Opinion ID: 629124
Heading Depth: 2
Heading Rank: 4

Heading: Calculation of Title VII Damages

Text: 30 Saulpaugh next contends that the district court erred in calculating the damages it awarded her. Specifically, Saulpaugh argues that the district court: (1) erred in excluding salary for her period of disability from its award of back pay; (2) erred in excluding the value of lost employer retirement contributions; (3) abused its discretion by failing to compound the interest that it awarded her; and (4) abused its discretion by failing to award Saulpaugh the equitable remedy of front pay. We will address each of these contentions in turn. 31 Given Saulpaugh's success on her claim for retaliatory discharge, she would ordinarily be entitled to an award of back pay from the date of her termination until the date of judgment. See Dunlap-McCuller v. The Riese Organization, 980 F.2d 153, 159 (2d Cir.1992). The purpose of back pay is to completely redress the economic injury the plaintiff has suffered as a result of discrimination. See Gutzwiller v. Fenik, 860 F.2d 1317, 1333 (6th Cir.1988); see also Sellers v. Delgado Community College, 839 F.2d 1132, 1126 (5th Cir.1988) (holding that a back pay award should make injured parties whole by placing them in the position that they would have been but for the discrimination). This award should therefore consist of lost salary, including anticipated raises, and fringe benefits. Id. 32 The district court nevertheless excluded from its award the differential in Saulpaugh's salary from 1988 on, because she has been disabled since that date, and would not have been able to work at the Hospital. Saulpaugh argues that as the wrongdoer, the Hospital should bear the risk of her injury. However, Saulpaugh is only entitled to losses suffered as a result of defendants' discrimination. See Gutzwiller, 860 F.2d at 1333. Because Saulpaugh would not have been entitled to her salary from the Hospital while disabled, her losses after 1988 were not the result of the discrimination that she suffered. See EEOC v. Independent Stave Co., Inc., 754 F.Supp. 713, 721 (E.D.Mo.1991) (awarding back pay from the date of discharge until date of disability). Likewise, Saulpaugh is not entitled to retirement benefits, because her benefits would not have vested before she became disabled. 33 Title VII authorizes a district court to grant pre-judgment interest on a back pay award. See, e.g., Clarke v. Frank, 960 F.2d 1146, 1153-54 (2d Cir.1992). Its purpose is to prevent an employer from attempting to enjoy an interest-free loan for as long as it can delay paying out back wages. Id. at 1154 (citation omitted). Therefore, this Court has held that it is ordinarily an abuse of discretion not to include pre-judgment interest in a back-pay award. Id. (emphasis in original). Given that the purpose of back pay is to make the plaintiff whole, it can only be achieved if interest is compounded. For example, if the average interest rate from Saulpaugh's discharge until her award was 7.22% a year, not an unreasonable estimate, then a $1 loss in 1985 would be worth approximately $1.83 in the beginning of 1993. By awarding Saulpaugh the equivalent of only $1.07, the district court was not making her whole and was instead effectively giving the defendants an interest free loan except for one year's worth of interest. Because the district court did not make Saulpaugh whole, its failure to apply a compound rate of interest to its calculation of damages constituted an abuse of discretion. See Clarke, 960 F.2d at 1153. On remand, however, the district court may wish to deny interest for specific years if it concludes that a delay in the litigation was the result of dilatory tactics by the plaintiff. We leave this determination to the district court in the first instance. 34 Finally, the district court did not abuse its discretion in denying Saulpaugh the remedy of front pay. The award of front pay is discretionary, and where as here the district court makes a specific finding that an award of back pay was sufficient to make a plaintiff whole, no abuse of discretion can be found. Cf. Barbano v. Madison County, 922 F.2d 139, 147 (2d Cir.1990) (holding that failure to award front pay, because the district court impliedly found that other relief was sufficient, did not constitute an abuse of discretion).