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USDOL/OALJ Reporter
Creekmore v. ABB Power Systems Energy Services, Inc., 93-ERA-24 (ALJ Nov. 7, 1994)


Date:     November 7, 1994

Case No:  93-ERA-24

     CALVIN J. CREEKMORE
          COMPLAINANT

          against

     ABB POWER SYSTEMS ENERGY SERVICES, INC.
          RESPONDENT

Appearances:
     Robert W. Heagney, Esq.
          For the Complainant

     James M. Paulson, Esq.
     Joseph P. McConnell, Esq.
     John Susen, Esq.
          For the Respondent


Before:  DAVID W. DI NARDI
         Administrative Law Judge


                              AMENDED
                     RECOMMENDED DECISION AND ORDER
                     ON MOTION FOR RECONSIDERATION


     This case arises under the Energy Reorganization Act of 1974
as amended, 42 U.S.C. § 5851 ("Act" or "ERA"), and the
implementing regulations found in 29 C.F.R. Part 24, whereby
employees of licensees or applicants for a license of the Nuclear
Regulatory Commission and their contractors and subcontractors may
file complaints and receive certain redress upon a showing of being
subjected to discriminatory action for engaging in a protected
activity.  The undersigned conducted hearings in New London,
Connecticut on May 4,5,6,7,12, 1993, July 26,27, 1993, and November
22, 1993, in Boston, Massachusetts at which time the parties were
given the opportunity to present oral arguments, their witnesses 

