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
AMENDEDRECOMMENDED 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.
FIRSTAMENDED 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
ORDERON 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