Opinion
Case No. 99-4120-DES
July 19, 2001
MEMORANDUM AND ORDER
This matter is before the court sua sponte and on defendants' Motion to Determine amount of Judgment (Doc. 83). On June 28, 2001, the jury returned a verdict in the above-captioned matter in favor of the plaintiff. The jury found defendants retaliated against and sexually harassed plaintiff and awarded plaintiff $40,000 in back pay, $300,000 in compensatory damages and $160,000 in punitive damages. The court notified the parties that it would consider the jury award of back pay as advisory only and ordered the parties to file simultaneous briefs on the issue. Both parties have briefed the issue of back pay. In addition, defendants' Motion to Determine amount of Judgment (Doc. 83) includes a request that the court limit the compensatory and punitive damage awards under Title VII. The jury award is altered as discussed below.
I. COMPENSATORY AND PUNITIVE DAMAGES
Defendants request that the court limit the compensatory and punitive damage awards under Title VII. The amount of compensatory and punitive damages which plaintiff may recover depends on the number of defendants' employees. 42 U.S.C. § 1981a(b)(3) imposes the following limitation on awards in Title VII cases:
The sum of the amount of compensatory damages awarded under this section for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, and the amount of punitive damages awarded under this section, shall not exceed, for each complaining party — . . .
(C) in the case of a respondent who has more than 200 and fewer than 501 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $200,000;. . . .
The uncontroverted testimony of Robert Adams, Director of Properties and Compliance at Osborn Transportation, Inc. ("OTI"), established that defendant employed under 501 people. The evidence showed that OTI employed approximately 250 employees and Logistics Services, Inc. ("LSI") employed approximately 58 employees. Because defendants employed less than 501 people, defendants' request that the court reduce the compensatory and punitive damage awards to $200,000 is granted.
The court will reduce the $300,000 compensatory damage award to $130,420, and the $160,000 punitive damage award to $69,580.
II. BACK PAY
Title VII provides for equitable relief, which includes back pay. Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 556 (10th Cir. 1999). "The amount of back pay awarded to a successful Title VII plaintiff is committed to the sound discretion of the district court." Daneshvar v. Graphic Technology, Inc., 40 F. Supp.2d 1225, 1239-41 (D.Kan. 1998). Accordingly, the court announced prior to the verdict that it would consider the juries award of back pay, which was $40,000, as merely advisory.
The amount of back pay award requested by the parties can not be reconciled. Plaintiff and defendant appear to agree that plaintiff made $5.50 an hour and worked twenty-four hours a week. Plaintiff and defendant also agree the maximum amount of time used to calculate back pay is until January 27, 2001, the date plaintiff returned to steady employment. Plaintiff argues back pay should begin March 8, 1998, the first day she was unable to return to work due to the sexual assault. Defendant argues back pay should begin on April 9, 1998, the date of alleged discharge. Defendant argues plaintiff should not receive back pay after October 31, 1998, the date LSI ceased operations in Topeka, Kansas, where plaintiff was employed. Plaintiff argues she should receive overtime pay, anticipated pay increases, and prejudgment interest through January 27, 2001. Each argument is discussed below.
A. Time Period Used to Calculate Back Pay
First, the parties dispute when the back pay should begin. Back pay covers the time period from the date of discharge until the date of the entry of judgment. Daneshvar, 40 F. Supp.2d at 1241 (citing Daniel v. Loveridge, 32 F.3d 1472, 1477 (10th Cir. 1994)). The evidence presented establishes that plaintiff was discharged on April 9, 1998. Plaintiff appears to argue that she should receive back pay from March 8, 1998, the date she was unable to work as a result of the sexual assault. However, back pay covers the time period for which an employee is not offered employment. While plaintiff could have argued that she was constructively discharged on the date of the sexual assault, this theory was not presented at trial, and the court will not consider this theory to calculate back pay. Therefore, the court will calculate back pay from April 9, 1998, the date plaintiff was discharged.
