Opinion ID: 28771
Heading Depth: 2
Heading Rank: 6

Heading: Compensatory Damages – Back Pay and Front Pay

Text: In reviewing a district court’s damage award, this court reviews all issues of law de novo. Rhodes v. Guiberson Oil Tools Div’n, 82 F.3d 615, 620 (5th Cir. 1996) (Rhodes II). “Absent an error of law, a district court's award of compensatory damages presents an issue of fact, subject to the clearly erroneous standard of review.” Id. If the district court’s factual findings are plausible in light of the evidence presented, this court will not reverse its decision even if this court would have reached a different conclusion. Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927, 936 (5th Cir. 1996). The Appellees, on their cross-appeal, challenge the district court’s limitation of the back pay award to compensation through May 25, 2000 – the date Unocal/Spirit’s Permian Basin operation ceased to exist – rather than through September 29, 2000 – the date of the final judgment. The Appellees also appeal the district court’s denial of a front pay award.
The purpose of ADEA back pay compensation is to restore the plaintiff to the position he would have been in absent the discrimination. McKennon v. Nashville Banner Public Co., 115 47 S.Ct. 879, 886 (1995). The purpose is not to restore a plaintiff to a better position than he would have been in. Cf. id. (compensatory principle is difficult to apply when there is after-acquired evidence of plaintiff’s wrongdoing that would have led the employer to terminate plaintiff anyway for a legitimate reason). As a matter of law, the district court did not err in finding that it could award back pay for some period less than the entire time up to the date of the judgment. Cf. Brunneman v. Terra Intern. Inc., 975 F.2d 175, n.5 (5th Cir. 1992) (affirming jury award of back pay up to date of judgment, but not suggesting such an award was mandatory). The determination of the proper period for awarding back pay is a factual matter that should be set aside only if clearly erroneous. Id. In the instant case, the district court’s conclusion that back pay should only be awarded through the May 25, 2000 cessation of Unocal/Spirit’s operation was not clearly erroneous. Cf. McKennon, 115 S.Ct. at 361 (in awarding back pay, district court can take account of “factual permutations” in the particular case). The factual finding that the business entity that employed the Appellees ceased to exist on May 25 is undisputed. Even absent discrimination, the Appellees would no longer be employed by Unocal and would not have received wages. The Appellees argue, however, that Pure was the alter ego of Unocal. They emphasize that Unocal was the majority shareholder 48 in Pure and controlled Pure’s board of directors and that about seventy percent of Spirit employees moved to Pure. But the district court heard the evidence concerning the sale of Unocal’s operations to Pure and impliedly found that Pure was not Unocal’s alter ego or agent. The Appellees’ assertions do not, without more, demonstrate that the district court’s finding was clearly erroneous. We decline to disturb the district court’s award of back pay.
Front pay is an equitable remedy that is normally employed when the ADEA’s preferred remedy of reinstatement is impracticable. Patterson, 90 F.3d at 937 n.8; Brunnemann, 975 F.2d at 180. A front pay award is intended to compensate the plaintiff for wages and benefits he would have received from the defendant employer in the future if not for the discrimination. Burns, 890 F.2d at 753. This court reviews a district court’s determination regarding a front pay award for abuse of discretion. Id. In the instant case, if, as we hold above, the district court’s back pay finding was not clearly erroneous, then the district court did not abuse its discretion by holding that the Appellees were not entitled to front pay. The back pay finding was effectively a finding that the Appellees would not have 49 received future wages from Unocal, even absent the discrimination. See id. at 753 (front pay award would be “purely speculative” when defendant employer sold assets to another company and many employees were terminated). We affirm the district court’s holding that the Appellees were not entitled to an award of front pay. VIII. Whether Hough and Earles Were Exempt Under the FLSA Hough and Earles appeal the district court’s bench trial holding that they were “exempt” administrative employees under the FLSA and therefore not entitled to compensation for unpaid overtime. The FLSA imposes maximum work hour standards and requires employers to compensate employees who work overtime. 29 U.S.C. § 207. Employees who are classified as “exempt” are not entitled to such compensation; in pertinent part, 29 U.S.C. § 213(a)(1) exempts “any employee employed in a bona fide executive, administrative, or professional capacity.” These exemptions are construed narrowly against the employer and the employer has the burden of proving that an employee is exempt. Dalheim v. KDFWTV, 918 F.2d 1220, 1224 (5th Cir. 1990) The district court’s findings as to whether an employee is exempt are reviewed under a mixed standard of review. In Dalheim, this court recognized that it can be difficult to discern which issues in this inquiry are questions of law and which are questions of fact. Id. at 1225. 