In Carter v. Marten Transport, Ltd., ARB Nos. 06-101, 06-159, ALJ No. 2005-STA-63 (ARB June 30, 2008), the ARB affirmed the ALJ's compensatory damages awards for the value of personal items that the Complainant was unable to carry home when discharged and which were not returned to him, and for the expenses he incurred in traveling home after the discharge.
[STAA Digest IX B 1]
COMPENSATORY DAMAGES; EMOTIONAL DISTRESS AWARD GROUNDED IN COMPLAINANT'S TESTIMONY
In Carter v. Marten Transport, Ltd., ARB Nos. 06-101, 06-159, ALJ No. 2005-STA-63 (ARB June 30, 2008), the ALJ awarded compensatory damages of $10,000 for emotional distress based on the Complainant's testimony about depression and distress he experienced as the result of his discharge, about having to live off his retirement savings as a result of his discharge, and about his continued unemployment. The ARB acknowledged that the Complainant had turned down a comparable job, but nonetheless affirmed the ALJ's award. The ARB also affirmed the ALJ's reliance on his observation of the Complainant's distress during the hearing. On appeal, the Respondent argued that there was no proof that the distress was related to the discharge. The ARB found, however, that substantial evidence supported the ALJ's finding.
[STAA Digest IX b 1]
COMPENSATORY DAMAGES IS SYNONYMOUS WITH ACTUAL DAMAGES, AND HAS THE PURPOSE OF MAKING THE COMPLAINANT WHOLE FOR HARM CAUSED BY THE RESPONDENT’S UNLAWFUL ACT
In Hobson v. Combined Transport, Inc., ARB Nos. 06-016, 06-053, ALJ No. 2005-STA-35 (ARB Jan. 31, 2008), the ARB defined "compensatory damages" as follows:
The STAA does not define "compensatory damages." Black’s Law Dictionary defines the term to mean "[d]amages sufficient in amount to indemnify the injured person for the loss suffered." Compensatory damages is synonymous with "actual damages," which is the amount awarded to "compensate for a proven injury or loss; damages that repay actual losses." The purpose of a compensatory damage award is to make the complainant whole for the harm caused by the employer’s unlawful act. Put another way, compensatory damages are meant to restore the employee to the same position he would have been in if not discriminated against. Compensatory damages are designed to compensate discriminatees not only for direct pecuniary loss, but also for such harms as impairment of reputation, personal humiliation, and mental anguish and suffering.
USDOL/OALJ Reporter at 7-8 (footnotes omitted).
[STAA Digest IX b 1]
COMPENSATORY DAMAGES; COMPLAINANT’S PURCHASE OF A TRACTOR IN ORDER TO OBTAIN WORK FOUND NOT TO BE A LOSS RESULTING FROM THE RESPONDENT’S UNLAWFUL ACT
In Hobson v. Combined Transport, Inc., ARB Nos. 06-016, 06-053, ALJ No. 2005-STA-35 (ARB Jan. 31, 2008), the ARB found that the ALJ erred in awarding the Complainant the $20,000 he spent to buy a tractor to become an owner/operator (which was a condition to being able to drive for another freight company following his discharge by the Respondent). The ALJ had reasoned that the Respondent’s unlawful discharge had put the Complainant in the position where the tractor purchase was necessary to obtain employment. The ARB found that this was error as a matter of law.
The ARB found that the Complainant had not lost a $20,000 tractor as the result of his discharge. Rather, the ARB found that the Complainant chose to buy the tractor to go to work for the other company, and that awarding him $20,000 for the tractor would not restore the Complainant to the same position he would have had but for the discharge, but instead amounted to a windfall.
[STAA Digest IX b 1]
COMPENSATORY DAMAGES; EMOTIONAL DISTRESS AWARD MAY BE BASED SOLELY ON COMPLAINANT’S CREDIBLE TESTIMONY
In Hobson v. Combined Transport, Inc., ARB Nos. 06-016, 06-053, ALJ No. 2005-STA-35 (ARB Jan. 31, 2008), the ARB affirmed the ALJ’s award of $5,000 in compensatory damages for stress and anxiety which was based solely on the Complainant’s testimony and was not supported by medical evidence. The ARB noted that the ALJ had found the testimony credible, that it was unrefuted, and that the ARB has affirmed reasonable emotional distress awards that had been based solely on the employee’s testimony.
[STAA Digest IX B 1]
COMPENSATORY DAMAGES FOR EMOTIONAL DISTRESS; COMPLAINANT’S BURDEN TO PROVE
In Simon v. Sancken Trucking Co., ARB No. 06-039, -088, ALJ No. 2005-STA-40 (ARB Nov. 30, 2007), the ALJ found that the Complainant suffered emotional distress as a result of his termination and inability to find permanent employment, and awarded $5,000.00 in compensatory damages. The ARB found no documentary evidence in the record supporting any loss of reputation or mental anguish, and therefore reversed the compensatory damages award, holding that emotional distress may not be presumed but must be proven.
[STAA Whistleblower Digest IX B 1]
COMPENSATORY DAMAGES; ALLEGATIONS SUPPORTED ONLY BY COMPLAINANT'S TESTIMONY
In Roberts v. Marshall Durbin Co., ARB Nos. 03-071 and 03-095, ALJ No. 2002-STA-35 (ARB Aug. 6, 2004), the ALJ awarded $10,000 in compensatory damages based on a finding that Complainant's testimony regarding his humiliation and emotional distress was unrefuted, credible and persuasive. On appeal, the Respondent contended that since no evidence supported the Complainant's bare allegations, the ALJ's award was erroneous. The ARB affirmed the ALJ, finding that he had evaluated the Complainant's testimony and provided a rationale that was supported by substantial evidence.
[STAA Digest IX B 1]
TAX IMPLICATIONS OF WHISTLEBLOWER AWARD
In Murphy v. Internal Revenue Service, No. 05-5139 (D.C.Cir. Aug. 22, 2006), the Plaintiff had been awarded damages in a Department of Labor whistleblower proceeding, which included payments for "emotional distress or mental anguish" and "injury to professional reputation." See Leveille v. New York Air National Guard, ARB No. 98-079, ALJ Nos. 1994-TSC-3 and 4 (ARB Oct. 25, 1999). The Plaintiff initially paid taxes on the award, but later filed an amendment seeking a refund. The IRS denied the request for refund, and the Plaintiff filed suit in federal court arguing that the amount should have been excluded from gross income under 26 U.S.C. § 104(a), which provides an exclusion for damages received on account of personal physical injuries or physical sickness, or in the alternative that the I.R.C. provision was unconstitutional to the extent that failed to exclude damages awarded for emotional distress and injury to professional reputation. The District Court rejected both arguments. The Court of Appeals for the District of Columbia also rejected the first argument, but accepted the constitutional argument, finding that damages for matters such as emotional distress and injury to reputation are not income within the meaning of the 16th Amendment to the Constitution. The Department of Justice thereafter petitioned for an en banc hearing. The appeals panel, however, issued an Order on December 22, 2006 vacating the August 22, 2006 decision, and scheduling oral argument. Murphy v. Internal Revenue Service, No. 05-5139 (D.C. Cir. Dec. 22, 2006).
In its decision on rehearing, the Court of Appeals held that the compensatory damages award, "even if it is not income within the meaning of
the Sixteenth Amendment, is within the reach of the congressional power to tax under Article I, Section 8 of the Constitution."
Murphy v. Internal Revenue Service, No. 03-CV-02414 (D.C.Cir. July 3, 2007), slip op. at 5-6. Moreover, upon
close review of the ALJ and ARB decisions, the court found that the Plaintiff compensatory damages award was not "awarded by reason of,
or because of, ... [physical] personal injuries," and therefore § 104(a)(2) of the IRC did not permit her to exclude the award from gross
income. Id. at 11. The court held that "gross income in § 61(a) must ... include an award for nonphysical damages such as
Murphy received, regardless of whether the award is an accession to wealth." Id. at 19.
[STAA Whistleblower Digest IX B 1]
CIVIL RIGHTS TAX RELIEF; DEDUCTION FOR ATTORNEYS' FEES AND COSTS INCURRED BY INDIVIDUALS WHO PREVAIL IN EMPLOYMENT DISCRIMINATION CASES
The American Jobs Creation Act of 2004 includes a "civil rights tax relief" provision at Section 703, establishing a deduction from gross income for attorneys' fees and court costs incurred by, or on behalf of, individuals who prevail in employment discrimination and other enumerated types of cases. H.R. 4520, signed by the President on October 22, 2004.
[STAA Whistleblower Digest IX B 1]
EMOTIONAL DISTRESS; UNREFUTED TESTIMONY
In Jackson v. Butler & Co., ARB Nos. 03-116 and 03-144, ALJ No. 2003-STA-26 (ARB Aug. 31, 2004), the ARB affirmed the ALJ's award of $4,000 for emotional distress based on the testimony of the Complainant and his wife, even though that testimony was not supported by evidence of professional counseling or other medical evidence, where the testimony was unrefuted by the Respondent.
[STAA Whistleblower Digest IX B 1 ]
DAMAGES; RETIREMENT PLAN
In Jackson v. Butler & Co., ARB Nos. 03-116 and 03-144, ALJ No. 2003-STA-26 (ARB Aug. 31, 2004), the ARB awarded the Complainant the amount he would have been entitled to in 401(k) plan contributions up to the time he began participating in a similar plan from a subsequent employer.
[STAA Whistleblower Digest IX B 1]
DAMAGES; HEALTH BENEFITS; LOSSES INCURRED AFTER THE ALJ'S DECISION
In Jackson v. Butler & Co., ARB Nos. 03-116 and 03-144, ALJ No. 2003-STA-26 (ARB Aug. 31, 2004), the ARB awarded the Complainant the amount he had to pay out-of-pocket for a health plan with a subsequent employer and held that this amount would continue to accrue until the Complainant was reinstated.
The ARB also awarded the Complainant uncontested out-of-pocket medical expenses that were covered under the Respondent's policy but not under his current employer's policy. The ARB noted that the ALJ had correctly declined to award estimated future out-of-pocket expenses incurred after issuance of the Recommended Decision and Order. The ARB, however, granted leave to the Complainant to request modification of the ARB's final decision to establish such indirect health care plan losses between the time of the ALJ's recommended decision and the ARB's final decision.
IX B 1 Hearing confined to
calculation of award
In Bascom v. APT Transportation, Inc., 92-STA-32
(Sec'y Nov. 9, 1992), the Regional Administrator of OSHA found
the Complainant's STAA complaint to have merit and order back pay
of $219.33 per week (average weekly pay received prior to
discharge), plus interest.
The Complainant requested a hearing solely as to the amount of
the back pay owed to him, contending that there was a large
difference between the amount of pay to which he was entitled and
the amount he actually received.
Agreeing with the ALJ's calculations with only minor adjustments,
the Secretary found that the Complainant was entitled to $141.31
per working day for 41 days, plus interest.
The Respondent did not participate in the hearing process and
declined to respond to the ALJ's order to show cause why the case
should not be decided based on the existing record.
[STAA Digest IX B 1]
COMPENSATORY DAMAGES; OTHER BENEFITS
A complainant who establishes that he or she was terminated from employment as the
result of unlawful discrimination on the part of the respondent is entitled to a presumption of full
relief. In Johnson v. Roadway Express, Inc., ARB No. 99-111, ALJ No.
1999-STA-5 (ARB Mar. 29, 2000), the ARB ordered the ALJ on remand to determine (1)
whether and in what amount Respondent is responsible for payment of medical expenses for
which Complainant would have been covered by the health and welfare fund (the Board noting
that Respondent must pay sufficient monies into the health and welfare fund to permit
Complainant's immediate coverage upon reinstatement); (2) whether and in what amount
Complainant is entitled to vacation and holiday pay for the period in which he is entitled to back
pay; (3) whether and to what extent Respondent must contribute the necessary pension funds on
behalf of Complainant.
[STAA Digest IX B 1]
COMPENSATORY DAMAGES; INTEREST ON PURCHASE OF CAR
A complainant is not entitled to recover as compensatory damages interest on an
automobile loan where the automobile was purchased prior to his unlawful termination. Jackson v. Protein Express, 95-STA-38
@ 5 (ARB May 29, 1998).
[STAA Digest IX B 1]
COMPENSATORY DAMAGES; MEANING OF "COMPENSATORY"
In Michaud v. BSP Transport,
Inc., 95-STA-29 (ARB Oct. 9, 1997), Respondent contended that the phrase in 49
U.S.C. § 31105(b)(3)(A) -- "compensatory damages, including back pay" --
does not include damages for emotional suffering, psychic injury, and medical expenses, but only
back pay (i.e., lost wages, salary, or commissions), and other employment-related forms
of compensation (i.e., fringe benefits, vacation pay, bonuses, sick pay, disability
benefits, etc.).
The ARB rejected this contention, holding that the common meaning of compensatory includes
both back wages as well as damages for pain and suffering. The ARB noted that both it and the
Secretary had consistently held that compensatory damages under the STAA include damages for
pain and suffering, mental anguish, embarrassment, and humiliation, and that reviewing courts
have affirmed Secretarial orders pursuant to the STAA that required payment of compensatory
damages.
