Court Opinion

ID: 9488071
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:35:19.634169+00
Date Added: 2024-06-11T17:52:40.348997
License: Public Domain

GARTH, Circuit Judge,

concurring and dissenting.

I agree with the court that the jury verdict finding Westinghouse liable for an ADEA violation should be sustained. I cannot agree, however, that the same conduct charged to Westinghouse and found to violate the ADEA, without more, justified a finding that Westinghouse was willful in its violation of the ADEA, resulting in the imposition of a liquidated damages award. The court’s holding today leads ineluctably to the conclusion that every ADEA disparate treatment violation will also constitute a willful violation that permits a liquidated damages award.
I cannot agree with such a holding and I accordingly dissent from so much of the majority’s opinion as affirms the award of liquidated damages against Westinghouse.1
I.
The ADEA provides for liquidated damages of twice the backpay award when an employer’s violation of the ADEA is “willful.” 29 U.S.C. § 626(b). Congress added this penalty as a deterrent to knowing misconduct by employers. 113 Cong.Rec. 2199 (1967) (comments of Senator Javits).
Unfortunately, the term “willful” has eluded easy or precise definition. The difficulties which have attended the effort to define willfulness have resulted in numerous and sometimes conflicting decisions on the meaning and application of § 626(b). See 2 Howard C. Eglitt, Age Discrimination § 8.30 (2d ed. 1993). Nonetheless, while the courts of appeals have adopted different standards at different times, the courts have consistently adhered to two principles to resolve disputes under § 626(b).
First, courts have consistently acknowledged that Congress intended only some violations of the ADEA to be willful.
Second, courts have been careful not to punish good faith efforts by employers to comply with the Act.
Today’s decision by the majority ignores both of those principles.
This appeal represents this court’s first interpretation of willfulness since Hazen Paper v. Biggins, — U.S. —, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993). Hazen represents the Supreme Court’s latest restatement of the standard for willful violations. The majority’s disregard of the two established principles of interpretation under the ADEA, which I have identified, is therefore all the more troubling.
Before I discuss those principles and the majority’s failure to apply these principles in its analysis of the Stareeski record, I should explain that I have no quarrel with the court’s statement that willfulness exists when an employer “knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA.” Hazen, — U.S. at —, 113 S.Ct. at 1710. Rather, I strongly disagree with the majority’s application of this standard in the present appeal— an application that makes every ADEA violation a willful violation and ignores the good faith attempts of an employer to comply with its statutory duties.
II.
The Supreme Court and the courts of appeals have repeatedly recognized that Congress did not intend every violation of the ADEA to be a willful violation. In Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985), the Supreme Court rejected Thurston’s argument that a violation was willful whenever the employer knew the ADEA was “in the picture” because that standard would elimi*1105nate the distinction between ordinary and willful violations.
[T]he broad standard proposed by [Thur-ston] would result in an award of double damages in almost every case. As employers are required to post ADEA notices, it would be virtually impossible for an employer to show that he was unaware of the Act and its potential applicability. Both the legislative history and the structure of the statute show that Congress intended a two-tiered liability scheme. We decline to interpret the liquidated damages provision of ADEA § 7(b) in a manner that frustrates this intent.
Id. at 128, 105 S.Ct. at 625 (footnote omitted). Rather than adopt Thurston’s standard, the Court concluded that willfulness may be proved when the employer “knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA.” Id. at 126, 105 S.Ct. at 624 (quoting Air Line Pilots Ass’n v. Tran World Airlines, 713 F.2d 940, 956 (2d Cir.1983)). As the Supreme Court explained in Hazen, the principle adopted in Thurston, which it labeled the two-tiered liability principle, distinguishes between ordinary and willful violations:
The two-tiered liability principle was simply one interpretive tool among several that we used in Thurston to decide what Congress meant by the word “willful,” and in any event we continue to believe that the “knowledge or reckless disregard” standard will create two tiers of liability across the range of ADEA cases. It is not true that an employer who knowingly relies on age in reaching its decision invariably commits a knowing or reckless violation of the ADEA.
Hazen, — U.S. —, 113 S.Ct. at 1709.
Three years after Thurston, the Supreme Court had an opportunity to reconsider the principle of two-tiered liability in McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988), a case involving the statute of limitations under the FLSA. The FLSA provides for a three year statute of limitations following willful violations as compared to the ordinary two year statute of limitations. 29 U.S.C. § 255(a). The Court refused to abandon either the knowledge or reckless disregard standard or the principle that some but not all violations will be willful. “The fact that Congress did not simply extend the limitations period to three years, but instead adopted a two-tiered statute of limitations, makes it obvious that Congress intended to draw a significant distinction between ordinary violations and willful violations.” 486 U.S. at 132, 108 S.Ct. at 1681. A lower standard would “obliterate[ ] any distinction between willful and nonwillful violations” by adopting a more lenient standard. Id. at 132-33, 108 S.Ct. at 1681.