50 The Dalheim court explained that questions of “historical fact” (e.g., whether an employee’s work was reviewed by a supervisor) and inferences drawn from historical facts (e.g., whether an employees work is “original and creative”) are fact findings reviewed for clear error. Id. at 1226. The ultimate finding whether the employee is exempt, though based on historical fact and factual inferences, is a legal conclusion subject to plenary de novo review. Id. Thus, the proper inquiry in the instant case is (1) whether the district court’s historical factual findings and factual inferences were clearly erroneous and, (2) whether they support the district court’s legal conclusion that Hough and Earles were exempt under the administrative exemption. The Secretary of Labor has defined the test for the administrative exemption for employees who, like Hough and Earles, earned more than $250 per week, in 29 C.F.R. 541.2: An administratively exempt employee is one whose “primary duty” consists of “office or nonmanual work directly related to management policies or general business operations” and who “customarily and regularly exercises discretion and independent judgment.”15 The district court made findings of historical 15 The employee must also meet the following criteria: “(c)(1) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined in the regulations of this subpart), or (2) Who performs under only general supervision work along 51 fact concerning Hough and Earles’s employment and reached the legal conclusion that they met the test for the administrative exemption. Hough and Earles assert that they do not seek to set aside the district court’s factual findings and they do not argue that the specific findings listed by the district court are erroneous. They do, however, assert that the record contains additional evidence supporting further findings of fact. This amounts to requesting de novo review of the facts and is inappropriate for this court’s review of the district court’s factual findings made after a bench trial. See Owsley v. San Antonio Indep. Sch. Dist., 187 F.3d 521, 523 n.1 (distinguishing Dalheim, in which the court reviewed factual findings following a bench trial only for clear error, from Owsley, in which the court was reviewing a summary judgment de novo). The district court considered the evidence cited by Hough and Earles in reaching its understanding of the pertinent facts and implicitly rejected the further specialized or technical lines requiring special training, experience, or knowledge, or (3) Who executes under only general supervision special assignments and tasks; and (d) Who does not devote more than 20 percent, or, in the case of an employee of a retail or service establishment who does not devote as much as 40 percent, of his hours worked in the workweek to activities which are not directly and closely related to the performance of the work described in paragraphs
52 findings that they now urge. Because Hough and Earles have not shown that the court’s factual findings are clearly erroneous, and because they have not shown that the district court clearly erred in refusing to make the additional factual findings that they now assert, we take the district court’s factual findings as established and review its conclusions of law de novo. In Lott v. Howard Wilson Chrysler-Plymouth, 203 F.3d 326 (5th Cir. 2000), this court offered guidance for applying the administrative exemption: “The exercise of discretion and independent judgment necessitates consideration and evaluation of alternative courses of conduct and taking action or making a decision after the various possibilities have been considered. 29 C.F.R. § 541.207(a). This exercise of discretion and independent judgment must relate to matters of consequence. 29 C.F.R. § 541.207(b)-(c)(1). Final decision making authority over matters of consequence is unnecessary. As a general rule, an employee's ‘primary duty’ involves over 50% of the employee's work time. And yet, flexibility is appropriate when applying this rule, depending on the importance of the managerial duties as compared with other duties, frequency of exercise of discretionary power, freedom from supervision, and comparative wages.” Id. at 331 (case citations omitted). Further guidance is found in 29 C.F.R. § 541.201, in which the Secretary offers examples of staff employees who may typically qualify for the administrative exemption, provided they meet all the tests required in 29 C.F.R § 541.2. The district court’s factual findings concerning Hough’s position as HES Coordinator accord with the “safety director” position contemplated in 29 53 C.F.R. § 541.201(a)(2)(ii). Earles’s production technician position is analogous to the “field representatives of utility companies” and “district gaugers for oil companies” contemplated in 29 C.F.R. § 541.201(a)(3). The district court did not err in its legal conclusion that Hough and Earles were exempt employees. We affirm the district court’s holding that Hough and Earles were not entitled to compensation for unpaid overtime on their FLSA claims. IX. Whether Plaintiffs Were “Prevailing Parties” Entitled to Legal Fees The ADEA, by reference to the FLSA, mandates that a district court award attorneys’ fees to a plaintiff who is a “prevailing party.” Purcell, 999 F.2d at 961. The court has discretion in deciding what is reasonable. Id. In the context of a 42 U.S.C. § 1988 action in which a plaintiff was awarded only nominal damages, the Supreme Court explained that “to qualify as a prevailing party, a civil rights plaintiff must obtain at least some relief on the merits of his claim.” Farrar v. Hobby, 113 S.Ct. 566, 573 (1992). As detailed above, we affirm the district court’s judgment in favor of the Appellees as to several of their claims. These plaintiffs have obtained “at least some relief on the merits” and thus qualify as prevailing parties. We have held that liquidated damages must be awarded in an amount equal to the back pay award. 54 In light of this holding, we instruct the district court to consider on remand what, if any, adjustment should be made to the amount of the legal fees award.