[STAA Digest IX B 1]
COMPENSATORY DAMAGES; COMPARATIVE AWARDS
In Michaud v. BSP Transport,
Inc., 95-STA-29 (ARB Oct. 9, 1997), the ARB affirmed the ALJ's
recommendation of a compensatory damages award of $75,000 where the evidence showed that
prior to discharge, Complainant had substantial savings, owned a house, had good credit, and a
stable financial position, but after Respondent's unlawful action, Complainant began defaulting
on payments, lost his house through foreclosure, his savings, and his ability to obtain credit, and
has received public assistance. Complainant also suffered major depression as the result of
Respondent's unlawful discharge.
[STAA Digest IX B 1]
COMPARATIVE AWARD; SEVERE EMOTIONAL DISTRESS
In Dutkiewicz v. Clean Harbors Environmental Services, Inc., 95-STA-34
(ARB Aug. 8, 1997), Complainant was awarded $30,000 in compensatory damages
were there was unrefuted evidence that Complainant experience severe emotional distress
because of relocation to a different state to take a lower paying job, concerns for his family's
survival, difficulties with his marriage, and ongoing peptic ulcer disease -- all proximately
caused by his unlawful discharge by Respondent.
IX B 1 Liability for Complainant's mental distress
In Moyer v. Yellow Freight System, Inc., 89-STA-7
(Sec'y Aug. 21, 1995), the Respondent relied on Bossalina v.
Lever Brothers, 47 Fair Empl. Prac. Cases (BNA) 1264, 1167-68
(D. Md. 1986), to argue that it could not be held accountable for
the Complainant's mental distress and that the Complainant must
be responsible for his own well being. The Secretary rejected
the reliance on Bossalina, noting that it was an Age
Discrimination in Employment Act case. Rather, an employer who
violates the employee protection provision of the STAA and in so
doing caused the employee to experience mental and emotional
distress may be held liable for compensatory damages. Slip op.
at 23-24 n. 16.
An employer whose discriminatory conduct aggravates an employee's
pre-existing condition is liable for the effects of its illegal
action on the employee. Slip op. at 26-27.
IX B 1 Compensatory damages; recovery for forced
sale of truck; need for credible basis need
to establish actual loss
In Ass't Sec'y & Lansdale v. Intermodal Cartage Co.,
Ltd., 94-STA-22 (Sec'y July 26, 1995), the Secretary
recognized that compensatory damages may be recovered by a
complainant for losses incurred by the sale by an owner-
operator's truck occasioned by his or her financial situation
resulting from the Respondent's retaliatory acts. Generally, a
forced sale is unlikely to result in a sale for market value, and
there is a presumptive loss. Further, the Respondent generally
has uncertainty in the amount of damages resolved against it.
Where, however, the record fails to provide a credible basis for
estimating the value of an actual loss, such an award will not be
made.
In Roadway Express, Inc. v. Dole, 929 F.2d 1060
(5th Cir. 1991), the Fifth Circuit rejected an argument by the
Secretary that evidence of disparate treatment is not a required
element of proof for a Surface Transportation Assistance Act
claim. Whistleblowers are not entitled to compensation that they
were not otherwise entitled to receive. Section 405(b), 49
U.S.C. § 2305(b), guarantees equal economic treatment, not
special economic treatment. The statute provides that no person
shall discriminate against an employee with respect to the
employee's compensation. Whether there is discrimination must,
per force, be determined by comparing the denial of compensation
to some established or expected norm, i.e., occasions on which
compensation is paid.
Thus, where under the terms of a collective bargaining agreement
the employer was not required to compensate drivers for delay
time caused by safety concerns where the highway had not been
officially closed or another driver had previously negotiated the
same route, but the record established that the employer had
authorized and paid compensation to other drivers under similar
circumstances, the company was found to have discriminated
against drivers who had refused to operate their tractor-trailers
during hazardous weather conditions and who had not received
authorization for the delays from the dispatcher.
IX B 1 a No special economic treatment
Four employees refused to drive the company's trucks during a
hazardous ice storm. Employer paid the drivers their regular
compensation for the trip, but refused to pay for their overnight
layover. Employees filed complaints with the Secretary of Labor
arguing that Employer violated section 405(b) of STAA. The court
held that section 405(b) guarantees the drivers equal economic
treatment compared to other similarly situated drivers, not
special economic treatment. Thus, the Secretary must show some
basis for an entitlement to the compensation that these
employees have been denied. The court found that employer
discriminated against the drivers by paying compensation to these
and other drivers under similar circumstances in which it refused
to authorize and pay the complainants who asserted their rights
under STAA. Roadway Express, Inc. v. Dole, 929
F.2d 1060, 1066 (5th Cir. 1991).
An award of back pay under the STAA is not a matter of discretion
but is mandated once it is determined that an employer has
violated the STAA. Moravec v. HC & M Transportation,
Inc., 90-STA-44 (Sec'y Jan. 6, 1992), citing
Hufstetler v. Roadway Express, Inc., 85-STA-8 (Sec'y Aug. 21,
2986), slip op. at 50, aff'd sub nom., Roadway Express, Inc.
v. Brock, 830 F.2d 179 (11th Cir. 1987).
[STAA Digest IX B 2 a]
BACK PAY AWARDS; LEGAL FRAMEWORK
A wrongfully terminated employee is entitled to back pay. 49 U.S.C.A. § 31105(b)(3). "An award of back pay under the STAA is not a matter of discretion but is mandated once it is determined that an employer has violated the STAA." Assistant Sec'y & Moravec v. HC & M Transp., Inc., 90-STA-44, slip op. at 10 (Sec'y Jan. 6, 1992). The purpose of a back pay award is to return the wronged employee to the position he would have been in had his employer not retaliated against him. ...
Back pay awards to successful whistleblower complainants are calculated in accordance with the make-whole remedial scheme embodied in Title VII of the Civil Rights Act, 42 U.S.C.A. § 2000e et seq. (West 1988). ... Ordinarily, back pay runs from the date of discriminatory discharge until the complainant is reinstated or the date that the complainant receives a bona fide offer of reinstatement. ... While there is no fixed method for computing a back pay award, calculations of the amount due must be reasonable and supported by evidence; they need not be rendered with "unrealistic exactitude." ...
Slip op. at 5-6 (some citations omitted).
[STAA Digest IX B 2 a]
BACK PAY; USE OF TITLE VII AUTHORITY
Back pay awards to victorious whistleblowers in DOL adjudications are to be calculated in
accordance with the make whole remedial scheme embodied in § 706 of Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1988). See Loeffler v.
Frank, 489 U.S. 549 (1988).
Polgar v. Florida Stage Lines, 94-STA-46 (ARB Mar. 31, 1996).
The purpose of a back pay award is to make "persons whole
for injuries suffered for past discrimination." Nelson
v. Walker Freight Lines, Inc., 87-STA-24 (Sec'y Jan. 15,
1988), slip op. at 5, quoting Albemarle Paper Co. v.
Moody, 422 U.S. 405, 421 (1975). In keeping with the
objective, it must appear that the employer's misconduct caused
the complainant to lose the wages he claims as back pay.
Gaddy v. Abex Corp., 884 F.2d 312, 320 (7th Cir. 1989);
cf. Francis v. Bogan, Inc., 86-ERA-8 (Sec'y Apr. 1, 1988),
slip op. at 6 (the period of an employer's liability ends when
the employee's employment would have ended for reasons
independent of the violation found). Thus, where there is
uncontradicted testimony tending to show that because of the
implementation of a seniority list system of dispatch complainant
would not have earned the gross back pay claimed, the ALJ must
consider this testimony when calculating the back pay owed.
Hamilton v. Sharp Air Freight Service, Inc., 91-
STA-49 (Sec'y July 24, 1992).
[STAA Digest IX B 2 a iii]
BACK PAY; SPECULATION ABOUT POSSIBLE EARNINGS IF COMPLAINANT HAD STAYED WITH THE RESPONDENT
In Simon v. Sancken Trucking Co., ARB No. 06-039, -088, ALJ No. 2005-STA-40 (ARB Nov. 30, 2007), the Complainant asserted that the ALJ erred in calculating the amount of back pay because he failed to "resolve the uncertainties" in the Complainant’s favor if he had stayed with the Respondent. The ARB rejected this contention, stating that it "does not indulge in speculation about what a complainant would have earned in his position if he had not been discharged by the employer. Oliver v. Hydro-Vac Servs., Inc., ARB No. 97-063, ALJ No. 1991-SWD-001, slip op. at 3 (ARB Jan. 6, 1998), citing Welch v. Univ. of Tex. & Its Marine Sci. Inst., 659 F.2d 532, 535 (5th Cir. 1981) (back pay awarded from date of constructive discharge to date grant expired because ‘it is simply a matter of speculation’ whether grantee would have received another grant)."
Uncertainties in calculating back pay are resolved against the
discriminating party.
Kovas v. Morin Transport, Inc., 92-STA-41 (Sec'y
Oct. 1, 1993).
[STAA Whistleblower Digest IX B 2 a iii] BACK PAY; REPRESENTATIVE EMPLOYEE METHOD; UNREALISTIC EXACTITUDE NOT REQUIRED
In Johnson v. Roadway Express, Inc., ARB No. 01 013, ALJ No. 1999 STA 5 (ARB Dec. 30, 2002), the ALJ had employed the "representative employee" method for calculating backpay. Respondent argued that such would result in a windfall to Complainant because his attendance record established that he had never earned total wages similar to those of the representative employees. The ALJ declined to make an adjustment, stating that he would not speculate about Complainant's conduct and would resolve uncertainties against the discriminating employer. The ARB affirmed the ALJ, finding that back pay awards need not be rendered with "unrealistic exactitude, and that the evidence did not permit a trier of fact to actually determine the source of the disparities.
[STAA Digest IX B 2 a iii]
BACK PAY; FAILURE OF RESPONDENT TO ESTABLISH PRECISE AMOUNT OF WEEKLY EARNING OF COMPLAINANT BEFORE ALJ
In Murray v. Air Ride, Inc., ARB No. 00-045, ALJ No. 1999-STA-34 (ARB Dec. 29, 2000), Respondent argued on appeal to the ARB that the ALJ had erred in estimating Complainant's salary at ,000 per week for purposes of calculating back pay, maintaining that pay records showed that the average weekly wage was actually $902.33. The ARB reviewed the relevant exhibit and found that the ALJ's finding was consistent with this evidence. The ARB faulted Respondent for not making its argument before the ALJ.
[STAA Digest IX B 2 a iii]
RELIEF FROM BACK PAY ORDER; POTENTIAL BANKRUPTCY OF RESPONDENT
In Ass't Sec'y & Ferguson v. K & P,
Inc., 96-STA-17 (ARB Oct. 30,
1996), Respondent argued that his company would be bankrupted if it were required to pay over
$40,000 in back wages. The Board noted that the Secretary had held that "a defendant
seeking relief from a back pay order on the grounds that it would force the company out of
business 'must carry a heavy burden of showing inability to comply'". Slip op. at 2, citing
OFCCP v. Disposable Safety Wear, 59 Fair Empl. Prac. Cases [BNA] 1597, 1600, Sec'y
Dec. Sept. 28, 1992, and cases cited therein. The Board found that Respondent did not make
such a showing.
IX B 2 a iii Burden of proof; back pay deductions
Under the STAA, 49 U.S.C. app. § 2305(c), the employer, and
not the complainant, bears the burden of proving a deduction from
back pay on account of interim earnings. Hadley v.
Southeast Coop. Serv. Co., 86-STA-24 (Sec'y June 28,
1991).
In Nix v. Nehi-RC Bottling Company, Inc., 84-STA-1
(Sec'y July 13, 1984), the Secretary found that Respondent had
violated the employee protection provision of the STAA. Since
Complainant was not interested in returning to work for
Respondent, reinstatement was not ordered. The Secretary
remanded the case to the ALJ for calculation of back pay due,
less interim earnings and all legal deductions. The Secretary
pointed out that no proof was offered on consequential damages
and no request was made for costs and attorneys fees. Since the
remand order was limited to calculation of back wages, it appears
that the Secretary was not allowing consequential damages or
costs and attorneys fees.
IX B 2 a iv Permitting the complainant on remand to put on
additional evidence of entitlement to compensatory
damages
In Nolan v. AC Express, 92-STA-37 (Sec'y Jan. 17,
1995), the Secretary noted that the STAA authorizes compensatory
damages, which may be awarded for emotional pain and suffering,
mental anguish, embarrassment, and humiliation. The Complainant
had not testified concerning any anguish or psychological harm
due to his layoff, and the ALJ did not rule on his entitlement to
compensatory damages. On remand, the Secretary instructed the
ALJ to afford the parties the opportunity to present evidence
concerning entitlement to compensatory damages, if any.
[Editor's note: In an ERA decision, the Secretary
found that a Complainant who had not attempted to prove his
future medical expenses for mental pain and suffering in the
original hearing before the ALJ could not have the amount
increased in a motion under Fed. R. Civ. P. 59 or 60. The
Complainant in that case was attempting to show his additional
expenses from the date of the ALJ's hearing until shortly
following a remand from the 6th Circuit, nearly 3 1/2 hears
later. In this decision, the Secretary discussed how a plaintiff
has the burden of proving each element of damage. Deford v.
Tennessee Valley Authority, 81-ERA-1 (Sec'y Aug. 16, 1984)
(ruling on motion for reconsideration). Nonetheless, in another,
more recent, ERA decision, the Secretary remanded for a hearing
on compensatory damages. In that case, however, the ALJ had
found that the Complainant had not established a prima facie
case. Pillow v. Bechtel Contr., Inc., 87-ERA-35 (Sec'y
July 19, 1993). In the instant case, the Secretary had adopted
the ALJ's recommendation that the Respondent had violated the
STAA. Thus, it appears that Deford is limited closely to
its facts, and the failure of a complainant to put on evidence
concerning compensatory damages will not result in a closing of
the record on that issue in most circumstances.]
