Opinion ID: 3011207
Heading Depth: 2
Heading Rank: 2

Heading: The Back Pay Calculation

Text: Back pay calculations are reviewed for abuse of discretion. See Booker v. Taylor Milk Co., Inc., 64 F.3d 860, 867 (3d Cir. 1995). Back pay may be awarded even if an exact dollar calculation is impossible. See Christopher v. Stouder Mem'l Hosp., 936 F.2d 870, 880 (6th Cir. 1991). The court may estimate what a claimant's earnings would have been without discrimination, and uncertainties are resolved against a discriminating employer. See Wooldridge v. Marlene Indus. Corp., 875 F.2d 540, 549 (6th Cir. 1989); Taylor v. Central Penn. Drug & Alcohol Servs. Corp., 890 F. Supp. 360, 370 (M.D. Pa. 1995).
Durham argues that the District Court used the wrong base salary for Evans because it used Evans's 1992 salary even though she left in 1993. This meant the difference between $119,000 and $66,000, or $53,000 per year. Durham cites to other cases that used a plaintiff's salary on the last day of employment to calculate back pay, even though the harassment had preceded that last day. Durham's precedents are easily distinguishable, because they concern cases of harassment that did not have a tangible impact on plaintiffs' compensation. See, e.g., Virgo v. Riviera Beach Assoc., Ltd., 30 F.3d 1350 (11th Cir. 1994). If Durham's argument were to be accepted, then it would be 26 to a discriminator's advantage to increase its mistreatment from a hostile environment to a decrease in pay, so that any ultimate penalty would be minimized. Evans's attempts to deal with the discrimination without quitting, despite the negative effects on her salary, should not be held against her. The District Court did not abuse its discretion when it used Evans's salary from 1992, the last full year before the discrimination began, as the benchmark. Because Evans's salary when she left was less than a nondiscriminatory salary would have been, it should not be used as the benchmark. See EEOC v. Delight Wholesale Co., 973 F.2d 664, 668, 670 (8th Cir. 1994); cf. Gunby v. Pennsylvania Elec. Co., 840 F.2d 1108, 1119 (3d Cir. 1988) (back pay should be the difference between actual wages and the wages the plaintiff would have earned absent discrimination). Evans consistently earned $90,000 per year in the last few years before she came to Durham, and she was a leading producer at Durham, earning $128,000 and then $119,000. It was reasonable to conclude that, but for the discrimination, Evans would have continued her outstanding performance. Cf. Goss, 747 F.2d at 889 (upholding the District Court's calculation of commissions lost through discrimination because the estimates were reasonably based on the plaintiff's past performance);11 Gallo, 779 F. Supp. at 808 (calculating back pay on a commission basis and taking into account plaintiff's demonstrated ability to get commissions).
According to Durham, Evans made $65,955 in 1993, of which she earned $15,000 at Paul Revere. At $5000 per month, this was more than the $4200 per month she made at Durham. Ordinarily, there is no entitlement to back pay _________________________________________________________________ 11. Goss is particularly apposite, because in that case, as here, the employer was undergoing some turmoil that arguably exerted downward pressure on everyone's commissions. Exxon objected to the District Court's choice of a base year because, it argued, that year was not representative of the new order. See Goss, 747 F.2d at 889. The court rejected Exxon's claim because the wrongdoer should bear the risk of uncertainty, not the victim. See id. 27 when the claimant makes more money at another job than she could have made at her former job. Durham suggests that Evans is therefore not entitled to any back pay. There are two reasons that Durham's claim fails. First, because we find that the District Court did not abuse its discretion when it chose 1992 as the benchmark year, it follows that Evans was earning almost $10,000 per month in the absence of discrimination, and so she did not get a better-paying job for back pay purposes. Second, Evans's success at Paul Revere was short-lived, and ended in February 1994. After that, she made substantially less per month, and it would be both unfair and illogical--in the absence of a finding that she unreasonably failed to mitigate her damages--to reduce her award by the sums that Durham projects that she could have earned. Significantly, the court found that her decline was caused by Durham's actions against her, which ultimately led her to take disability leave from Paul Revere. Because Durham's conduct affirmatively impaired her ability to mitigate her damages, it would be inequitable to reduce her back pay award in this case. 3. Durham's Post-employment Actions Against Evans Anticipating this response to Durham's back pay argument, Durham contends that there is no support in the record for the proposition that adverse actions against Evans after her employment ended justify continuing the back pay award. In particular, Durham notes that there are no findings that it retaliated against Evans for engaging in a protected activity. The District Court apparently did not discuss retaliation because it treated the post-employment actions as continuing discrimination. Post-employment actions by an employer can constitute discrimination under Title VII if they hurt a plaintiff's employment prospects. See Passer v. American Chem. Soc'y, 935 F.2d 322, 331 (D.C. Cir. 1991) (ADEA case); London v. Coopers & Lybrand, 644 F.2d 811, 816 (9th Cir. 1981); Shehadeh v. Chesapeake & Potomac Tel. Co., 595 F.2d 711, 719-21 (D.C. Cir. 1978); Daley v. St. Agnes Hosp., Inc., 490 F. Supp. 1309, 1313 (E.D. Pa. 1980). The lawsuit against Evans and the complaints to the 28 Insurance Department had the potential to affect her ability to sell insurance, and the District Court found that she was powerfully affected because of the anxiety created by the investigation. This kind of threat to Evans's livelihood is sufficiently employment-related to be an employment action. See Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 198 (3rd Cir. 1994) (post-employment threat to a teacher's license constituted employment action). The conclusion that the post-employment actions were a continuation of the initial discrimination seems plausible in light of the finding that, during her employment with Durham, her agency