[PAGE 2] and documentary evidence.[1] On November 1, 1994, I issued a RECOMMENDED DECISION AND ORDER ON MOTION FOR RECONSIDERATION and AMENDED ORDER. Counsel for the Complainant has pointed out a clerical error on line 3 in ORDER provision to on page 10. Accordingly, I now issue a correction of such error and the correction is highlighted in boldface type for ease of reference. This Administrative Law Judge, by Recommended Decision and Order dated September 1, 1994, concluded, inter alia, that Calvin J. Creekmore ("Complainant" herein) had been an employee covered by the ERA, that he had been engaged in protected activity, that Respondent knew that he had engaged in protected activity, that he was thereafter subjected to an adverse employment action when ABB Power Systems Energy Services, Inc. ("Respondent") discriminatorily terminated Complainant's services and that the Respondent did not have a legitimate, non-discriminatory reason for terminating Complainant. Accordingly, this Administrative Law Judge awarded Complainant back wages and certain compensatory damages as specifically found in said decision. However, with reference to certain damages, Complainant was directed to submit additional data to clarify those damages to enable this Administrative Law Judges to determine whether such damages are appropriate compensatory damages. Respondent filed a response on October 28, 1992. (RX 57) This Court specifically requested additional clarification of three areas of damages: 1) Offsets to "Lost Wages Atlantic Group" Recommended Decision and Order (RD&O at 48); 2) Reduction to present value of "Lost Vacation" (RD&O at 50-51) and 3) Data related to "Loss of Equity on House" (RD&O at 51). This Court additionally requested Complainant's counsel to submit a Supplemental Fee Petition related to time spent with regard to the reply brief and this Motion for Reconsideration. (RD&O at 52) 1. LOST WAGES - THE ATLANTIC GROUP With reference to this issue, the Court has indicated that Complainant should be awarded lost wages, as calculated by Alan G. Goddard and set forth on page 4 of CX-72, subtracting therefrom the interim earnings of Complainant. While the Court identifies lost wages as $67,820.00, CX-72 sets it out as $68,830.00. Complainant's affidavit identifies his earnings for the temporary employment with National Inspection and Consultants, Inc. between September 10, 1992, his date of termination from Respondent, and
[PAGE 3] March 1, 1993, his date of employment with the Atlantic Group to be $18,315.00 The affiant states that this was the only temporary employment held by Complainant during this period. (CX 84) Complainant's W-2 forms for 1992 and 1993 corroborate these wages. (CX 85) Complainant further identifies his compensation from the Atlantic Group, Inc. from March 1, 1993 to May 12, 1993 to be $14,663.50. The Atlantic Group and National Inspections earnings equal $32,978.50, which when subtracted from the lost wages of $68,830.00 equal $35,851.50 or if from $67,830.00, equal $34,851.50. (CX 84) The Complainant respectfully requests that this Court award $35,851.50 as lost wages from The Atlantic Group. Complainant submits that it is his burden to establish the "gross amount of back pay due" and that the burden then shifts to the Respondent to "prove facts which would mitigate that liability". (CX 81 at 20, citing Lederhaus v. Donald Paschen and Midwest Inspection Service, Ltd., 91-ERA-13 (Sec'y Oct. 26, 1992), slip. op. at 9- 10; Moody v. TVA, Dept. of Labor Dec., Vol. 7, No. , pg. 658 (1993). With reference to this issue, Respondent states as follows in its reply brief (RX 55): When the Court attempted to establish a figure for pay to which Complainant may be entitled, it rightfully sought to mitigate these damages by offsetting severance pay provided by PSESI, as well as other money Complainant earned after his employment with PSESI terminated. In his memorandum in support of the Motion for Reconsideration, Complainant offsets the proposed $68,830.00 award for lost wages by $32,978.50 (an amount equal to National Inspection and Consultants, Inc. (hereinafter "National Inspection") earnings from September 1992 through February 1993 ($18,315.00) and The Atlantic Group earnings from March 1993 through May 1993 ($14,663.50) and states that as a result he is entitled to $35,851.50. However, Complainant misconstrues the offsets the Court has instructed him to make, according to Respondent. For the months of September 1992 through February 1993, Complainant received severance pay equal to the full amount of his salary from PSESI. Therefore, any money which Complainant earned above that amount during that time period should be reduced from the $68,830.00 award. In his affidavit, Complainant represents
[PAGE 4] that this amount is $18,315.00 (the amount earned from National Inspection). Complainant also received severance pay for the months of March 1993 through May 1993. However, the offset for this period should not be an amount equal to 12.5 weeks of pay from The Atlantic Group as Complainant proposes; rather, as the Court recognized, the deduction should be an amount equal to 12.5 weeks of severance pay from PSESI. This is because the difference between Complainant's PSESI salary and his Atlantic Group salary was already calculated into the $68,830.00 proposed lost wage figure determined by the Complainant's actuary (see Goddard Report, CX-72, p.4). Therefore, the correct second deduction from the $68,830.00 figure should be $15,875.00.