Frank L. LOEB, Plaintiff, v. TEXTRON, INC., et al., Defendants.
Nos. 78-1340, 78-1364.
United States Court of Appeals, First Circuit.
Argued Nov. 8, 1978. Decided June 21, 1979.
600 F.2d 1003
A. Lauriston Parks, Providence, R.I., with whom Dennis J. McCarten and Hanson, Curran & Parks, Providence, R.I., were on brief, for Frank L. Loeb.
Dennis D. Clark, Atty., U. S. Dept. of Labor, Washington, D.C., with whom Carin Ann Clauss, Sol. of Labor, and Donald S. Shire, Associate Sol., Washington, D.C., were on brief, for the Secretary of Labor, amicus curiae.
Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.
LEVIN H. CAMPBELL, Circuit Judge.
Frank L. Loeb brought this action in January 1976, alleging that the defendants (Textron, Textron‘s Speidel division, and several of its officers) had discharged him in 1975 because of his age, in violation of the Age Discrimination in Employment Act of 1967 (ADEA),
FACTS
Loeb was hired by Textron‘s Speidel division as International Sales Manager on August 23, 1971, when he was 50 years old. This was classified as a “level 7” position and carried an annual salary of $24,000 plus bonuses. As International Sales Manager, Loeb supervised sales in areas that in 1974 accounted for 14.55% of Speidel‘s total international sales. From 1971 through 1974, Loeb‘s immediate supervisor, Vanover, Vice-President of International Operations, wrote favorable reports on his performance and recommended that he receive raises; in 1972, 1973 and 1974 he received bonuses of $3,570, $3,443 and $2,279, respectively.
At annual management meetings held in 1973 and 1974, Textron adopted “People Development” as a top priority. This program was designed “to ensure that the corporation would have personnel at all levels of its organization ‘to manage our companies in the future.‘” Thus one Textron division “began anticipating its people requirements” by breaking down various job categories “by age and length of service to anticipate retirements or obsolescence.” Company executives were encouraged to develop “coded and rated organization chart[s]” for “each of the key positions, age (and so, time to retirement), length of service, time on the present assignment and promotability,” and to set timetables for “how you plan to prepare for and fill each organizational need-and when.” At the 1974 meeting, the Executive Vice-President-Operations reviewed an “Aging” chart of corporate and divisional officers and commented that the Company had “a greater proportion of our combined senior management over 55 than we do under 40. That‘s a warning.”
The events leading to Loeb‘s discharge began in late 1974. Vanover was transferred to the Engineering Department in response to problems that had developed there; at the same time, Textron reorganized Speidel‘s International Department. It abolished Vanover‘s position, placed international manufacturing under a Vice-President for Operations, and placed the international sales staff under a Vice-President for Sales and Marketing, who was to be assisted by a Director of International Sales and Marketing. Defendant Frank Grzelecki, then 37 years old, became Vice-President for Sales and Marketing, and Robert Ford, then 32 years old, became Director and-as a result-Loeb‘s immediate supervisor. Textron did not consider
Ford soon began studying Loeb‘s performance and taking over some of his responsibilities. He claimed that there were problems with Loeb‘s work in Puerto Rico, Switzerland and Germany, and moved to discharge Loeb in February 1975. This action was stopped by Speidel‘s President, who noted that there was a lack of documentation to support Loeb‘s termination and suggested that Loeb be given specific written assignments, against which his performance could be measured. This was done on March 19, 1975; Loeb‘s title and duties were taken away, he was made “Area Manager-Latin America” instead, and he was given an assignment listing marketing goals for Latin America. In May, Loeb responded to Ford in a report that Textron asserts indicated that there either was insufficient business to be done in Latin America or that Loeb could not develop such business. In June, Ford fired Loeb on the ground that he could not generate enough business in Latin America to justify his salary, noted “involuntary termination-poor job performance” on his personnel record and told him that there were no other openings in the International Department. Loeb was 54 at that time.
On November 1, 1975, a 34-year-old man named Stein Owre joined Speidel‘s International Department as “Senior Product Manager-International.” Owre had written to Ford in January 1975, shortly before Ford first recommended Loeb‘s termination, and Ford had interviewed him in Europe in March and April. Between those two interviews Speidel had advertised for a “Senior Product Manager, International” with qualifications that closely paralleled Owre‘s; Ford had offered Owre the position formally on August 28.
Textron has not used Loeb‘s former title, “International Sales Manager,” for any employee since it was taken from him in March 1975. Loeb‘s title as “Area Manager-Latin America” remained unused until January 1978, when it was given to one Joseph Torres, who was then 46 years old and had been functioning as Area Manager-Latin America since Loeb‘s dismissal. In the two-and-a-half years after Loeb received his March 1975 assignment, Speidel never sold more than $24,000 of goods per year-i. e., goods equivalent in value to Loeb‘s salary-in the Latin American countries covered by that assignment.
After the close of trial, the court delivered an instruction to the jury that attempted in large measure to track the analysis presented by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a major decision in the area of private, non-class actions under Title VII of the Civil Rights Act of 1964,
“1) That he is within the protected age group, that is, 40 to 65 years;1
2) That he was demoted or discharged;
3) That he was replaced by a younger person or persons outside the protected age group; and
4) That he was qualified to do the job.”
