Opinion ID: 541961
Heading Depth: 1
Heading Rank: 2

Heading: Matlack's Appeal

Text: A. Willfulness 12 Under the ADEA, a successful plaintiff is entitled to double damages under the liquidated damages provision only when the factfinder has determined that the violation of the Act was willful. 29 U.S.C. Sec. 626(b) (1982). This court confronted the standard of conduct to be applied to the willfulness determination in Dreyer v. Arco Chemical Co., 801 F.2d 651 (3d Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1348, 94 L.Ed.2d 519 (1987). We found guidance in the opinion of the Supreme Court in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985), where the Court stated that Congress intended a two-tier liability scheme and that double damages should not be awarded in every ADEA case. Thurston, 469 U.S. at 128, 105 S.Ct. at 625. The standard for willfulness for liquidated damages announced in Thurston looked to whether the employer knew or showed reckless disregard for whether its conduct in promulgating a corporate policy had a disparate impact on protected employees. Id. In Dreyer, we reasoned that the Thurston standard is not easily incorporated in cases alleging disparate treatment in a discrete employment situation because in such situations, which necessarily involve intentional conduct, the employer will have known or should have known that the conduct violated the Act. Dreyer, 801 F.2d at 656-58. We concluded that in order to effectuate the two-tiered standard to sustain liquidated damages there must be some additional evidence of outrageous conduct. Id. at 658 (adopting the standard of the Restatement (Second) of Torts Sec. 908(2) for punitive damages). 13 Defendant incorrectly construes this statement as imposing a quantitative requirement for a finding of willfulness. In fact, we were also applying a qualitative analysis. Although willfulness will probably be proved in most cases by evidence additional to that required to show an ADEA violation, in an appropriate case, one act, if it meets the qualitative standard, could show both intentional age discrimination and willfulness. See Dreyer, 801 F.2d at 658 (The circumstances of the violation itself may be so egregious ... that double damages may be warranted.). We suggested looking at  'the character of the defendant's act, [and] the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause.'  Id. (quoting Restatement (Second) of Torts Sec. 908(2) (test for punitive damages)). 14 In Dreyer, we eschewed providing a litany of situations which would warrant a factfinder in finding willfulness, noting that in most cases liquidated damages would be dependent upon an ad hoc inquiry into the particular circumstances. 2 Nonetheless, review of the fact patterns in the series of cases on the willfulness issue decided by this court since Dreyer is informative of our application of the general principle. See Anastasio v. Schering Corp., 838 F.2d 701 (3d Cir.1988); Lockhart v. Westinghouse Credit Corp., 879 F.2d 43 (3d Cir.1989); Bartek v. Urban Redevelopment Auth., 882 F.2d 739 (3d Cir.1989); Bruno v. W.B. Saunders Co., 882 F.2d 760 (3d Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 880, 107 L.Ed.2d 962 (1990); Turner v. Schering-Plough Corp., 901 F.2d 335 (3d Cir.1990). Only in Bruno did we sustain the finding of willfulness. 15 Kelly argues that the jury could have found willfulness in the fact that Matlack gave admittedly pretextual reasons both to her and to the EEOC as a justification for her termination. She also contends that the fact that she was required to file suit to meet these false defenses goes to the extent of the harm she suffered and therefore provide[s] ample justification for the award of liquidated damages. Appellee's Brief at 19. 16 These facts cannot alone be enough to establish willfulness. In each of our ADEA cases cited above, defendant proffered a reason other than age for the termination and the factfinder found that reason to be pretextual. None of our cases found that fact to be sufficient evidence of willfulness. 17 In Anastasio, a 62-year old manager of engineering was terminated when his position was eliminated, ostensibly to meet budgetary guidelines, and he declined to accept the lower grade non-managerial positions offered. Although a 38-year old manager was added before his termination, and three additional managerial positions were created three days after Anastasio's termination and filled by people in their thirties, see 838 F.2d at 705-07, we found insufficient evidence of willfulness. Id. at 706-07. In Dreyer, the two plaintiffs were given pretextual reasons for their discharge, but we overturned the jury's willfulness finding. See 801 F.2d at 656-59. In Bartek, the employer's failure to promote plaintiff because he was allegedly not as qualified as the younger persons promoted was determined to be pretextual but we vacated the award of liquidated damages. See 882 F.2d at 744-46. In our most recent case on this issue, Turner, we held that a jury could find that the reason given to terminate plaintiff rather than offer him a new position was pretextual, but we found no basis to allow the jury to award punitive damages. See Turner, 901 F.2d at 346-47. Those precedents establish that pretext alone is no basis to award liquidated damages. 18 Nor do we see any reason to hold that the fact that defendant chose to litigate its defense shows the type of willfulness that warrants liquidated damages. If it were, then any jury could automatically award the double damage remedy. Although Kelly argues that the litigation posture of Matlack enhanced her damages and therefore supports the finding of willfulness, in Turner we held that termination which diminished the size of Turner's vested pension and thereby enhanced his damages was not enough to require a trial on the liquidated damages claim. If it were, the admittedly wavering line between ordinary cases of age discrimination and outrageous cases warranting liquidated damage awards would be wholly obliterated. Id. at 347. 