The Supreme Court in Hazen cautioned against abandoning the principle of two-tiered liability. Willful violations only extend to knowing or reckless violations of the ADEA, whether they result from formal or informal policies. — U.S. at —, 113 S.Ct. at 1709. The Court repeated that “Congress aimed to create a ‘two-tiered liability scheme,’ under which some but not all ADEA violations would give rise to liquidated damages.” Id. — U.S. at —, 113 S.Ct. at 1708 (quoting Thurston, 469 U.S. at 127, 105 S.Ct. at 624-25). Further, the Court took pains to demonstrate why the Thurston standard does not result in liquidated damages in every case. Id. — U.S. at —, 113 S.Ct. at 1709.
III.
The principle of two-tiered liability has not stood alone as an interpretive guide to the meaning of § 626(b) of the ADEA. Courts have also been guided by a desire to encourage good faith attempts at compliance with the ADEA.
In Thurston, the Court stressed this when it held that TWA had not acted willfully, despite the adoption of a policy which explicitly disadvantaged older workers, when the airline believed the policy was a permissible bona fide occupational qualification (BFOQ). The Court concluded that “[i]t is reasonable to believe that the [company and its lawyers], in focusing on the larger overall problem, simply overlooked the challenged aspect of the new plan.” 469 U.S. at 130, 105 S.Ct. at 626. Thus, TWA’s violation did not warrant liquidated damages. A company is not liable *1106for liquidated damages when it “act[s] reasonably and in good faith in attempting to determine whether [its] plan would violate the ADEA.” Id. at 129, 105 S.Ct. at 625.
The Court in Hazen also acknowledged the importance of a company’s good faith efforts to comply with the law. “If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed.” — U.S. at —, 113 S.Ct. at 1709.
The relevance of an employer’s good faith has been repeatedly recognized by the courts of appeals. See, e.g., Schrand v. Federal Pacific Electric Co., 851 F.2d 152, 158 (6th Cir.1988); Gilliam v. Armtex, Inc., 820 F.2d 1387, 1390 (4th Cir.1987); Whitfield v. City of Knoxville, 756 F.2d 455, 463 (6th Cir.1985).
IV.
Despite courts’ consistent use of these principles to guide the interpretation of § 626(b), the majority here fails to acknowledge or apply either. This failure unfortunately is not harmless because here the majority’s conclusion that Starceski is entitled to liquidated damages does violence to both.
A.
If we adopt the majority’s view of willfulness, every successful disparate treatment ease under the ADEA will also be treated as a willful violation. According to the court, the evidence that establishes willfulness is the testimony that Jaafar, Starceski’s supervisor, told Saul that Jaafar intended to discharge senior engineers and directed Saul to lower certain employee’s performance evaluations. While Westinghouse contends that Jaafar’s statement referred to the company’s job category “Senior Engineer A” and not to older employees, the jury could certainly have believed Starceski’s assertion that Jaa-far was actually referring to older engineers. Hence, the jury had grounds to decide that Jaafar, a Westinghouse supervisor, intentionally discharged Starceski because of his age — a violation of the ADEA.2
However, the existence of an intent to act on the basis of age, the sine qua non of an ADEA disparate treatment case, cannot by itself also be the determinant of willfulness. Such a rule extinguishes any distinction between an ordinary disparate treatment case and a willful violation. Every ADEA plaintiff who claims disparate treatment must prove that the employer intentionally acted on the basis of the plaintiffs age. Hazen, — U.S. at —, 113 S.Ct. at 1706-07; St. Mary’s Honor Center v. Hicks, — U.S. —, —, —, —, 113 S.Ct. 2742, 2748, 2751, 2756 125 L.Ed.2d 407 (1993); Seman v. Coplay Cement Co., 26 F.3d 428, 432-33 (3d Cir.1994); Colgan v. Fisher Scientific Co., 935 F.2d 1407, 1417 (3d Cir.1991). Disparate treatment cases are far and away the largest proportion of ADEA cases brought in the courts. Congress surely did not intend to permit an award of liquidated damages in every one of these cases.
The resulting tension is not solved by the court’s statement that evidence of intent by itself is reasonable evidence that Westinghouse “ ‘knew or showed reckless disregard’ for its statutory duty to avoid discriminating against Starceski because of his age.” Maj. Op. Typescript at 1099. This assertion does not “draw a significant distinction between ordinary violations and willful violations.” McLaughlin, 486 U.S. at 132, 108 S.Ct. at 1681.
*1107If, as the majority apparently believes, intent and willfulness are the same under the ADEA, it is virtually impossible for a defendant to defend against a claim of willfulness apart from its defense against the plaintiffs underlying ADEA claim. Moreover, it reduces the two-tiered liability principle to a single-tiered determination that the ADEA has been violated.
B.
Similarly, the majority ignores almost entirely Westinghouse’s proof of its good faith effort to avoid a violation of age or race discrimination laws during its reduction in force. The majority misconstrues Westinghouse’s argument as an attempt to show that the violation “resulted from no more than accident, inadvertence or ordinary negligence.” Maj. Op. at 1099. Westinghouse argues not that the violation was accidental but that Westinghouse did not recklessly disregard its duties under the Act as revealed by its review of its employment decisions to prevent employment discrimination.