[2] The total offset is then $34,190.00 ($18,315.00 and $15,875), which reduces the "Lost Wages Atlantic Group" figure to $34,640.00 rather than the $35,851.00 suggested by Complainant. I agree with Respondents on this issue as otherwise Complainant will receive a substantial windfall. thus, Complainant is entitled to an award of $34,640.00 as his lost wages with the Atlantic Group. Furthermore, Respondent submits that this award is more seriously flawed because it reflects an element of front pay which relies upon a presumption that Complainant would have continued to work in his former position until retirement. However, PSESI was sold, restructured and moved to Florida after the conclusion of the hearings in this matter. See Affidavit of Richard F. Walsh, current Vice President of Human Resources for the Nuclear Operations Division of Combustion Engineering, Inc. (RX 56) As noted in the Walsh Affidavit, following the sale of the PSESI operations and prior to its move to Florida, a number of managerial employees were laid off. It is likely, therefore, that even if Complainant were still an employee of PSESI at the time of sale, he would have been laid off as well. Consequently, because this award of damages is still being considered by the Court, it is appropriate for the Court to consider whether the position held by Complainant at PSESI still exists. Because PSESI was sold, restructured in this fundamental way and moved, it is not appropriate for the Court to consider this element of damages which is based on the incorrect presumption that PSESI would continue to exist as it had in 1992 when Complainant was still employed by it. Moreover, Nuclear Operations, of which CE Nuclear Services is a part, during the past year alone laid off over 450 employees (equaling approximately 33% of its work force) as a result of a downturn in business and resulting significant operating losses.
[PAGE 5] (See RX 56) With reference to the merits of this claim for the lost wages sustained by Complainant as a result of his discriminatory discharge by Complainant and his subsequent temporary employment and then his permanent employment with the Atlantic Group, I have already found and concluded that Complainant is entitled to an award of those lost wages as proper compensatory damages after the appropriate deduction for his interim earnings. The fact that PSESI has been sold to another company is no reason to deny Complainant of this award as this sale could have taken place for a number of reasons, only one of which Respondent cites. Moreover, while Respondent speculates that Complainant probably also would have been laid-off due to the economic downturn, it is proper for me to conclude that Complainant, as a loyal, dedicated and conscientious employee, would certainly have been retained by the Respondent or by the acquiring company as he readily moved his family to Virginia after being employed by The Atlantic Group. Moreover, Complainant had previously indicated his willingness to relocate to Tennessee and take a position there. On this issue, I also find and conclude that Respondent's calculations are more reasonable and, thus, Complainant is awarded the amount of $34,640.00 as lost wages resulting from his discriminatory discharge and his subsequent employment for the pertinent period of time. Complainant has filed the September 24, 1994 letter of Alan C. Goddard, F.S.A., a Pension Actuary & Consultant, wherein Mr. Goddard has stated (CX 87): 2. PRESENT VALUE OF LOST VACATION TIME I have relied upon the assumptions set forth in my July 27, 1993 letter marked Exhibit CX-72 in the matter of Creekmore v. ABB/PSESI, Case No. 93-ERA-24. I have calculated the present value of a stream of payments of ,277.00 per week for two weeks per year for years 1 through 10 and one week per year from years 11 through 15. The payment was increased 4% per year going forward and reduced to present value at the P.B.G.C. prescribed interest rates as set forth in CX-72 as done on page 4 thereof, "Additional Compensation". I have computed such present value to be:
[PAGE 6] 1) With discounting at interest only: $31,562 2) With discounting at interest and mortality: $29,727 With reference to this issue, Respondent submits that this award is an inappropriate type of front pay and is also impermissible for two additional reasons: In the award considered under "Lost Wages Atlantic Group" (RDO, p. 48; Section 1 supra.), the Court allows Complainant damages for wages he would have received if he had remained at PSESI and his salary had increased at a steady rate until projected retirement at age sixty-five. This projected future salary is then mitigated by his past and projected future wages from The Atlantic Group. In this recovery, the Complainant's salary is made whole from the date of discharge until a projected retirement at age sixty-five. However, if the Court additionally provided Complainant damages for lost vacation time, it would allow Complainant a windfall, according to Respondent. In the total back/front pay award, PSESI would reimburse Complainant for his fifty-two week per year salary until retirement. If the Court provided Complainant with two weeks pay for lost vacation for ten years and one week pay the following five years, Complainant would be provided remuneration for fifty-four weeks per year for ten years and for fifty-three weeks per year for the following five years. In other words, if the Court awarded Complainant damages for lost vacation pay in addition to the "Lost Wages Atlantic Group" award, Complainant would receive 104% of his annual PSESI salary for ten years and 102% of his annual PSESI salary for another five years. This would be a windfall. What the Complainant lost, if anything, is the intangible benefit of enjoying an extra two weeks or one week of vacation for fifteen years. He has not lost any quantifiable wages at all for this period. Any award based upon this loss is unquantifiable and would be entirely speculative. An award of damages for lost vacation time is also inappropriate for the reasons stated in Section 1, supra. See also Walsh Affidavit. Even in the event Complainant had not been laid off by the new owners and had moved to Florida, it is uncertain whether he would have continued to receive the same amount of vacation from the new owners of the operation. Any possible damages arising from future PSESI employment would therefore be based only on conjecture and speculation and should not be
