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Allen v. International Truck and Engine Corp.

United States District Court, S.D. Indiana, Indianapolis Division

April 18, 2017

GREG ALLEN, et al., Plaintiffs,
v.
INTERNATIONAL TRUCK AND ENGINE CORPORATION, f/k/a NAVISTAR INTERNATIONAL CORPORATION, Defendant.

          ENTRY ON DAMAGES

          RICHARD L. YOUNG, JUDGE

         Plaintiff, Matthew Whitfield, an African-American, first applied for an electrician position with Defendant, International Truck and Engine Corporation, f/k/a Navistar International Corporation, in 1996. While the union was initially unable to verify that Whitfield met the posted job requirements, it ultimately cleared him for hire in September 1998. At some point, a cover page with the word “black” was attached to his application. In December 1999, Whitfield was unofficially told that Navistar would not hire him. Navistar hired several white electricians with less experience than Whitfield during this period.

         Whitfield filed suit against Navistar in 2001, alleging that it discriminated in hiring. He was a co-plaintiff with a certified class of 26 other African-American employees who only alleged a racially hostile work environment. The court separated Whitfield's hiring discrimination claim from that class action for trial, and ultimately found in favor of Navistar. The Seventh Circuit reversed, and, pursuant to that decision, this court held that Navistar was liable to Whitfield for failing to hire him on the basis of his race, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and Section 1 of the Civil Rights Act of 1866, 42 U.S.C. § 1981. The court took the issue of damages under advisement and heard oral argument on February 2, 2017.

         A district court has “wide discretion” in fashioning remedies to make victims of discrimination whole. EEOC v. AutoZone, Inc., 707 F.3d 824, 840 (7th Cir. 2013). See also Johnson v. Ry. Express Agency, Inc., 421 U.S. 454, 461 (1975) (“[T]he remedies available under Title VII and under § 1981, although related, and although directed to most of the same ends, are separate, distinct, and independent.”). After considering the evidence and the parties' submissions, the court finds that Whitfield is entitled to back pay, a tax-component award, lost pension benefits, prejudgment interest, compensatory damages, and punitive damages.

         I. Limitation for Misrepresentations

         At the outset, Navistar alleges that Whitfield's damages should be limited due to misrepresentations and false statements in his applications. Specifically, it asserts that he provided incorrect dates of employment for several employers, and failed to provide any information for others. At trial, Whitfield admitted to making certain errors on his applications, and to signing Navistar's “pre-employment authorization and release” which states, “Falsification or omission of information will result in withdrawal of the application for employment consideration or discharge.” (Filing No. 442, Transcript, Volume I (“Tr. I”) 124:11-25).

         In McKennon v. Nashville Banner Publ. Co., the Supreme Court concluded, “In determining appropriate remedial action, the employee's wrongdoing becomes relevant not to punish the employee . . . but to take due account of the lawful prerogatives of the employer in the usual course of its business and the corresponding equities that it has arising from the employee's wrongdoing.” 513 U.S. 352, 361 (1995). See Id. at 362 (“Once an employer learns about employee wrongdoing that would lead to a legitimate discharge, we cannot require the employer to ignore the information, even if . . . the information might have gone undiscovered absent the suit.”). Navistar highlights this language and emphasizes that the court should limit Whitfield's damages because he would have been discharged for these misrepresentations. See Rooney v. Koch Air, LLC, 410 F.3d 376, 382 (7th Cir. 2005) (“We know from McKennon that after-acquired evidence like this does not bar all relief, although it can limit recoverable damages.”).

         Importantly though, the McKennon Court established a hurdle that an employer must clear before it can invoke this doctrine: “Where an employer seeks to rely upon after-acquired evidence of wrongdoing, it must first establish that the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone if the employer had known of it at the time of the discharge.” 513 U.S. at 362-63. Navistar failed to meet that burden here. The language from Navistar's “pre-employment authorization and release” is relevant, but that alone cannot satisfy the McKennon standard. There was no testimony from anyone at Navistar that this boilerplate warning was actually enforced in practice. Moreover, no decision-maker from Navistar testified that Whitfield, in particular, would have been terminated solely because of those errors.

         Showing that the decision would have been justified is not the same as proving that the decision would have been made. See O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 759 (9th Cir. 1996) (“The inquiry focuses on the employer's actual employment practices, not just the standards established in its employee manuals, and reflects a recognition that employers often say they will discharge employees for certain misconduct while in practice they do not.”) (quoted in Sheehan v. Donlen Corp., 173 F.3d 1039, 1048 (7th Cir. 1999)).