IX B 2 a iv Absence of request for consequential
damages
In Nix v. Nehi-RC Bottling Co., Inc., 84-STA-1
(Sec'y July 13, 1984), no proof was offered on the Complainant's
consequential damages, if any, and no request was made for costs
and attorney's fees, if any. A representation was made that the
Complainant had found a full time job and was not interested in
returning to work for the Respondent. Thus, upon declining to
adopt the ALJ's recommendation of no violation of the Act, the
Secretary remanded the case to the ALJ to calculate the back pay
due from the date of discharge to the date of full time re-
employment, "less interim earnings and all legal
deductions."
[Editor's note: The library is missing a March 5, 1985 remand
order of the Secretary and the ALJ's recommended order on this
second remand, but there is a Final Decision & Order After
Second Remand, Nix v. Nehi-RC Bottling Co., Inc.,
84-STA-1 (Sec'y May 2, 1985), from which it appears that the
reason for the second remand was to include prejudgment interest
on the back pay award.]
BACK PAY; TOLLING UPON COMPLAINANT'S EMPLOYMENT AT A HIGHER
PAYING JOB [STAA Digest IX B 2 b]
Where the Complainant had obtained higher paying employment
prior to receipt of a reinstatement offer from the Respondent it
was unnecessary for the ALJ to reach the question of the date the
reinstatement offer was properly made to the Complainant by the
Respondent for purposes of calculating back pay. The other
employment tolled the Respondent's liability for back pay.
Ass t Sec'y & Mulanax & Andersen v. Red Label
Express, 95-STA-14 and 15 (Sec'y Nov. 1, 1995).
[STAA Digest IX B 2 b]
BACK PAY; ENTITLEMENT TO FULL PAY DURING TRAINING AND EXAM
RESULT PERIOD PRIOR TO NEW ASSIGNMENTS UPON REINSTATEMENT
In Dutkiewicz v. Clean Harbors Environmental Services, Inc., 95-STA-34
(ARB Aug. 8, 1997), Complainant was entitled to full pay during the period of training
and awaiting the results of a DOT-required physical examination prior to being assigned to drive.
In Polger v. Florida Stage Lines, 94-STA-46 (Sec'y
Apr. 18, 1995), the ALJ calculated the back wage compensation by
determining a per trip rate, and then making a number of
assumptions about how many trips the Complainant missed because
of his unlawful discharge.
The Secretary held that it was not necessary for the ALJ to
determine the number of trips per individual month the
Complainant would have made had he not been discharges, and noted
that such a calculation makes it difficult to award the
Complainant the full amount of back pay owed.
Rather, the ALJ should have estimated the number of trips the
Complainant made per week, multiplied that number by the per trip
rate, and figured an estimated weekly pay.
[STAA Digest IX B 2 b i]
CALCULATION OF BACK PAY
In Ass't Sec'y & Cotes v. Double R. Trucking, Inc., ARB No. 99-061,
ALJ No. 1998-STA-34 (ARB Jan. 12, 2000), the ARB approved the following method for
calculation of back pay:
(1) determine the number of straight and overtime hours worked by the complainant
during the relevant time period (in the instance case, from the date of
Complainant's last raise to his termination from employment)
(2) divide the total hours by the number of weeks in the period to determine an
average number of hours worked per week
(3) multiply the weekly average of straight and overtime hours by the complainant's
straight time pay rate and his overtime pay rate, producing an average weekly
wage
(4) determine the number of weeks in which the complainant lost wages (in the
instant case, the weeks from termination until the date Complainant was no longer
available for work, when he returned to school and removed himself from the
labor market)
(5) multiply the average weekly wage by the number of weeks of lost work. Add
straight time pay for holidays that would have been paid.
(6) deduct interim earnings
[STAA Digest IX B 2 b i]
BACK PAY CALCULATIONS; IRREGULAR WORK SCHEDULE; USE OF
CALENDAR WEEKS REASONABLE
In Cook v. Guardian Lubricants, Inc., 95-STA-43 (ARB May 30, 1997), the
ALJ's use of calendar weeks, rounded to the closest full week, as the basic computation unit was
reasonable in view of Complainant's irregular work schedules. The Board noted that back pay
calculations must be reasonable and supported by the evidence of record, but need not be
rendered with "unrealistic exactitude." Slip op. at 11-12 n.12.
IX B 2 b i Calculation of back wages based on quarters
for seasonal work and
estimate for increase in work
In Polgar v. Florida Stage Lines, 94-STA-46 (Sec'y
June 5, 1995), the Secretary
modified his Final Decision and Order based on a clarification
that the Complainant had worked only
20 weeks rather than 52 weeks in 1994. In the original Final
Decision and Order, the Secretary
calculated weekly earnings based on 52 weeks.
In the modified decision, the Secretary divided the total number
of trips by the number of weeks
actually worked, multiplied by the earnings per trip. Added to
the calculation were weekly tips.
The Secretary made adjustments for (1) the seasonal nature of the
Respondent's business by
computing back pay on a quarterly basis, and (2) evidence of an
increase in work at the time of the
discharge not attributable to the season by estimating an 50
percent increase in the number of trips
over the prior year (1993) where 1994 data was not available.
IX. B. 2. b. 1 Computation of back pay
Back pay continues to accrue until paid. Chapman v. T.O.
Haas Tire Co., 94-STA-2 (Sec'y Aug. 3, 1994).
IX B 2 b 1 Uncertainties resolved against discriminating
employer
In Clay v. Castle Coal & Oil Co., Inc., 90-STA-
37 (Sec'y June 3, 1994), the ALJ found Complainant entitled to
lost regular or "straight-time" pay. The ALJ computed
this pay by multiplying the regular hourly rate by an eight-hour
work day and a five-day workweek for the two-year back pay
period.
On review, the Respondent argued that this overstated the number
of hours by assuming that Complainant "would have worked 40
hours every week of the year," and pointed to Complainant's
work history and to the histories of several drivers which show
that they did not work the maximum possible hours.
In adopting the ALJ's computation, the Secretary concluded that
the disparity was not great, and that, because as a full-time
employee scheduled to work at least an eight-hour workday,
Complainant conceivably could have worked each workweek in its
entirety or near entirety, there should be not speculation on the
amount of any reduction.
The Secretary noted that Back pay awards are, at best,
approximate and any "uncertainties in determining what an
employee would have earned but for the discrimination should be
resolved against the discriminating employer." Pettway
v. American Cast Iron Pipe Co., 494 F.2d 211, 260-261 (5th
Cir. 1974).
IX.B.2.b.i. Quarterly base period; overtime
calculation
In Clay v. Castle Coal & Oil Co., Inc., 90-STA-
37 (Sec'y June 3, 1994), the Secretary adopted the ALJ
calculation of lost overtime pay by estimating that Complainant
would have worked 8.5 hours of regular overtime each workweek
based on an extrapolation from the Complainant's final two
quarters of employment with Respondent.
The Respondent argued that the ALJ's method overstated the yearly
overtime hours because Respondent's seasonal business, the
delivery of heating oil, peaked during the winter months examined
by the ALJ. Complainant countered that the winter was
uncharacteristically mild, and less overtime than usual was
available.
The Respondent argued further that overtime calculations should
be premised on the overtime actually worked by Complainant during
the three-year period preceding his discharge. The Secretary,
however, concluded that such period was unrepresentative because
shortly before the discharge Respondent agreed to increase
Complainant's weekday overtime.
In addition, the Secretary noted that a a comparison of the ALJ's
calculations with the overtime hours actually worked during the
relevant period by three other comparable drivers was persuasive
of the reasonableness of the ALJ's calculations. Finally, the
Secretary noted that double overtime hours, while apparently
available, were not factored into the back pay equation, and that
this omission offered a further reason to afford Complainant
inclusive recovery of regular wages.
IX B 2 b i Back pay computation; base period
Where a complainant becomes entitled to back pay as the result of
an employer's STAA violation, the gross back pay award should be
computed using a quarterly base period. This approach assumes
that the interim earnings in one particular quarter have no
effect on an employer's back pay liability for any other quarter,
and is consistent with the practice of the National Labor
Relations Board and the Department of Labor in other
discrimination areas. Polewsky v. B & L Lines
Inc., 90-STA-21 (Sec'y May 29, 1991), citing NLRB v.
Seven-Up Bottling Co., 344 U.S. 344, 345-50 (1989); City
of Passaic, 78-CET-122 (Sec'y Apr. 25, 1990), slip op. at 13,
aff'd, No. 90-3393 (3d Cir. Jan. 17, 1991); OFCCP v.
Washington Metropolitan Area Transit Auth., 84-OFC-8 (Sec'y
Dec. on Back Pay and Remand Order Aug. 23, 1989), slip op. at 12
and (Sec'y Order Denying Motion to Amend Aug. 23, Order, Nov. 17,
1989), slip op. at 9, appeal docketed, No. 91-5050 (D.C.
Cir. Mar. 5, 1991).
Although it is proper to calculate back pay by using the wages of
a representative employee, see, e.g.,Assistant
Secretary and Reed v. National Minerals Corp., 91-STA-34
(Sec'y July 24, 1992), slip op. at 7, the ALJ properly used
unrefuted evidence of the Complainant's actual earnings before
discharge and after reinstatement to establish an average weekly
wage for the back pay period where the Respondent's evidence of
the 1992 earnings of two employees with similar seniority to the
Complainant failed to indicate whether those employees
consistently worked weekends, as the Complainant did.
Uncertainties in calculating back pay are resolved against the
discriminating party. Thus, because it was uncertain whether the
other employees' pay reflected the same willingness to work that
the Complainant exhibited, the uncertainty was resolved against
the Respondent. Hamilton v. Sharp Air Freight Service,
Inc., 91-STA-49 (Sec'y Nov. 25, 1992).
[STAA Digest IX B 2 b ii]
BACK PAY; PROMOTION; USE OF REPRESENTATIVE EMPLOYEE TO
DETERMINE THAT COMPLAINANT WOULD HAVE BID ON AND RECEIVED
PROMOTION
In Clifton v. United Parcel
Service, 94-STA-16 (ARB May 14, 1997), Complainant's back pay award was
adjusted for a promotion based on the experience of a representative employee: the fellow
employee who was ranked in seniority just below Complainant at the time Complainant was
fired. That representative employee was given a full-time position after Complainant was
terminated.
The record indicated that Complainant had bid on three positions in prior years, and had
held two part-time positions at the time he was fired. The Board concluded that this evidence
proved Complainant's desire to obtain full-time employment and that he would have bid on the
position awarded to the representative employee.
The record also indicated that Respondent had a collective bargaining agreement with the
Teamsters Union, which made positions available to employees according to seniority.
Respondent did not offer any evidence that there were circumstances where the most senior
employee bidding on the position did not receive the job. Thus, the Board concluded that
Complainant would have been awarded the job had he not been wrongfully discharged.
IX B 2 b ii "Representative employee"
formula
A formula for computing back pay keyed to the earnings of a
"representative employee" gives a reasonable
approximation of what a complainant would have earned but for the
discrimination. Palmer v. Western Truck Manpower, Inc.,
85-STA-16 (Sec'y June 26, 1990), slip op. at 7, appeal
pending, No. 92-70231 (9th Cir. Apr. 13, 1992).
Reed v. National Minerals Corp., 91-STA-34 (Sec'y
July 24, 1992).
IX B 2 b ii Representative employee method
That the amount of overtime a complainant would have worked, but
for the discrimination, cannot be determined with certitude does
not deprive the complainant of all compensation for overtime
hours lost. It is appropriate to use a representative employee
method for determining overtime the complainant would have worked
but for the discrimination. Palmer v. Western Truck
Manpower, Inc., 85-STA-16 (Sec'y June 26, 1990),
vacated on other grounds sub nom., Western Truck Manpower,
Inc. v. United States Dept. of Labor, 943 F.2d 56 (1991)
(table case; unpublished decision available at 1991 U.S. App.
LEXIS 21675), readopted, (Sec'y Mar. 13, 1992).
IX B 2 b ii Representative employee/seniority
formula
Where an award of back pay "can be only a close
approximation," it has been held that "the use of a
seniority formula to compute the earnings of a 'representative
employee' gives a reasonable approximation of what [a
complainant] would have made but for the discrimination."
NLRB v. Superior Roofing Co., 460 F.2d 1240, 1241 (9th Cir.
1972), cited with approval in Sure-Tan, Inc. v. NLRB, 467 U.S.
883, 901 n.11 (1984). Palmer v. Western Truck Manpower,
Inc., 85-STA-16 (Sec'y June 26, 1990), vacated on
other grounds sub nom., Western Truck Manpower, Inc. v. United
States Dept. of Labor, 943 F.2d 56 (1991) (table case;
unpublished decision available at 1991 U.S. App. LEXIS 21675),
readopted, (Sec'y Mar. 13, 1992).
IX B 2 b ii Averaging of wages
Given that the Respondent's drivers are not paid a fixed rate
and work no set hours, but rather, are paid by the trip, and
trips are determined by driver seniority, the ALJ averaged the
wages of three drivers above and five drivers below the
Complainant on the seniority roster. This calculation would
minimize the difference in wages due to individual drivers'
preference and the average so obtained would constitute a
reasonable approximation of what the Complainant would have
earned. The ALJ noted that this method is reasonable and uses a
formula which has had prior court approval. See NLRB v. S.E.