It instructed that, if Loeb proved these elements, the defendant had “the burden to prove by a fair preponderance of the evidence a legitimate non-discriminatory reason” for its actions; if the jury found that the defendant “was motivated by reasonable factors other than age or [by] good cause,” then it was to “further find whether or not the reasonable factors or good cause . . . were in fact a pretext arranged in order to accomplish discrimination against plaintiff because of his age.” Finally, the jury was told that the plaintiff had the burden of proving by a preponderance that the defendant‘s reasons were in fact a pre-
In the midst of this part of the instruction the court interjected an issue not addressed by McDonnell Douglas: the possibility that Textron had “mixed motives” for Loeb‘s discharge, one of which was age. It said:
“If you find by a preponderance of the evidence, that Plaintiff‘s age was one factor in the decision to demote or discharge him, and, Plaintiff‘s age made a difference in determining whether he was demoted, or retained or discharged, then you must find for Plaintiff . . . Plaintiff need not prove that his age was the sole factor affecting the decision to demote or discharge him provided he can show that age contributed to or affected the decision to demote or discharge.”
The jury returned a verdict of $90,700 for Loeb. In response to a special interrogatory, it found that the defendants’ violation of the ADEA had been willful, thus raising the possibility of awarding Loeb liquidated damages under Section 7 of the Act,
A multitude of issues are raised by the parties on appeal. Defendants challenge the verdict largely on the ground that the court instructed the jury erroneously. They argue, first, that the principles of McDonnell Douglas do not apply to age
Even assuming the validity of the verdict, defendants argue that the court‘s award of liquidated damages was not authorized by the statute and that the court abused its discretion by awarding Loeb payments until age 70 and a pension thereafter. Loeb counters, however, by arguing that he was entitled to reinstatement and that the award of liquidated damages was too low. We reverse and remand for a new trial in accordance with the principles set forth herein.
INTRODUCTION
This appeal raises questions of first impression in this circuit concerning the correct way to try an age discrimination case brought under
Because the path is tortuous and, in places, unlit, we map out our journey and some of our destinations in advance:
We begin by analyzing the district court‘s jury charge. Leaving aside our later conclusion that the full McDonnell Douglas formulation should not be recited to the jury, see Part I(B)(5), infra, we hold that the district court in any event misstated that formulation, both as to the burden on the defendant and as to the elements making up the prima facie case.
We next discuss the more general question of the applicability of McDonnell Douglas to age discrimination cases and to jury trials. We conclude that the operative principles behind McDonnell Douglas are applicable in age cases as in Title VII cases,3 but that the McDonnell Douglas formula is not to be read in full to the jurors. The formula, moreover, does not set forth immutable guidelines for the decision of all discrimination cases. Rather it is applicable to a greater or lesser degree in varying circumstances; the judge should understand its basis and apply it functionally as circumstances warrant.
After disposing of the McDonnell Douglas issue, we address the question whether age must simply be “a factor” or a determinative factor in the employment decision to warrant a finding of discrimination. We conclude that, at least where defendant denies that age was a consideration,4 the
Finally, we consider the district court‘s handling of damages.
I. THE MCDONNELL DOUGLAS ISSUES
A. The Jury Instructions On Their Face Did Not Correctly Reflect McDonnell Douglas Principles.
McDonnell Douglas involved the Title VII claim of a black civil rights activist who sought re-employment as a mechanic in response to the defendant‘s job opportunity notice. Complainant was rejected even though he was a mechanic whose qualifications were not disputed and even though the prospective employer continued to seek other mechanics. In that case, the Court said that a Title VII complainant “must carry the initial burden . . . of establishing a prima facie case of racial discrimination,” 411 U.S. at 802, 93 S.Ct. at 1824, and that this “may” be done by showing that he “belongs to a racial minority,” that “he applied and was qualified for a job for which the employer was seeking applicants,” that “despite his qualifications, he was rejected,” and that, “after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant‘s qualifications,” Id.
In McDonnell Douglas, the Supreme Court held that the complainant had proven the elements of a prima facie case as described. “The burden then must shift to the employer,” the Court went on, “to articulate some legitimate, nondiscriminatory reason for the employee‘s rejection. . . [T]his suffices to discharge petitioner‘s burden of proof at this stage and to meet respondent‘s prima facie case of discrimination.” Id. at 802-03, 93 S.Ct. at 1824, (emphasis added). Complainant, however, must then “be afforded a fair opportunity to show that petitioner‘s stated reason for respondent‘s rejection was in fact pretext.” Id. at 804, 93 S.Ct. at 1825.
The mechanics of the burden shifting in McDonnell Douglas and the meaning of the requirement that the defendant “articulate a legitimate nondiscriminatory reason” for the plaintiff‘s discharge have caused no little difficulty among courts. Here the district court interpreted McDonnell Douglas to require defendants to prove by a preponderance that their actions “were motivated by reasonable factors other than age or were for good cause.” (Emphasis added.) Just four months earlier, we ourselves stated (incorrectly) that defendants must “prove absence of discriminatory motive.” Sweeney v. Board of Trustees of Keene State College, 569 F.2d 169, 177 (1st Cir.), vacated and remanded, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978) (emphasis added). Our decision was remanded by the Supreme Court on the ground that “there is a significant distinction between merely ‘articulat[ing] some legitimate, nondiscriminatory reason’ and ‘prov[ing] absence of discriminatory motive.‘” 439 U.S. at 25, 99 S.Ct. at 295. The majority and the dissent there agreed that, “the employer‘s burden is satisfied if he simply ‘explains what he has done’ or ‘produc[es] evidence of legitimate nondiscriminatory reasons.‘” 439 U.S. at 25 n.2, 99 S.Ct. at 296 (emphasis added); compare 439 U.S. at 25, 99 S.Ct. at 295 (Stevens, J., dissenting).
