Damages In Employment Discrimination Cases: An Overview of Recent Developments 

Louis Pechman*


“The concept underlying the remedial scheme in employment discrimination cases is to make the plaintiff whole.” Perdue v. CUNY, 13 F. Supp. 2d 326, 340 (E.D.N.Y. 1998).

“The Second Circuit has consistently emphasized district courts have broad discretion to fashion a wide range of remedies in employment discrimination cases.” Colwell v. Suffolk County Police Dep’t, 967 F. Supp. 1419, 1431 (E.D.N.Y. 1997) (citations omitted).

It is well settled that the “calculation of damages is the province of the jury.” Ismail v. Cohen, 899 F.2d 183, 186 (2d Cir. 1990).

Statutory Limits on Damages
The Civil Rights Act of 1991 limits the amount of compensatory and punitive damages that can be recovered under Title VII, the ADA and the Vocational Rehabilitation Act of 1973. The amount of the cap depends on the size of the employer:

Number of EmployeesApplicable Cap
501 or more$300,000
101 200$100,000
42 U.S.C. § 1981a(b)(3).

Allocation of Damages
“In determining allocation in such instances, courts have adopted the sensible approach, consistent with Circuit preference, that the jury award will be allocated under the liability theory that provides plaintiff the most complete recovery. Generally, to avoid the limits on damages under Title VII, this approach will result in the allocation of all the recovery to the HRL claim. However, when punitive damages are interjected into the equation, compensatory damages can be recoverable under the HRL claim, and punitive damages under the Title VII claim to the extent consistent with the Title VII statutory cap.” Funk v. F&K; Supply, Inc., 43 F. Supp. 2d 205, 225 (N.D.N.Y. 1999) (citations omitted).

“[M]ultiple punitive damage awards on overlapping theories of recovery may not be duplicative at all, but may instead represent the jury’s proper effort to punish and deter all the improper conduct underlying the verdict.” Mason v. Oklahoma Turnpike Authority, 115 F.3d 1442, 1460 (10th Cir. 1997). See also Atchley v. The Nordam Group, Inc. 180 F.3d 1143, 1149 (10th Cir. 1999) (“The jury award in this case addresses two separate and distinct wrongs, notwithstanding the fact they are based on the same conduct.”).


General Framework for Backpay
“The purpose of backpay is to completely redress the economic injury the plaintiff has suffered as a result of discrimination. In this sense, when awarding backpay, a court should attempt to place a victim of unlawful discrimination in as near a position as she would have been in absent the discrimination. An award of backpay, therefore, should ordinarily consist of lost salary, including anticipated raises, and fringe benefits.” EEOC v. Joint Apprenticeship Committee of the Joint Indust. Bd. of the Electrical Indust., 164 F.3d 89, 101 (2d Cir. 1998) (citations omitted).

The two overarching principles which guide the computation of a backpay award are “(1) unrealistic exactitude is not required, [and] (2) uncertainties in determining what an employee would have earned but for the discrimination should be resolved against the discriminating employer.” EEOC v. Joe’s Stone Crab, Inc., 15 F. Supp.2d 1364, 1376 (S.D. Fla. 1998) (citations omitted).

Specific Components to Backpay
Annuity/pension. See, e.g., Rhodes v. Guiberson Oil Tools, 82 F.3d 615 (5th Cir. 1996) (“The ‘plaintiff’s interest’ in a pension plan should be determined by considering both the amount of pension benefits the plaintiff would have received had he not been terminated and the amount of pensions benefits, if any, that the plaintiff actually received.”).

Medical expenses. See, e.g., EEOC v. Farmer Bros., 31 F.3d 891, 902 (9th Cir. 1994) (recovery for lost insurance benefits limited to amount plaintiff spent for replacement coverage).

“Rule of Thumb” Approach. See, e.g., Stratton v. The Dept. for the Aging for the City of N.Y., 132 F.3d 869, 882 (2d Cir. 1997) (jury was entitled to accept testimony of plaintiff — who has personally been involved in salary administration — that the “rule of thumb” for the value of fringe benefits was 35% of salary).

Commissions. See, e.g., Eichenwald v. Krigel’s, Inc., 908 F. Supp. 1531, 1559-64 (D. Kan. 1995) (court awarded lost commissions on the basis of the value of the merchandise plaintiffs would have sold had they not been constructively discharged).

