*2 PRESENT: STAPLETON, HUTCHINSON and GARTH, Circuit Judges (Filed: May 3, 1995) ____________
Joseph A. Vater, Jr. Esquire (Argued) Beth Ann Slagle, Esquire
Meyer, Unkovic & Scott
1300 Oliver Building
Pittsburgh, PA 15222
Attorneys for John D. Starceski Louise Q. Symons, Esquire (Argued) Westinghouse Electric Corporation
Law Department
11 Stanwix Street
6 Gateway Center
Pittsburgh, PA 15222
Attorney for Westinghouse Electric Corporation *3 ____________
____________ OPINION OF THE COURT ____________
HUTCHINSON, Circuit Judge.
Appellant/cross-appellee Westinghouse Electric Corporation ("Westinghouse") appeals an order of the United States District Court for the Western District of Pennsylvania denying Westinghouse's post-trial motion for judgment notwithstanding the verdict, [1] a new trial or a remittitur of damages on appellee/cross-appellant John D. Starceski's ("Starceski") claim for violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.A. § 621 et seq. (West 1985 & Supp. 1994). Starceski cross-appeals other parts of the same order that denied his motions for pre-judgment interest and reinstatement.
We will affirm the district court's denial of
Westinghouse's post-trial motions. The record is not critically deficient of evidence from which a jury might have reasonably found that Westinghouse discriminated against Starceski because of age, nor does it appear that the district court abused its discretion in refusing Westinghouse's motions for a new trial or *5 remittitur. We also reject Westinghouse's objections to the district court's Price Waterhouse "mixed-motives" instruction and its challenge to the jury's finding it willfully discriminated against Starceski.
On Starceski's cross-appeal from the denial of his motions for pre-judgment interest and reinstatement, we will vacate the district court's order denying Starceski's motion for pre-judgment interest and remand for the purpose of calculating the interest due and adding it to his judgment; but we will affirm the district court's refusal to grant him reinstatement. An award of pre-judgment interest together with an award of liquidated damages is not a double recovery. The two serve different purposes and work together to facilitate the ADEA's "make-whole" purpose. Finally, we hold that the district court did not err in concluding that reinstatement is inappropriate under the circumstances.
I. Statement of Facts and Procedural History In April 1989, Westinghouse terminated Starceski from his senior engineer position after thirty-six years of service. When terminated, Starceski was about one month short of his sixty-fourth birthday.
Starceski worked for Westinghouse from 1951 to 1953 and from 1956 to March 1981 as an engineer in its Bettis Atomic Power Laboratory. [2] In March 1981, Westinghouse transferred him to its *6 Nuclear Services Division ("NSD"). There he was responsible, among other things, for the design, building and upgrading of tools to repair reactor components in nuclear power plants. In early 1985, Starceski began reporting to Richard Saul, a first-level supervisor, whom Westinghouse terminated in February 1989. Starceski thereafter reported directly to Ali Jaafar, the second-level manager who had been Saul's supervisor.
In late 1988, Jaafar received a directive to reduce his staff by about eighteen people during the following year. Saul testified that, in an October 1988 staff meeting, Jaafar directed the first-level managers to transfer work from older to younger employees and to rank employees by their value to the group. According to Saul, Jaafar also instructed him to "doctor" Starceski's evaluation to reflect poor performance. Starceski stated that once these orders were given, he was not given any new assignments and work was also taken away from other older colleagues, sometimes immediately after being assigned to them.
In March 1989, Starceski and five other engineers were informed that their services were no longer needed. Five of these six were in ADEA's protected age group. Their average age was fifty-one. The average age of the remaining engineers in the department was thirty-nine. The youngest member of the six was ultimately retained by Westinghouse, along with others who ranked lower than Starceski in performance according to Saul's evaluation.
On March 13, 1991, Starceski filed this action against Westinghouse alleging that it terminated him on the basis of age *7 in violation of the ADEA. Westinghouse stipulated that Starceski's job performance was not a factor in his layoff, but contended that it was part of a reduction in force and a lack of work for persons with Starceski's skills. The district court initially granted Westinghouse's motion for summary judgment, but Starceski appealed to this Court, and we reversed and remanded the case for trial. Starceski v. Westinghouse Electric Corp., No. 92-3552 (3d Cir. April 19, 1993).
On February 11, 1994, a jury returned a general verdict awarding Starceski compensatory damages of $267,268.55. Immediately after the jury's verdict was announced, counsel for Starceski requested reinstatement. The district court denied this request. It then charged the jury on willfulness. The jury found that Westinghouse had willfully discriminated against Starceski on the basis of age. This doubled Starceski's compensatory damages giving him an award totalling $651,910.68 after counsel fees and costs were added.