In light of the Supreme Court‘s remand of our decision in Sweeney, we conclude that the district court erred by placing too great a burden on defendants. We think it now clear that McDonnell Douglas leaves the burden of persuasion at all times with the plaintiff, and that the employer‘s burden to “articulate” a legitimate, nondiscriminatory reason is not a burden to persuade the trier that he was in fact motivated by that reason and not by a discriminatory one. Rather it is a burden of production-i.e., a burden to articulate or state a valid reason,5 following which the complain-ant must show that the reason so articulated or stated is a mere pretext or “cover-up” for what was in truth a discriminatory purpose.6 This, indeed, is only logical. If an employer were to prove that he was motivated by a legitimate reason, there would be no room left for showing that that reason was a “pretext,” as pretext is “a purpose or motive alleged or an appearance assumed in order to cloak the real intention or state of affairs.” Webster‘s Third New International Dictionary (1971). To say, as the court did here, that the defendant must prove that its action was based on a legitimate reason and that the plaintiff must “then” prove that it was not, is contradictory.
Confusion as to the defendant‘s burden under McDonnell Douglas was created in part by the Supreme Court itself, in Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978). There the Court at one point said, “the burden which shifts to the employer is merely that of proving that he based his employment decision on a legitimate consideration . . .” Id. at 577, 98 S.Ct. at 2950 (emphasis added). Sweeney leads us to believe, however, that Furnco‘s use of the word “proving” must be understood in light of the fact that,
“In litigation the only way a defendant can ‘articulate’ the reason for his action is by adducing evidence that explains what he has done; when an executive takes the witness stand to ‘articulate’ his reason, the litigant for whom he speaks is thereby proving those reasons.”
Sweeney, 439 U.S. at 26, 99 S.Ct. at 297 (Stevens, J., dissenting). This conclusion not only seems required by Sweeney, it is also most consistent with the fact that the plaintiff must prove that the defendant‘s reason was a pretext for discrimination, McDonnell Douglas, 411 U.S. at 804, 93 S.Ct. 1817, i. e., that the defendant‘s action was not based on the reason given.
While the district court‘s misstatement of the burden of proof was a serious enough error to require a new trial, it was not the only error. The court was also incorrect in instructing that, as part of his prima facie case, Loeb had to prove that
“A prima facie case under McDonnell Douglas raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors. See International Brotherhood of Teamsters v. United States, supra 431 U.S. [324], at 358 n.44, [97 S.Ct. at 1866, 52 L.Ed.2d 396]. And we are willing to assume this largely because we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, especially in a business setting. Thus, when all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer‘s actions, it is more likely than not the employer, whom we generally assume acts only with some reason, based his decision on an impermissible consideration such as race.”
438 U.S. at 577, 98 S.Ct. at 2949-2950.
To apply the above concept in the present case, which involves firing, not hiring, the critical elements (beyond being within the protected class, i. e., age 40-65, and fired) must be modified to produce an analogous inference. Complainant would be required to show that he was “qualified” in the sense that he was doing his job well enough to rule out the possibility that he was fired for inadequate job performance, absolute or relative. See Teamsters, 431 U.S. at 358 n.44, 97 S.Ct. 1843.10 He would also have to show that his employer sought a replacement with qualifications similar to his own, thus demonstrating a continued need for the same services and skills.11 Without proof along these lines, the conceptual underpinnings of McDonnell Douglas would not remain recognizable. Proof beyond this, however, is not mandated by McDonnell Douglas, and does not fit its
B. Use of McDonnell Douglas in ADEA Cases.
We now turn to defendants’ more fundamental objection, that the McDonnell Douglas formula has no relevance to age discrimination cases and should not have been used in this case at all.
1. The Purpose and Limitations of McDonnell Douglas and its Relevance to Age Discrimination Cases.
Defendants’ objection to use of McDonnell Douglas in ADEA cases assumes that McDonnell Douglas establishes a form of “strict analysis” unwarranted when a complainant alleges that he has been treated unfavorably because of his age, rather than because of “more invidious” factors, such as race or sex. We cannot accept this premise.
The Supreme Court has said that, “The method suggested in McDonnell Douglas . . . is merely a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination.” Furnco, 438 U.S. at 577, 98 S.Ct. at 2949. As such, it addresses two problems that exist in most employment discrimination cases: (1) direct evidence of discrimination is likely to be unavailable, and (2) the employer has the best access to the reasons that prompted him to fire, reject, discipline or refuse to promote the complainant. To offset, to some degree, these difficulties, McDonnell Douglas affirms the right of a complainant to make a prima facie showing of discrimination by establishing that his rejection did not result from “the two most common legitimate reasons“-lack of qualifications or absence of a job opening. Teamsters, 431 U.S. at 358, n.44, 97 S.Ct. at 1866; see Sweeney, 569 F.2d at 176-77. Proof of the McDonnell Douglas-type prima facie case assures the plaintiff his day in court despite the unavailability of direct evidence, and entitles him to an explanation from the defendant-employer for whatever action was taken.