Contrary to the majority, I believe the record reflects Westinghouse’s reasonable, if unsuccessful, effort to prevent discrimination. As Hazen and Thurston discuss, this good faith effort makes a liquidated damages award inappropriate. “If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed.” Hazen, — U.S. at —, 113 S.Ct. at 1709.
Once Westinghouse decided that it would need to lay off some employees, Westinghouse counseled all of its managers to choose employees based only on business reasons. App. 486. Once the managers chose candidates for lay off, each manager was required to give reasons for his or her decisions. App. 487. Two human resources employees and the company’s legal counsel reviewed these justifications for possible discrimination. App. 487.
According to these company reports, Starceski was chosen because the company lacked work in his division. App. 488. Westinghouse human resources personnel confirmed this characterization with Mr. Jaa-far’s manager, Mr. Esposito. App. 490. Starceski does not dispute that a number of projects in Westinghouse’s Nuclear Services Division were terminated or being wound up during the time period in which he was laid off. These facts gave Westinghouse personnel more reason to credit Jaafar’s representation. Though Westinghouse did not investigate Jaafar’s and Esposito’s statements further, the circumstances disclosed by the record gave Westinghouse every reason to believe that the sole reason for Starceski’s discharge was the lack of work in his department.
Given the importance of good faith to our prior interpretations, willfulness is surely not demonstrated simply by showing that Westinghouse informed its managers of the ADEA and proof that an ADEA violation occurred. Thurston itself declined to hold “that a violation of the Act is ‘willful’ if the employer simply knew of the potential applicability of the ADEA.” 469 U.S. at 127, 105 S.Ct. at 625; see also Sanchez v. Puerto Rico Oil Co., 37 F.3d 712, 721 (1st Cir.1994) (“A finding of willfulness requires something more than merely showing that an employer knew about the ADEA and its potential applicability in the workplace.”).
Nothing in this record leads to a conclusion that Westinghouse recklessly disregarded the rights of its older employees. Everything points to a conclusion that Westinghouse “acted reasonably and in good faith in attempting to determine whether [its] plan would violate the ADEA.” Thurston, 469 U.S. at 129, 105 S.Ct. at 625. In Starceski’s case unfortunately, its internal efforts were unsuccessful.
Unlike the majority, however, I would not punish Westinghouse twice for its failure, once through a backpay award and again through a liquidated damages award. Such a policy does nothing to encourage companies to scrutinize closely their employment decisions and policies. While a company’s inability to protect perfectly against age discrimination is grounds to award backpay and restitution so that an employee is fully compen*1108sated, it does not warrant doubling the award.
V.
Willfulness, as defined by Thurston, focuses on a company’s knowledge of or reckless disregard for whether its actions violate the ADEA. Sanchez, 37 F.3d at 721-22 (“Willfulness, then requires an element akin to reckless disregard of, or deliberate indifference to, an employer’s ADEA-related obligations.”); Brown v. Stites Goncrete, Inc., 994 F.2d 553, 560 (8th Cir.1993) (en bane) (“[I]t is a willful violation of the law as opposed to voluntary conduct in general that is required.”); Benjamin v. United Merchants & Mfrs., Inc., 873 F.2d 41, 44 (2d Cir.1989) (Willfulness occurs when employer has been “indifferent to the requirements of the governing statute and acted in a purposeful, deliberate, or calculated fashion.”); Coston v. Plitt Theatres, Inc., 860 F.2d 834, 837 (7th Cir.1988) (“The term ‘knew’ ... refers to the fact that the employer knew he was violating the ADEA, not to the fact that he was aware of the Act.”). Willfulness is not a matter of additional evidence but a matter of additional misconduct. See Hazen, — U.S. at —, 113 S.Ct. at 1709; Kelly v. Matlack, 903 F.2d 978, 982 (3d Cir.1990).
An employer who pays no attention to its duties under the Act does so at the risk of paying double the penalty for any resulting violations. An employer who goes forward with an employment decision when it knows that its actions illegally discriminate against older workers likewise risks the imposition of liquidated damages. When awarded under these circumstances, liquidated damages serve as a necessary and beneficial deterrent to ADEA violations. Thurston, 469 U.S. at 125-26, 105 S.Ct. at 624.
On the other hand, an employer’s or a supervisor’s intentional use of age in an employment decision, while completely adequate grounds for an ordinary ADEA award, does not by itself suffice to find that the employer knowingly pursued an unlawful course of conduct or recklessly disregarded its statutory duties. To so hold is to eliminate the ADEA’s two-tiered liability scheme and to overlook Westinghouse’s good faith efforts to prevent an ADEA violation.
Because I fear that today’s decision by the court operates to merge both tiers of the two-tiered liability principle into one — i.e., a mere disparate treatment violation of the ADEA — and because I cannot support the court’s disregard for these principles which have consistently guided our interpretation of the ADEA, I respectfully dissent from the court’s affirmance of the district court’s award of liquidated damages.3