Prejudgment Interest
“The decision to award prejudgment interest is within the discretion of the trial court.” Criado v. IBM Corp., 145 F.3d 437, 445 (1st Cir. 1998) (no abuse of discretion for district court to determine that prejudgment interest was not appropriate where large award of damages made her whole and was sufficient to deter employer from future wrongdoing). See also Greenway v. The Buffalo Hilton Hotel, 143 F.3d 47, 56 (2d Cir. 1998) (“it is within the trial court’s broad discretion to elect whether and how to compute pre-judgment interest”).

“An award of prejudgment interest adjusts the backpay award for inflation and reflects the present day value of income that should have been paid to the claimant in the past.” EEOC v. Joe’s Stone Crab, Inc., 15 F. Supp.2d 1364, 1379 (S.D. Fla. 1998). See also Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1182-1183 (2d Cir. 1996) (plaintiff awarded pre-judgment interest for ten month period between the jury verdict and entry of judgment after resolution of post-trial motions).

Tax Liability Enhancement
“[A] district court, in the exercise of its discretion, may include a tax component in a lump sum back pay award to compensate prevailing Title VII plaintiffs. This accords with a prevailing practice in the settlement of Title VII suits which commonly include an amount to offset the plaintiff/taxpayer’s increased liability.” EEOC v. Joe’s Stone Crab, Inc., 15 F. Supp.2d 1364, 1380 (S.D. Fla. 1998) (citations omitted). See also Luciano v. Olsten Corp., 912 F. Supp. 663, 674 (E.D.N.Y. 1996) (award included $3,538 for early withdrawal tax penalty from IRA account and the $11,675 that the plaintiff paid in taxes on the money she withdrew from the retirement account) aff’d, 110 F.3d 210 (2d Cir. 1997). Cf. Best v. Shell Oil Co., 4 F. Supp.2d 770, 776 (N.D. Ill. 1998) (plaintiff’s request for tax liability enhancement of award is denied); Dashnaw v. Pena, 12 F.3d 1112 (D.C. Cir. 1994) (request for “tax gross-up” factor rejected).

Other Pecuniary Losses
“Pecuniary losses include, for example, moving expenses, job search expenses, medical expenses, psychiatric expenses, physical therapy expenses, and other quantifiable out-of-pocket expenses that are incurred as a result of the discriminatory conduct. To recover damages, the complaining party must prove that the employer’s discriminatory act or conduct was the cause of his loss. The critical question is whether the complaining party incurred the pecuniary losses as a result of the employer’s discriminatory action or conduct.” EEOC Enforcement Guidance On Damages Under the Civil Rights Act of 1991, No. 915.002, p.6 (July 14, 1992). See e.g. Abdullah Alizai v. MVM, Incorporated, 77 Fair Empl. Prac. Cas. (BNA) 879 (E.D. Va. 1998) (plaintiff entitled to dental expenses of $1,937 because the stress of his termination caused him to grind his teeth in his sleep and crack his tooth).

Limits to Backpay
Plaintiff intended to quit. See, e.g., EEOC v. Ilona of Hungary, Inc., 108 F.3d 1569, 1580 (7th Cir. 1997) (backpay award reversed where evidence showed that employee intended to quit her job). The court in Ilona noted that it must do its best to “recreate the conditions and relationships that would have existed if the unlawful discrimination had not occurred.”

Intervening disability. See, e.g., Thornley v. Penton Publishing, Inc., 104 F.3d 26 (2d Cir. 1997) (backpay excludes periods when the claimant “would have been unable, due to an intervening disability, to continue employment”). See also Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1101 (3d Cir. 1995).

Retirement. See, e.g., Kirsch v. Fleet Street, Ltd., 148 F.3d 149 (2d Cir. 1998) (backpay cut off by plaintiff’s retirement).

Education. See, e.g., Dailey v. Societe Generale, 108 F.3d 451, 456 (2d Cir. 1997) (“[T]here is no per se rule that finds inherently incompatible the duty of a Title VII plaintiff to use reasonable diligence in securing comparable employment and such a plaintiff’s decision to attend school on a full-time basis. Rather, the central question a court must consider when deciding whether a student-claimant has mitigated her damages is whether an individual’s furtherance of his education is inconsistent with his responsibility to use reasonable diligence in finding other suitable employment.”). See also Keller v. Connaught, Inc., 1997 U.S. Dist. LEXIS 1251, at *9 (E.D. Pa. February 10, 1997) (“if a discrimination plaintiff is unable, after the reasonable exercise of due diligence, to find suitable, comparable employment, the plaintiff may have no alternative but to obtain further education in order to re-enter the workforce”).