Post-trial, Starceski asked for the addition of
pre-judgment interest and reinstatement. Westinghouse, on the other hand, filed a motion it called a "motion for judgment n.o.v." [3] or, in the alternative, a new trial or remittitur. The district court denied Westinghouse's motions and Starceski's request for pre-judgment interest and reinstatement. This timely appeal and cross-appeal followed.
II. Jurisdiction and Standard of Review The district court had subject matter jurisdiction over this case under the ADEA, 29 U.S.C.A. § 621 et seq. We have appellate jurisdiction under 28 U.S.C.A. § 1291 (West 1993).
In reviewing a district court's ruling on a post-trial
motion for judgment as a matter of law, this Court applies the
same standard as the district court. Lightning Lube, Inc. v.
Witco Corp.,
(3d Cir. 1980), cert. denied,
In reviewing a district court's denial of a motion for
a new trial or remittitur, we ask generally whether the district
court abused its discretion, but if the court's denial of the
motion is based on application of a legal precept, our review is
*9
plenary and, in addition, any findings of fact on which the
court's exercise of discretion depends are reviewed for clear
error. See Rotondo,
III. Discussion Westinghouse raises several challenges to the district court's denial of its post-trial motions. It asserts that (1) the district court improperly gave the jury a so-called "mixed-motives" instruction, see Price Waterhouse v. Hopkins, 490 U.S. 228 (1989); (2) the district court erred in upholding the jury's finding that Westinghouse had failed to sustain its Price Waterhouse burden of proving that Starceski would have been terminated regardless of his age; (3) there was insufficient evidence to uphold the jury's finding of a willful ADEA violation; and (4) a remittitur was necessary because there was insufficient evidence to support the jury's damages award.
On his cross-appeal, Starceski argues that the district court should have granted his motion for pre-judgment interest and reinstatement. We will first discuss Westinghouse's arguments and then Starceski's cross-appeal.
A. Pretext and "Mixed-Motives"
Before submitting the case to the jury, the district
court determined that Starceski provided sufficient direct
evidence to support a claim of age-based disparate treatment
requiring a Price Waterhouse, or so-called "mixed-motives"
*10
instruction, rather than a McDonnell Douglas/Burdine, 411 U.S.
792 (1973) and
In Griffiths v. CIGNA Corp.,
overruled on other grounds, Miller v. CIGNA Corp., No. 93-1773,
[I]n a [mixed-motives] case unaffected by the Civil Rights Act of 1991, the evidence the plaintiff produces is so revealing of discriminatory animus that it is not necessary to rely on any presumption from the prima facie case [as is necessary in a pretext action] to shift the burden of production. Both the burden of production and the risk of non-persuasion are shifted to the defendant who . . . must persuade the factfinder that[,] even if discrimination was a motivating factor in the adverse employment decision, it would have made the same employment decision regardless of its discriminatory animus.
*12
Id. at 778 (citing Price Waterhouse,
[S]tray remarks in the workplace, while perhaps probative of [a discriminatory animus], cannot justify requiring the employer to prove that its [employment] decisions were based on legitimate criteria. Nor can statements by nondecisionmakers, or statements by decisionmakers unrelated to the decisional process itself, suffice to satisfy the plaintiff's burden in this regard; . . . What is required is . . . direct evidence that decisionmakers placed substantial negative reliance on an illegitimate criterion in reaching their decision.
Price Waterhouse ,
In applying this standard to Starceski's case, we are
drawn at once to the testimony of Saul, who was once Starceski's
first-level manager at Westinghouse. Saul testified that Jaafar,
a second-level manager responsible for the layoff decision
affecting Starceski, gave orders to him and other supervisors
under him in preparation for a work force reduction directed
by higher management to consider age in the assignment of
work. Saul specifically testified that Jaafar, at a meeting
*13
concerning the impending reduction, told the first-level managers
to transfer work from older to younger employees. Saul also
testified that he discussed Jaafar's comments with other managers
after the meeting and they took Jaafar's statements as an order
to set up older employees for termination in the impending work
force reduction. Saul said "it was actually a fact that the
older engineers or the senior people [were] going to be let go in
'89." Joint Appendix ("App.") at 446. Saul also testified that
Jaafar instructed him to "doctor" Starceski's performance
appraisals so that they would reflect poor performance. These
directives from Jaafar to Saul and other first-level managers are
precisely the kind of evidence that is needed to indicate "that
[the] decisionmakers [involved here] placed substantial negative
reliance on an illegitimate criterion [i.e. , age] in reaching
their [termination] decision." Price Waterhouse,
In Hook, we quoted with approval the following passage from the Second Circuit's opinion in Ostrowski v. Atlantic Mutual Insurance Companies:
"[P]urely statistical evidence would not warrant [a Price Waterhouse 'mixed-motives'] charge; nor would evidence merely of the plaintiff's qualification for and availability of a given position; nor would 'stray' remarks in the workplace by persons who are not involved in the pertinent decisionmaking process. . . . If however, the plaintiff's nonstatistical evidence is directly tied to the forbidden animus, for example[,] policy documents or statements of a person involved in the decisionmaking process that reflect a discriminatory or retaliatory animus of the type complained of in the suit, that plaintiff is entitled to a burden-shifting instruction."