Nichols of Olno, Inc., 704 F.2d 921 (6th Cir. 1983). The
Respondent urged that only the Complainant's prior earnings be
considered. The ALJ, while finding logic in the argument,
rejected this method because the Respondent did not produce any
such figures for calculation. Stone v. Nu-Car Carriers,
Inc., 86-STA-16 (ALJ Dec. 28, 1988).
Where an employer is found to have violated STAA, 49 U.S.C. app.
§ 2305, and the complainant is found to be entitled to an
offer of reinstatement to his or her former position and to back
pay, the employer's liability for back pay continues until such
time as the employer reinstates the complainant or makes him a
bona fide offer of reinstatement. Polewsky v. B & L
Lines Inc., 90-STA-21 (Sec'y May 29, 1991).
[STAA Digest IX B 2 b iii]
BACK PAY; LIABILITY FOR BACK PAY ENDS UPON A BONA FIDE OFFER OF REINSTATEMENT, NOT UPON THE COMPLAINANT’S OBTAINING A COMPARABLE JOB
In Hobson v. Combined Transport, Inc., ARB Nos. 06-016, 06-053, ALJ No. 2005-STA-35 (ARB Jan. 31, 2008), the ALJ erred in awarding back pay from the date of discharge to the date when the Complainant found comparable work. The ARB stated that "[b]ack pay liability ends when the employer makes a bona fide, unconditional offer of reinstatement or, in very limited circumstances, when the employee rejects a bona fide offer, not when the employee obtains comparable employment." USDOL/OALJ Reporter at 5 (footnote omitted). The ARB vacated the ALJ’s back pay award, and instead ordered back pay from the date of discharge to the date of a bona fide offer of reinstatement, with a reduction in liability for other earnings, but enhanced by pre-judgment and post-judgment interest.
[STAA Whistleblower Digest IX B 2 b iii]
BACK PAY; LIABILITY FOR DIFFERENCE BETWEEN PAY WITH RESPONDENT AND SUBSEQUENT EMPLOYER CONTINUES UNTIL REINSTATEMENT OR COMPLAINANT DECLINES REINSTATEMENT
In Densieski v. La Corte Farm Equipment, ARB No. 03-145, ALJ No. 2003-STA-30 (ARB Oct. 20, 2004), the ALJ awarded back pay from the date of the Complainant's discharge to the date of his reemployment with another company, less the amount he received in unemployment insurance. The ARB adopted that ruling. In addition, the Complainant was entitled as part of the back pay award to the difference between his rate of pay with the Respondent and what he had earned with his subsequent employer. The ARB stated that this obligation would cease as of the date of reinstatement or the date the Complainant declined a good faith offer of reinstatement.
[STAA Digest IX B 2 b iii]
BACK PAY; ALJ IS REQUIRED TO MAKE A FINDING ON THE DATE THAT BACK PAY LIABILITY ENDS
In Dale v. Step 1 Stairworks, Inc., ARB No. 04-003, 2002-STA-30 (ARB Mar. 31, 2005), the ALJ erred by failing to determine when the Respondent's back pay liability ended. Back pay liability ends when the employer makes a bona fide unconditional offer of reinstatement or when the complainant declines such an offer.
[STAA Digest IX B 2 b iii]
BACK PAY; DATE ELIGIBILITY FOR BACK PAY ENDS; WAIVER OF
REINSTATEMENT NOT VALID UNLESS EMPLOYER MADE UNCONDITIONAL OFFER
OF REINSTATEMENT
In Ass't Sec'y & Burke v. C.A. Express,
Inc., 96-STA-5 (ALJ May 20, 1997), the ALJ had accepted the OSHA investigator's
calculation of back pay as it was the only evidence of record on the issue. Id. @ 13; slip
op. at 15. In the ARB's decision adopting the ALJ's decision on the merits, the ARB indicated
that this calculation was based on the period from termination of employment to an alleged
waiver of reinstatement. Ass't Sec'y & Burke v. C.A. Express, Inc., 96-STA-5,
slip op. at 3 (ARB Sept. 17, 1997). The ARB found that a waiver of reinstatement is valid only
when an employer has made an unconditional offer of reinstatement, and since there was no
evidence of such an offer in the instant case, held that the appropriate cut-off date for back pay is
the date of hire at a commensurate rate of pay.
[STAA Digest IX B 2 b iii]
BACK PAY; OFFER OF REINSTATEMENT DOES NOT TERMINATE LIABILITY
WHERE OBJECTIVE REASONABLE PERSON WOULD HAVE DECLINED THE OFFER
In Michaud v. BSP Transport, Inc., 95-STA-29 (ALJ June 12, 1997), the ALJ
recommended a back pay award from date of termination of employment through and until
Respondent pays the award to Complainant, even though Respondent had made an unconditional
offer of reinstatement. The ALJ concluded that the rule to be applied was whether an objective
reasonable person would have refused the offer of reinstatement. The ALJ found that back pay
liability was not tolled in this case because an objective reasonable person would not have
accepted Respondent's offer based on the advice of a treating physician that such a position
would be too stressful for Complainant and would not make good psychological sense.
IX B 2 b iii Back pay; termination upon unconditional offer
of reinstatement; tolling if offer is invalid
In Ass't Sec'y & Lansdale v. Intermodal Cartage Co.,
Ltd., 94-STA-22 (Sec'y July 26, 1995), the Complainant,
an owner-operator, was offered reinstatement on July 15, 1994.
Because he had sold his trucks because of financial problems
related to his discharge, however, he was unable to resume
employment until August 24, 1995 when he succeeded in replacing
his truck. The Secretary held that, while the back pay period
usually is tolled upon an unconditional offer of reinstatement,
the period is not tolled where the offer is invalid, such as
where immediate resumption of employment is not feasible. The
Secretary concluded that under the circumstances, the back pay
period in this matter should be extended to August 24, 1994.
IX.B.2.b.iii. Back pay accrual; relation to
reinstatement
In Dutile v. Tighe Trucking, Inc., 93-STA-31 (Sec'y
Oct. 31, 1994), the Secretary noted that he had followed earlier
decisions in ordering in this case that the back pay continues to
accrue until payment of the award. In Dutile, the
Complainant had indicated at hearing that he did not want
reinstatement.
The Secretary noted that in the past, the Secretary has found
that where the complainant states that he does not desire
reinstatement, back pay continues to accrue until compliance with
the order.
Chapman v. T.O. Haas Tire Co., 94-STA-2 (Sec'y
Aug. 3, 1994), slip op. at 9, appeal docketed, No.
94-3334 (8th Cir. Sept. 21, 1994); Gagnier v. Steinmann
Transportation, Inc., 91-STA-46 (Sec'y July 29, 1992),
slip op. at 6; Moravec v. HC & M Transportation,
Inc., 90-STA-44 (Sec'y Jan. 6, 1992), slip op. at 20,
22.
Nonetheless, in scrutinizing the policy of honoring a discharged
employee's statement that he or she does not seek reinstatement,
the Secretary noted that he had become aware that a complainant
who is not ordered to be reinstated may gain a windfall as back
pay continues to accrue during the pendency of remanded issues
such as calculation of the exact amount of back pay and related
benefits. If instead reinstatement is ordered in such cases, the
respondent will have the obligation to make a bona fide
reinstatement offer. The respondent's back pay liability would
terminate upon the declination of the offer.
The Secretary directed that in the future, when a complainant
states at the hearing that he does not desire reinstatement,
the parties or the ALJ should inquire as to why.
If there is such hostility between the parties that reinstatement
would not be wise because of irreparable damage to the employment
relationship, the ALJ may decide not to order it. If, however,
the complainant gives no strong reason for not returning to his
former position, reinstatement should be ordered.
The Secretary noted that while it may seem harsh in this case
that back pay continues to accrue despite the Respondent's
attempt to pay the award in November 1993, the Respondent had not
availed itself of several means to terminate its back pay
liability, such as immediately complying with the November 29,
1993, Decision and Order, which set forth the formula for
computing back pay and interest and was issued a few weeks after
the Complainant rejected the tendered award.
In addition, if the Respondent voluntarily had made a bona fide
offer of reinstatement, the Complainant's rejection of the offer
would have terminated back pay.
See Asst. Secretary and Zessin v. ASAP Express,
Inc., 92-STA-33 (Sec'y Jan. 19, 1993), slip op. at 14;
Phillips v. MJB Contractors, 92-STA-22 (Sec'y Oct. 6,
1992), slip op. at 4-5 (Respondent owes back pay until
reinstatement or declination of offer).
IX B 2 b iii Continuance of backpay
See Gagnier v. Steinmann Transportation, Inc.,
91-STA-46 (Sec'y July 29, 1992), casenoted at IX A 6 in regard to
the effect of the complainant's decision not to seek
reinstatement.
Upon proving a violation of the STAA, the complainant is entitled
to back pay. The back pay award is offset by a complainant's
interim earnings in positions he or she could not have held had
his or her employment with Respondent continued. Nolan v. AC Express, 92-STA-37 (Sec'y Jan. 17,
1995).
IX B 2 b iv Deduction of interim earnings; rate
of interest
In Ass't Sec'y & Kerrick v. JLC Industries,
Inc., 94-STA-33 (Sec'y Jan. 24, 1995), the Secretary
adopted the ALJ's finding that the Respondent violated the STAA
whistleblower provision when it discharged the Complainant for
refusing to drive a vehicle.
In his Recommended Decision and Order, the ALJ had recommended
ordering the Respondent, inter alia, to "[p]ay directly to
Complainant back wages plus interest, adjusted by interim
earnings." Ass't Sec'y & Kerrick v. JLC Industries,
Inc., 94-STA-33 (ALJ Oct. 13, 1994). The Secretary further
clarified this order, discussing evidence of average weekly wage
adduced by the Assistant Secretary, noting that the Complainant
1994 W-2 form did not reveal the amount of interim earnings and
ordering that Complainant provide Respondent with this form so
that these interim earnings (there was testimony of about two
weeks of work in 1994) could be deducted from the back pay award.
The Secretary also clarified the rate of interest as that
specified in 26 U.S.C. § 6621.
In Dale v. Step 1 Stairworks, Inc., ARB No. 04-003, 2002-STA-30 (ARB Mar. 31, 2005), the ARB found that the ALJ had committed several errors in calculating the back wages owed the Complainant, and remanded for further proceedings. Part of the Board's instructions relating to remand involved the calculation of interest. The Board wrote:
Furthermore, the ALJ should determine the pre-judgment and post-judgment interest on the back pay award. See Murray v. Air Ride, Inc., ARB No. 00-045, ALJ No. 99-STA-34, slip op. at 9 (ARB Dec. 29, 2000). In calculating the interest on back pay awards under the STAA, the rate used is that charged for underpayment of federal taxes. See 26 U.S.C.A. § 6621(a)(2) (West 2002); Drew v. Alpine, Inc., ARB Nos. 02-044, 02-079, ALJ No. 2001-STA-47, slip op. at 4 (ARB June 30, 2003). Moreover, the interest accrues, compounded quarterly, until Step 1 pays the damages award. Assistant Sec'y & Cotes v. Double R. Trucking, Inc., ARB No. 99-061, ALJ No. 1998-STA-34, slip op. at 3 (ARB Jan. 12, 2000); see Doyle v. Hydro Nuclear Services, ARB Nos. 99-041, 99-042, 00-012, ALJ No. 89-ERA-22, slip op. at 18-21 (ARB May 17, 2000) (outlining the procedures to be followed in computing the interest due on back pay awards).
[STAA Digest IX B 2 b viii]
POST-JUDGMENT INTEREST
A complainant who is successful on the merits is entitled to post-judgment interest, calculated in the same manner as pre-judgment interest, for any period between the issuance of the ARB's final order and the payment of the back pay award. Murray v. Air Ride, Inc., ARB No. 00-045, ALJ No. 1999-STA-34 (ARB Dec. 29, 2000).
[STAA Digest IX B 2 b viii]
INTEREST ON BACK PAY
"Interest is due on back pay awards from the date of discharge to the date of
reassignment. Prejudgment interest is to be paid for the period following [a complainant's]
termination ... until the ALJ's order of reinstatement. Post-judgment interest is to be paid
thereafter, until the date payment of back pay is made. ... The rate of interest to be applied is that
required by 29 C.F.R. §20.58(a)(1999) which is the IRS rate for the underpayment of taxes
set out in 26 U.S.C.A. §6621 (1999). ... The interest is to be compounded quarterly."
Johnson v. Roadway Express, Inc., ARB No. 99-111, ALJ No. 1999-STA-5
(ARB Mar. 29, 2000), slip op. at 17-18 (citations omitted).
[STAA Digest IX B 2 b viii]
INTEREST ON BACK PAY; QUARTERLY COMPOUNDING OF INTEREST
The rate of interest to be applied on a back pay award under the whistleblower provision of
the STAA is that required by 29 C.F.R. § 20.58(a)(1999) that is, the IRS rate of
underpayment of taxes set out in 26 U.S.C.A. §6621 (1999). The interest is compounded
quarterly. Ass't Sec'y & Cotes v. Double R. Trucking, Inc., ARB No. 99-061,
ALJ No. 1998-STA-34 (ARB Jan. 12, 2000).