Second, defendants argue that back pay should be cut off on October 31, 1998, the date defendants no longer maintained operations or employees in Topeka, Kansas. The purpose of Title VII is to put the plaintiff in the same position she would have been in absent discrimination. See Harper v. Godfrey, Co., 45 F.3d 143, 149 (7th Cir. 1995). Accordingly, courts have determined that where an employer goes out of business and terminates all employees, plaintiff's eligibility for back pay ceases. See EEOC v. Monarch Machine Tool Co., 737 F.2d 1444, 1453 (6th Cir. 1980) (citing Schlei and Grossman, Employment Discrimination Law 1240-41 (1974)); EEOC v. Regency Architectural Metals Corp., 896 F. Supp. 260, 271 (D.Conn. 1995) (holding a plaintiff's right to back pay ends upon date of the sale of employer's business); Helbling v. Unclaimed Salvage and Freight Co, Inc., 489 F. Supp. 956, 963 (E.D.Pa. 1980) (same).
Plaintiff argues that back pay should not cease because LSI's parent corporation, OTI, could have offered her a comparable position at one of its other locations. Courts have held back pay does not cease where a successor company exists which could have offered continued employment. See Gaddy v. Abex Corp., 884 F.2d 312, 319 (7th Cir. 1989) (holding back pay not limited because plaintiff could have continued her employment with successor company); Dybala v. Landau and Heyman, Inc., No. 94-C-7719, 1998 WL 67608 (N.D.Ill. Feb. 10, 1998) (same). However, these cases involve the sale of a business to a successor company which results in the continuation of the type of business and business location and the retention of existing employees.
In this case, OTI closed its business in Topeka, Kansas, LSI, on October 31, 1998. Defendants did not retain any Topeka employees after that date. No employees were transferred or offered positions by defendants to any other locations. There is no evidence to suggest plaintiff would have been offered a comparable position at a different location in absence of the discriminatory conduct. The purpose of Title VII is to place plaintiff in the same position she would have been in absent discrimination, not a better position. Harper, 45 F.3d at 149. Absent discrimination, plaintiff would have lost her job when defendant's business in Topeka closed. Therefore, the court finds back pay should be awarded from April 9, 1998, to October 31, 1998.
B. Amount of Back Pay Award
The parties disagree as to the amount of compensation. The parties agree that plaintiff earned $5.50 an hour and worked twenty-four hours a week. Plaintiff requests that the back pay award include anticipated pay increases and overtime. The court finds it would be inappropriate to include anticipated pay increases. Further, the court finds no evidentiary basis to award overtime pay. Therefore, the back pay award will be calculated at a weekly rate of $132 ($5.50 an hour multiplied by twenty-four hours a week). The court calculates that from April 9, 1998, to October 31, 1998, plaintiff would have earned $4,224. Therefore, the court awards plaintiff $4,224 in back pay.
The court notes plaintiff abandoned her claim that defendant discriminated against her based on her gender by not paying her overtime.
The court calculates the time period from April 9, 1998, to October 31, 1998, to be thirty weeks, resulting in an award of $3,960. However, defendants submit that plaintiff is entitled to thirty-two weeks of back pay, resulting in an award of $4,224. The court assumes that this figure includes two weeks severance pay, for which there was limited evidence produced at trial. Therefore, the court will adopt the higher figure submitted by defendants.
C. Prejudgment Interest
The court finds plaintiff's request for prejudgment interest is appropriate. The court will award prejudgment interest on back pay using the interest rates provided in § 6621 of the Internal Revenue Code. See Regency, 896 F. Supp. at 271. Plaintiff is directed to submit interest calculations by July 30, 2001, showing the total amount of interest accumulated on the $4,224 award of back pay. The defendant shall file any written objection to the calculations by August 6, 2001. The court will enter final judgment upon receipt of the additional submissions.
IT IS THEREFORE BY THE COURT ORDERED that defendants' Motion to Determine amount of Judgment (Doc. 83) is granted in part. The $300,000 compensatory damage award is reduced to $130,420, and the $160,000 punitive damage award is reduced to $69,580. The court awards plaintiff $4,224 in back pay, subject to prejudgment interest to be determined based on additional submissions. Plaintiff shall file prejudgment interest calculations by July 30, 2001. Defendants shall file any written objection to the calculations by August 6, 2001. The court will enter final judgment upon consideration of the additional submissions.