Offsets to Backpay
Social Security. See, e.g., Dominquez v. Tom James Co., 113 F.3d 1188 (11th Cir. 1997) (Social Security payments should not be used to offset backpay awards).

Unemployment. See, e.g., Dailey v. Societe Generale, 108 F.3d 451, 459-61 (2d Cir. 1997) (upholding lower court’s backpay award which had not been reduced by unemployment benefits received by plaintiff in sex discrimination action). Compare Wilcox v. Stratton Lumber, Inc., 921 F. Supp. 837, 843 (D. Me. 1996) (deducting unemployment compensation from backpay award) with Iannone v. Harris, Inc., 941 F. Supp. 403, 412-413 (S.D.N.Y. 1996) (“it better serves the purposes of Title VII for the victim rather than the perpetrator of the discrimination be the beneficiary”); Davis v. Rutgers Casualty Insurance Co., 964 F. Supp. 560, 574 (D.N.J. 1997) (collateral source rule applied to hold “unemployment compensation received by the plaintiff should not be deducted from a Title VII backpay award”).

Separation Payments. See, e.g., Rhodes v. Guiberson Oil Tools, 82 F.3d 615, 620 (5th Cir. 1996) (“Severance pay is a post-termination economic benefit that [plaintiff] would not have received had he remained employed.”).


Statutory Framework
“Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the backpay otherwise allowable.” 42 U.S.C. § 2000e-5(g)(1).

Employee’s Burden
Plaintiff must demonstrate reasonable efforts to find work. Suggs v. ServiceMaster Education Food Mgt., 72 F.3d 1228, 1233 (6th Cir. 1996) (“A plaintiff in an action under Title VII has a duty to mitigate damages; she may not remain unemployed and collect a windfall.”). But see Moore v. The University of Notre Dame, 22 F. Supp.2d 896, 907 (N.D. Ind. 1998) (“When evaluating the reasonableness and duration of a job search a court may consider the plaintiff’s background and individual characteristics.”); EEOC v. Pape Lift, Inc., 115 F.3d 676, 684 (9th Cir. 1997) (inquiry as to reasonableness of job search should be tailored “to the particular characteristics of the injured plaintiff”); Ford Motor Co. v. EEOC, 458 U.S. 219, 231 (1982) (plaintiff need not “go into another line of work, accept a demotion, or take a demeaning position”).

Plaintiff may not abandon efforts to find work. See, e.g., Payne v. Security Sav. & Loan Ass’n, 924 F.2d 109, 111 (7th Cir. 1991) (“His discouragement is understandable, and his lack of success regrettable, but his duty to mitigate did not evaporate in the face of his difficulties.”).

Plaintiff cannot be overly selective. See, e.g., McCall v. Myrtle Beach Hosp., Inc., 1997 U.S. App. LEXIS 23745, *19-20 (4th Cir. Sept. 10, 1997) (rejection of four similar positions as a licensed nurse in same geographic area was not “reasonable diligence” to mitigate damages even though positions were not in plaintiff’s area of specialization).

Personal Tragedy Does Not Eliminate Duty to Mitigate. “[A] decision to forego comparable employment for personal reasons, however understandable, constitutes a failure to mitigate damages as a matter of law.” Griffin v. Four Seasons Resorts and Hotels, Ltd., 1999 U.S. Dist. LEXIS 3968, *3 (S.D.N.Y. March 30, 1999) (plaintiff rejected position so that she could relocate to Australia to tend to her terminally ill mother).

Employer’s Burden
“The defendant bears the burden of showing that there were suitable positions and that the plaintiff failed to use reasonable care in seeking them.” Denesha v. Farmers Ins. Exchange, 161 F.3d 491, 502 (8th Cir. 1998). See also EEOC v. Massey Yardley Chrysler Plymouth, Inc., 117 F.3d 1244, 1251 52 (11th Cir. 1997) (“[T]he burden of proving lack of diligence is on the employer.”).