We disagree, however, with the sweeping statement of the court of appeals in Glover that:
[a]s a general rule, we [sh]ould expect that all successfully prosecuted age discrimination cases involving a reduction in force would involve mixed-motives because the plaintiff would be alleging the employer had both a legitimate reason (the economic need *15 to reduce the workforce) and an illegitimate reason (to terminate an employee based on his or her age).
Glover,
We believe, on the other hand, that the distinction between a Price Waterhouse and a McDonnell Douglas/Burdine case
lies in the kind of proof the employee produces on the issue of bias. In the former, direct evidence of discriminatory animus leads not only to a ready logical inference of bias, but also to a rational presumption that the person expressing bias acted on it. As Chief Justice Vinson put it in, Avery v. Georgia, 345 U.S. 559, 562 (1953), he who has a mind to discriminate is likely to do so. A pretext case is different. It depends on circumstantial evidence allowing the factfinder to infer that the falsity of the employer's explanation shows bias. The inference from Saul's testimony that bias against older employees played a substantial part in the selection of those employees who would be discharged is direct and inescapable. The district court did not err when it gave the jury a Price Waterhouse instruction. Westinghouse, however, contends that, even if there was sufficient evidence to warrant a Price Waterhouse instruction, it should not have been given here because the district court abused its discretion when it allowed Starceski, after all the evidence was in, to change his theory of recovery from pretext under *16 McDonnell Douglas/Burdine to "mixed-motives" under Price Waterhouse. Westinghouse argues that the district court should have made a decision or forced an election on pretext or "mixed-motives" at the beginning of the case and that its failure to do so was so prejudicial that Westinghouse is entitled to a new trial. This contention lacks merit. [7] In Armbruster we said:
an employee [need not] elect to proceed on either a pretext or a Price Waterhouse theory at trial. Rather, we think that an employee may present his case under both theories and the district court must then decide whether one or both theories properly apply at some point in the proceedings prior to instructing the jury. See, e.g., Price Waterhouse, 490 U.S. at 247 n. 12,109 S.Ct. at 1788 n. 12; id. at 278,109 S.Ct. at 1805 (O'Connor, J., concurring); Griffiths,988 F.2d at 472 ; see also Ostrowski,968 F.2d at 185 .
Accordingly, we hold that the district court's decision to give the jury a "mixed-motives" instruction, made shortly *17 before the case went to the jury, does not entitle Westinghouse to a new trial.
B. Westinghouse's Price Waterhouse Affirmative Defense Having found that age played a role in Westinghouse's decision to discharge Starceski, Price Waterhouse then required the jury to decide whether Westinghouse sustained its burden of proving by a preponderance of the evidence that it would have terminated Starceski even if it had not discriminated. Hook , 28 F.3d at 368. In other words, the risk of non-persuasion, as well as the burden of production, was now on Westinghouse to prove that it would have fired Starceski anyway, without regard to his age.
Westinghouse stipulated that Starceski was not
terminated because of poor job performance, the usual defense in
this kind of a case, but argued instead that there was no work at
Westinghouse which Starceski could do. Starceski, however, had
produced evidence tending to show Westinghouse still had work he
could do when it terminated him. The jury believed Starceski.
It found that Westinghouse did not meet its burden of proving
that the company would have discharged Starceski even if it had
not considered his age. After reviewing the evidence presented
at trial, we cannot say that it does not rationally support this
finding. Evidence will support a jury verdict "if reasonable
persons could differ as to the conclusions to be drawn from it."
Gilkerson v. Toastmaster, Inc.,
IV. Was Westinghouse's ADEA Violation Willful? Westinghouse next contends that the district court erred in upholding the jury's finding of willfulness.
Willfulness is significant because the ADEA provides double
damages when the employer's discriminatory conduct is willful.
29 U.S.C.A. § 626(b). The double recovery is punitive and is
intended to deter willful conduct. Trans-World Airlines, Inc. v.
Thurston,
An ADEA violation is willful if the employer either
"knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the ADEA." Hazen Paper Co. v. Biggins,
In the instant case, the district court reasoned: [T]he evidence was undisputed that Mr.
Ali Jaafar was defendant's management personnel with final decisionmaking authority over plaintiff's layoff. Plaintiff's evidence, through his then supervisor, Mr.
Dick Saul, was that several months prior to the planned layoff, Mr. Jaafar told Mr. Saul to set up the "senior" engineers in plaintiff's department for permanent layoff. Mr. Saul testified that the clear meaning of Mr. Jaafar's instructions was that the older engineers in plaintiff's department were to be specifically targeted for permanent layoff. Mr. Saul further testified that thereafter, Mr. Jaafar directed him to artificially lower plaintiff's performance evaluation.