[PAGE 7] allowed., according to Complainant. While there may be some element of uncertainty or speculation involved in this issue, any uncertainty or speculation should be borne by Respondent as Respondent's actions have brought this situation about and, to adopt Respondent's thesis, means that Complainant would be bearing the brunt of such uncertainty or speculation. The cases I have already cited lead me to conclude that the concept of compensatory damages should be resolved in the Complainant's favor. Moreover, there is no windfall or double recovery for Complainant as this award simply compensates him for the lost vacation time he enjoyed at Respondent, but will not enjoy at the Atlantic group. I agree with Complainant that he "will still be required to obtain leave without compensation (from) his present employer to receive the full benefit he lost as a result of the wrongful termination." Thus, the "lost vacation pay" will simply reimburse him for that leave without pay status. (CX 8) Thus, Complainant is hereby awarded the amount of $29,727.00 as the present value of his lost vacation benefits as this amount has been discounted at interest and mortality. 3. LOST EQUITY ON COMPLAINANT'S HOUSE The Court has requested that the data provided related to the Complainant's lost equity in his home be supplemented. The Complainant has now filed the appraisal of his former home, 10 Welch Drive, Enfield, Connecticut prepared on June 27, 1989. This appraisal identifies the value of Plaintiff's property to be $160,000.00. Plaintiff further identified in his affidavit improvements he made in his home following the preparation of the appraisal, which improvements total $34,500.00. The lost equity based upon the Fair Market Value of $160,000.00 prior to improvements and the $34,500.00 in improvements is $64,000.00 as Creekmore sold his home on May 3, 1993 for $130,500.00 (CX 8) Claimant has identified the following improvements to his former house in Connecticut: A. Storm windows and doors $12,000.00 B. Roof Replacement 3,000.00 C. Siding (vinyl) 10,000.00 D. Kitchen modernization 6,500.00 E. Bathroom modernization 2,200.00
[PAGE 8] F. Flooring replacement 800.00 Total $34,500.00 Respondent submits that an award for damages for "lost equity" in the sale of his house in May 1993 is inappropriate for several reasons. As an initial matter, Respondent reiterates its position that it is inappropriate as a consequential damage for a retaliatory discharge to allow Complainant to recover for loss of equity in his home. Such damage is not a reasonably foreseeable consequence of discharge of an employee. A similar conclusion was reached by a federal district court in Illinois. In Skirpan v. United Airlines, 1989 U.S. Dist. LEXIS 8637, 4 I.E.R. Cases 929 (N.D. Ill. 1989), an employer was found liable for discharging its employee in retaliation for his filing a worker's compensation claim. However, in assessing consequential damages, the court refused to allow recovery when the employee was forced to sell his home for less than market value. The court stated, "While it is clearly foreseeable that an employee will suffer financial hardship as a result of the wrongful discharge, for which he is compensated by receiving back pay, the forced sale of [plaintiff's] home and his alleged inability to receive full value for it is too attenuated from [the employer's] wrongdoing to support this alleged element of damage. We therefore deny plaintiff's request for damages arising out of the loss of his home." Id. at *11, 4 I.E.R. Cases at 932. As in the Skirpan case, the consequential damages related to loss in the equity in the sale of Complainant's home are too attenuated to be foreseeable and should therefore be unrecoverable, according to Respondent. Next, in establishing a basis from which to claim his loss of equity, the Complainant uses a real estate appraisal which was made almost four years before the sale without providing any further evidence as to why a 1989 appraisal is appropriate. Complainant does not inform the Court why this appraisal should be used to determine a loss in equity in his home when the 1989 date has no particular relevance to any of the events surrounding the termination of Complainant's employment. Needless to say, Respondent should not be liable to reimburse Complainant for natural decreases in the real estate market since 1989 which have no relation or connection to Complainant's employment. Complainant has not met his burden of providing the Court with a basis from which to provide an award for loss of equity in his home.[3] Thirdly, Complainant has provided the Court with figures
[PAGE 9] relating to improvement to his residence which constitute maintenance to his residence rather than capital improvements. Generally, replacement of such items as worn floors, broken or disrepaired appliances or bathroom fixtures are maintenance and not capital improvements, and they do not increase the equity in a home.[4] Moreover, Complainant has not provided the Court with documentation concerning any of the alleged repairs from which it can adequately assess whether any of the expenditures increased the Complainant's equity in his home. Complainant has not adequately proven these costs, and the Court should not allow him recovery for them. Lastly, and most fundamentally, Complainant may not recover for any loss of equity in the sale of his house in Connecticut because, as noted in the Walsh Affidavit (RX 56), Respondent was sold and all operations were moved to Florida. Therefore, even if Complainant had not been laid off following the sale and had remained with Respondent, through the natural course of his employment he still would have needed to sell his Connecticut home to move to Florida and would have incurred whatever loss in equity for which he now seeks recovery. As noted above, Respondent can only be held liable for putting Complainant in the same position he would have been in had he remained in his