The Second Circuit has recently held that an employer may be absolved of the burden of demonstrating that suitable employment was available if the plaintiff made no reasonable efforts to seek employment:

An employer . . . is released from the duty to establish the availability of comparable employment if it can prove that the employee made no reasonable efforts to seek such employment.

This rule provides an appropriate exception to the usual requirement that the employer prove that suitable work exists and that the employee has not made reasonable efforts to find it. The underlying rationale is that an employer should not be saddled by a requirement that it show other suitable employment in fact existed – the threat being that if it does not, the employee will be found to have mitigated his damages – when the employee, who is capable of finding replacement work, failed to pursue employment at all.

Greenway v. The Buffalo Hilton Hotel, 143 F.3d 47, 54 (2d Cir. 1998) (citations omitted).

Self Employment
“Self employment, if it is undertaken in good faith and is a reasonable alternative to seeking other comparable employment, may be considered permissible mitigation.” Hawkins v. 1115 Legal Service Care, 163 F.3d 684, 696 (2d Cir. 1998). See also Smith v. Great Am. Restaurants, Inc., 969 F.2d 430, 438 (7th Cir. 1992) (“the notion that starting one’s own business cannot constitute comparable employment for mitigation purposes not only lacks support in the cases, but has a distinctly un-American ring”). But see Clarke v. Whitney, 975 F. Supp. 754, 759-60 (E.D. Pa. 1997) (plaintiff did not meet reasonable efforts standard where he abandoned three month job search in favor of forming his own business in which he had invested no start-up capital).


The McKennon Decision
In McKennon v. Nashville Banner Pub’g Co., 513 U.S. 352 (1995), the Supreme Court considered whether an employer could use after-acquired evidence to defeat a plaintiff’s cause of action for employment discrimination. The Court held that such evidence may not bar the employee from recovering, but that it may render the employee ineligible for front pay and reinstatement, and limit backpay to the period between the unlawful termination and the date on which discovery was made.

Employer’s Burden
The employer “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.” McKennon, 513 U.S. at 362 63.

Pleading Issues
“‘[A]fter-acquired evidence’ is an affirmative defense that must indeed be pleaded and proved pursuant to Rule 8(c).” Red Deer v. Cherokee County, Iowa, 183 F.R.D. 642, 653 (N.D. Iowa 1999).

Pendent Claims
Notwithstanding McKennon, after-acquired evidence may completely bar pendent state law claims, particularly those that do not implicate public policy interests such as the eradication of discrimination. See, e.g., Lewis v. Fisher Service Co., 13 IER Cases 1043, 1047 (S.C. Sup. Ct. 1998) (the rationales underlying McKennon are inapplicable in employment contract cases and therefore may be proffered as a complete bar to liability in an employee handbook breach of contract action); Crawford Rehabilitation Services, Inc. v. Weissman, 938 P.2d 540 (Col. Sup. Ct. 1997) (en banc) (after-acquired evidence of resume fraud may provide an employer with a complete defense to claims for breach of implied contract and promissory estoppel).

Is the Best Defense a Good Offense?
Under certain circumstances, employee misconduct may arise to a level where a counterclaim is warranted. Consider, however, whether the counterclaim is realistic or will be viewed as an act of retaliation.

In Merriweather v. Family Dollar Stores of Indiana, Inc., 103 F.3d 576, 582, n.3 (7th Cir. 1998), the Seventh Circuit upheld a punitive damages award of $25,000 which was imposed, in part, because of the “deception” of the key company witness in support of an after-acquired evidence defense that was later abandoned.


Rationale For Front Pay
Front pay is recommended “where reinstatement is inappropriate and the plaintiff has been unable to find another job, in order to make victims of discrimination whole in cases where the factfinder can reasonably predict that the plaintiff has no reasonable prospect of obtaining comparable alternative employment.” Reed v. A.W. Lawrence & Co., Inc., 95 F.3d 1170, 1182 (2d Cir. 1996). See also Fox v. CUNY, 1998 U.S. Dist. LEXIS 718, *38 (S.D.N.Y. Jan. 26, 1999) (front pay is appropriate where there is no position available for plaintiff at the time of judgment or where the employer-employee relationship may have been irreparably damaged by animosity associated with the litigation); Newhouse v. McCormick & Co., 110 F.3d 635 (8th Cir. 1997) (district court did not abuse its discretion when granting front pay where lawsuit strained the parties’ relationship).