Once an explanation is given, plaintiff then must show that it was not the real reason for his rejection or discharge, but rather a pretext for discrimination. McDonnell Douglas, 411 U.S. at 804, 93 S.Ct. 1817. This is true even where, as here, the proffered “legitimate reason,” poor job performance, disputes one of the elements of the prima facie case (i.e., that plaintiff was performing well)-the ultimate question is not whether defendants’ decision to fire or discipline plaintiff reflected an objective factfinder‘s judgment of plaintiff‘s abilities, but whether it was unlawfully motivated. See Teamsters, 431 U.S. at 335 n.15, 97 S.Ct. 1843. Here again, however, plaintiff may proceed with indirect evidence, as by demonstrating that the reason advanced applied to other employees who did not have plaintiff‘s “protected” characteristics, but that they were not rejected or fired. See id. 411 U.S. at 804-05, 93 S.Ct. 1817.
McDonnell Douglas, in short, helps an alleged victim of discrimination identify
Given this understanding of McDonnell Douglas, we see no inherent reason why it is any less a “sensible, orderly way to evaluate the evidence” in an age discrimination case than in any other. McDonnell Douglas meets a problem of proof that may be present in any case where motivation is in issue, but does not alter the traditional burdens of proof in civil litigation, and is not intended to deflect the factfinder from the central issue of whether the employer was motivated by discriminatory factors.
2. The Statutory History of the ADEA Does Not Preclude Use of McDonnell Douglas.
Defendants argue that Congress evidenced an intent to avoid the “strict, formal approach” of McDonnell Douglas when it chose to deal with age discrimination in a separate statute, rather than in an amendment to Title VII, and to provide explicitly that it shall not be unlawful, “to discharge or otherwise discipline an individual for good cause,”
We are not convinced. As the Supreme Court has noted, “the prohibitions of the ADEA were derived in haec verba from Title VII.” Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978); e. g., compare
The mere fact that Congress chose to pass a separate statute rather than to amend Title VII does not imply that age discrimination was intended to be subject to different standards and methods of proof than race or sex discrimination. Nor is defendants’ position supported by the provisions in the ADEA that find no parallel in Title VII. The first of these,
3. McDonnell Douglas is Adaptable to a Jury Trial.
Defendants argue that the McDonnell Douglas rules for the “order and allocation of proof” should not be used in ADEA cases because they cannot be adapted to trials before juries. They contend that a McDonnell Douglas charge will confuse the jurors and that use of the shifting burdens will make it difficult to dispose of motions for directed verdicts.
While of some moment, these points take an unnecessarily literal view of what use of McDonnell Douglas in a jury setting entails. We cannot quarrel with the fact that the subtleties of McDonnell Douglas are confusing-as discussed in Part I(A) of this opinion, the “prima facie case,” “burden of persuasion,” and the shifting “burden of production” have caused considerable difficulty for judges of all levels. McDonnell Douglas was not written as a prospective jury charge; to read its technical aspects to a jury, as was done here, will add little to the juror‘s understanding of the case and, even worse, may lead jurors to abandon their own judgment and to seize upon poorly understood legalisms to decide the ultimate question of discrimination. Since the advantages of trial by jury lie in utilization of the jurors’ common sense, we would have serious reservations about using McDonnell Douglas if doing so meant engulfing a lay jury in the legal niceties discussed in this opinion.
But we do not equate use of McDonnell Douglas with a requirement that the full formulation be read in haec verba to the jury. McDonnell Douglas is to a large extent an analytical framework enunciated post hoc, in light of a given set of facts, to give judges a method of organizing evidence and assigning the burdens of production and persuasion in a discrimination case. In light of this and the fact that the defendants’ burden is one of production rather than of persuasion, only the factual determinations necessary to the underlying rationale of McDonnell Douglas need be made by the jury-the burden-shifting can and should be monitored by the judge.16 Moreover, the term “prima facie case” need never be mentioned to the jurors; as we indicate in the following section, McDonnell Douglas should be used to identify the important factual issues, and these can be set out in the charge, or in special questions, divorced from legal jargon.
Nor does use of McDonnell Douglas, as we understand it, pose any real, as opposed to theoretical, difficulty for disposing of motions for directed verdicts in jury trials. Normally the plaintiff will know ahead of trial what reason the defendant is relying on, and the usual order of trial, with plaintiff putting all of his evidence in first, will suffice. If defendant then moves for a directed verdict, the judge will be able to determine whether enough evidence has been introduced to allow the jury to find each disputed element of the prima facie case and that defendants’ reason is a pretext. As the defendants’ burden is not one of persuasion, McDonnell Douglas creates no impediment to ruling on this motion before the defendant has put on his defense.
4. McDonnell Douglas is Not an Inflexible Formula.
While we conclude that McDonnell Douglas provides an appropriate and
5. Utilization of McDonnell Douglas in the Jury Instruction.
We cannot formulate a charge that should be given in every ADEA case, nor would it be appropriate, in advance of the new trial, to indicate what charge should be given in the present case. We can state, however, some flexible guidelines and give some general directions for use by the district court.