manager impliedly threatened to file a lawsuit against Evans if she were to quit after the discrimination began. Furthermore, Durham's conduct in filing suit against Evans for replacing sixteen policies while ignoring the conduct of a man who transferred 170 policies could support the inference that the lawsuit was filed for discriminatory, not simply retaliatory, reasons. Evans further argues that the evidence would support upholding the District Court on a claim of post-employment retaliatory conduct. Title VII prohibits retaliation against employees who engage in a protected activity such as stating a claim of discrimination (as Evans did in her resignation letter) and filing suit. See 42 U.S.C. S 2000e-3(a). We agree that the facts found by the District Court would support a retaliation claim. Durham, citing Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 741 (1983), responds that filing a lawsuit against Evans for breach of her non-competition agreement cannot form the basis of a retaliation claim unless the lawsuit lacked a reasonable basis because of Durham's First Amendment right to take disputes to the courts. Bill Johnson's, however, construed a specific, ambiguous provision of the NLRA defining unfair labor practices. Its reasoning has not been extended to Title VII, in part because the prohibition on retaliation is so explicit and the public policy behind the retaliation provision so compelling. In addition, Durham took other post-employment actions besides filing the lawsuit against Evans, and we need not rely on the lawsuit to find retaliatory conduct. John Heyman, an agency manager, failed to conduct a full audit 29 of Evans's accounts, contrary to industry custom and to Durham's own policies. Because Evans's accounts were left up in the air, policyholders made inquiries that ultimately became complaints when payments that should have been prepaid were not made. Durham states that the evidence is clear that the complaint letters about Evans came from policyholders and were not solicited by Durham. Yet the evidence supports the conclusion that it was Durham's unusual inaction that set the entire process in motion. Rather than acting in its own self-interest and keeping Evans's former clients satisfied with their Durham policies, the record shows that Durham allowed record-keeping problems to escalate into complaints. Durham also sent letters to all of Evans's clients that arguably encouraged such complaints. The complaints only targeted Evans despite the concurrent involvement of a man in 75% of the relevant cases. 12 Most importantly, as a result of the complaints, the Pennsylvania Insurance Department investigated Evans. Durham contends that the investigation occurred without Durham's urging. But that is a disputed issue and, at all events, it could be inferred that the investigation would not have happened but for Durham's arguably discriminatory failure to audit Evans's accounts properly. In addition, unprompted by the Insurance Department, Heyman sent it information mistakenly indicating that Evans had committed a serious offense. Evans testified to the seriousness of the resulting charges and the negative effects this series of events had on her ability to continue her insurance work. These facts resemble those in other cases in which courts have found retaliation when an employer instigates _________________________________________________________________ 12. Heyman and others testified that they refused to return phone calls when anyone called to ask about Evans's policies after she left. Durham apparently reads this testimony to suggest that its employees did not instigate any complaints. After the somewhat disturbing letter they sent to Evans's former customers, however, policyholders might well be more likely to write out a complaint, and to name the only person whose name they knew, at least if no one else at the insurance company would answer questions about the policies. 30 government action against a former employee. See Berry v. Stevinson Chevrolet, 74 F.3d 980, 985 (10th Cir. 1996) (encouraging a person to report the suspected crime of a former employee can be retaliation); Beckham v. Grand Affair, Inc., 671 F. Supp. 415, 419 (W.D.N.C. 1987) (reporting a former employee for criminal trespass can be actionable retaliation); see also EEOC v. Virginia Carolina Veneer Corp., 495 F. Supp. 775, 777 (W.D. Va. 1980) (filing a state law defamation claim against an ex-employee is impermissible retaliation), appeal dismissed, 652 F.2d 380 (4th Cir. 1981). These cases reasoned that such instigation could constitute a retaliatory adverse employment action because government investigation can hurt a person's employment prospects. The same reasoning would support a finding that post-employment attempts to get a person investigated can be employment discrimination. Cf. Charlton, 25 F.3d at 198 (suggesting that post-employment action might sustain a claim of discrimination as well as of retaliation). In sum, we conclude that Durham's post-employment acts against Evans at the very least prevent Durham from arguing that Evans unreasonably failed to mitigate her damages, which is the only way Durham could avoid a back pay award under these circumstances.13 _________________________________________________________________ 13. Evans argues that the District Court erred by miscomputing her back pay. Durham responds that she should have made a post-trial motion to correct the judgment under Fed. R. Civ. P. 52(b). Rule 59(e) would be more appropriate, as Rule 52(b) concernsfindings and their effects on the judgment rather than errors in the judgment alone, but the general point is well taken. See Perez v. Cucci, 932 F.2d 1058, 1059 (3d Cir. 1991) (Rule 59(e) should be used to challenge inclusion of back pay award). The miscomputation alleged is a bit confusing, since Evans argues that the court attributed too much to her in employer matching pension funds and then too little in lost compensation, resulting in a figure that was in total too low. It is not clear how she derived this calculation, because the District Court's award does not set forth amounts for specific categories of loss. This does not seem to be a clerical mistake, which would be correctable under Rule 60(a). Back pay is within the discretion of the District Court, and we do not have reason to conclude that the District Court abused its discretion. 31