. For purposes of clarity, I not only concur in the court's affirmance of the jury verdict as to the ADEA violation, but I agree as well that we should uphold the district court's rulings which denied Stareeski reinstatement and which denied remittitur. Because my reading of the record and of Hazen Paper Co. v. Biggins, — U.S. —, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993), causes me to conclude that no liquidated damages should have been awarded against Westinghouse. I would vacate the award of liquidated damages and remand for a determination of prejudgment interest.

. I deliberately do not address the issue of whether Jaafar's conduct could be attributed to Westinghouse. I do not do so because, even if we assume that Jaafar was speaking for Westinghouse, Jaafar's statements do not demonstrate that Westinghouse either knew or showed reckless disregard for its duties under the ADEA. Even though the jury may have found that Jaafar may have discriminated against Starceski on the basis of Starceski's age, that finding does not constitute proof that Jaafar or Westinghouse knew that Jaafar’s choices in selecting employees for discharge violated the Act, even if Jaafar was generally aware of the Act. See Brown v. Stites Concrete, Inc., 994 F.2d 553, 560 (8th Cir.1993) (en banc) ("[I]t is a willful violation as opposed to voluntary conduct in general that is required.''); Coston v. Plitt Theatres, Inc., 860 F.2d 834, 837 (7th Cir.1988) ("the term 'knew' ... refers to the fact that the employer knew he was violating the ADEA, not to the fact that he was aware of the Act.”). Further evidence of willfulness is necessary.

. Because I would not award liquidated damages, I would remand the case for a determination of prejudgment interest. Such an order would obviate any conflict between liquidated damages and prejudgment interest. Forced to choose between an award of both liquidated damages and prejudgment interest, I would permit only one sanction because I believe, as we have held, that liquidated damages serve both compensatory and punitive functions. Blum v. Witco Chemical Corp., 829 F.2d 367, 382 (3d Cir.1987). In doing so, I would join the majority of courts of appeals that have considered the question since Thurston. See Powers v. Grinnell Corp., 915 F.2d 34, 40-41 (1st Cir.1990); Hamilton v. 1st Source Bank, 895 F.2d 159, 165-66 (4th Cir.1990); Burns v. Texas City Refining, Inc., 890 F.2d 747, 752-53 (5th Cir.1989); Coston v. Plitt Theatres, Inc., 831 F.2d 1321, 1336 (7th Cir.1987), vacated on other grounds, 485 U.S. 1007, 108 S.Ct. 1471, 99 L.Ed.2d 700 (1988).