[STAA Whistleblower Digest IX B 2 b viii]
BACK PAY AND FRONT PAY; INTEREST; PREJUDGMENT COMPOUNDED
QUARTERLY AT RATE DETERMINED UNDER 26 U.S.C. §6621(b)(3) PLUS THREE
PERCENTAGE POINTS
In Doyle v. Hydro Nuclear
Services, ARB Nos. 99-041, 99-042, and 00-012, ALJ No. 1989-ERA-22 (ARB
May 17, 2000), the ARB wrote: "In light of the remedial nature of the ERA's employee
protection provision and the 'make whole' goal of back pay, we hold that the prejudgment interest
on back pay ordinarily shall be compound interest. Our reasoning applies equally to back pay
awards under analogous employee protection provisions of the other federal statutes under which
we issue administratively final decisions [the CAA, CERCLA, FWPCA, SDWA, SWDA, STAA
and TSCA]. Absent any unusual circumstance, we will award compound interest on back pay in
cases arising under all of these employee protection provisions." Id. @ 18
(footnote omitted). The ARB held that the compounding of interest should be quarterly. The
ARB continued:
...As provided by the ALJ and the parties' stipulation, the interest rate is that
charged on the underpayment of Federal income taxes, which consists of the
Federal short-term rate determined under 26 U.S.C. §6621(b)(3) plus three
percentage points. See 26 U.S.C. §6621(a)(2); FRD&O at 2; 1999
Stip. at ¶4.
The Federal short-term interest rate to be used is the
so-called "applicable federal rate" (AFR) for a quarterly period of
compounding. See, e.g., Rev. Rul. 2000-23, Table 1.
The ARB also applied this ruling to prejudgment interest on a front pay award.
[For additional details on how the interest calculation is made, see the decision @ 18-19]
[STAA Digest IX B 2 b viii]
BACK PAY; INTEREST
Payment of interest on a back pay amount is mandatory in a discrimination case in order to make
the complainant whole. In STAA cases, the rate used is the one used for computing interest for
underpayment of Federal taxes, 26 U.S.C. § 6621(a)(2). Ass'y Sec'y & Cotes v. Double R Trucking,
Inc., ARB No. 99-061, ALJ No. 1998-STA-34 (ARB July 16, 1999).
IX B 2 b viii Prejudgment interest
Prejudgment interest shall be calculated in accordance with 26
U.S.C. § 6621 (1988), which specifies the rate for use in
computing interest charged on underpayment of Federal taxes.
See Park v. McLean Transportation Services, Inc., 91-STA-
47 (Sec'y June 15, 1992), slip op. at 5 [and other cases,
citations omitted].
Gagnier v. Steinmann Transportation, Inc., 91-STA-
46 (Sec'y July 29, 1992).
IX.B.2.b.viii. Inculsion of ancillary benefits
In Dutile v. Tighe Trucking, Inc., 93-STA-31 (ALJ
July 1, 1994), the ALJ concluded that it is now well-settled that
the Complainant, in addition to his award of back pay and
interest thereon, is also entitled to restoration of the pension
contributions and the health and welfare benefits of which he has
been deprived as a result of the discriminatory and illegal
actions of the Respondent. In this regard, see Hufstetler v.
Roadway Express, Inc., 85-STA-8 (Sec'y, Aug. 21, 1986)
(dealing with the restoration and payment of all pension
contributions and lost medical benefits).
In a motion for reconsideration, however, Dutile v. Tighe
Trucking, Inc., 93-STA-31 (ALJ Aug. 6, 1994), Respondent
presented evidence that Complainant was not entitled to those
benefits as he rejected the Employer's medical insurance plan and
as his rights had not vested in the Employer's retirement and
pension plan. The ALJ concluded that the Complainant was
entitled only to be restored to the status quo ante he
enjoyed on his last days of employment and on that day he did not
participate in the medical insurance program offered by the
Employer and his rights in the retirement and pension plan had
not vested.
IX.B.2.b.viii. Prejudgment interest
In Clay v. Castle Coal & Oil Co., Inc., 90-STA-
37 (Sec'y June 3, 1994), the Secrerary awarded prejudgment
interest on the back pay amount to be determined under Section
6621 of the Internal Revenue Code at the rate used in computing
interest charged on underpayment of Federal taxes. This was
because Complainant was deprived of the use of wages for which he
now should be compensated by means of an award of interest.
IX.B.2.b.viii. Health and welfare benefits
In Dutile v. Tighe Trucking, Inc., 93-STA-31 (Sec'y
Oct. 31, 1994), the ALJ recommended that Complainant be found
entitled to payment of the pension contributions and the health
and welfare benefits of which he was deprived as a result of the
discriminatory discharge.
The Secretary noted that in Hufstetler v. Roadway Express,
Inc., 85-STA-8 (Sec'y Aug. 21, 1986), slip op. at 48,
rev'd on other grounds, Roadway Express, Inc. v. Brock,
830 F.2d 179 (11th Cir. 1987), the former Secretary had held that
a successful complainant under the STAA "has no personal
entitlement to the amount that would have been paid as health and
welfare benefits" had he not been discharged.
The Secretary announced that where a complainant has not
presented any evidence of claims of medical losses or the
purchase of private insurance as a substitute for the benefits he
or she would have received under the health and welfare fund, the
Secretary will not order a respondent to pay directly to the
complainant the amounts that the company would have spent for
health and welfare benefits. A respondent must,
however, restore past health and welfare benefits to the extent
that they affect current or future entitlement to benefits.
See Hufstetler, slip op. at 49.
The Secretary also ordered the Respondent to restore, rather than
pay directly to the Complainant, any 401(k) plan contributions to
which he would have been entitled had he not been discharged.
See Hufstetler, slip op. at 59.
IX B 2 b viii Prejudgment interest on back pay
award
Prejudgment interest on a back pay award under the STAA should be
calculated in accordance with 26 U.S.C. § 6621. Park
v. McLean Transportation Services, Inc., 91-STA-47 (Sec'y
June 15, 1992).
IX B 2 b viii No relief of interest obligation based on
length of adjudication
The employer is not to be relieved of interest on a back pay
award because of the time elapsed during adjudication of the
complaint. See Palmer v. Western Truck Manpower,
Inc., 85-STA-16 (Sec'y Jan. 26, 1990).
IX B 2 b viii Interest on back pay award
Secretarial decisions award interest on back pay under the STAA
calculated in accordance with 26 U.S.C. § 6621 (1988), which
specifies the rate for use in computing interest charged on
underpayment of Federal taxes. Phillips v. MJB
Contractors, 92-STA-22 (Sec'y Oct. 6, 1992).
Anderson v. Jonick & Co., Inc., 93-STA-6 (Sec'y
Sept. 29, 1993).
IX B 2 b viii Calculation of interest
In STAA cases, interest on back pay is calculated in accordance
with 26 U.S.C. § 6621, which specifies the rate for use in
computing interest charged on underpayment of Federal taxes.
Phillips v. MJB Contractors, 92-STA-22 (Sec'y Oct.
6, 1992).
IX B 2 b viii Prejudgment interest on back pay -
STAA
Prejudgment interest is awarded on the back pay amount to be
determined under Section 6621 of the Internal Revenue Code at the
rate used in computing interest charged on underpayment of
Federal taxes. See Johnson v. Old Dominion Security, 86-
CAA-3, et. seq. (Sec'y May 29, 1991), slip op. at 24, 32;
Wells v. Kansas Gas & Electric Co., 85-ERA-22 (Sec'y
Mar. 21, 1990), slip op. at 17 and n.6, appeal dismissed,
No. 91-9526 (10th Cir. Aug. 23, 1991).
Reed v. National Minerals Corp., 91-STA-34 (Sec'y
July 24, 1992).
IX B 2 b viii Delays caused by Complainant
In Palmer v. Western Truck Manpower, Inc., 85-STA-
16 (Sec'y June 26, 1990), vacated on other grounds sub nom.,
Western Truck Manpower, Inc. v. United States Dept. of Labor,
943 F.2d 56 (1991) (table case; unpublished decision available at
1991 U.S. App. LEXIS 21675), readopted, (Sec'y Mar. 13,
1992), Respondent contended that it should not be liable for
prejudgment interest for periods of extensive delay caused by
Complainant's requests for continuances. The Secretary noted
additional reasons contributed to the length of the remand
proceedings, and concluded that the delay was not so inordinate
as to relieve Respondent of liability for interest during any
part of the back pay period. The Secretary also noted that
"[s]ince Respondent has had the use of these monies
throughout this time, Respondent is not prejudiced unfairly by
this ruling."
IX B 2 b viii Interest on back pay - STAA
Interest on a back pay award under STAA is calculated in
accordance with 26 U.S.C. § 6621 (1988). Asst. Sec. and
Park v. McLean Transportation Services, Inc., 91-STA-47
(Sec'y June 15, 1992), slip op. at 5.
Hamilton v. Sharp Air Freight Service, Inc., 91-
STA-49 (Sec'y July 24, 1992).
IX B 2 b viii STAA; back pay with interest
Where a complainant is awarded back pay with interest, the
Secretary has noted that although some prior decisions under STAA
calculated prejudgment interest under 28 U.S.C. § 1961
(1988), more recent decisions have applied 26 U.S.C. § 6621
(1988). Smith v. Specialized Transp. Servs., 91-
STA-22 (Sec'y Nov. 20, 1991), citing Moyer v. Yellow Freight
Sys., Inc., 89-STA-7 (Sec'y Sept. 27, 1990).
IX B 2 b viii Prejudgment interest
In Palmer v. Western Truck Manpower, Inc., 85-STA-
16 (Sec'y June 26, 1990), vacated on other grounds sub nom.,
Western Truck Manpower, Inc. v. United States Dept. of Labor,
943 F.2d 56 (1991) (table case; unpublished decision available at
1991 U.S. App. LEXIS 21675), readopted, (Sec'y Mar. 13,
1992), Respondent contended that because 29 U.S.C. § 1961
provides for post-judgment interest, it was not liable for
prejudgment interest.
The Secretary held that prejudgment interest on back pay awards
has customarily been assessed in cases arising under the STAA.
The assessment of prejudgment interest is necessary to comport
with the policy of making Complainant whole. Calculation of the
dollar amount of prejudgment interest in STAA cases has been in
accordance with 29 U.S.C. 1961. The use of section 1961 for the
assessment of prejudgment interest is consistent with Federal
court rulings to the effect that, although section 1961 is silent
regarding prejudgment interest, it does not bar the awarding of
interest prior to judgment in accordance with its provisions.
[citations omitted].
In Gagnier v. Steinmann Transportation, Inc., 91-
STA-46 (Sec'y July 29, 1992), the Secretary agreed with the ALJ's
decision to calculate the Complainant's back pay based on his
average weekly wage based on the salary the Complainant accepted
when he was hired rather than the salary of his
"replacement" driver.
The purpose of a back pay award is to make "persons whole
for injuries suffered for past discrimination." Nelson
v. Walker Freight Lines, Inc., 87-STA-24 (Sec'y Jan. 15,
1988), slip op. at 5, quoting Albemarle Paper Co. v.
Moody, 422 U.S. 405, 421 (1975). In keeping with the
objective, it must appear that the employer's misconduct caused
the Complainant to lose the wages he claims as back pay.
Gaddy v. Abex Corp., 884 F.2d 312, 320 (7th Cir. 1989);
cf. Francis v. Bogan, Inc., 86-ERA-8 (Sec'y Apr. 1, 1988),
slip op. at 6 (the period of an employer's liability ends when
the employee's employment would have ended for reasons
independent of the violation found).
Thus, where the record indicated that the Respondent had
implemented a seniority system of dispatch that would have cut
down the gross back pay claimed by the Complainant, the Secretary
remanded the matter to the ALJ to take additional evidence on the
matter, the ALJ having erred in not addressing the point in the
recommended decision.
Hamilton v. Sharp Air Freight Service, Inc., 91-
STA-49 (Sec'y July 24, 1992).
[STAA Digest IX B 2 b xi]
BACK PAY; END PERIOD UPON COMPLAINANT VOLUNTARILY BECOMING
FULL-TIME STUDENT
A back pay award is terminated on the date that the complainant voluntarily becomes a full-time
student, and thus no longer available for work. Ass'y
Sec'y & Cotes v. Double R Trucking, Inc., ARB No. 99-061, ALJ No.
1998-STA-34 (ARB July 16, 1999).
IX B 2 b xi Periods of unavailability attributable to
illegal acts of employer
Although an employer is generally not liable for back pay periods
during which the wrongfully discharged employee was disabled, a
wrongfully discharged employee will not be held accountable for
periods of unavailability for work that are due to the illegal
action of the employer. Moyer v. Yellow Freight System,
Inc., 89-STA-7 (Sec'y Aug. 21, 1995) (Complainant's need
for hidradenitis surgery and other disabling conditions were
connected to his wrongful discharge; Respondent's liability,
however, was tolled for a period during which the Complainant
could not work because he had broken a finger).
IX B 2 b xi Complainant's failure to end or report SSA
disability benefits; no tolling of Respondent's
liability under circumstances
In Moyer v. Yellow Freight System, Inc., 89-STA-7
(Sec'y Aug. 21, 1995), the Complainant, after nearly ten years of
absence, was reinstated to work for the Respondent. Upon
reinstatement, he did not report to SSA, which had awarded him a
disability benefit, that he had returned to work, and he did not
notify the Respondent of his SSA disability benefit. Upon
discovery of the SSA benefit, the Respondent placed the
Complainant on "unpaid sick status", arguing that this
was justified so that it could confirm whether the Complainant
posed a safety risk under applicable safety regulations.
