both tiers of the two-tiered liability
principle into one -- i.e. a mere disparate treatment violation
of the ADEA -- and because I cannot support the court's disregard
for these principles which have consistently guided our
interpretation of the ADEA, I respectfully dissent from the
court's affirmance of the district court's award of liquidated
damages.20
20
. Because I would not award liquidated damages, I would
remand the case for a determination of prejudgment interest.
Such an order would obviate any conflict between liquidated
damages and prejudgment interest. Forced to choose between an
award of both liquidated damages and prejudgment interest, I
would permit only one sanction because I believe, as we have
held, that liquidated damages serve both compensatory and
punitive functions. Blum v. Witco Chemical Corp., 829 F.2d 367,
382 (3d Cir. 1987). In doing so, I would join the majority of
courts of appeals that have considered the question since
Thurston. See Powers v. Grinnel Corp., 915 F.2d 34, 40-41 (1st
Cir. 1990); Hamilton v. 1st Source Bank, 895 F.2d 159, 165-66
(4th Cir. 1990); Burns v. Texas City Refining, Inc., 890 F.2d
747, 752-53 (5th Cir. 1989); Coston v. Plitt Theaters, Inc., 831
F.2d 1321, 1336 (7th Cir. 1987), vacated on other grounds, 485
U.S. 1007 (1988).