Starceski v. Westinghouse, No. 91-0454, slip op. at 5 (W.D. Pa.
*20
testimony on whether Jaafar gave these orders, but state again
that we are obliged to view the evidence in the light most
favorable to Starceski, the verdict winner. See Radabaugh, 997
F.2d at 450. Looking at the record in this way, Westinghouse's
position that the violation resulted from no more than accident,
inadvertence or ordinary negligence is factually incorrect. See
Sanchez,
Starceski was the oldest. The average age of those laid off was
fifty-one. The average age of those retained was thirty-nine.
[12]
. We reject Westinghouse's argument that Jaafar's intent
cannot be imputed to it. Jaafar was a second level manager and
was the final decision maker on the selection of people for
termination. Therefore, his intent is imputed to the company
both for the purpose of determining whether the Act was violated
and for the purpose of determining whether that violation was
willful. See Crawford v. West Jersey Health Systems, 847
F. Supp. 1232, 1236 (D.N.J. 1994) (test for determining agency is
whether "the alleged agent has 'participated in the decision-
making process that forms the basis of the discrimination'")
(quoting Hamilton v. Rodgers ,
Admission of the EEOC decision on probable cause and its file is
entrusted to the discretion of the district court. Walton v.
Eaton Corp.,
[13] . The dissenting opinion contends that Jaafar's statements were insufficient to show that Westinghouse acted willfully. In doing so, the dissenting opinion in footnote 2 disclaims any need to consider whether Jaafar's "conduct could be attributed to *21 Accordingly, we will affirm the district court's denial of Westinghouse's motion for judgment as a matter of law or a new trial on willfulness.
(..continued)
Westinghouse." It concludes that a jury finding that Jaafar may have discriminated is not proof that Westinghouse knew or approved Jaafar's act. In this respect, the dissenting opinion fails to give Starceski, as the verdict winner, the benefit of all inferences that reasonably can be drawn from the evidence. One such inference from Saul's testimony about Jaafar's remarks is that Westinghouse knew of or showed reckless disregard for its duties under the ADEA. Under the usual standards governing the interpretation of a verdict speaking generally to any issue, we should assume the jury so found. Thus, our analysis does not disturb the two-tier rule as the dissenting opinion suggests.
V. Remittitur
Finally, Westinghouse contends the jury's verdict
should be reduced because (1) Starceski testified he was not able to work in 1993 because of an emotional disability; and (2) there was an insufficient basis in the record to make a precise determination of lost pension benefits.
An ADEA claimant is entitled to be made whole for
losses sustained as a result of a wrongful termination.
Albemarle Paper Co. v. Moody ,
In this case, the jury returned a general verdict. The
law "presumes the existence of fact findings implied from the
jury's having reached that verdict." Railroad Dynamics, Inc. v.
A. Stucki Co.,
The award clearly reflects that the jury awarded plaintiff the $223,616.60 he claimed in lost wages and saving plan
contributions. . . . The jury then added plaintiff's claim for lost pension contributions in the amount of
$51,766.95. . . . The jury obviously rejected, and therefore subtracted, plaintiff's claim for "unreimbursed expenses" for 1989 and 1990 in the amounts of $3,649 and $4,466 respectively [for a total of $267,268.55.]
Starceski, No. 91-0454, slip op. at 6-7.
We have recognized that "[t]rial courts and the parties
themselves invariably lack perfect hindsight to forecast what
would have happened had there been no unlawful acts." Rodriquez
v. Taylor,
Westinghouse, however, contends that Starceski had
family obligations and concerns that precluded him from working
during 1993, and that the record does not provide any basis for
the calculation of lost pension benefits. Thus, to the extent
the damage award includes recovery for these injuries,
Westinghouse asks that it be reduced. "[A]s a general rule, [an
employment discrimination plaintiff] will not be allowed back pay
during any periods of disability" and "an employer who has
discriminated need not reimburse the plaintiff for salary loss
attributable to the plaintiff and unrelated to the employment
discrimination." Mason ,
Authority, Red Arrow Div.,
Westinghouse also contends that Starceski's proof
relating to his pension benefits fails because he did not take
into account the effect of a plan modification. We also reject
this argument. Though Westinghouse may have modified its pension
program during the course of this dispute, it never produced any
*25
documents showing the effect of the modifications on Starceski's
pension. In the absence of evidence concerning the effect of the
changes the jury was free to draw its own inferences from
Starceski's evidence concerning the benefits he was entitled to
under the original plan. See E.E.O.C. v. Kallir, Philips, Ross,
Inc.,
The district court did not abuse its discretion when it
denied Westinghouse's motion for remittitur. The damages awarded
Starceski were neither excessive as a matter of law nor "clearly
unsupported" by the record. See Brunnemann,
Having considered all of Westinghouse's challenges to the denial of its post-trial motions, we turn to Starceski's cross-appeal.