The Secretary noted that an employer may terminate the employment
of a complainant following reinstatement on any legal basis, and
that the Respondent's safety concerns may have merit. See
49 C.F.R. § 391.11 et seq. Nonetheless, under the
particular circumstances of the case, the Secretary concluded
that there would be no tolling of the Respondent's liability to
pay the Complainant during his forced sick leave. The Secretary
found that the Complainant's conduct regarding the SSA disability
benefit were not extraordinary, unforeseeable, or independent of
the Respondent's wrongful conduct. The Secretary accepted the
Complainant's testimony about his state of mind and behavior at
the time, and found that the Complainant's concerns were well-
founded in view of the level of anxiety he was experiencing.
In Phillips v. MJB Contractors, 92-STA-22 (Sec'y
Oct. 6, 1992), the ALJ correctly excluded from a back pay award
the period during a usual winter layoff because the Complainant
would not have earned wages from the Respondent during that time.
See Cram v. Pullman-Higgins Co., 84-ERA-17 (Sec'y Jan. 14,
1985).
IX B 2 b xii Retirement and health benefits
In Dutile v. Tighe Trucking, Inc., 93-STA-31
(Sec'y Mar. 16, 1995), the Secretary declined to consider the
ALJ's revised recommended decision concerning the amount of
benefits due, based on the ALJ's lack of authority to issue such
a revised order. Nonetheless, the Secretary remanded the matter
to the ALJ to reopen the record on the damages issue because the
record before the Secretary made it impossible to ascertain the
exact measure of 401(k) plan contributions and health and welfare
benefits owed pursuant to his Final Decision. The Secretary
provided precise instructions, such as:
401(k) Plan Contributions
Because the Complainant did not seek reinstatement, the
owed contributions to the 401 (k) plan are to be paid
directly to the Complainant.
To establish the dollar amount of 401(k) contributions,
the Complainant must present competent, sworn evidence of
the amount Respondent would have contributed from the date
of discharge to the date of tender of the correct amount of
plan contributions.
The Complainant is entitled to such increase in vesting
as would have occurred had he not been discharged.
Health and Welfare Benefits
Reimbursements for health care expenses should be made
directly to the Complainant if he already paid the charge,
or to the health care provider if not already paid.
Distinguishing Hufstetler v. Roadway Express, Inc.,
85-STA-8 (Sec'y Aug. 21, 1986), in which there was no
personal entitlement by the complainant, but a payment to
the health and welfare fund was ordered to cover a hiatus in
coverage).
The parties were ordered to provide competent, sworn
evidence of whether the Complainant had taken the steps
necessary to opt into plan coverage (noting that this
usually involves paperwork), but the coverage did not go
into effect because of his discharge. If so, the Respondent
will be liable for health care expenses incurred.
If there should have been health care coverage, the ALJ
must determine when coverage would have begun because the
Respondent is liable only for expenses incurred after the
date coverage would have taken effect. If the Complainant
paid premiums for other health care coverage, the Respondent
is only liable for those premiums paid between the date of
discharge and the future date of compliance with the payment
order. If the Complainant had no alternative health
insurance and incurred health care expenses that would have
been covered under the Respondent's plan, the Respondent
must reimburse the Complainant directly.
Fringe benefits such as vacation pay should be included in a back
pay award. A complainant, however, is not entitled to receive
both straight wages and vacation time for the same period. Where
it is the practice of the employer to pay an employee for
vacation time not taken, it is equitable that a complainant
receive both straight wages and vacation pay for the same period.
Where, however, an employee must take his vacation or lose it,
the addition of vacation pay to a back pay award of straight
salary for the same period would compensate the complainant for
more than he lost as a result of the employer's illegal
discrimination. Palmer v. Western Truck Manpower,
Inc., 85-STA-16 (Sec'y June 26, 1990), vacated on
other grounds sub nom., Western Truck Manpower, Inc. v. United
States Dept. of Labor, 943 F.2d 56 (1991) (table case;
unpublished decision available at 1991 U.S. App. LEXIS 21675),
readopted, (Sec'y Mar. 13, 1992) (finding that the ALJ
erred in recommending vacation pay where there was no evidence of
complainant's entitlement thereto).
IX B 2 b xiii Benefits from other sources do not
diminish back pay liability
Benefits received from other sources during the period following
the complainant's wrongful discharge, as opposed to earnings from
alternative interim employment, may not diminish an employer's
liability for back pay. Moyer v. Yellow Freight System,
Inc., 89-STA-7 (Sec'y Aug. 21, 1995) (benefits from a
"welfare" program, a "soldiers and sailors"
fund, unemployment compensation, pension fund, permanent workers'
compensation disability, and Social Security disability
benefits).
IX B 2 b xiii Back pay; operating expenses not actually
incurred
In Ass't Sec'y & Lansdale and Lee v. Intermodal Cartage
Co., Ltd., 94-STA-22
(ALJ Mar. 27, 1995), the ALJ found in her Recommended Decision
and Order that an owner-operator,
whose compensation includes both salary and operating expenses,
is not entitled to recover operating
expenses as part of a back pay award. Citing by analogy Bing
v. Roadway Express, 485 F.2d
441, 453 (5th Cir. 1973) (Title VII claim involving a truck
driver).
IX B 2 b xiii Inclusion in back pay of ancillary
benefits
In Anderson v. Jonick & Co., Inc., 93-STA-6
(Sec'y Sept. 29, 1993), the Secretary's award of back pay
included back wages plus "full benefits normally paid by
Respondent including, but not limited to, contributions to
Complainant's 401(k) retirement plan . . . ."
IX B 2 b xiii Lost tips may be included in back pay award
In Polger v. Florida Stage Lines, 94-STA-46 (Sec'y
Apr. 18, 1995), the Secretary adopted the ALJ's finding, based on
a credibility assessment of Complainant's testimony, that the
Complainant (a bus driver) made an estimated $50 per week in
tips. The lost tips was added to the back pay award.
In Nelson v. Walker Freight Lines, Inc., 87-STA-24
(Sec'y Jan. 15 1988) the Secretary remanded the case for
recomputation of back pay owed to the Complainant. The ALJ
originally deducted from the Complainant's award of back pay, all
wages earned by Complainant in a part time job during the time he
was discharged from work with Respondent.
The Secretary determined that under both the NLRA and Title VII
of the Civil Rights Act, it has been held that part-time or
"moonlighting" earnings of the discharged employees are
not offset from the amount the employee would have earned had he
not been discharged, where the employee held or could have held
the second job while working for the employer. On the other
hand, where the employee would not have been able to work at the
same time at both the second job and the job he lost because of
discrimination, the earnings from the second job are offset.
In Nelson v. Walker Freight Lines, Inc., 87-STA-24
(Sec'y July 26, 1988), it was found on January 15,1988 that
Respondent had violated Section 2305(b) of the STA. Accordingly,
the Respondent was ordered to pay Complainant back wages. On
April 21, 1988, the United States Bankruptcy Court in San
Bernadino, California discharged Braxton Bragg Walker from all
dischargeable debts and declared null and void any judgment
thereafter obtained against Mr. Walker.
The Secretary held that the Bankruptcy Court order applies only
to the personal liabilities of Mr. Walker, an individual and also
noted that the order neither mentioned Walker Freight Company or
Package Express and contained nothing to suggest that a judgment
against either of those entities was null and void.
Furthermore, the Secretary determined that even if the order did
apply to Respondent, the automatic stay provision of the
Bankruptcy code, 11 U.S.C. Section 362(a) only provides that the
filing of the petition for bankruptcy operates to stay the
commencement or continuation of any administrative proceeding
against the debtor that was or could have commenced prior to the
bankruptcy case. This does not operate to stay the resolution of
Complainant's 2305 claim since Subsection (b)(4) of Section 362
specifically exempts from this automatic stay provision "the
commencement or continuation of an action or proceeding by a
governmental unit to enforce such governmental unit's police or
regulatory power."
The Secretary noted that the courts have refused to stay
proceedings by administrative agencies under the Fair Labor
Standards Act, National Labor Relations Act, The Migrant and
Seasonal Agricultural Worker Protection Act or under Title VII of
Civil Rights Act of 1964. "In exempting such governmental
Actions, these courts have relied on the statement in the
legislative history of the Bankruptcy Act of 1978 to the effect
that:
Paragraph (4) exempts commencement or
continuation of actions and proceedings by
governmental units to enforce police or
regulatory powers. Thus, where a
governmental unit is suing a debtor to
prevent or stop violation of fraud,
environmental protection, consumer
protection, safety, or similar police or
regulatory laws, or attempting to fix damages
for violation of such a law, the action is
not stayed under the automatic stay.
H.R. Rep. No. 95-595, 95th Cong., 2d Sess. 343,
reprinted
in 1978 U.S. Code Cong. & Admin. News, 5787, 6299."
This has been held to encompass governmental actio enforcing
employment discrimination provisions of the NLRA, NLRA v.
Evans Plumbing Co., 639 F.2d at 292, and of Title VII,
EEOC v. Rath Packing Co., 787 F.2d at 323-325, and to
permit the entry of judgments for injunctive relief and for
backpay. NLRB v. Evans, 639 F.2d at 293; EEOC
v. Rath Packing Co., 787 F.2d at 326.
Accordingly, since the STAA is safety law, actions taken to
enforce the STAA are exempted form the bankruptcy automatic stay
provision.
IX B 2 b xv Impact of bankruptcy order
In Nelson v. Walker Freight Lines, Inc., 87-STA-24
(Sec'y July 26, 1988), it was found on January 15,1988 that
Respondent had violated Section 2305(b) of the STA. Accordingly,
the Respondent was ordered to pay Complainant back wages. On
April 21, 1988, the United States Bankruptcy Court in San
Bernadino, California discharged Braxton Bragg Walker from all
dischargeable debts and declared null and void any judgment
thereafter obtained against Mr. Walker.
The Secretary held that although Section 2305 actions do not
require the filing of a complaint by a Federal administrative
unit, they nevertheless can be proceedings by a governmental unit
within the meaning of the automatic stay exemption of the
Bankruptcy code since the regulations implementing Section 2305
specifically provide that the prosecuting party shall be the
Assistant Secretary for OSHA in any case in which either the
employer alone or both the employer and the Complainant object to
the Secretary's preliminary finding.
In Ass't Sec'y & Mulanax & Andersen v. Red Label
Express, 95-STA-14 and 15 (ALJ July 7, 1995), the
Respondent contended that the back pay award should be reduced
because one Complainant was under 21 years of age and therefore
barred from driving for any commercial motor carrier by 49 C.F.R.
§ 391.11(b). The ALJ rejected this contention, however,
because
(1) The Respondent failed to offer into evidence any
information indicating when it first realized its
employment of the underage Complainant as a driver was
unlawful.
(2) Even if the Respondent established this date, the
equitable doctrine of unclean hands would still prevent
it from relying on its own illegal conduct in hiring an
underage driver as a justification for reducing
damages.
See McKennon v. Nashville Banner Publishing Co., 115 S.
Ct. 879 (1995).
[STAA Digest IX B 2 b xvi]
DISCOVERY SANCTION; AFTER-ACQUIRED EVIDENCE; REFUSAL OF RESPONDENT TO DISCLOSE INFORMANT MAY SUBJECT RESPONDENT TO EVIDENTIARY SANCTION ON MERITS – BUT NOT ON THE QUESTION OF THE REMEDY
In Cefalu v. Roadway Express, Inc., ARB No. 08-001, ALJ No. 2003-STA-55 (ARB Jan. 30, 2008), the ARB remanded the matter to the presiding ALJ for consideration of whether reinstatement was an appropriate remedy in light of the 7th Circuit’s decision in Roadway Express, Inc. v. United States Dep’t of Labor, 495 F.3d 477 (7th Cir. 2007). In Roadway, the court had held that the ALJ properly imposed a discovery sanction for the Respondent’s refusal to disclose who reported that the Complainant had lied on his employment application about his record of accidents; but that the sanction went to evidentiary matters, and should not have been applied the question of remedy.
BACK PAY; WORK AVAILABILITY [STAA Digest IX B 2 b xvi]
In Ass t Sec'y & Mulanax & Andersen v. Red
Label Express, 95-STA-14 and 15 (Sec'y Nov. 1, 1995), the
ALJ rejected the Respondent's argument that it was not liable for
back pay during the period in which one of the Complainants had
been under the age of 21, which is the minimum age required for
drivers under D.O.T. regulation 49 C.F.R. § 391.11(b),
citing and distinguishing McKennon v. Nashville Banner
Publishing Co., 115 S.Ct. 879 (1995). The Secretary,
however, agreed with the Assistant Secretary's appellate brief in
which it was contended that the Complainant, although not old
enough to drive a commercial motor vehicle, was eligible to drive
other vehicles operated by the Respondent, as he in fact had been
doing prior to being terminated from employment. The Secretary
thus found that the Respondent had failed to establish that the
Complainant was either unwilling or unable to perform his
customary work with the Respondent.
The Secretary, in a footnote, observed without comment the
Assistant Secretary's alternative argument that in situations
where the employee's work would subject him or her to the DOT age
requirement, the decision of the Supreme Court in Sure-Tan,
Inc. v. National Labor Relations Board, 467 U.S. 883 (1984)
(illegal alien case), rather than McKennon, provides
guidance.
[STAA Digest IX B 2 b xvii]
DEDUCTIONS FROM BACK PAY; LOTTERY WINNINGS
Lottery winnings are not deductible from a back pay award. Cook v. Guardian
Lubricants, Inc., 95-STA-43, slip op. at 12 n.13 (ARB May 30, 1997).
