Opinion ID: 439951
Heading Depth: 1
Heading Rank: 5

Heading: the liquidated damages award

Text: 104 The district court's 1974 Remedial Order, 374 F.Supp. at 1390, disallowed liquidated damages under the Equal Pay Act. On appeal in Laffey I, we remand[ed] the matter of liquidated damages in toto for reconsideration by the District Court. 567 F.2d at 466 n. 279. With our Laffey I instructions as its guide, the district court permitted further discovery and ultimately found that the relevant facts mandated a liquidated damages award. Laffey v. Northwest Airlines, Inc., 24 Empl.Prac.Dec. (CCH) p 31,384 (D.D.C. Nov. 21, 1980) [hereafter, Nov. 21, 1980, Decision ]. NWA contends that the district court erred in finding liquidated damages mandatory and in calculating the amount of the award. We reject both contentions as insubstantial and sustain the district court's liquidated damages adjudication in all respects. 105
106 As Laffey I recounted, 567 F.2d at 463-65, the Fair Labor Standards Act, which serves as the procedural and remedial framework for Equal Pay Act claims, initially provided that prevailing employees were entitled to an automatic award of liquidated damages in an amount equal to unpaid wages. Congress amended the statute in 1947 36 to commit to judicial discretion disallowance or limitation of liquidated damages if the employer satisfies the court that he acted in good faith and with reasonable grounds for believing that his act or omission was [lawful]. 29 U.S.C. Sec. 260 (1982). Both prior to and after this amendment, courts have described liquidated damages as serving a compensatory, not a penal, purpose. See, e.g., Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 902, 89 L.Ed. 1296 (1945); Thompson v. Sawyer, 678 F.2d 257, 281 (D.C.Cir.1982); Marshall v. Brunner, 668 F.2d 748, 753 (3d Cir.1982); Usery v. Chef Italia, 540 F.Supp. 587, 591 n. 9 (E.D.Pa.1982). 107 Initially, the district court concluded that NWA had acted in good faith: NWA committed a willful violation of the Equal Pay Act, the court explained, because it was fully aware of [the Act] and adopted a deliberate and knowing course of conduct despite its awareness; but the evidence did not indicate an intentional, bad faith, attempt [by NWA] to evade the law. 1974 Remedial Order, 374 F.Supp. at 1390. 37 For several reasons, the district court, on first examination, also found it not unreasonable for NWA to believe that its purser/stewardess pay differential was lawful. Id. 108 On review, we held the reasons given by the District Court for disallowing liquidated damages ... legal[ly] inadequa[te]. Laffey I, 567 F.2d at 465. The good faith of which the Act speaks, we restated, is 'an honest intention to ascertain what the ... Act requires and to act in accordance with it.'  Id. at 464 (quoting Addison v. Huron Stevedoring Corp., 204 F.2d 88, 93 (2d Cir.), cert. denied, 346 U.S. 877, 74 S.Ct. 120, 98 L.Ed. 384 (1953) ). Good faith must be established affirmatively, we observed; it is not enough that it appear that the employer probably did not act in bad faith. Laffey I at 465. 109 Four of the five reasons supplied by the district court for finding NWA reasonably believed it complied with the law related to then traditional industry practice and employee acquiescence. 38 We stated: That an employer and others in the industry have broken the law for a long time without complaints from employees is plainly not the reasonable ground to which the statute speaks. Id. (footnote omitted). Further, we remarked that the prevalence of sex-discrimination litigation against the airline industry naturally prompts the question whether NWA should reasonably have known that neither its own tradition, the industry custom nor the employees' silence was a reliable indicium of the demands of the law. Id. (footnotes omitted). 39 110 In Laffey I, we recognized that [a]ny assessment of an employer's good faith or grounds for his belief in the legal propriety of his conduct is necessarily a finding of fact, to be disturbed on appeal only if clearly erroneous. 567 F.2d at 464 (footnote omitted). We found, however, that the district court had erroneously declared and applied the governing law: it had misperceived the meaning of both good faith (by apparently accepting the absence of bad faith as sufficient) and reasonable grounds (by considering several factors irrelevant to that determination). The clearly erroneous rule, see FED.R.CIV.P. 52(a), therefore did not stand in the way of a remand. 111 On this appeal, by contrast, we find no legal infirmity in the district court's assessment. Instead, we are satisfied that the district court closely followed the guidance supplied in Laffey I, which constitutes the law of the case and of this circuit. Approaching the district court's fact findings with appropriate regard to that tribunal's function and to the need for finality served by FED.R.CIV.P. 52(a), we have no occasion to disturb the liquidated damages award. 112 We summarize here the principal points made by the district court, with ample record support, in explanation of its ultimate finding that NWA did not have a reasonable foundation for a positive belief that in fact its policies compl[ied] with the law. Nov. 21, 1980, Decision, 24 Empl.Prac.Dec. at 18,286 (emphasis in original). First, NWA officials concluded that the jobs of purser and stewardess were in fact different without consulting the in-flight supervisors responsible for knowing the duties of each, without commissioning a study of the jobs (as they did nine years later), and without scrutinizing the jobs for differences in duties. Id. 40 Next, NWA's alleged belief that wages established through collective bargaining were invulnerable to Equal Pay Act challenge, despite the language of the Act and the Wage-Hour Administrator's published interpretation, 41 could not rest on an honest intention to ascertain what the Act required. Id. 113 Additionally, NWA could not establish its good faith by reason of its termination of other discriminatory personnel practices--after considerable delay and an EEOC finding of probable violations. Id. (emphasis in original). Further, NWA gained no mileage from its purported reliance on an EEOC statement that the duties of the purser and stewardess were different, for the vaunted EEOC statement merely recited [NWA's] own job descriptions. Id. at 18,287. Finally, NWA's actions after the lawsuit was filed ... fail[ed] to satisfy its burden of showing an honest intention to comply [with the law] prior to commencement of litigation. Id. (emphasis in original). 42 114 In Laffey I, we cautioned the district court that the employer bore a  'substantial burden' of proving that his failure to comply was in good faith and also was predicated on reasonable grounds for a belief that he was in compliance. 567 F.2d 464-65 (quoting in part Rothman v. Publicker Indus., Inc., 201 F.2d 618, 620 (3d Cir.1953)) (footnote omitted). If the employer cannot convince the court in these respects, we emphasized, an award of liquidated damages remains mandatory. Id. at 465 (footnote omitted). The district court, for solid, plainly stated reasons, was unconvinced that NWA acted with the requisite good faith and reasonable grounds. 43 We uphold that determination as free from any clear error.