position with the company. Complainant still would have been in the position of incurring whatever equity loss he suffered even if Respondent had taken no action concerning his employment. Therefore, Respondent should not be liable for any loss of equity in the sale of Complainant's Connecticut home,[5] according to Respondent. I have already ruled that Complainant's loss of equity in the forced sale of his home is an appropriate element of compensatory damages as part of his wrongful discharge by Respondent. The 1989 appraisal as to the value of the home is the best evidence in the record as to the value thereof and I accept as probative that appraisal for purposes of this proceeding as it is well-settled that any doubts or uncertainties should be borne by Respondent, the party responsible for the discriminatory discharge of Complainant. I agree with Complainant that there is "(n)o evidence of a real estate market decrease" in this closed record. However, I do agree with Respondent that it should not be responsible for ordinary repairs and maintenance to the house. Thus, as "flooring replacement" constitutes ordinary repairs, as opposed to capital improvement, I shall deduct the amount of $800.00 from the damages sought by Complainant. The other improvements are in my judgment, capital improvements and have
[PAGE 10] enhanced the value of the home. Accordingly, Complainant is awarded the amount of $33,700.00 as the value of the "lost equity" in his home. 4. Supplemental Attorney's Fee The Complainant respectfully requests the Court award supplemental attorney's fee for the preparation of Complainant's responsive brief as well as this Motion for Reconsideration with supporting data in the amount of $9,512.82, including costs all as set forth in the appropriate affidavit. (CX 88) Complainant's attorney is awarded the supplemental fee in the amount of $9,512.82 as such fee is fully-itemized, is fully- supported and is reasonable. FIRST AMENDED ORDER[6] It is further ORDERED that Respondent shall pay to Complainant, in addition to the amount of $398,339.00 awarded in my September 1, 1994 Recommended Decision and Order, the additional amount of 98,067.00, representing those damages specifically considered and awarded in the Motion For Reconsideration. It is further ORDERED that interest shall be paid on the back wages and compensatory damages awarded herein, at the appropriate so-called IRS rate, commencing on September 10, 1992, the date of the wrongful termination, and such interest shall continue until the date of full payment to Complainant. It is further ORDERED that Respondent shall pay to Robert W. Heagney, Complainant's attorney, the additional fee of $9,512.82, including litigation expenses, as a reasonable fee for representing Complainant in this matter between June 24, 1994 and September 26, 1996. DAVID W. DI NARDI ADMINISTRATIVE LAW JUDGE DATED:
[PAGE 11] Boston, Massachusetts DWD:gcb SERVICE SHEET Case Name: Calvin Creekmore v. A.B.B. PSESI, Inc. Case No.: 93-ERA-24 Title of Document: AMENDED RECOMMENDED DECISION AND ORDER ON MOTION FOR RECONSIDERATION A copy of the above document was sent to the following: Employment Standards Admin. James Paulson, Esq. Wage & Hour Division Morgan, Brown & Joy U.S. Department of Labor One Boston Place Room S-3502, FPB Boston, MA 02108 200 Constitution Ave., NW Washington, DC 20210 Kenneth W. Jackson Ms. Elizabeth Culbreth Assistant District Director Secretary of Labor U.S. Department of Labor Office of Admin. Appeals Wage & Hour Division Room S-4309 135 High Street, Rm. 310 200 Constitution Ave., NW Hartford, CT 06103 Washington, DC 20210 Deputy Associate Solicitor Division Of Fair Labor Standards Office of the Solicitor U.S. Department of Labor Room N-2716 200 Constitution Ave., NW Washington, DC 20460 Albert H. Ross, Reg. Solicitor U.S. Department of Labor One Congress Street, 11th Floor Boston, MA 02114 Calvin Creekmore c/o Robert W. Heagney, Esq. Gillman & Marks INTEROFFICE MAIL 1 Riverview Square East Hartford, CT 06108 Library John Susen, Esq. A.B.B. Power Systems Energy Services, Inc. Department 613 GC 29 1000 Prospect Hill Road GAYLE C. BONIA Windsor, CT 06095 Legal Tech [ENDNOTES] [1] The following abbreviation shall be used herein: "ALJ"- Administrative Law Judge Exhibits; "CX"-Complainant Exhibits; "DX"-Administrator Exhibits "RX"-Respondent Exhibits; "TR"- Transcript. [2] This figure comes from multiplying Complainant's rate of severance pay (,270.00/wk -- his final salary) by 12.5 weeks. [3] Moreover, Complainant has not even substantiated his assertions regarding the sale of his Connecticut home in May 1993 with any supporting documentation other than his affidavit. PSESI has the right to examine such documents in order to adequately assess his claim of this loss. [4] The Internal Revenue Code only allows adjustments to the taxable basis for improvement to real property when the improvement is a capital expenditure. See generally I.R.C. § 1016(a)(1) and the regulations promulgated thereunder; and Internal Revenue Service, Publication 551, Basis of Assets. Expenditures which are merely for general maintenance are not considered capital expenditures. [5] It is interesting to note that Complainant would have suffered a similar loss in equity if he had taken a position as a Client Service Manager for the Tennessee valley Authority, which he alleges was offered to him. Although PSESI maintains its position that this job did not exist, Complainant's charge that he was discriminatorily denied that job militates against his claim that he would not have sold his Connecticut home and incurred an equity loss if his employment had not been terminated. As noted in the Walsh Affidavit, at the time this position was discussed with Complainant, CE Nuclear Services did not have a policy of reimbursing relocating employees for loss on the sale of a home. [6] The Final Order shall be issued by the Secretary of Labor



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