Ohio Civil Rights Commission v. Ingram, 69 Ohio St. 3d 89

69 Ohio St. 3d 89 | Ohio | 1994

A. William Sweeney, J.

With respect to the first issue on appeal before this court, appellant argues that the trial court did not have jurisdiction to deviate from the back pay period set forth in the commission’s order of November 14, 1985. However, our review of R.C. 4112.06 leads us to conclude otherwise. R.C. 4112.06 provided in part:

“(A) * * * the commission may obtain an order of court for the enforcement of its final orders, in a proceeding as provided in this section. Such proceeding shall be brought in the common pleas court of the state within any county wherein the unlawful discriminatory practice which is the subject of the commission’s order was committed or wherein any respondent required in the order to cease and desist from an unlawful discriminatory practice or to take affirmative action resides or transacts business.

“(B) * * * The court * * * shall have power to * * * make and enter, upon the record and such additional evidence as the court has admitted, an order enforcing, modifying and enforcing as so modified, or setting aside in whole or in part, the order of the commission.” (Emphasis added.) (The current version of R.C. 4112.06[B] adds the power to remand.)

The trial court modified the commission’s order in a manner that not only complied with the foregoing statutory provisions, but was also fair to all parties. While the commission awarded Pelfrey back pay covering the period from when she was unlawfully discharged through the date she was offered reemployment by appellant, a subsequent intervening event, ie., Pelfrey’s obtaining of a better paying job, rendered literal enforcement of the order unfair. Given the clear language of R.C. 4112.06(B) above, the trial court had both the jurisdiction and obligation to modify the commission’s order as it did. Accordingly, we hold that pursuant to R.C. 4112.06, a common pleas court has jurisdiction to modify an order of the Ohio Civil Rights Commission, and we therefore affirm the judgment of the court of appeals below.

The second issue raised on appeal concerns the propriety of the trial court’s award of prejudgment interest on the back pay award. Appellant contends that where damages in an action are unliquidated, interest begins to run when there is a monetary judgment definite in amount. Since the definite amount of back pay due Pelfrey was not determined until the trial court judgment was issued on January 10, 1992, appellant argues that interest should not be assessed prior to that date. In support of its argument, appellant relies on Cleveland Ry. Co. v. Williams (1926), 115 Ohio St. 584, 155 N.E. 133.

The commission contends that Williams is distinguishable from the cause sub judice because that case involved a personal injury award, whereas an employment discrimination award is designed to restore victims to the economic position that they would have enjoyed, but for the discrimination. See Ohio Civ. Rights Comm. v. Lucas Cty. Welfare Dept. (1982), 6 Ohio App.3d 14, 6 OBR 38, 451 N.E.2d 1246. Amici curiae submit that cases involving similar situations where prejudgment interest has been awarded in connection with back pay determinations under Title VII of the Civil Rights Act of 1964 are also applicable here. See Plumbers & Steamfitters Joint Apprenticeship Commt. v. Ohio Civ. Rights Comm. (1981), 66 Ohio St.2d 192, 196, 20 O.O.3d 200, 202-203, 421 N.E.2d 128, 131, wherein we stated that “[i]n previous cases, however, we have determined that federal case law interpreting Title VII of the Civil Rights Act of 1964, Section 2000e et seq., Title 42, U.S.Code, is generally applicable to cases involving alleged violations of R.C. Chapter 4112. [State ex rel.] Republic Steel [Corp.] v. Ohio Civil Rights Comm. (1975), 44 Ohio St.2d 178 [73 O.O.2d 478, 339 N.E.2d 658] * * *.”