VI. Starceski's Cross-Appeal Starceski asserts that the district erred in denying his motion for pre-judgment interest and reinstatement. For the reasons discussed below, we will vacate the district court's denial of pre-judgment interest, but affirm its refusal to grant reinstatement.
A. Pre-Judgment Interest The district court reasoned that an award of pre-judgment interest is precluded in an ADEA case when liquidated damages are awarded for willfulness "because the purpose of liquidated damages [like pre-judgment interest] is . . . to compensate plaintiff for the loss of the use of his funds up to trial, [making] an award for both liquidated damages and prejudgment interest . . . double compensation for the same loss." Starceski , No. 91-0454, slip op. at 8.
As the district court recognized, this Court has not
yet decided whether pre-judgment interest may be awarded along
with liquidated damages. The courts of appeals that have decided
this issue are divided. Compare Criswell v. Western Airlines,
Inc.,
(1985); Reichman v. Bonsignore, Brignati & Mazzotta, P.C., 818
F.2d 278, 281-82 (2d Cir. 1987) (same); Lindsey v. American Cast
Iron Pipe Co.,
1336-37 (7th Cir. 1987) (same), vacated on other grounds, 486
*27
U.S. 1020 (1988); Rose v. National Cash Register Corp., 703 F.2d
225, 230 (6th Cir.) (same), cert. denied,
Gibson v. Mohawk Rubber Co.,
This circuit split is a consequence of two competing
theories concerning Congress's purpose in providing liquidated
damages for willful violations of the ADEA. We think the Supreme
Court's decision in Thurston ,
Rather, we are persuaded by the reasoning of the courts
of appeals for the second, ninth and eleventh circuits, who rely
on Thurston, supra, to permit awards of both liquidated damages
[15]
and pre-judgment interest. After Thurston, this Court held
*29
that liquidated damages are punitive in nature. See Turner v.
Schering-Plough Corp.,
B. Reinstatement
Starceski also contends that the district court erred
in denying his request for reinstatement. We have held that the
decision to grant reinstatement or its alternative, front pay, is
within the sound discretion of the district court. Maxfield v.
Sinclair Int'l,
In determining whether to grant either reinstatement or front pay, we have suggested that district courts should take into consideration the ADEA's purpose to make aggrieved plaintiffs whole "by restoring them to the position they would have been in had the discrimination never occurred." Id. Although reinstatement "is the preferred remedy to avoid future lost earnings" because it is consistent with the ADEA's make-whole philosophy, we have concluded that reinstatement is not feasible in cases where there "may be no position available at the time of judgment or the relationship between the parties may have been so damaged by animosity that reinstatement is impracticable." Id.
Here, we initially note that Starceski failed to object
when the trial judge instructed the jury on front pay, even
though he intended to make a motion for reinstatement.
[17]
*31
Starceski is not entitled to both reinstatement and front pay.
In any event, the district court found that reinstatement was not
a viable option due to the lack of available positions and given
the animosity between the parties. We cannot say that finding is
clearly erroneous. Moreover, on this record, we see no abuse of
discretion in the district court's decision to deny Starceski the
remedy of reinstatement. "The district court was in a much better
position [than us] to determine whether or not reinstatement was
feasible based on the testimony and evidence at trial."
Brunnemann ,
VII. Conclusion On Westinghouse's appeal, we will affirm the district court's order denying Westinghouse's post-trial motions for judgment as a matter of law or a new trial, as well as its denial of a remittitur.
On Starceski's cross-appeal, we will affirm the
district court's denial of reinstatement but vacate its order denying pre-judgment interest and remand this case to the district court for the addition of pre-judgment interest due Starceski to the judgment in his favor. Each party shall bear its own costs.
Starceski v. Westinghouse Electric Corp., Nos. 94-3182 & 94-3208 GARTH, Circuit Judge, concurring and dissenting,
I agree with the court that the jury verdict finding Westinghouse liable for an ADEA violation should be sustained. I cannot agree, however, that the same conduct charged to Westinghouse and found to violate the ADEA, without more, justified a finding that Westinghouse was willful in its violation of the ADEA, resulting in the imposition of a liquidated damages award. The court's holding today leads ineluctably to the conclusion that every ADEA disparate treatment violation will also constitute a willful violation that permits a liquidated damages award.
I cannot agree with such a holding and I accordingly dissent from so much of the majority's opinion as affirms the award of liquidated damages against Westinghouse. [18]
I.
The ADEA provides for liquidated damages of twice the backpay award when an employer's violation of the ADEA is "willful." 29 U.S.C. § 626(b). Congress added this penalty as *33 a deterrent to knowing misconduct by employers. 113 Cong. Rec. 2199 (1967) (comments of Senator Javits).