The central issue, which the court must put directly to the jury, is whether or not plaintiff was discharged “because of his age,”
Whether the jury is also instructed that the plaintiff must establish the four elements of the McDonnell Douglas-type prima facie case (properly tailored to the circumstances) and that the employer‘s reason is a pretext, will depend on whether the plaintiff‘s age discrimination
While the above instructions would fit a “classic” or “pure” McDonnell Douglas paradigm, it is obvious that most cases will not come neatly packaged in that form. At least two other types of cases seem likely. One is a case which simply does not fit the mold of the McDonnell Douglas formula, as where plaintiff‘s evidence of discrimination is significantly different (for example, where plaintiff relies chiefly upon direct evidence of discriminatory motive in a letter or on an admission from defendant). The court should not force a case into a McDonnell Douglas format if to do so will merely divert the jury from the real issues; rather it should use its best judgment as to the proper organization of the evidence and the charge. In cases of this type, the best charge may simply be one that emphasizes that plaintiff must prove, by a preponderance of the evidence, that he was discharged because of his age-with adequate explanation of the meaning of the age statute, the determinative role age must have played, etc., see infra and Part II, infra.
Another case would be one in which proof of the McDonnell Douglas elements is a significant part of plaintiff‘s total evidence, but where there is also other evidence, direct or circumstantial, that might support an inference of discrimination. In the present case, for example, there were company documents that might be interpreted as indicating a preference for younger employees, although there apparently was no direct evidence that Loeb in particular was fired because of age.23 Here the district court will again have to exercise its judgment. Strict adherence to McDonnell Douglas, with instructions as to all elements of the particular prima facie case there described, may not be required. If, for example, there is substantial other evidence to warrant a finding of discrimination, it may be superfluous to tell the jury that it must find each element of the prima facie case. Rather, as in the previous case, the question of discrimination can be put more directly and simply.
Whatever the role of McDonnell Douglas in the particular case, we strongly encourage the court to go beyond the bare outlines of the issues mentioned here, and to provide the jury with a helpful and meaningful explanation of the relevance of the evidence introduced and of the interests of the parties. It would be useful to discuss the policies of the Age Discrimination Act and the plaintiff‘s rights thereunder, as the court did here to some extent. The court should also, especially when a management level job is involved, explain that an employer is entitled to make its own subjective business judgments, however misguided they may appear to the jury, and to fire an employee for any reason that is not discriminatory.24
II. THE MIXED MOTIVE INSTRUCTION
We now turn to that portion of the charge in which the court said that Loeb did not have to prove that age was the “sole factor” in the decision to discharge him, and that he could recover simply by proving that age was one factor that “contributed to or affected the decision.” This touches on a situation not addressed by McDonnell Douglas: the possibility that defendants were motivated by both legal and discriminatory motives.
Plaintiff‘s brief apparently concedes that he was required to prove that age was the determining factor, but argues that this was conveyed by instructing that age had to have “made a difference.” We agree with defendants, however, that the court‘s statement was inadequate to convey to the jury the legal standard it should follow. To find that age was a factor that affected the decision is not equivalent to finding that age was a determinative factor, yet proof that it was a determinative factor is, as both parties recognize, essential to recovery under the ADEA.25
We do not quarrel with the court‘s statement that age did not have to be the sole factor motivating defendants to act; we do think, however, that the court should have instructed the jury that for plaintiff to prevail he had to prove by a preponderance of the evidence that his age was the “determining factor” in his discharge in the sense that, “but for” his employer‘s motive to discriminate against him because of age, he would not have been discharged. See McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 282 n.10, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976); Fisher v. Flynn, 598 F.2d 663 (1st Cir. 1979) (Title VII plaintiff must prove “but for” causation); cf. Givhan v. Western Line Consolidated School District, 439 U.S. 410, 99 S.Ct. 693, 58 L.Ed.2d 619 (1979); Mt. Healthy City Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977); Rosaly v. Ignacio, 593 F.2d 145 (1st Cir. 1979) (employers who considered protected expression in employment decisions can prevail by showing
III. DAMAGES
Although this case must be remanded for a new trial, the trial court‘s damages award raises several legal issues that we address, in the event they will recur.
A. Liquidated Damages
The ADEA provides that, “liquidated damages shall be payable only in cases of willful violations of this chapter.”
The ADEA also incorporates the enforcement provisions of the Fair Labor Standards Act,
“if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act . . .”
Defendants go on to argue that liquidated damages were awarded improperly here, as there was no specific finding that they had not acted in “good faith.”
Leaving aside the obvious, that a finding of “willfulness” would seem to preclude a finding of “good faith,”27 we do not agree that a specific finding as to defendants’ good faith under Section 11 of the Portal-to-Portal Act is required before liquidated damages may be awarded in an ADEA case. The Supreme Court, in comparing the ADEA and the FLSA in Lorillard v. Pons, supra, read the ADEA to permit liquidated damages awards where an ADEA violation is “willful,” 434 U.S. at 581, 98 S.Ct. 866, and noted that,
“Although § 7(e) of the ADEA,
29 U.S.C. § 626(e) , expressly incorporates §§ 6 and 10 of the Portal-to-Portal Pay Act,29 U.S.C. §§ 255 and259 , the ADEA does not make any reference to § 11,29 U.S.C. § 260 . . . .”