The arguments raised and the cases cited by the commission and amici correctly illustrate the rationale and appropriateness of an award of prejudgment interest in employment discrimination cases. As noted by the United States Supreme Court in Loeffler v. Frank (1988), 486 U.S. 549, 557-558, 108 S.Ct. 1965, 1970-1971, 100 L.Ed.2d 549, 558-559:

“[Apparently all the United States Courts of Appeals that have considered the question agree that Title VII authorizes prejudgment interest as part of the backpay remedy in suits against private employers. This conclusion surely is correct. The backpay award authorized by § 706(g) of Title VII, as amended, 42 U.S.C. § 2000e-5(g), is a manifestation of Congress’ intent to make ‘persons whole for injuries suffered through past discrimination.’ Albemarle Paper Co. v. Moody, 422 U.S. 405, 421 [95 S.Ct. 2362, 2373, 45 L.Ed.2d 280, 299] (1975). Prejudgment interest, or course, is ‘an element of complete compensation.’ West Virginia v. United States, 479 U.S. 305, 310 [107 S.Ct. 702, 706, 93 L.Ed.2d 639, 646] (1987).” (Footnotes omitted.)

As the foregoing cases suggest, interest should begin to run on a back pay award under R.C. 4112.05(G) from the time at which the party was discriminated against, in order to restore victims to the economic position they would have been in had no discrimination occurred. To rule otherwise would in effect give the employer an interest-free loan until the damages are liquidated in an official determination. See Clarke v. Frank (C.A.2, 1992), 960 F.2d 1146, 1153-1154.

Therefore, we affirm the judgment of the court of appeals on this issue, and hold that prejudgment interest that is calculated from the time the aggrieved party was discriminated against is a proper measure of damages in an employment discrimination case.

The third issue raised by appellant concerns the trial court’s inclusion of salary increases in its calculation of Pelfrey’s back pay award. Appellant argues that since the commission never expressly found that Pelfrey would have continued to receive salary increases had she not been fired, the trial court erred in calculating salary increases in the back pay award. Appellant further contends that the trial court erred in not deducting from the back pay award the $615 vacation pay that Pelfrey received, since there was no express finding by the commission that Pelfrey was entitled to vacation pay in addition to her regular salary.

The commission’s order does not support appellant’s assertions. It specifically states that Pelfrey “received no reprimands or indications from [appellant] that she was performing less than satisfactorily,” and that “[s]he received periodic raises throughout her employment” with appellant. In addition, the commission ordered that Pelfrey be offered reemployment and “be paid at the wage scale she would have attained had she been employed by [appellant] on September 9, 1983 to the present[,] including all normal wage increments accruing during that period.”

While the latter-quoted passage from the commission’s order was premised on Pelfirey’s acceptance of reemployment, there is nothing in the order which negates the inclusion in back pay of normal salary increases in the event that Pelfrey declined reemployment. With regard to the $615 vacation pay, the appellate court noted that appellant had presented no evidence as to whether it was the usual practice of the office to compensate employees for unused vacation time. Under these circumstances, we are persuaded by the standard articulated by the Sixth Circuit United States Court of Appeals and relied on by the court of appeals which holds that “[a]ny ambiguity in what the claimant would have received but for discrimination should be resolved against the discriminating employer.” Rasimas v. Michigan Dept. of Mental Health (C.A.6, 1983), 714 F.2d 614, 628. In addition, we are guided by the mandate of R.C. 4112.08 that “[t]his chapter shall be construed liberally for the accomplishment of its purposes * * *.” Thus, we hold that where the amount of back pay that would have been received by a victim of employment discrimination is unclear, any ambiguities should be resolved against the discriminating employer.

In applying this standard to the instant cause, we affirm the judgment of the appellate court insofar as it upholds the trial court’s calculation of Pelfrey’s back pay award to include salary increases, with no deduction for the amount Pelfrey received from appellant for vacation pay.

With respect to the issue on cross-appeal, the commission contends that unemployment compensation benefits should not be deducted as “interim earnings” from a complainant’s back pay award under R.C. 4112.05(G).¹ The appellant counters that adoption of the commission’s argument would make Pelfrey more than whole and would essentially result in awarding punitive damages against it. Appellant relies on this court’s decision in State ex rel. Guerrero v. Ferguson (1981), 68 Ohio St.2d 6, 22 O.O.3d 98, 427 N.E.2d 515, that a reinstated public employee who was wrongfully excluded from employment is entitled to back pay subject to a reduction for unemployment compensation benefits received. Therein, we reasoned that the state should not be required to compensate an individual twice. Id., 68 Ohio St.2d at 7, 22 O.O.3d at 98-99, 427 N.E.2d at 516.