Discretion to Award Front Pay
“District courts have been granted broad discretionary power in determining whether to award front pay as a possible equitable remedy for plaintiff’s damages.” Evans v. State of Connecticut, 967 F. Supp. 673, 685 (D. Conn. 1997). See also Newhouse v. McCormick & Co., 110 F.3d 635 (8th Cir. 1997) (“front pay, including the determination of how much front pay to award, is an equitable issue for the court”). Cf. Kelley v. Airborne Freight Corp., 140 F.3d 335, 354 (1st Cir. 1998) (the jury awards front pay under Massachusetts law).

“Generally, in awarding front pay, the following factors are relevant: (1) the employee’s future in the position from which she was terminated; (2) her work and life expectancy; (3) her obligation to mitigate her damages; (4) the availability of comparable employment opportunities and the time reasonably required to find substitute employment; (5) the discount tables to determine the present value of future damages; and (6) ‘other factors that are pertinent in prospective damage awards.'” Suggs v. ServiceMaster Education Food Mgt., 72 F.3d 1228, 1234 (6th Cir. 1996) (citation omitted). See also Ogden v. Wax Works, Inc., 29 F. Supp.2d 1003, 1015 (N.D. Iowa 1998) (comprehensive review of remedies, including list of factors used by various courts in analyzing entitlement to front pay).

“Because front pay and reinstatement are forward-looking remedies, they are inappropriate where the employment term would already have ended by the time of judgment.” Banks v. The Travelers Companies, 1999 U.S. App. LEXIS 9205, *15 (2d Cir. May 12, 1999).

Duration of Front Pay
“An employee receiving front pay in lieu of reinstatement is entitled to front pay only until such time that the employee can reasonably be expected to have moved on to similar or superior employment.” Williams v. Pharmacia, 137 F.3d 944, 954 (7th Cir. 1998).

Front pay has been extended for extraordinary periods where attainment of similar position is not realistic. In Padilla v. Metro-North Commuter R.R., 92 F.3d 117, 126 (2d Cir. 1996) for example, the court affirmed a district court’s award of front pay in the amount of the difference between his salary as a train dispatcher and the salary paid to the superintendent of trash operations until he reaches the age of 67 (i.e., the year 2019) when he can retire with full benefits. The court noted that plaintiff has only a high school education and was able to obtain a salary of approximately $65,000 by developing “unique and narrowly focused skills, and that it is very unlikely that he will be able to find alternative employment at this salary.” See also Kelley v. Airborne Freight Corporation, 140 F.3d 335, 355 at n.12 (1st Cir. 1998) (“Given Kelley’s $100,000 salary and that he would probably never gain comparable employment because of his lack of education, we find no abuse of discretion in the district court’s decision to award $1,000,000 in front pay”); Pierce v. Atchinson, Topeka and Santa Fe Ry. Co., 65 F.3d 562 (7th Cir. 1995) (front pay award of ten years is affirmed where plaintiff was likely to work to retirement if he had not been terminated because his job was of “immense importance” to him); Tyler v. Bethlehem Steel Corp., 958 F.2d 1176, 1189 (2d Cir.) (affirming front pay award for a period of 17 years in the total amount of $667,000), cert. denied, 506 U.S. 826 (1992).

Arguments to Limit Front Pay
No continuing effect of discrimination; plaintiff already made whole; additional damages are unnecessary. See, e.g., Sharkey v. LASMO, 15 F. Supp.2d 401, 404 (S.D.N.Y. 1998) (“Front pay and other future benefits may only be awarded where the jury’s award is insufficient to make the plaintiff whole for the discrimination he suffered.” The Court found that the damage award of $1.4 million was more than ample to compensate plaintiff, and declined to award an additional amount in front pay on pension benefits.); Gonzales v. Sandoval County, 2 F. Supp.2d 1442, 1447 (D.N.M. 1998) (Jury’s advisory opinion of $450,000 award in front pay is reduced to zero in light of plaintiff’s receipt of higher paying job. Court notes “[f]ront pay is intended to compensate victims of discrimination following judgment for any continuing effects of discrimination, until the victim can be made whole.”); Feltner v. Title Search Co., 75 Fair Empl. Prac. Cas. (BNA) 159, 161 (N.D. Ind. 1996) (court denied front pay as “unnecessary” where the plaintiff established that she was constructively discharged due to sexual harassment and was awarded $20,000 in punitive damages, “similar to an award of liquidated damages in an age discrimination case”); Carey v. Mt. Desert Island Hospital, 156 F.3d 31, 41 (1st Cir. 1998) (affirming district court’s refusal to award front pay was not an abuse of discretion where substantial liquidated damages “will more than adequately compensate plaintiff”).