         Accordingly, no limitation is warranted.[1]

         II. Back Pay

         Back pay represents the wages a plaintiff would have earned but for the employer's adverse employment decision. In fashioning a back pay award, “[t]he court must ‘do its best to recreate the conditions and relationships that would have existed if the unlawful discrimination had not occurred.'” EEOC v. Ilona of Hung., 108 F.3d 1569, 1580 (7th Cir. 1997) (quoting United States v. City of Chicago, 853 F.2d 572, 575 (7th Cir. 1988)). “This process of recreating the past will necessarily involve a degree of approximation and imprecision.” Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 372 (1977). Recognizing this, the Seventh Circuit has held that “unrealistic exactitude is not required” and any “ambiguities in what an employee . . . would have earned but for discrimination should be resolved against the discriminating employer.” Stewart v. Gen. Motors Corp., 542 F.2d 445, 452 (7th Cir. 1976). Accord Goss v. Exxon Office Sys. Co., 747 F.2d 885, 889 (3d Cir. 1984) (“The risk of lack of certainty with respect to projections of lost income must be borne by the wrongdoer, not the victim.”).

         The parties agree that Whitfield is entitled to back pay, and that the back pay period in this case is May 16, 1998-December 31, 2008. See Whitfield v. Int'l Truck & Engine Corp., 755 F.3d 438, 442 (7th Cir. 2014). They disagree, however, on the exact amount to be awarded.

         A. Gross Back Pay

         If hired, Whitfield would have been classified as an E84 electrician. At Navistar's Indianapolis plant, all E84 electricians were paid the same hourly rate, regardless of seniority or other factors. (See Tr. I 240:5-8). Thus, the disparity in annual earnings among the E84 electricians is attributable solely to the difference in hours worked during the year, principally owing to the desire to work overtime. There is uncontroverted testimony that overtime at the Indianapolis plant was abundant and available to all electricians. (See e.g., Id. 102:14-19, 183:19-184:12). Accordingly, Whitfield's earnings for each year would have been determined by the extent to which he took advantage of those overtime opportunities.

         At trial, Whitfield testified that he would have worked all of the overtime that was available at Navistar, and emphasized that he did not turn down overtime opportunities in his other jobs. (See e.g., Id. 100:18-101:6). He therefore posits that the court should use the highest-paid electrician for each year as a comparator. Navistar, on the other hand, advocates for using Mr. Vickers as a comparator because he worked some overtime and he was the first electrician hired after Whitfield initially applied.

         Both of these approaches have flaws. First, selecting the highest-paid electrician each year would produce an artificially high award. Notwithstanding Whitfield's testimony, it is simply not reasonable to assume that he would have been the highest earner every single year. Indeed, for the eleven years at issue in this case, the top-earner is different for each year. No single electrician had the highest earnings more than once from 1998 to 2008. This is understandable given that consistently working significant amounts of overtime can take a toll on the body and strain personal relationships.

         Similarly, selecting Mr. Vickers as a comparator solely because of his hire date is odd given that the hourly rate for E84 electricians did not depend on seniority. Moreover, his earnings for 2006 and 2008 were unusually low, as compared to his earnings for other years.

         The court finds that the most reasonable method of calculating Whitfield's gross back pay is using the average of the gross annual earnings for all electricians who worked overtime for each year. This compromise approach reflects Whitfield's claim that he would have worked significant overtime, but also ensures that he is not put in a better position than he would have been if he had actually been hired. See Harper v. Godfrey Co., 45 F.3d 143, 149 (7th Cir. 1995) (“One purpose of Title VII is to put a plaintiff in the same position he/she would have been in had the discrimination not occurred, not in a better position.”).

         Unfortunately, that method is unavailable. Following oral argument, the court ordered the parties to jointly submit several charts representing different ways of calculating back pay, including this preferred method. The parties submitted these charts, but Whitfield claims that the wage data used to compute the averages is unreliable due to numerous internal errors and discrepancies (e.g., Curtis Jr. had 1999 Gross Earnings of only $391.85, but overtime pay of $13, 125.54).[2] Additionally, he emphasizes that using averages would only be appropriate if the court excluded low-wage outliers, such as individuals who did not work a full year because they quit or were fired (e.g., in 2005, Shake's Gross Earnings were $9.43).

         The court therefore finds that using Mr. Vickers' earnings, while not perfect, is the most reasonable method for calculating Whitfield's gross back pay. This is the person Navistar hired in lieu of Whitfield, so it is logical to use him as a comparator. Although Mr. Vickers' earnings for 2006 and 2008 were relatively low, the data reveals that earnings for all electricians were lower in 2006 and 2008. There is no information in the record explaining why this occurred. Most importantly, Whitfield actually suggested using Mr. Vickers as a comparator in his post-trial proposed findings. (See Filing No. 462 at 33). His sudden opposition to using Mr. Vickers post-remand is therefore unconvincing.

         Accordingly, Whitfield's gross back pay for each year is as follows:

Year

Earnings

1998

$47, 481.86[3]

1999

$83, 093.55

2000

$78, 714.30

2001

$71, 554.36

2002

$64, 820.38

2003

$69, 166.58

2004

$83, 843.55

2005

$88, 501.75

2006

$4, 662.72

2007

$62, 524.60

2008

$32, 417.88

TOTAL

$686, 781.50

         The court must now determine what deductions, if any, are appropriate.