19 Kelly points to the evidence that the younger employee who had taken over her work met with her to learn her procedures. She states that in Lockhart we cited this type of conduct as warranting the imposition of liquidated damages. The reference in Lockhart, however, merely stated that a jury might find evidence of outrageous behavior if an employer requested that an older employee train a young, inexperienced person for his job prior to involuntary termination. Lockhart, 879 F.2d at 58 n. 18. That is not the situation here. The employee who absorbed Kelly's duties had been employed by the company for approximately the same number of years as Kelly and had been in charge of the department to which Kelly's administrative duties were transferred in the reorganization. The need to ascertain the nature of Kelly's duties had none of the aspects of humiliating conduct implied in the Lockhart footnote. 20 The strongest evidence tending to show that Matlack's conduct was willful is that Matlack misled Kelly into believing that she would have a job after the Lansdowne facility was closed and that she was induced to stay with the company for several months because of that misrepresentation. Once again, we look to our precedent for guidance. Durham, one of the plaintiffs in Lockhart, had also been informed that he was to have the position newly created as a result of the corporate reorganization, that of Atlanta Area Business Center Manager, see 879 F.2d at 50, and as evidence of outrageous conduct he pointed to the facts that he worked an overwhelming amount of extra hours in planning the Atlanta Area Business Center, that he was asked to work a month after notification of his discharge to train his reputed replacement, and that his termination occurred when he was under a contract to buy a new home that he was forced to buy while jobless. Id. at 58. We ruled, nonetheless, that this proffered evidence falls short of that 'minimum quantum' needed to support the jury's finding of willful discrimination. Id. Kelly's evidence in this case is certainly no more suggestive of outrageousness than was that in Lockhart. 3 21 Finally, we must compare the evidence in this case with that in Bruno v. W.B. Saunders Co., 882 F.2d 760 (3d Cir.1989), where we held that there was sufficient evidence to support the jury's finding of willfulness. In Bruno, as in this case, a department was closed and the job held by the plaintiff was eliminated. See id. at 762-63. In Bruno, unlike this case, an existing job became open into which a far less senior employee was placed, and we held that there was evidence from which a jury could have inferred that the job description created by defendant was intended to provide justification for the selection of the younger employee over Bruno. See id. at 771. 22 In reviewing Bruno in the context of our other precedent, we deem it significant that Bruno testified that her employer conditioned its offer of a position at another facility on Bruno's dropping the age discrimination charge which she had filed with the EEOC. See id. at 770. Although any violation of the ADEA subverts Congress' policy to eliminate age discrimination from our economy, an attempt by the employer to pressure an employee to withdraw a charge circumvents the central role Congress gave to the EEOC in the investigation, conciliation and mediation of instances of alleged age discrimination. A jury crediting testimony of an employer's effort to bypass the EEOC may reasonably view the insidious effect of such conduct as warranting liquidated damages. 23 In this case, there is an absence of any comparable conduct. There was a corporate reorganization; Kelly's job was eliminated; her duties folded into that of a younger employee but one with equivalent seniority and with more experience on the sophisticated computer system; Kelly pointed to no available position which would have been suitable for her, and complains primarily because the employer failed to create a new position for her. While the employer's pretextual reasons for Kelly's termination and its action in misleading her into believing she would be retained could have been evidence to support the jury's verdict of age discrimination, an issue that is not before us, we see insufficient evidence from which the jury could have found willful conduct to support liquidated damages. We will therefore reverse the district court's order denying defendant's motion for a JNOV on liquidated damages. 4 B. The Fringe Benefit Claim 24 Matlack's other claim on its appeal is that the jury's award of thirty percent of Kelly's back pay and front pay as fringe benefits is not supported by the evidence. To show the lost fringe benefits, Kelly introduced into evidence an earlier employee handbook that referred to the benefits as your invisible paycheck and listed the employees' fringe benefits as consisting of vacations, holidays, sick leave/funeral leave, short and long term disability benefits, tuition aid program, comprehensive hospital, surgical and medical benefits, including dental and vision care, life and accidental death insurance, pension plan, social security contributions, workmen's compensation contributions, and state and federal unemployment contributions. The handbook then stated, [t]he current value of your Invisible Paycheck is approximately 30 [cents] for each dollar of your pay. App. at 72. Defendant did not object at the time of the introduction of this evidence. 25 To rebut Kelly's evidence on fringe benefits, Matlack introduced its 1984 handbook in effect when Kelly was terminated, which did not contain the invisible paycheck language. It introduced an expert witness to support its contention that nine of the eleven benefits listed in the handbook were already reflected in the employees' paychecks. That witness also testified that the cost to Matlack of hospitalization for each employee was $757 per year, and Matlack concedes that even under its position, Kelly lost not only her medical benefits but also her pension benefits. 26 When the special interrogatory on fringe benefits was presented to the jury, the jury was given only two choices as to the value of the benefits lost: 30% of pay or $757. Matlack did not object to the interrogatory. A jury is free to select the highest figure for which there was evidentiary support. 5 The jury in this case chose the plaintiff's version based, as it was, on Matlack's own words in its handbook. The jury could have reasonably believed that even though the handbook at the time of Kelly's termination did not contain the 30% language, that value continued to apply because there was testimony that the same fringe benefits were included. We cannot say that the jury's decision had no basis in the evidence. Thus, there was no error of law nor did the district court abuse its discretion in denying defendant's motion for JNOV or a new trial on this ground.