434 U.S. at 581-82 n.8, 98 S.Ct. at 870. This selectivity is strong evidence that Congress did not intend to graft Section 11 onto the ADEA. See id. at 582, 98 S.Ct. 866. The reason is clear: under
The trial court here decided that reinstatement would be inappropriate. In lieu thereof, and in addition to the clearly authorized awards of back pay and liquidated damages, it ordered Textron to make gradually decreasing yearly payments totalling $90,00029 until age 70, and then to begin paying Loeb a lifetime pension.30 Although Loeb had worked for Textron for only four of the ten years required for rights to vest under Textron‘s pension plan, the court ordered that this pension award be computed on the basis of ten years continuous employment, with the last five years at an annual compensation of $25,326 (Loeb‘s salary at the time of his termination). Defendants object to both the pension award and to the payments in lieu of reinstatement.
An award of pension benefits is plainly authorized under the ADEA. Congress intended that the calculation of “amounts owing” to a prevailing plaintiff include “items of pecuniary or economic loss such as wages, fringe, and other job-related benefits.” H.Conf.Rep.No.95-950, 95th Cong., 2d Sess. 13, reprinted in [1978] U.S. Code Cong. & Admin. News pp. 528, 535. Pension benefits are part of an individual‘s compensation and, like an award of back pay, should be awarded under
When reinstatement is not ordered, any pension benefits due a prevailing plaintiff normally should be liquidated as of the date damages are settled, see Monroe v. Penn-Dixie Cement Corp., 335 F.Supp. 231, 235 (N.D.Ga.1971), and should approximate the present discounted value of plaintiff‘s interest. Just as with back pay, the award should be computed as if plaintiff had been employed until the date damages are settled. Where the time from plaintiff‘s initial employment until that date does not meet the employer‘s vesting requirements, some pension award may still be appropriate-an employer need not be allowed to stand on requirements that plaintiff cannot meet because of the employer‘s own wrongful acts. In such cases, the district court will have to exercise its discretion carefully. At the least, a plaintiff will be entitled to whatever would have been paid into the pension fund on his behalf. At most, he will be entitled to be treated as a vested employee and to receive a pension award based on employment from when he was first hired until damages are settled or on the minimum vesting period. This is a matter of some technicality, however, and one that we leave largely to the trial court‘s discretion.
A more difficult question is raised by the award of payments in lieu of reinstatement. Defendants argue that the court abused its discretion by making this award; they argue that reinstatement is a discretionary remedy and that it is virtually unprecedented to award payments when reinstatement is found to be inappropriate.31 Plaintiff argues, on the other hand, that he should have been reinstated. Neither party, however, has addressed the relevant issues in any meaningful way; lacking the benefit of adequate briefing on this matter, we confine ourselves to noting the crucial questions to be considered before any such award is made, and to offering some tentative answers. See Vazquez v. Eastern Air Lines, Inc., 579 F.2d 107, 112 (1st Cir. 1978). Should Loeb prevail on remand, these questions should be given more thorough consideration by the district court.
“In any action brought to enforce this chapter the court shall have jurisdiction to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter, including without limitation judgments compelling employment, reinstatement or promotion, or enforcing the liability for amounts deemed to be unpaid minimum wages or unpaid overtime compensation,”
Given these principles, three questions are raised by the present case: First, what standards must govern the district court in deciding whether to grant or deny reinstatement to a prevailing plaintiff? See generally Albemarle Paper Co. v. Moody, 422 U.S. 405, 415-22, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). Second, assuming that reinstatement is properly denied, are damages in lieu thereof authorized or prohibited under the FLSA; does the legislative history of the ADEA counsel any different result? Finally, if such damages are available, what standards should govern the district court in deciding what amount, if any, to award?
To answer these questions, should they need to be addressed after the new trial, the district court should examine, inter alia, the traditional equitable powers of the federal courts33 and the remedies available under the FLSA. A relevant starting point may be
The Fifth Circuit‘s suggestion of damages in lieu of reinstatement was based in part on a statement the Supreme Court quoted with approval in Robert De Mario Jewelry, supra:
“Unless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction. And since the public interest is involved in a proceeding of this nature, those equitable powers assume an even broader and more flexible character than when only a private controversy is at stake. . . . [T]he court may go beyond the matters immediately underlying its equitable jurisdiction . . . and give whatever other relief may be necessary under the circumstances,”
361 U.S. at 291, 80 S.Ct. at 335, quoting Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946). Wirtz, 302 F.2d at 157 n.3. The Supreme Court‘s endorsement of broad equitable relief in that case must be taken with caution, however. The Court has never been confronted with the issue of damages in lieu of reinstatement and, undoubtedly because of the difficulty of ascertaining future damages, there does not appear to be significant authority for such awards by “equity courts,” except perhaps in cases involving the breach of employment contracts of specified duration.34 Nor did the Court in De Mario or the Fifth Circuit in Goldberg discuss the legislative history of the FLSA as it bore on this particular issue. Further, in the few Title VII and FLSA cases in which payments in lieu of reinstatement have been made, the amounts have been relatively small and have been designed to assist plaintiff during the period in which he can be expected to find other employment. Atlas Roofing, supra, 377 F.2d at 115 n.5 and cases cited in note 31, supra. The reasons for this approach are clear: First, payments in lieu of reinstatement are payments for services not rendered. Second, any assessment of what an individual might have earned had he been reinstated usually is highly speculative,35 given the possibilities of promotions or legitimate demotions or terminations. Assuming, without in any way deciding, that a monetary award may be made in lieu of reinstatement, we suspect that both continuing payments and substantial awards calculated, for example, on the basis of life expectancy would be inappropriate. For the time being, however, we leave all of these questions open for initial consideration by the district court, if they surface again after a new trial.
