Opinion ID: 1863815
Heading Depth: 2
Heading Rank: 1

Heading: Front pay damages.

Text: 1. Background. Channon contends the district court erred in concluding that front pay constitutes future pecuniary loss, subject to the compensatory damages cap imposed by 42 U.S.C. § 1981a(b)(3)(D). She asserts front pay is an equitable remedy exempt from the cap. Because Channon's contention implicates the interpretation of federal statutes, our review is for correction of errors of law. See Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 460 (Iowa 2000). Channon's sex discrimination claim is premised on 42 U.S.C. § 2000e-2. That statute pertinently provides that [i]t shall be an unlawful employment practice for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's... sex.... 42 U.S.C. § 2000e-2(a)(1). That statute also pertinently provides that [i]t shall be an unlawful employment practice for an employer ... to limit, segregate, or classify his employees ... in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's ... sex.... 42 U.S.C. § 2000e-2(a)(2). Channon's retaliation claim is premised on 42 U.S.C. § 2000e-3. That statute pertinently provides: It shall be an unlawful employment practice for an employer to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter. 42 U.S.C. § 2000e-3(a). Section 102 of the Civil Rights Act of 1991, as codified at 42 U.S.C. § 1981a(a), significantly expands the monetary relief potentially available to plaintiffs who would have been entitled to back pay under prior law. Before 1991, for example, monetary relief for a discriminatorily discharged employee generally included only an amount equal to the wages the employee would have earned from the date of discharge to the date of reinstatement, along with lost fringe benefits such as vacation pay and pension benefits. United States v. Burke, 504 U.S. 229, 239, 112 S.Ct. 1867, 1873, 119 L.Ed.2d 34 (1992). Under § 102, however, a Title VII plaintiff who wins a back pay award may also seek compensatory damages for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. [42 U.S.C. § 1981a(b)(3).] In addition, when it is shown that the employer acted with malice or with reckless indifference to the [plaintiff's] federally protected rights, [42 U.S.C. § 1981a(b)(1)], a plaintiff may recover punitive damages. Landgraf v. USI Film Prods., 511 U.S. 244, 253-54, 114 S.Ct. 1483, 1491, 128 L.Ed.2d 229, 245 (1994). However, [42 U.S.C. § 1981a(b)(3)] imposes limits, varying with the size of the employer, on the amount of compensatory and punitive damages that may be awarded to an individual plaintiff. Thus, the sum of such damages awarded a plaintiff may not exceed $50,000 for employers with between 14 and 100 employees; $100,000 for employers with between 101 and 200 employees; $200,000 for employers with between 200 and 500 employees; and $300,000 for employers with more than 500 employees. Id. at 254 n. 6, 114 S.Ct. at 1491 n. 6, 128 L.Ed.2d at 245 n. 6. There is no dispute that $300,000 is the relevant cap in this case. See 42 U.S.C.A. § 1981a(b)(3)(D). The question is whether front pay damages fall within the term future pecuniary damages as used in 42 U.S.C. § 1981a(b)(3). If so, such damages would be subject to the $300,000 cap. The term front pay is not found in the Civil Rights Act of 1964. However, courts have defined the concept to mean the amount of pay the plaintiff would have received had [he or she] continued in [his or her] position after a judgment in [his or her] favor. Eileen Kuklis, Comment, The Future of Front Pay Under the Civil Rights Act of 1991: Will it be Subject to the Damage Caps? 60 Alb. L.Rev. 465, 468 (1996) [hereinafter Kuklis]; see also Hudson v. Reno, 130 F.3d 1193, 1203 (6th Cir.1997) (`Front pay' is widely defined as the salary that an employee would have received had he or she not been subjected to unlawful discrimination of his or her employer, subject to the employee's mitigating his or her damages.). Front pay is a form of relief that assumes the plaintiff would have continued in [his or her] position absent unlawful actions by the defendant. Kuklis at 469. The 1964 Act did not expressly provide for a damages award in the form of front pay. Id; see 42 U.S.C. § 2000e-5g. Nevertheless, before the enactment of 42 U.S.C. § 1981a, courts hearing Title VII actions often awarded front pay, in lieu of reinstatement, where reinstatement was deemed inappropriate or merely delayed by the defendant and the award of back pay had failed to make the plaintiff `whole.' Kuklis at 469 (footnote omitted); see Scarfo v. Cabletron Sys., Inc., 54 F.3d 931, 954 (1st Cir.1995) (holding that [i]n a Title VII case, the court has discretion to award front pay from the date of judgment forward when reinstatement is impracticable or impossible). In providing for front pay in Title VII cases, courts often treated the remedy as equitable in nature. In doing so, the courts have relied on 42 U.S.C. § 2000e-5(g)(1) (providing that the court may order reinstatement or any other equitable relief as the court deems appropriate). See EEOC v. Gen. Lines, Inc., 865 F.2d 1555, 1561 (10th Cir.1989). As mentioned, however, the Civil Rights Act of 1991 imposed a cap on recovery of compensatory damages ... for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. 42 U.S.C. § 1981a(b)(3). Compensatory damages awarded under the Act excludes back pay, interest on back pay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964 [42 U.S.C. § 2000e-5(g)]. 42 U.S.C. § 1981a(b)(2) (emphasis added). In relevant part, § 706(g) provides: If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include but is not limited to, reinstatement or hiring of employees, with or without back pay ... or any other equitable relief as the court deems appropriate. 42 U.S.C. § 2000e-5(g)(1)(A) (emphasis added). 2. Analysis. In deciding whether front pay is subject to the compensatory damages caps, the federal circuits which have decided the question present the issue this way: Is front pay compensatory damages... for future pecuniary losses or is it any other type of relief authorized under section 706(g)i.e., any other equitable relief that the court deems appropriate? Here the district court held that front pay constituted compensatory damages... for future pecuniary losses and therefore subject to the damages cap. We need not dwell on this issue because our holding on the allocation issue in division II.B of this opinion renders this issue moot. In addition, the United States Supreme Court has recently held that front pay is any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964. Pollard v. E.I. du Pont de Nemours & Co., ___ U.S. ___, 121 S.Ct. 1946, 1952, ___ L.Ed.2d ___ (2001). Front pay, is therefore not subject to the damages cap, and the district court erred in concluding otherwise. Id.