Noel v. New York State Office of Mental Health Central New York Psychiatric Center
2012 U.S. App. LEXIS 18526
| 2d Cir. | 2012Background
- In 2005 Noel was terminated from the NYS Office of Mental Health Central New York Psychiatric Center following participation in a discrimination investigation.
- A jury awarded Noel back pay, front pay, and emotional distress; an amended judgment later totaled $318,217.48, including $280,000 for back and front pay.
- The State forwarded the judgment to the OSC for payment; the OSC withheld taxes and sent a net check to Noel.
- Noel objected, and the district court found the party could not be double-paid and ordered repayment of the amounts withheld.
- The State argued withholding of wages was required by the Internal Revenue Code and state law; Noel argued the State had no authority to withhold from a judgment without court direction.
- The court held back and front pay are wages subject to withholding; reverse in part the district court and remand to recover withheld taxes; affirm with respect to retirement contributions and union dues and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Title VII back/front pay wages for withholding purposes? | Noel argues back/front pay in a judgment is not wages. | State argues they are wages and must be withheld. | Yes, they are wages subject to withholding. |
| May a district court order double payment when taxes were withheld from a judgment? | Noel contends no double payment should be required beyond the judgment. | State contends withholding is proper and the court may oversee fewer refunds. | No, the remedy of double payment must be reversed; Noel must repay the withheld taxes. |
| Are deductions beyond taxes (retirement contributions, union dues) properly addressed? | Noel argues the propriety of those deductions from the judgment is unclear. | State withheld some deductions; not adequately defended on appeal. | Affirm; retirement contributions and union dues may be treated differently; additional analysis warranted but upheld. |
Key Cases Cited
- Rivera v. Baker West, Inc., 430 F.3d 1253 (9th Cir. 2005) (back pay/wages withholding under tax withholding rules)
- Ramos v. Davis & Geck, Inc., 224 F.3d 30 (1st Cir. 2000) (ADEA/back pay and withholding implications)
- Gerbec v. United States, 164 F.3d 1015 (6th Cir. 1999) (ERISA context: back wages treated as wages for withholding)
- Mayberry v. United States, 151 F.3d 855 (8th Cir. 1998) (back/front pay similarly treated for withholding)
- Hemelt v. United States, 122 F.3d 204 (4th Cir. 1997) (back pay subject to withholding)
- Dotson v. United States, 87 F.3d 682 (5th Cir. 1996) (front pay vs. back pay distinctions in withholding)
- Soc. Sec. Bd. v. Nierotko, 327 U.S. 358 (1946) (wages defined as remuneration for employment)
- Rowan Cos., Inc. v. United States, 452 U.S. 247 (1981) (interpretation of wages for withholding purposes)