The judgment is vacated and the case remanded for a new trial.
BOWNES, Circuit Judge (concurring and dissenting).
Because of errors made by the district judge in instructing the jury, I agree that
I.
My overriding concern is that the majority opinion may be read as an attempt to dilute the force of McDonnell Douglas in discrimination cases. That case has been the lodestar, continually looked to by the Supreme Court in this area. See, e. g., Franks v. Bowman, 424 U.S. 747, 772, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976); International Brotherhood of Teamsters v. United States, 431 U.S. 324, 359 n.45, 97 S.Ct. 1843, 1867, 52 L.Ed.2d 396 (1977); United Air Lines v. McMann, 434 U.S. 192, 98 S.Ct. 444, 54 L.Ed.2d 402 (1977); Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978); Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978). McDonnell Douglas first established the requirements of a prima facie case, emphasizing that the format therein described was appropriate to accommodate both the strong policy reasons for allowing plaintiff to proceed on the basis of a prima facie case and the further logical reason that the employer was the person best able to explain legitimate reasons for failing to hire (or firing) an otherwise qualified person who was within the protected class. While I agree that the precise formulation spelled out McDonnell Douglas need not be transmitted verbatim to the jury, I surely see no error in so doing. Furthermore, if the majority opinion can be read to suggest that the jury need not be informed of the role played by the prima facie case in the McDonnell Douglas matrix, I must demur.
Inherent rational grounds underlie the McDonnell Douglas prima facie case rule. As noted by the Supreme Court in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 359 n.45, 97 S.Ct. 1843, 1867, 52 L.Ed.2d 396 (1977), “[p]resumptions shifting the burden of proof are often created to reflect judicial evaluations of probabilities and to conform with a party‘s superior access to the proof.” The Supreme Court has utilized the prima facie case to meet the problems of proof in discrimination cases. The important role of the prima facie case should, therefore, be communicated to the jury. Failure to do so slights both the logic and the underlying policies giving rise to it. These reasons do not vanish once defendant has adduced sufficient rebuttal evidence to protect against a directed verdict. Some instruction to the jury on the prima facie case is necessary for a full appreciation of what is involved in discrimination cases. So long as a trial court does not fall into the mistake of placing upon defendant an improper burden, its commenting on shifting burdens imports no error. Certainly, it will not be difficult for a trial judge to explain to a jury what a prima facie case means and what is necessary to rebut it.
The difficulties involved in instructing a jury in a products liability case, where liability is alternately premised on the three theories of strict liability, negligence, and warranty are no less complex than the shifting burdens outlined in McDonnell Douglas. Nor would such an instruction be beyond the ability of the average juror to adequately comprehend and appreciate. This important aspect of discrimination cases should not be sidestepped or hidden from the jury on the unsupported theory that it might be too complex or confusing.
II.
I also think it important to set out precisely what burden shifts to the defendant once the plaintiff has made out a prima facie case. Although it has been stated that once the plaintiff has made out a prima facie case, the “burden of proof” shifts to the defendant, an analysis of the Supreme Court cases compels the conclusion that this does not mean proof by a preponderance of the evidence. In Furnco Construction Corp. v. Waters, supra, 438 U.S. at 577, 98 S.Ct. at 2950, the Court discussed the McDonnell Douglas, test, explaining that once a prima facie case had been made out, “the burden which shifts to the employer is merely that of proving that he based
III.
My next point of clarification is with that portion of the majority opinion, ante at 1011 and 1019-1020, where the burden which is placed on plaintiff is that of proving that he would not have been fired “but for” age. With the following gloss, I concur. The “but for” analysis has been used at least on one occasion by the Supreme Court in a Title VII case, McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976), where the Court discussed the burden on plaintiff in showing defendant‘s reasons to be pretextual.
The use of the term “pretext” in this context does not mean, of course, that the Title VII plaintiff must show that he would have in any event been rejected or discharged solely on the basis of his race, without regard to the alleged deficiencies; as the closing sentence to the quoted passage makes clear, no more is required to be shown than that race was a “but for” cause. See also Albemarle Paper Co. v. Moody, 422 U.S. 405, 425 [95 S.Ct. 2362, 2375, 45 L.Ed.2d 280] (1975). Id. at 282 n.10, 96 S.Ct. at 2580. As I think this makes clear, the burden on plaintiff once defendant denies discriminatory motive is that of showing that the legitimate motive advanced by defendant is pretextual. In other words, plaintiff need not-once having established a prima facie case-canvass the entire waterfront and eliminate every other possible motive for the discharge. He must simply meet defendant‘s alleged valid reason by showing it to be a pretext. To the extent that the majority opinion can be understood to place a heavier burden on plaintiff than this, I suggest that it places plaintiff under an impermissible handicap.