115 NWA next argues that, even if the district court properly determined that the statute entitled the Equal Pay Act plaintiffs to liquidated damages, the years 1974 and 1975 should have been left out of the calculation. These are the relevant facts. NWA's contract with the cabin attendants' union expired at the end of 1973. Negotiations for a new contract took place in 1974 and 1975. During that two-year interval, pursers and stewardesses were paid under the terms of the expired contract, which accorded higher pay to pursers. The new contract, signed December 20, 1975, equalized purser and stewardess wage rates 44 and provided for a retroactive adjustment covering the negotiation period. 116 Thus, in early 1976, the stewardesses received retro-pay for the difference between wages paid pursers and stewardesses in 1974 and 1975. The parties agreed on subtraction of this retro-pay from NWA's basic back-pay liability. NWA unsuccessfully sought credit for the retro-pay against liquidated damages as well, and now challenges the district court's refusal to subtract the retro-pay from the liquidated damages award. See Laffey v. Northwest Airlines, Inc., 582 F.Supp. 280 at 281, 282-284 (D.D.C.1982) [hereafter, Oct. 25, 1982, Mem. Op.], reprinted in J.R.E. 180, 183-89. 117 In opposing credit for the retro-pay against liquidated damages, plaintiffs relied on the district court's November 1973 Findings, 366 F.Supp. at 789, holding that the purser/stewardess pay differential violated the Equal Pay Act. 45 Retroactive adjustment over two years later, plaintiffs argued and the district court agreed, did not relieve NWA of its liquidated damages liability for the years 1974 and 1975, a period during which pursers received, but stewardesses continued to await, the higher pay. NWA, on the other hand, maintained that the retro-pay stewardesses received in 1976 should be treated for all Equal Pay Act remedial purposes as if it had been paid in 1974 and 1975. NWA characterized payments under 1973 contract as merely on account; lump-sum adjustments retroactively establishing actual wage rates for past years, NWA stressed, were a standard feature of labor agreements in the airline industry. See Oct. 25, 1982, Mem.Op. at 282, reprinted in J.R.E. 185 (quoting NWA); NWA Brief at 22, 82. 118 We conclude that the district court appropriately refused to relate back the retro-pay, and thereby exclude 1974 and 1975 from the liquidated damages calculation. The wages involved in fact were not received until two years after they were earned. That reality, in the circumstances here presented, is dispositive of plaintiffs' statutory entitlement to liquidated damages. 119 In rejecting NWA's relate back argument, the district court stressed this central consideration: liquidated damages are not punitive; they are intended to compensate employees for a payment delay which might result in damages too obscure and difficult of proof to be redressed by any other means. Oct. 25, 1982, Mem.Op. at 282-283, reprinted in J.R.E. 185-86 (quoting language appearing in Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 583-84, 62 S.Ct. 1216, 1222-23, 86 L.Ed. 1682 (1942)); see cases cited supra ----. As its principal ground of objection to the district court's ruling, 46 NWA asserts that section six of the Railway Labor Act, 45 U.S.C. Sec. 156 (1982), obligated it to maintain the status quo as to all conditions of employment, including wages, during the two-year pendency of contract negotiations. 47 That Act, we are confident, does not stop an employer from immediately equalizing wages upward in accordance with the judicial determination that an existing wage disparity violates the Equal Pay Act. 48 120 The Railway Labor Act provision NWA cites fosters bargaining over disputes to avert the disruption of commerce strikes and lockouts occasion. See, e.g., Detroit & Toledo Shore Line Railroad Co. v. United Transportation Union, 396 U.S. 142, 148-50, 90 S.Ct. 294, 298-299, 24 L.Ed.2d 325 (1969). But the Equal Pay Act requires equalizing the wages of the lower paid sex up to the level of the higher paid sex. See, e.g., Corning Glass Works v. Brennan, 417 U.S. 188, 206-07, 94 S.Ct. 2223, 2233-2234, 41 L.Ed.2d 1 (1974). A court determination of an Equal Pay Act violation leaves nothing for the employer and union to bargain about. Just as the National Labor Relations Act's prohibition against an employer's unilateral change in wages under negotiation 49 gives way to commands for an employer's compliance with other laws, 50 so the analogous provision of the Railway Labor Act erects no obstacle, on the facts here presented, to an employer's immediate payment of equal wages to men and women performing equal work. 121 Stewardesses did not receive until 1976 pay made to pursers in 1974 and 1975; NWA must now compensate for the withholding period, during which it remained out of compliance with the Equal Pay Act, by paying the liquidated damages ordered by the district court. 122