[STAA Digest IX B 2 b xvii]
BACK PAY AWARD; METHOD FOR CALCUATION; NO ADJUSTMENT FOR OWNER-OPERATOR STATUS
In Ass't Sec'y & Bryant v Mendenhall Acquistion Corp., ARB No. 04-014, ALJ No. 2003-STA-36 (ARB June 30, 2005), the ARB found that the ALJ erred in calculating back pay for a driver who had worked for the Respondent as an owner-operator, but whose subsequent employment was as an employee driver. The ALJ had attempted to make adjustments for the different ways that contract drivers and employee drivers are paid. The ARB, however, found that this was error, holding that the Complainant's "earnings before mandatory payroll deductions, whether as an independent contractor or an employee, are the basis for the back pay (and front pay) award."
The ARB calculated the back pay award by determining the average weekly amount that the Respondent paid to the Complainant (using calendar weeks, rounded to the closest full week). It then calculated the length of the back pay liability from the date the Complainant was terminated until the date that the Complainant's truck had been repossessed (and he therefore could not have worked as an owner-operator) rather than the actual date that the Employer offered reinstatement. The Board then multiplied the number of weeks of the back pay liability by the average weekly income from the Respondent. Finally, the Board deducted the Complainant's interim earnings with his subsequent employer.
In Roberts v. Marshall Durbin Co., ARB Nos. 03-071 and 03-095, ALJ No. 2002-STA-35 (ARB Aug. 6, 2004), the Respondent was relieved of its burden of showing the availability of substantially equivalent work to support its claim that the Complainant failed to mitigate damages where the Complainant admitted that he had not looked for work for about 8 months after his discharge because he was busy working on his OSHA complaint. Once the Complainant began his job search, however, the Respondent was obliged to present evidence of the availability of substantially equivalent work. It was not enough in this regard to merely ask the ALJ to take judicial notice that properly licensed truck drivers have no trouble finding jobs.
[STAA Digest IX B 3 a]
MITIGATION OF DAMAGES; BURDEN OF PROOF IS ON THE RESPONDENT; ALJ HAS A DUTY TO INFORM A PRO SE LITIGANT OF THAT BURDEN
In Dale v. Step 1 Stairworks, Inc., ARB No. 04-003, 2002-STA-30 (ARB Mar. 31, 2005), the ARB found that the ALJ erred in limiting a back pay award based on a finding that the Complainant had failed demonstrate an effort to mitigate losses. A complainant has a duty to exercise reasonable diligence to mitigate damages, but it is the employer's burden to prove failure to mitigate.
In Dale, the Respondent was appearing pro se. Consequently, the Board found that the ALJ had a duty to inform the Respondent that it had the burden of proof to show that the Complainant had breached his duty to mitigate damages.
IX B 3 a Mitigation of damages; burden
of proof
Where an employer is found to have violated STAA, 49 U.S.C. app.
§ 2305, and the complainant is found to be entitled to an
offer of reinstatement to his or her former position and to back
pay, the burden of showing that complainant failed to make
reasonable efforts to mitigate damages is on the employer.
Polwesky v. B & L Lines, Inc., 90-STA-21 (Sec'y
May 29, 1991), citing Carrero v. N.Y. Hous. Auth., 890
F.2d 569 (2d Cir. 1989) and Rasimas v. Michigan Dep't of
Mental Health, 714 F.2d 614 (6th Cir. 1983).
[STAA Digest IX B 3 a]
MITIGATION OF DAMAGES
In Johnson v. Roadway Express, Inc., ARB No. 99-111, ALJ No.
1999-STA-5 (ARB Mar. 29, 2000), the ARB held that Respondents have the burden of proving
by a preponderance of the evidence that the employee did not exercise reasonable diligence in
finding other suitable employment. A respondent may prove that the complainant did not
mitigate damages by establishing that comparable jobs were available, and that the complainant
failed to make reasonable efforts to find substantially equivalent and otherwise suitable
employment. The ARB also held that "an employer must meet both prongs of [this] test
before the burden of going forward with evidence that he or she exercised due diligence shifts
back to the employee." Slip op. at 16 n.14.
The ARB found that Respondent failed to prove that other comparable jobs were available.
Although Respondent argued that there was a "well-documented shortage of drivers,"
the ARB found this to be a bald assertion, and not the sort of specific proof needed to establish
that substantially equivalent positions were available. The ARB stated that it could find that
Respondent failed to carry its burden on this ground alone, but went on to find that Respondent
also did not prove that Complainant failed to exercise due diligence in mitigating his damages
when he declined a position with another truck line.
The ALJ had found that Complainant's turning down of a job offer with another truck line
was a failure to mitigate. The ARB, however, found that the ALJ's conclusion that these were
substantially equivalent positions was not supported by substantial evidence on the record as a
whole. The ARB noted that Respondent is a unionized carrier which paid fringe benefits.
Respondent's position was for less-than-trailer load freight, and for a district bid run which
involved driving from the home terminal to another terminal and back several times a day. In
contrast, Complainant testified that the other truck line was not unionized, and Respondent
presented no evidence or argument on this point. Respondent also failed to establish that the new
position would have paid the same. The ARB noted that "[a] lower-paying, non-union
position would not constitute substantially equivalent employment." Slip op. at 16
(citation omitted). Finally, the new position would have involved driving throughout the United
States.
[STAA Digest IX B 3 a]
MITIGATION OF DAMAGES; COMPLAINANT'S BURDEN
In Johnson v. Roadway Express, Inc., ARB No. 99-111, ALJ No.
1999-STA-5 (ARB Mar. 29, 2000), the ARB held that Respondents have the burden of proving
by a preponderance of the evidence that the employee did not exercise reasonable diligence in
finding other suitable employment. If, however, a respondent presents evidence that the
complainant did not mitigate damages by establishing that comparable jobs were available, and
that the complainant failed to make reasonable efforts to find substantially equivalent and
otherwise suitable employment, Complainant has the burden of going forward with evidence that
he or she exercised due diligence.
"A complainant is only required to make reasonable efforts to mitigate damages, and
is not held to the highest standards of diligence. ... Such efforts include checking want ads,
registering with employment agencies, discussing employment opportunities with friends and
acquaintances." Slip op. at 16 n.14 (citations omitted).
[STAA Digest IX B 3 a]
DUTY TO MITIGATE; AFFIRMATIVE DEFENSE
The Sixth Circuit affirmed DOL's decision on back pay in Intermodal Cartage
Co., Ltd. v. Reich, No. 96-3131 (6th Cir. Apr. 24, 1997)(unpublished decision available
at 1997 U.S. App. LEXIS 9044)(case below 94-STA-22). The central issue in the appeal was the
complainants' duty to mitigate. The court wrote:
An employee discharged in violation of the Act has a duty to mitigate damages
by seeking other substantially equivalent employment. The employer can assert the
employee's failure to do so as a defense against liability for back pay. However, the
failure-to-mitigate or "willful loss of earnings" defense will be difficult to
sustain if the facts are at all favorable to the employee. The Sixth Circuit has discussed
the defense as follows:
It is beyond peradventure that the defense of willful loss of earnings is an
affirmative defense, with the burden of proof resting upon the employer. . .
. Further, a wrongfully-discharged employee is only required to make a
reasonable effort to mitigate damages, and is not held to the highest
standard of diligence. This burden is not onerous, and does not mandate
that the plaintiff be successful in mitigating the damage. . . . The
reasonableness of the effort to find substantially equivalent employment
should be evaluated in light of the individual's background and experience
and the relevant job market. . . . Finally, it must be remembered that the
Board's conclusion as to whether an employer's asserted defenses against
liability have been successfully established [*7] will be overturned on
appeal only if the record, considered in its entirety, does not disclose
substantial evidence to support the Board's findings. . . . The general rule
in labor cases is that "an employee must at least make reasonable
efforts to find new employment which is substantially equivalent to the
position [lost] . . . and is suitable to a person of his background and
experience" . . . .
NLRB v. Seligman & Assoc.
, 808 F.2d 1155, 1164-65 (6th Cir. 1986), quoting
(with citations omitted) NLRB v. Westin Hotel, 758 F.2d 1126, 1129-30 (6th Cir. 1985).
The efforts to mitigate damages must be analyzed with these principles in mind.
IX B 3 a Back pay; mitigation of damages; reasonable
diligence standard
In determining the amount of back pay, the burden is on the
employer to prove that the complainant failed to mitigate damages
by the exercise of reasonable diligence in seeking other suitable
alternative employment. To carry that burden, an employer must
show both that there were substantially equivalent positions
available and that the employee did not use reasonable care and
diligence in seeking such positions.
A determination regarding the issue of reasonable diligence
requires consideration of the particular characteristics of the
complaint at the pertinent time. A complainant "is only
required to make reasonable efforts to mitigate damages and is
not held to the highest standards of diligence." Slip op.
at 13, quoting Rasimas, 714 F.2d at 624. The complainant
must be given the benefit of every doubt in evaluation of his or
her efforts to obtain alternative employment. Moyer v.
Yellow Freight System, Inc., 89-STA-7 slip op. at 9, 12-
(Sec'y Aug. 21, 1995).
In Moyer, the Secretary found, inter alia, that
the Complainant was hampered in finding a job by the
uncertainty and instability related to financial instability
caused by his wrongful termination and attendant aggravation
of a chronic physical problem.
the Complainant did not unjustifiably leave jobs held
during the interim from discharge to reinstatement because
the evidence that the Complainant's chronic physical
condition progressed after the discharge to the point of
disability, and because the working conditions of the
alternative jobs were more difficult than the Complainant's
work for the Respondent.
the Complainant was reasonably concerned that
prospective employers would be wary of employing him based
on the circumstances of his discharge by the Respondent, his
legal challenge to that discharge, and the possibility of
reinstatement by the Respondent.
the Complainant's preparations for and attendance at
depositions and hearings in this case played a significant
role in his interim employment history (bolstered by SSA
findings of disability based in part on anxiety related
disorders, as well as several physician's reports). The
Secretary noted that a statement by the Complainant that he
was concerned that his marginal wages would be attached by
creditors did not that he simply did not want to pay these
bills, but was rather simply a reflection of his anxiety.
IX B 3 a Mitigation of damages; intentionally or
heedlessly failed standard; efforts outside
trucking industry
The standard for determining whether the Respondent met its
burden of establishing Complainant's failure to mitigate damages
is whether the complainant "intentionally or
heedlessly" failed to protect his or her own interests.
Ass't Sec'y & Lansdale v. Intermodal Cartage Co.,
Ltd., 94-STA-22 (Sec'y July 26, 1995), citing
Hufstetler v. Roadway Express, Inc., 85-STA-8 (Sec'y Aug.
21, 1986), aff'd sub nom. Roadway Express, Inc. v. Brock,
830 F.2d 179 (11th Cir. 1987).
In addition, complainants cannot be blamed for seeking
opportunities outside the trucking industry which they sought
only after making reasonable efforts to find substantially
similar employment in the trucking industry.
IX B 3 a Mitigation of damages; burden of proof
In Polwesky v. B & L Lines, Inc., 90-STA-21
(Sec'y May 29, 1991), the Secretary apparently takes the position
that an employer must show that jobs for a complainant were
available during the back pay period to carry its burden of
showing that the complainant failed to make reasonable efforts
to mitigate damages resulting from his or her discharge in
violation of STAA, 49 U.S.C. app. § 2305.
IX B 3 a Mitigation of damages; burden of proof
The ALJ held that the Complainant's extensive efforts to get
reinstated constituted a sufficient effort to fulfill his duty to
mitigate damages. The ALJ found that his role in attempting to
obtain reinstatement was not a passive one of just filing the
complaint and grievance, but rather, he very actively pursued his
remedies by retaining an attorney, by conferring with that
attorney and his local union and Department of Labor officials,
and by participating in union and Department of Labor
proceedings. The ALJ held that not only are such activities
difficult to combine with an active job search, but also with any
job that might result from such a job search. Stone v. Nu-Car
Carriers, Inc., 86-STA-16 (ALJ Dec. 28, 1988).
IX.B.3.a. Burden of proof on employer to show failure to
mitigate
In Clarin v. Keller Specialized Transport, Inc.,
92-STA-38 (Sec'y Oct. 24, 1994), the Secretary adopted the ALJ's
Recommended Decision & Order. The only issue in the case was
calculation of back pay. The ALJ awarded back pay for the entire
period in which the Complainant remained unemployed. The
Employer failed to carry its burden of showing that the
Complainant was not looking for work during that period.
IX B 3 a Burden on employer to show wilful loss of
earnings
In Hufstetler v. Roadway Express, Inc., 85-STA-8
(Sec'y Aug. 21, 1986), overruled on other grounds,
Roadway Express, Inc. v. Brock, 830 F.2d 179 (11th Cir.
1987), Respondent argued that back pay of wages should be reduced
not only by any actual earnings during the period of the unlawful
discharge, but also by amounts Complainant could have earned.