IV.
The majority addresses the question of the propriety of future damages in lieu of reinstatement in the Damages portion of
The Age Discrimination in Employment Act treats damages as follows:
(b) The provisions of this chapter shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section. Any act prohibited under section 623 of this title shall be deemed to be a prohibited act under section 215 of this title. Amounts owing to a person as a result of a violation of this chapter shall be deemed to be unpaid minimum wages or unpaid overtime compensation for purposes of sections 216 and 217 of this title: Provided, that liquidated damages shall be payable only in cases of willful violations of this chapter. In any action brought to enforce this chapter the court shall have jurisdiction to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter, including without limitation judgments compelling employment, reinstatement or promotion, or enforcing the liability for amounts deemed to be unpaid minimum wages or unpaid overtime compensation under this section.
Damages in age discrimination cases are not premised on the exact formulations permissible in an ordinary tort case. “Put more plainly, money damages in a case under the Age Discrimination Act must be liquidated as of the date of judgment.” Monroe v. Penn-Dixie Cement Corp., 335 F.Supp. 231, 235 (D.Ga.1971). See also Bishop v. Jelleff Associates, 398 F.Supp. 579, 597 (D.D.C.1974); Schulz v. Hickok Mfg. Co., Inc., 358 F.Supp. 1208, 1217 (D.Ga. 1973). Cf. Brennan v. Ace Hardware Corp., 495 F.2d 368, 373 (8th Cir. 1974) (citing and following the language from Monroe, supra, 335 F.Supp. at 235). Nor is Mitchell v. De Mario Jewelry, 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960), to the contrary. That case involved a narrow point of statutory construction, namely, whether the 1949 amendment to the FLSA which added a proviso prohibiting the Secretary of Labor from seeking unpaid overtime wages on behalf of any employee,
The law is clear, I believe, that damages must be liquidated as of the date of judgment.
Notes
“In this case, Plaintiff must prove what is called a ‘prima facie’ case. To do this, he must prove:
1) That he is within the protected age group, that is, 40 to 65 years;
2) That he was demoted or discharged;
3) That he was replaced by a younger person or persons outside the protected age group; and
4) That he was qualified to do the job.
“If Plaintiff does not prove a prima facie case by a fair preponderance of the evidence, then your verdict must be for Defendants.
“If you find Plaintiff has proved these four (4) elements of a prima facie case, by a fair preponderance of the evidence, then each Defendant has the burden to prove by a fair preponderance of the evidence a legitimate non-discriminatory reason for his or its actions. That is, that his or its actions were motivated by reasonable factors other than age or were for good cause. If you find that Plaintiff has proved a prima facie case and Defendant has not proved that his or its actions were motivated by reasonable factors other than age or were for good cause, then your verdict must be for Plaintiff.
“If, however, you find that Plaintiff has proved a prima facie case and you also find that Defendant has proved that his or its actions were motivated by reasonable factors other than age or were for good cause, your task is not ended. Although you may find that Defendant was motivated by reasonable factors other than age or for good cause, you must further find whether or not the reasonable factors or good cause which motivated Defendant were in fact, a pretext arranged in order to accomplish discrimination against Plaintiff because of his age. If you find that Defendant was motivated by reasonable factors other than age or good cause, the Plaintiff has the burden to prove by a fair preponderance of the evidence that the reasonable factors other than age or good cause were in fact a pretext arranged to accomplish discrimination against Plaintiff because of his age. If you find that Plaintiff has proved by a fair preponderance of the evidence that the reasonable factors other than age or good cause were in fact a pretext arranged to accomplish discrimination against Plaintiff because of his age, then your verdict must be for Plaintiff.
“To put it in outline form:
“Plaintiff prevails if:
1. Plaintiff proves a prima facie case and Defendant does not prove a legitimate non-discriminatory reason, or
2. Plaintiff proves a prima facie case, and Defendant proves a legitimate non-discriminatory reason, and Plaintiff proves that Defendant‘s non-discriminatory reason is a pretext.
“Defendant prevails if:
1. Plaintiff does not prove a prima facie case, or
2. Plaintiff proves a prima facie case, and Defendant proves a non-discriminatory reason, and Plaintiff fails to prove that Defendant‘s non-discriminatory reason is a pretext.”
The court‘s repeated language at the end-“motivated by reasonable factors other than age or good cause” was obviously meant, as made clear at the onset, to be understood as “motivated by reasonable factors other than age or [motivated by] good cause.”
To the extent that the two Fifth Circuit cases can be read for the proposition that an award of future damages might be permissible-a view which I vigorously dispute-there are two distinguishing points between those cases and the case at bar. Both Atlas and Bama antedated amendments to the FLSA allowing a private right of action. SeeThe reasonableness of the employer‘s reasons may of course be probative of whether they are pretexts. The more idiosyncratic or questionable the employer‘s reason, the easier it will be to expose it as a pretext, if indeed it is one. The jury must understand that its focus is to be on the employer‘s motivation, however, and not on its business judgment. See NLRB v. Eastern Smelting & Refining Corp., 598 F.2d 666, 670 (1st Cir. 1979).