Unduly speculative. See, e.g., Greenbaum v. Svenska Handelsbanken, NY, 979 F. Supp. 973, 988 (S.D.N.Y. 1997) (“in light of the nature of the market at issue, as well as the financial instability of the defendant company itself, not to mention [plaintiff’s] own prospects for future advancement, an award of front pay would be unduly speculative in this case”).

Plaintiff would have lost job anyway for other reason. See, e.g., Williams v. Pharmacia, Inc., 137 F.3d 944, 953 (7th Cir. 1998) (front pay limited to one year where plaintiff would have lost her position by that time because of a merger); Reed v. Lawrence & Co., 95 F.3d 1170, 1182 (2d Cir. 1996) (front pay limited to seven weeks because defendant’s office where plaintiff had worked was scheduled to close and she would have lost her job anyway).

Plaintiff shares the blame. See, e.g., Best v. Shell Oil Co., 4 F. Supp.2d 770, 776 (N.D. Ill. 1998) (court limits front pay to nine months due, in part, to plaintiff’s less than harmonious employment history); Evans v. State of Connecticut, 967 F. Supp. 673, 685 (D. Conn. 1997) (front pay was denied where plaintiff was “as much at fault as the defendants in prolonging the closure of the case”).

Present value. See, e.g., Suggs v. ServiceMaster Education Food Mgt., 72 F.3d 1228, 1235 (6th Cir. 1996) (“The award of front pay must be reduced to present value.”).

Front Pay v. Lost Future Earnings
An award for lost future earnings is not duplicative of front pay because it compensates plaintiff “for a lifetime of diminished earnings resulting from the reputational harms she suffered as a result of [the employer’s] discrimination.” Williams v. Pharmacia, Inc., 137 F.3d 944, 953 (7th Cir. 1998). Cf. EEOC v. Joint Apprenticeship Comm. of the Joint Indust. Bd. of the Electrical Indust., 164 F.3d 89, 102 (2d Cir. 1998) (“The bite of the alleged discrimination . . . was not that it may have denied the claimants low paying apprenticeships. Rather, the real harm is that the alleged discrimination may have operated to deprive the claimants of the opportunity to train for a highly skilled and compensated trade.”).

Is Front Pay Subject to Title VII’s Damages Cap?
There is an emerging split in the circuits on the issue of whether front pay is subject to Title’s VII’s statutory limit on compensatory damages for “future pecuniary loss.” See 42 U.S.C. § 1981a(b)(3).

Front pay included within cap. “‘[F]ront pay,’ by both its definition and purpose in the law, is a ‘future pecuniary loss’ because it is a monetary award for the salary that the employee would have received but for the discrimination.” Hudson v. Reno, 130 F.3d 1193, 1202-04 (6th Cir. 1997).

Front pay excluded from cap. “In our view, front pay is not so much a monetary award for the salary that the employee would have received but for the discrimination, but rather the monetary equivalent of reinstatement, to be given in situations where reinstatement is impracticable or impossible. This subtle distinction is more than semantics because section 1981a(b)(2) provides that, compensatory damages awarded under this section shall not include backpay, interest on backpay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964.” 42 U.S.C. § 1981a(b)(2). We therefore, respectfully, disagree with the Sixth Circuit and conclude that front pay is an equitable remedy excluded from the statutory limit on compensatory damages provided for in section 1981a(b)(3).” Kramer v. Logan County School District, 157 F.3d 620, 626 (8th Cir. 1998). See also Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 556 (10th Cir. 1999) (“[E]ven though ‘future pecuniary losses’ could be understood to include front pay, the statute makes clear that the term is not to be understood in that fashion — or at least not for the purposes of determining the amounts subject to the § 1981a(b)(3)(C) compensatory damages cap.”).