The Secretary reasoned that because the STAA (and the ERA)
provide for compensatory damages in addition to back pay, any
damages resulting from the discriminatory action of an employer
are compensable. He also determined that the burden is on the
respondent to affirmatively show that a back pay award should be
reduced by a willful loss of earnings. Compare Marine Welding
& Repair Works v. NLRB, 494 F.2d 526 (5th Cir. 1974)
(NLRA case). The Secretary noted that unlike NLRA and Title VII,
which have discretionary back pay remedies and specifically
mandate the mitigation of damages, the STAA mandates back pay and
compensatory damages. At common law, an STAA whistleblower wrong
would be classified as a willful tort. In such cases the rule of
mitigation is that the injured person ". . . is not
prevented from recovering damages for a particular harm . . .
unless the injured person . . . intentionally or heedlessly
failed to protect his own interests." Restatement (Second)
of Torts § 918(2) (1977). Thus, the Secretary concluded
that a STAA whistleblower respondent bears the burden of
establishing that the complainant's actions were of such a nature
that he "intentionally or heedlessly" increased his
damages.
In the instant case, Respondent contended that Complainant
voluntarily left two subsequent jobs, thereby violating his
obligation to mitigate damages. The Secretary found, however,
that Complainant left one subsequent employer because he was
asked to drive in excess of the number of hours permitted by DOT
regulations, which was a valid reason for leaving such
employment. See Brady v. Thurston Motor Lines, Inc., 753
F.2d 1269 (4th Cir. 1985) (a voluntary quit does not toll a back
pay period when "it is prompted by unreasonable working
conditions"). There was a factual dispute over whether
Complainant unreasonably quit his second job, but the Secretary
looked to the number of miles Complainant had driven the previous
two weeks, credited his testimony that he needed time to go home
and get fresh clothes and told that to his supervisors, and found
that Complainant's refusal to take another assignment was not a
willful breach of the obligation to mitigate damages. The
Secretary also took into consideration that part of the reason
Complainant left the second employer was that he had to attend to
selling off farm equipment and livestock, which was necessary
because of his wrongful discharge, and which was therefore also
part of his duty to mitigate by protecting his financial
interests.
IX B 3 a Mitigation of damages, burden on respondent
Evidence that the complainant failed to mitigate his or her
damages reduces the amount of back pay owed. The Respondent has
the burden of establishing that the back pay award should be
reduced if the complainant did not exercise diligence in seeking
and obtaining other employment. Dutile v. Tighe Trucking,
Inc., 93-STA-31 (Sec'y Oct. 31, 1994).
Although not reaching the issue, the ARB in Johnson v. Roadway Express, Inc., ARB No. 01 013, ALJ No. 1999 STA 5 (ARB Dec. 30, 2002), cast doubt on the ALJ's ruling that union jobs that would have required Complainant to start at the bottom of the seniority list with lower pay than his position with Respondent (where Complainant had over 15 years of seniority) were not substantially equivalent employment. The ARB wrote: "In a significantly unionized industry such as the trucking industry, a complainant would always be required to begin his interim employment with a new company at the bottom of the seniority list, with all that entails. We think it unlikely that those facts in and of themselves, could, particularly after the passage of a reasonable amount of time without employment, protect a complainant from charges that he failed to mitigate his damages." (citations omitted).
[STAA Digest IX B 3 b]
MITIGATION; ACCEPTANCE OF WORK AT LOWER RATE OF PAY
An employee who has taken reasonable, but unsuccessful, steps to obtain substantially equivalent
employment may, after a reasonable period of time, consider other available, suitable
employment at a somewhat lower rate of pay. Cook v. Guardian Lubricants,
Inc., 95-STA-43 (ARB May 30, 1997).
[STAA Digest IX B 3 b]
BACK PAY; DUTY TO MITIGATE; JOB NOT SUBSTANTIALLY EQUIVALENT TO
FORMER POSITION
"Where an employer is found to have violated the STAA and the claimant is found
to be entitled to an offer of reinstatement to his former position with back pay, the claimant does
not breach the obligation to mitigate damages by declining a job that is not substantially
equivalent to his or her former position." Clifton v. United Parcel Service,
94-STA-16, slip op. at 3-4 (ARB May 14, 1997) (citation omitted).
IX b 3 b Mitigation of damages; substantially
equivalent job
Where an employer is found to have violated STAA, 49 U.S.C. app.
§ 2305, and the complainant is found to be entitled to an
offer of reinstatement to his or her former position and to back
pay, a complainant does not breach the obligation to mitigate
damages by declining to accept a job that is not substantially
equivalent to his or her former position with the employer.
Polwesky v. B & L Lines, Inc., 90-STA-21 (Sec'y
May 29, 1991), citing Carrero v. N.Y. Hous. Auth., 890
F.2d 569 (2d Cir. 1989) and Rasimas v. Michigan Dep't of
Mental Health, 714 F.2d 614 (6th Cir. 1983).
In regard to mitigation of damages resulting from discharge in
violation of STAA, 49 U.S.C. app. § 2305, the complainant
was found not to have unreasonably delayed in pursuing employment
outside his field or experience in Polwesky v. B & L
Lines, Inc., 90-STA-21 (Sec'y May 29, 1991), citing
Ford Motor Co. v. EEOC, 458 U.S. 219, 231-22 (1982).
IX B 3 c Mitigation of damages; delay in seeking
employment
In Stone v. Nu-Car Carriers, Inc., 86-STA-16 (ALJ Dec. 28,
1988), the Respondent argued that a more diligent job search by
the Complainant would have returned him to gainful employment
much sooner. The ALJ held that the Complainant is only under
obligation to refrain from "intentionally and
heedlessly" increasing his damages. See Hufstetler v.
Roadway Express, Inc., 85-STA-8. He added that while the
Complainant's job hunt might have been somewhat more efficacious
if undertaken along the lines suggested by the Respondent, it
certainly cannot be described as heedless and intended not to
produce results.
Moreover, the ALJ noted that even if a more stringent
"reasonable diligence" test were to be applied, see
Hufstetler, the Complainant's job search efforts would have
met that test. The diligence required is reasonable, not utmost
or great. The Complainant used a method of job hunting that he
had found successful in the past, and, was successful within five
months after he started using it, a reasonable amount of time.
A respondent's noncompliance with a temporary reinstatement order
does not suspend the complainant's duty to mitigate damages;
however, once reinstatement is ordered, a complainant reasonably
can expect that the employer will obey the law and thus, for some
period of time, may "mitigate" his damages by
maintaining his readiness to return to work for respondent
immediately upon notification of his reinstatement. Taking
alternative employment when subject to reinstatement could have
required complainant to given the substitute employer several
weeks notice before he would be available to return to the
respondent's employ. In the face of a respondent's recalcitrance
in refusing to reinstate, a complainant may mitigate by applying
for other truck driving positions.
Spinner v. Yellow Freight System, Inc., 90-STA-17
(Sec'y May 6, 1992).
COMPENSATORY DAMAGES; COMPARATIVE AWARD
[STAA Digest IX B 4]
In Ass't Sec'y & Bigham v. Guaranteed
Overnight Delivery, 95-STA-37 (ARB Sept. 5, 1996), the Board stated that the
ALJ concluded that although Complainant experienced emotional distress and mental anguish
as a result of his termination, his request for $48,000 in compensatory damages was
"ludicrous" The Board stated that the ALJ had observed that Complainant had only
cited one whistleblower decision to support this request.
The Board noted that courts have awarded compensatory damages for emotional
distress caused by wrongful discharge in amounts greater than the amount requested by the
prosecuting party, and held that it is "appropriate to review other types of wrongful
termination cases to assist in the analysis of the appropriate measure of compensatory damages
in whistleblower cases." The Board cited three Court of Appeals decisions in which the
amount of $50,000 was discussed. It then stated that it had reviewed the relevant evidence and
considered the facts in light of awards in the appellate court decisions as well as other
whistleblower decisions involving emotional distress, and concluded that Complainant should be
awarded $20,000 in compensatory damages.
[STAA Whistleblower Digest IX B 3 e]
EMOTIONAL DAMAGES; MODEST AWARD WHERE RESPONDENT'S CONDUCT WAS NOT AS EGREGIOUS AS IN OTHER CASES AND THE EVIDENCE OF EMOTIONAL DAMAGE WAS NOT EXTENSIVE
In Calhoun v. United Parcel Service, 2002-STA-31 (ALJ June 2, 2004), the ALJ found that the Respondent violated the STAA when it disciplined the Complainant for making pre-trip inspections that were more extensive than the Respondent's standard procedure (but which the ALJ found were reasonable). The ALJ found, based on his observations of the Complainant at two hearings, that the Complainant had suffered emotional distress as a result of the Respondent's retaliatory actions The Complainant had sought treatment with a psychologist, and the Respondent had not challenged whether Complainant suffered such distress. Reviewing other emotional damages awards to make a comparative award, the ALJ concluded that a modest award of $2,000 for emotional damages was appropriate under the facts of the case. The ALJ found that the Respondent's retaliation was not as egregious as taken by some employers in other cases and the evidence of emotional damage was not as extensive as in other cases.
[STAA Digest IX B 3 e]
COMPENSATORY DAMAGES; EMOTIONAL PAIN AND SUFFERING
In Murray v. Air Ride, Inc., ARB No. 00-045, ALJ No. 1999-STA-34 (ARB Dec. 29, 2000), Complainant requested $500,000 for emotional pain and suffering and mental anguish. While finding it credible that Complainant suffered such pain and stress as the result of his wrongful termination, the ALJ found that the requested amount was "ridiculously high." He also observed that Complainant had failed to put forth a reasonable monetary estimate of such damages, but based on the totality of the record and a comparison with similar cases, found that an award of $20,000 was appropriate. Respondent challenged the award as arbitrary and capricious.
The ARB characterized the award as modest and reasonable under the circumstances, pointing to evidence of record that Complainant had to file for bankruptcy and divest belonging, that he had been unable to seek treatment for a hernia, and that Complainant had gained weight from depression and stress. Complainant also testified that he had trouble sleeping and that his self-esteem had been damaged. On this basis, the ARB found that the award was supported by substantial evidence.
In Jackson v. Butler & Co., ARB Nos. 03-116 and 03-144, ALJ No. 2003-STA-26 (ARB Aug. 31, 2004), the ALJ had reduced the back pay award base on his finding that the Complainant lost his job at a subsequent employer as a result of a dispute, and that the Respondent was not an insurer of the Complainant's future employment. The ARB disagreed with the result, finding that the record did not clearly indicate that the Complainant had failed to exercise reasonable diligence to retain his position at the subsequent employer. The ARB observed that uncertainties in determining what the employee would have earned but for the discrimination are resolved against the discriminating employer.
[STAA Whistleblower Digest IX B 3 f] MITIGATION OF DAMAGES; REQUIREMENT TO ACT REASONABLY TO MAINTAIN INTERIM EMPLOYMENT
In Johnson v. Roadway Express, Inc., ARB No. 01 013, ALJ No. 1999 STA 5 (ARB Dec. 30, 2002), Complainant was employed with several employers following his unlawful discharge by Respondent. Complainant was discharged from one of those employers because of an incident in which he permitted a cousin to drive the employer's truck in violation of policy. The ARB affirmed the ALJ's finding that the infraction was sufficiently egregious to toll Respondent's back pay liability during the period when Complainant was without employment following this discharge. The opinion contains a discussion of the standards for determining whether a complainant's conduct in losing a job is a failure to mitigate.
Complainant had also argued on appeal that the termination from the subsequent employer should not toll Respondent's back pay liability but merely result in a deduction in the amount he would have earned had he stayed with the subsequent employer. The ARB disagreed, applying Brady v. Thurston Motor Lines, Inc., 753 F.2d 1269, 1277 79 (4th Cir. 1985), to hold that a break in employment based on unreasonable conduct by a complainant results in reduction of a backpay award to zero until new interim employment is secured.
[STAA Digest IX B 3 f]
MITIGATION; REQUIREMENT THAT EMPLOYEE ACT REASONABLY TO
MAINTAIN SUBSEQUENT EMPLOYMENT
Excerpts from Cook v. Guardian Lubricants, Inc., 95-STA-43 (ARB May 30,
1997):
The mitigation of damages doctrine requires that a wrongfully discharged
employee not only diligently seek substantially equivalent employment during the interim
period but also that the employee act reasonably to maintain such employment.... A
failure to mitigate damages through the retention of employment will reduce the
employer's back pay liability in that the back pay award will be reduced by no less an
amount than that which the complainant would have made had he remained in the interim
employment throughout the remainder of the back pay period....
* * *
[O]nly if the employee's misconduct is gross or egregious, or if it constitutes
a wilful violation of the company rules, will termination resulting from such conduct
serve to toll the discriminating party's back pay liability."
Slip op. at 6 (citations and footnote omitted).
The burden to establish that [a complainant] failed to exercise proper care
and diligence in the retention of alternative employment is on [the respondent]; any
failure of proof on this issue thus operates to [the respondent's] detriment.
Slip op. at 7 (citations omitted).
In Cook, the Board found that Respondent's liability for back pay was not
extinguished by Complainant's termination from one employer where the evidence was
inconclusive regarding the precise circumstances under which Complainant departed that
employment. In regard to another employer that discharged Complainant, the Board found that
Complainant had not taken reasonable steps to retain his employment because he had not
identified and discussed with that employer his concerns about accepting overweight shipments.
There was no evidence that Complainant was asked to violate applicable regulations or that
Complainant provided the basis for refusal of assignments. Complainant's failure to even
mention the overweight issue with the employer meant that the purposes of the employee
protection provision of the STAA were not being served. Compare Hufstetler. v. Roadway
Express, Inc., 85-STA-8 (Sec'y Aug. 21, 1986). In regard to two other employers from
whom Complainant had expressed legitimate concerns prior to termination of employment, the
Board found no failure to properly mitigate damages.