         B. Period of Disability

         Whitfield testified that while his application was pending at Navistar, he obtained employment at Amtrak. (Tr. I 68:11-17). He sustained an injury there in February 2002, and remained off of work until September 2004. (Id. 127:11-128:13). Navistar argues that this period of disability should be excluded from the back pay calculation. According to Navistar, it is unreasonable to award Whitfield back pay during this time because he was physically unable to work. Whitfield retorts that he would not have needed to take the job at Amtrak (and therefore would not have been injured there) if Navistar had not discriminated against him in the first place.[4]

         “Generally, a Title VII plaintiff can recover back pay only for the period the plaintiff is ‘available and willing to accept substantially equivalent employment' elsewhere; courts exclude periods where a plaintiff is unavailable to work, such as periods of disability, from the back pay award.” Lathem v. Dep't of Children & Youth Servs., 172 F.3d 786, 794 (11th Cir. 1999) (quoting Miller v. Marsh, 766 F.2d 490, 492 (11th Cir. 1985)). How this rule applies in a case like this-where a plaintiff who was unlawfully denied employment sustains an injury and becomes unable to work while mitigating his damages with a subsequent employer-has not been directly addressed by the Seventh Circuit.

         The Federal Circuit's decision in Martin v. Dep't of the Air Force, 184 F.3d 1366 (Fed. Cir. 1999), while not precisely on point, is instructive. In Martin, the plaintiff was wrongfully terminated from his position as an aircraft mechanic and then later reinstated after appealing to the Merit Systems Protection Board. Id. at 1367. Between his removal and reinstatement, he was injured while working as a “wrecker driver/mechanic” with an automobile dealership. Because of that injury, he was physically unable to work for just over one year. Id. at 1367-68. The primary issue was whether the plaintiff was entitled to back pay for his period of disability pursuant to the Back Pay Act, 5 U.S.C. § 5596.

         In its thorough discussion of the issue, the Martin court explained,

Given that the purpose of the Back Pay Act is to place a wrongfully discharged employee back in the position he would have been in had the termination not occurred and to make the employee whole, equity and reason require that if such an employee is unable to work because of an accident or illness closely related or due to interim employment or arises because of the unlawful discharge, the period of disability should be included in a back pay period.

Id. at 1372. Because the plaintiff's “injury was closely related to the nature of his interim employment and was not a ‘hazard of living generally, '” the court held that he was entitled to back pay for his period of disability. Id. See Best v. Shell Oil Co., 4 F.Supp.2d 770, 773 (N.D. Ill. 1998) (holding that the plaintiff was entitled to back pay under the Americans with Disabilities Act for a period when he was physically unable to work due to an injury sustained while mitigating damages).

         Because Title VII and Section 1981 were also intended to “make the employee whole” and put him “back in the position he would have been in” but for the adverse employment decision, the Martin court's analysis applies here. Unfortunately, there is virtually no evidence in the record about Whitfield's injury at Amtrak. The only established facts are that (a) Whitfield “sustained an injury on the job, ” and (b) he was consequently “off work for two years.” (Tr. I 127:11-21). The fact that he was injured “on the job” suggests that the injury was related to the interim employment, but that is not entirely clear. Other facts that are unknown but relevant to this inquiry include (a) whether Whitfield's job at Amtrak required him to perform the same or similar tasks under the same or similar conditions as he would have at Navistar, (b) whether light duty work was available at Amtrak, (c) whether light duty work would have been available at Navistar, and (d) whether Whitfield was physically capable of completing light duty work. Due to the sheer lack of evidence, it is impossible to determine whether the Martin standard is satisfied in this case.

         The question then is who bears the burden of proving that this type of deduction is warranted. The Seventh Circuit has made clear that “[a] Title VII victim is presumptively entitled to full relief.” Hutchison v. Amateur Elec. Supply, 42 F.3d 1037, 1044 (7th Cir. 1994) (quoted in Miles v. Indiana, 387 F.3d 591, 599 (7th Cir. 2004)). Therefore, just as with the affirmative defense of failure to mitigate, an employer must bear the burden of proving that a back pay offset for a period of disability is appropriate. See Ilona of Hung., 108 F.3d at 1580-81 (“If the victim of discrimination comes forward with evidence of the monetary harm that flowed from the employer's unlawful conduct, it is the employer's burden to prove that the victim failed to mitigate her damages or that the requested damages are otherwise excessive.”) (emphasis added); Hutchison, 42 F.3d at 1044 (“Once a plaintiff has established the amount of damages she claims resulted from her employer's conduct, the burden of going forward shifts to the defendant to show that the plaintiff failed to mitigate damages or that damages were in fact less than the plaintiff asserts.”) (emphasis added). To hold otherwise would frustrate the statutory purposes of eradicating discrimination and making discrimination victims whole.

         Navistar failed to meet its burden here. Therefore, Whitfield's period of disability shall not be excluded from his back pay award.

         C. Interim Earnings

         Whitfield maintains that the court should not consider his interim earnings because Navistar neglected to elicit any testimony regarding those earnings at trial. Since Navistar failed to carry its burden, Whitfield posits that the court should ignore the fact that he was earning an income while attempting to get hired by Navistar, and provide him with a full salary for each year in the back pay period. In its Entry on Whitfield's Motion for Entry of Final Judgment, the court noted that, regardless of Navistar's alleged trial ...


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