In Mers v. Dispatch Printing Co. (1988), 39 Ohio App.3d 99, 105, 529 N.E.2d 958, 965, the court of appeals extended Guerrero, supra, to apply to a private employer under the reasoning that the private employer pays into the Unemployment Compensation Fund and would in effect be paying twice if the employer were required to pay an award undiminished by the amount of unemployment compensation the terminated employee had received.

In contrast, the Sixth Circuit United States Court of Appeals has firmly refused to deduct unemployment compensation benefits from back pay awards in cases involving discrimination. See, e.g., Rasimas, supra; Knafel v. Pepsi-Cola Bottlers of Akron, Inc. (C.A.6, 1990), 899 F.2d 1473, 1480. See, also, Jones v. Ohio Dept. of Mental Health (S.D.Ohio 1987), 687 F.Supp. 1169.

As stated in Plumbers & Steamfitters, supra, this court will apply federal law precedent interpreting Title VII of the 1964 Civil Rights Act to cases involving violations of R.C. Chapter 4112. 66 Ohio St.2d at 196, 20 O.O.3d at 202-203, 421 N.E.2d at 131. In addition to the cases decided by the Sixth Circuit, a number of other federal courts have followed the rationale expressed by the United States Supreme Court in Natl. Labor Relations Bd. v. Gullett Gin Co. (1950), 340 U.S. 361, 71 S.Ct. 337, 95 L.Ed. 337, in holding that unemployment benefits should not be deducted from a back pay award to an employee fired in violation of the National Labor Relations Act. See, e.g., Hunter v. Allis-Chalmers Corp., Engine Div. (C.A.7, 1986), 797 F.2d 1417; Kauffman v. Sidereal Corp. (C.A.9, 1982), 695 F.2d 343; Craig v.Y&Y Snacks, Inc. (C.A.3, 1983), 721 F.2d 77. As pointed out by amici, courts have determined that deduction of unemployment compensation benefits from a back pay award should not be allowed because such benefits are collateral, and that the wrongdoers should not get the benefit of payments that come to the aggrieved party from a collateral source.

In resolving this issue, we note that R.C. 4112.05 attempts not only to compensate victims of unlawful discrimination and make the victim whole, but also to deter discrimination from occurring in the first place. However, allowing the discriminating employer to deduct unemployment benefits from a back pay award would benefit the employer by reducing the deterrence against discriminatory conduct while conferring no gain upon the victim. See Kauffman, supra, 695 F.2d at 347. Therefore, we reverse the judgment of the court of appeals on the cross-appeal and hold that unemployment compensation benefits are not “interim earnings” and should not be deducted from a back pay award made pursuant to R.C. 4112.05(G).

We are mindful that our decision today runs counter to our prior opinion in Guerrero, supra. While the rationale of Guerrero appears logical on the grounds that the state cannot be required to pay twice, we limit that holding to its particular facts, inasmuch as Guerrero did not involve unlawful employment discrimination.² As succinctly summed up by amici, the risk of over- or undercompensation should be borne by the perpetrator of the discrimination, not the victim.

Based on all of the foregoing, the judgment of the court of appeals is affirmed in part and reversed in part, thereby reinstating the judgment of the trial court.

Judgment accordingly.

Douglas, Resnick and F.E. Sweeney, JJ., concur. Moyer, C.J., and Pfeifer, J., concur in paragraphs one, two and three of the syllabus and in the judgment. Wright, J., dissents.

1 . R.C. 4112.05(G) states in part: “If the commission directs payment of back pay, it shall make allowance for interim earnings.”

2 . The court of appeals’ decision in Mers, supra, is readily distinguishable from the cause subjttdice, since the back pay award in Mers was premised upon promissory estoppel, not unlawful employment discrimination.