Unfortunately, the term "willful" has eluded easy or precise definition. The difficulties which have attended the effort to define willfulness have resulted in numerous and sometimes conflicting decisions on the meaning and application of § 626(b). See 2 Howard C. Eglitt, Age Discrimination § 8.30 (2d ed. 1993). Nonetheless, while the courts of appeals have adopted different standards at different times, the courts have consistently adhered to two principles to resolve disputes under § 626(b).
First, courts have consistently acknowledged that
Congress intended only some violations of the ADEA to be willful.
Second, courts have been careful not to punish good faith efforts by employers to comply with the Act.
Today's decision by the majority ignores both of those principles.
This appeal represents this court's first interpretation of willfulness since Hazen Paper v. Biggins , 113 S. Ct. 1701 (1993). Hazen represents the Supreme Court's latest restatement of the standard for willful violations. The majority's disregard of the two established principles of interpretation under the ADEA, which I have identified, is therefore all the more troubling.
Before I discuss those principles and the majority's
failure to apply these principles in its analysis of the
Starceski record, I should explain that I have no quarrel with
*34
the court's statement that willfulness exists when an employer
"knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the ADEA." Hazen,
II.
The Supreme Court and the courts of appeals have
repeatedly recognized that Congress did not intend every
violation of the ADEA to be a willful violation. In Trans World
Airlines, Inc. v. Thurston,
[T]he broad standard proposed by [Thurston] would result in an award of double damages in almost every case. As employers are required to post ADEA notices, it would be virtually impossible for an employer to show that he was unaware of the Act and its potential applicability. Both the legislative history and the structure of the statute show that Congress intended a two-tiered liability scheme. We decline to interpret the liquidated damages provision of ADEA § 7(b) in a manner that frustrates this intent.
Id. at 128 (footnote omitted). Rather than adopt Thurston's standard, the Court concluded that willfulness may be proved when *35 the employer "knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA." Id. at 126 (quoting Air Line Pilots Ass'n v. Tran World Airlines, 713 F.2d 940, 956 (2d Cir. 1983). As the Supreme Court explained in Hazen, the principle adopted in Thurston, which it labeled the two-tiered liability principle, distinguishes between ordinary and willful violations:
The two-tiered liability principle was simply one interpretive tool among several that we used in Thurston to decide what Congress meant by the word "willful," and in any event we continue to believe that the "knowledge or reckless disregard" standard will create two tiers of liability across the range of ADEA cases. It is not true that an employer who knowingly relies on age in reaching its decision invariably commits a knowing or reckless violation of the ADEA.
Hazen,
Three years after Thurston, the Supreme Court had an
opportunity to reconsider the principle of two-tiered liability
in McLaughlin v. Richland Shoe Co.,
the principle of two-tiered liability. Willful violations only
extend to knowing or reckless violations of the ADEA, whether
they result from formal or informal policies. 113 S. Ct. at
1709. The Court repeated that "Congress aimed to create a `two-
tiered liability scheme,' under which some but not all ADEA
violations would give rise to liquidated damages." Id. at 1708
(quoting Thurston,
liquidated damages in every case. Id. at 1709.
III.
The principle of two-tiered liability has not stood alone as an interpretive guide to the meaning of § 626(b) of the ADEA. Courts have also been guided by a desire to encourage good faith attempts at compliance with the ADEA.
In Thurston, the Court stressed this when it held that
TWA had not acted willfully, despite the adoption of a policy
which explicitly disadvantaged older workers, when the airline
believed the policy was a permissible bona fide occupational
qualification (BFOQ). The Court concluded that "[i]t is
reasonable to believe that the [company and its lawyers], in
focusing on the larger overall problem, simply overlooked the
*37
challenged aspect of the new plan."
The Court in Hazen also acknowledged the importance of
a company's good faith efforts to comply with the law. "If an
employer incorrectly but in good faith and nonrecklessly believes
that the statute permits a particular age-based decision, then
liquidated damages should not be imposed."
The relevance of an employer's good faith has been
repeatedly recognized by the courts of appeals. See, e.g. ,
Schrad v. Federal Pacific Electric Co.,
IV.
Despite courts' consistent use of these principles to guide the interpretation of § 626(b), the majority here fails to acknowledge or apply either. This failure unfortunately is not harmless because here the majority's conclusion that Starceski is entitled to liquidated damages does violence to both.
A.
