ALLEN v. INTERNATIONAL TRUCK AND ENGINE CORPORATION, 1:02-cv-00902

Background

Matthew Whitfield, an African-American applicant, applied for an E84 electrician position at Navistar in 1996 and was cleared for hire in Sept. 1998 but was not hired; a cover page labeling him "black" had been attached to his application. Navistar hired white electricians with less experience.
Whitfield sued for hiring discrimination under Title VII and § 1981; the district court initially found for Navistar, the Seventh Circuit reversed, and the district court found Navistar liable and reserved damages.
The court held a damages hearing and found Whitfield entitled to back pay (May 16, 1998–Dec. 31, 2008), tax-component award, lost pension ($23,000), prejudgment interest, compensatory damages, and punitive damages.
Navistar argued damages should be limited by after-acquired evidence (errors on Whitfield’s applications); court found Navistar failed to prove it would have terminated Whitfield based solely on those misrepresentations, so no McKennon limitation applied.
For back pay the court used earnings of the electrician actually hired instead of Whitfield (Mr. Vickers) as the comparator, calculated gross back pay $686,781.50, deducted interim earnings and amounts earnable for mitigation, yielding net back pay $363,317.00.
The court awarded prejudgment interest ($373,066.30 using 5.22% over 18.5 years), compensatory damages $12,000, punitive damages $106,250, and left the tax-component calculation to be submitted by Whitfield.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Limitation for misrepresentations / after-acquired evidence	Whitfield admitted some application errors but argued no limitation; lack of proof employer would have enforced discharge	Navistar argued McKennon bars or limits relief because falsifications would have led to discharge	Court: Navistar failed to show it would have terminated Whitfield solely on those grounds; no damages limitation applied
Back pay comparator / calculation method	Whitfield argued he would have worked abundant overtime and favored highest-paid electrician as comparator	Navistar proposed Mr. Vickers (first hire after Whitfield) and criticized use of top-earner; parties’ joint data unreliable for averages	Court: used Mr. Vickers as reasonable comparator; gross back pay $686,781.50
Period of disability / interim earnings / mitigation	Whitfield said his Amtrak injury (2002–2004) resulted from taking interim work and should not be excluded; also urged court not to deduct interim earnings because defendant failed to elicit them	Navistar sought exclusion of disability period and deductions for interim earnings and failure to mitigate	Court: Navistar bore burden and failed to show disability should be excluded; court deducted interim earnings per § 2000e-5(g)(1); found failure-to-mitigate reduction for Jan 2005–May 2007 and replaced 2005–2006 earnings with regional average salaries; net back pay $363,317.00
Compensatory / punitive / interest / pension / tax component	Whitfield sought full make-whole relief including tax component; modest emotional distress testimony supported compensatory damages and punitive damages for reckless indifference	Navistar opposed amounts and sought offsets/deductions and challenged punitive award given lack of identified decisionmaker	Court: awarded pension $23,000; prejudgment interest $373,066.30; compensatory $12,000; punitive $106,250 (approx. $10,000 per year not hired); tax component to be submitted by Whitfield

Key Cases Cited

McKennon v. Nashville Banner Publ. Co., 513 U.S. 352 (Sup. Ct.) (after-acquired evidence may limit but not bar relief; employer must show misconduct would have led to termination)
Kolstad v. American Dental Ass'n, 527 U.S. 526 (Sup. Ct.) (standard for punitive damages under Title VII requires malice or reckless indifference)
EEOC v. AutoZone, Inc., 707 F.3d 824 (7th Cir.) (district court discretion in remedies for discrimination)
EEOC v. Northern Star Hospitality, Inc., 777 F.3d 898 (7th Cir.) (approving tax-component award in Title VII back-pay context)
Pickett v. Sheridan Health Care Ctr., 813 F.3d 640 (7th Cir.) (prejudgment interest as compensation for time value of money; interest awards to make plaintiff whole)
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (Sup. Ct.) (guideposts for assessing punitive damages under due process)
Johnson v. Railway Express Agency, Inc., 421 U.S. 454 (Sup. Ct.) (Title VII and § 1981 remedies are distinct and separate)