If we adopt the majority's view of willfulness, every successful disparate treatment case under the ADEA will also be treated as a willful violation. According to the court, the evidence that establishes willfulness is the testimony that Jaafar, Starceski's supervisor, told Saul that Jaafar intended to discharge senior engineers and directed Saul to lower certain employee's performance evaluations. While Westinghouse contends that Jaafar's statement referred to the company's job category "Senior Engineer A" and not to older employees, the jury could certainly have believed Starceski's assertion that Jaafar was actually referring to older engineers. Hence, the jury had grounds to decide that Jaafar, a Westinghouse supervisor, intentionally discharged Starceski because of his age -- a violation of the ADEA. [19]
However, the existence of an intent to act on the basis
of age, the sine qua non of an ADEA disparate treatment case,
cannot by itself also be the determinant of willfulness. Such a
rule extinguishes any distinction between an ordinary disparate
treatment case and a willful violation. Every ADEA plaintiff who
claims disparate treatment must prove that the employer
intentionally acted on the basis of the plaintiff's age. Hazen,
The resulting tension is not solved by the court's
statement that evidence of intent by itself is reasonable
evidence that Westinghouse "`knew or showed reckless disregard'
for its statutory duty to avoid discriminating against Starceski
because of his age." Maj. Op. Typescript at 19. This assertion
does not "draw a significant distinction between ordinary
violations and willful violations." McLaughlin,
B.
Similarly, the majority ignores almost entirely
Westinghouse's proof of its good faith effort to avoid a violation of age or race discrimination laws during its reduction in force. The majority misconstrues Westinghouse's argument as an attempt to show that the violation "resulted from no more than accident, inadvertence or ordinary negligence." Maj. Op. Typescript at 18. Westinghouse argues not that the violation was accidental but that Westinghouse did not recklessly disregard its duties under the Act as revealed by its review of its employment decisions to prevent employment discrimination.
Contrary to the majority, I believe the record reflects Westinghouse's reasonable, if unsuccessful, effort to prevent discrimination. As Hazen and Thurston discuss, this good faith effort makes a liquidated damages award inappropriate. "If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed." Hazen, 113 S. Ct. at 1709.
Once Westinghouse decided that it would need to lay off some employees, Westinghouse counseled all of its managers to choose employees based only on business reasons. App. 486. Once the managers chose candidates for lay off, each manager was required to give reasons for his or her decisions. App. 487. *41 Two human resources employees and the company's legal counsel reviewed these justifications for possible discrimination. App. 487.
According to these company reports, Starceski was
chosen because the company lacked work in his division. App. 488. Westinghouse human resources personnel confirmed this characterization with Mr. Jaafar's manager, Mr. Esposito. App. 490. Starceski does not dispute that a number of projects in Westinghouse's Nuclear Services Division were terminated or being wound up during the time period in which he was laid off. These facts gave Westinghouse personnel more reason to credit Jaafar's representation. Though Westinghouse did not investigate Jaafar's and Esposito's statements further, the circumstances disclosed by the record gave Westinghouse every reason to believe that the sole reason for Starceski's discharge was the lack of work in his department.
Given the importance of good faith to our prior
interpretations, willfulness is surely not demonstrated simply by showing that Westinghouse informed its managers of the ADEA and proof that an ADEA violation occurred. Thurston itself declined to hold "that a violation of the Act is `willful' if the employer simply knew of the potential applicability of the ADEA." 469 U.S. at 127; see also Sanchez v. Puerto Rico Oil Co., 37 F.3d 712, 721 (1st Cir. 1994) ("A finding of willfulness requires something more than merely showing that an employer knew about the ADEA and its potential applicability in the workplace.").
Nothing in this record leads to a conclusion that
Westinghouse recklessly disregarded the rights of its older employees. Everything points to a conclusion that Westinghouse "acted reasonably and in good faith in attempting to determine whether [its] plan would violate the ADEA." Thurston, 469 U.S. at 129. In Starceski's case unfortunately, its internal efforts were unsuccessful.
Unlike the majority, however, I would not punish
Westinghouse twice for its failure, once through a backpay award and again through a liquidated damages award. Such a policy does nothing to encourage companies to scrutinize closely their employment decisions and policies. While a company's inability to protect perfectly against age discrimination is grounds to award backpay and restitution so that an employee is fully compensated, it does not warrant doubling the award.
V.
Willfulness, as defined by Thurston , focuses on a
company's knowledge of or reckless disregard for whether its
actions violate the ADEA. Sanchez,
41, 44 (2d Cir. 1989) (Willfulness occurs when employer has been
*43
"indifferent to the requirements of the governing statute and
acted in a purposeful, deliberate, or calculated fashion.");
Coston v. Plitt Theatres, Inc.,
On the other hand, an employer's or a supervisor's intentional use of age in an employment decision, while completely adequate grounds for an ordinary ADEA award, does not by itself suffice to find that the employer knowingly pursued an unlawful course of conduct or recklessly disregarded its statutory duties. To so hold is to eliminate the ADEA's two- tiered liability scheme and to overlook Westinghouse's good faith efforts to prevent an ADEA violation.
Because I fear that today's decision by the court
operates to merge both tiers of the two-tiered liability principle into one -- i.e. a mere disparate treatment violation *44 of the ADEA -- and because I cannot support the court's disregard for these principles which have consistently guided our interpretation of the ADEA, I respectfully dissent from the court's affirmance of the district court's award of liquidated damages. [20]
Notes
[1] . The motion for judgment n.o.v. is now one of three motions called a motion for "judgment as a matter of law." See Fed. R. Civ. P. 50(a). The other two correspond to the motion for a directed verdict at the close of plaintiff's case (in some systems once called a motion for an involuntary non-suit) and the motion for a directed verdict at the close of all evidence. See Fed. R. Civ. P. 50(a)-(b), as amended in 1991.
[2] . From about 1954 to 1956, Starceski worked for Sikorski Aircraft.
[3] . We will hereafter refer to this motion as a motion for judgment as a matter of law. See supra n.1.
[4] . The difference between the burden-shifting framework of a
McDonnell Douglas/Burdine pretext case and a Price Waterhouse
"mixed-motives" employment discrimination case has been the
subject of much comment since St. Mary's Honor Center v. Hicks,
[5] . In Miller, supra, we rejected the statement in Griffiths that
an employee advancing a McDonnell Douglas/Burdine pretext theory
must show that invidious discrimination is the "sole cause" of
his employer's adverse action. Miller,
[6] . To be sure, the jury was faced with conflicting testimony as
to whether Jaafar gave these directives. We are obliged,
however, to view the evidence and review the record in the light
most favorable to Starceski, the verdict winner. We must
therefore assume that Jaafar gave these orders. See Radabaugh v.
Zip Feed Mills, Inc.,
[7] . Starceski contends that Westinghouse waived this objection. We reject that argument. We believe Westinghouse's objection to the charge was sufficient to preserve this issue.
[8] . As a practical matter, the proofs required to defend this case under either a pretext or "mixed-motives" theory differed little. The effect is a shift in the burden, not the substance of the proofs. See supra n.4.
[9] . We have considered Westinghouse's argument that certain time sheets, identifying work that Starceski could have performed when it terminated him, were improperly admitted into evidence under the business records exception to the hearsay rule but conclude this argument lacks merit. A proper foundation was laid for the admission of these documents and they were properly admitted under Rule 803(6) of the Federal Rules of Evidence, which permits the admission of documents prepared in the ordinary course of business, even if the individual who prepared them does not testify about their contents. See Fed. R. Evid. 803(6).
[10] . This rejection of the "outrageous" standard effectively
overrules our decisions in Lockhart v. Westinghouse Credit Corp.,
March 14, 1994).
[11] We again acknowledge the conflicting
(..continued)
Co.,
[11] . The record also shows that five of the six individuals selected for layoff were in the protected age group, and
[14] . The ADEA incorporates the FLSA's liquidated damages
provision, but adds a requirement of "willful" conduct.
29 U.S.C.A. § 626(b). For a general discussion of the
legislative history showing Congress's selective incorporation of
FLSA provisions into the ADEA, see Sperling v. Hoffman-LaRoche,
Inc.,
[15] . Although the courts of appeals for the sixth, eighth and
tenth circuits have determined that an ADEA plaintiff cannot
recover both liquidated damages and pre-judgment interest, these
courts rendered their decisions before Thurston and, as of yet,
have not revisited this issue in light of Thurston's statement
that liquidated damages are punitive in nature. See, e.g., Smith
v. World Ins. Co.,
[16] . The difficulty with the FLSA incorporation argument is compounded by the ADEA requirement of willfulness, which is not found in the FLSA.
[17] . Neither party raised as an issue on appeal the use of a general verdict. In that verdict, the jury awarded compensatory damages of $267,268.55, an amount that appears to include at least some element of front pay.
[18] . For purposes of clarity, I not only concur in the court's
affirmance of the jury verdict as to the ADEA violation, but I
agree as well that we should uphold the district court's rulings
which denied Starceski reinstatement and which denied remittitur.
Because my reading of the record and of Hazen Paper Co. v.
Biggins,
[19] . I deliberately do not address the issue of whether
Jaafar's conduct could be attributed to Westinghouse. I do not
do so because, even if we assume that Jaafar was speaking for
Westinghouse, Jaafar's statements do not demonstrate that
Westinghouse either knew or showed reckless disregard for its
duties under the ADEA. Even though the jury may have found that
Jaafar may have discriminated against Starceski on the basis of
Starceski's age, that finding does not constitute proof that
Jaafar or Westinghouse knew that Jaafar's choices in selecting
employees for discharge violated the Act, even if Jaafar was
generally aware of the Act. See Brown v. Stites Concrete, Inc.,
[20] . Because I would not award liquidated damages, I would
remand the case for a determination of prejudgment interest.
Such an order would obviate any conflict between liquidated
damages and prejudgment interest. Forced to choose between an
award of both liquidated damages and prejudgment interest, I
would permit only one sanction because I believe, as we have
held, that liquidated damages serve both compensatory and
punitive functions. Blum v. Witco Chemical Corp.,