“[W]e have regarded frontpay as an equitable remedy available under section 706(g) both before and after the Civil Rights Act of 1991 made compensatory damages available under Title VII. Section 1981a(b)(2) therefore excludes frontpay from the range of compensatory damages subject to the damages cap under section 1981a(b)(3).” Martini v. Federal National Mortgage Ass’n, 1999 U.S. App. LEXIS 13639, *36 (D.C. Cir. June 18, 1999).


Scope of Award
“On the facts presented here, an award of $321,232.88 for a period of stress, headaches and dizzy spells is so excessive as to ‘shock the judicial conscience.’ In discrimination cases involving symptoms similar to those about which plaintiff testified – and even in cases in which the plaintiff’s symptoms were considerably more severe than those asserted here – courts have routinely limited damages awards to amounts ranging from $5,000 to $30,000.” Francis v. City of New York, 1999 U.S. Dist. LEXIS 8439 *11-12 (E.D.N.Y. June 1, 1999).

“Here, plaintiff testified that he was injured because he was ‘angry’ and ‘upset’ about the jokes and slurs and that he ‘just couldn’t take it anymore.’ Plaintiff also complained to his supervisors and started looking for a new job. Accepting plaintiff’s narration of the facts as true, this evidence sufficiently demonstrates the requisite injury to support compensatory damages. Furthermore, the damages must be proportional to the injury. We cannot say that the $70,000 award by the jury for compensatory damages is excessive when balanced against the harassment and isolation suffered by plaintiff over time. Plaintiff put up with a fairly steady stream of racial jokes and slurs during his employment, including insensitive conduct and comments by supervisors. Plaintiff was also intentionally isolated from his coworkers in retaliation for filing an EEOC complaint. The totality of the circumstances supports the compensatory damage award.” Moore v. Kuka Welding Systems + Robot Corp., 171 F.3d 1073, 1082 (6th Cir. 1999).

“There was sufficient evidence to support the jury’s determination that CUNY’s treatment of [plaintiff] caused her pain and suffering and emotional distress. [Plaintiff] testified that she felt disgraced, embarrassed, scared, and concerned that her future and reputation would be ruined. When testifying about how she felt about the way that other individuals in her department spoke, [plaintiff] stated that ‘I have never experienced this type of talk in a professional environment in athletics before, and not since. It made me feel belittled. It made me feel not equal. It made me feel disrespected. It made me feel that no matter what I did, it would not be valued.’ Consequently, she experienced significant stress which aggravated a preexisting back condition, causing her to consult with a chiropractor and physician and to take pain killers.” Perdue v. CUNY, 13 F. Supp. 2d 326, 337 (E.D.N.Y. 1998).

Proof of Emotional Distress
“Mental injury may be proved by the complainant’s own testimony, corroborated by reference to the circumstances of the alleged misconduct.” In the Matter of New York City Transit Authority v. State Division of Human Rights, 78 N.Y.2d 207, 216 (1991).

“[Plaintiff] has experienced severe emotional injury and pain as the result of sexual harassment in the course of her work in the Atlantic City Police Department. Contrary to Dr. Toborowsky’s stance, it is not necessary to prove that she has developed diagnosable psychiatric disorder in order to recognize or validate this substantial harm.” Hurley v. Atlantic City Police Dep’t, 174 F.3d 95, 112-113 (3rd Cir. 1999).

“[T]he only evidence of [plaintiff’s] distress — her own testimony — is insufficient to warrant an award of compensatory damages for that injury. She has not alleged any physical manifestations of her emotional distress, and despite the discrimination, she remained a lieutenant with the County police.” Annis v. County of Westchester, 136 F.3d 239, 249 (2d Cir. 1998).

“The Court is not convinced that Annis should be read so broadly as to preclude any award of compensatory damages for mental anguish absent corroborating testimony. Here, where Mahoney testified to the existence of physical symptoms resulting from Canada Dry’s conduct, the Court finds that Annis is distinguishable, and that an award of compensatory damages is supportable based upon well established Second Circuit authority.” Mahoney v. Canada Dry Bottling Co., 1998 U.S. Dist. LEXIS 6576, *18 (E.D.N.Y. May 7, 1998).

“Unlike in Annis, plaintiff here did not even offer any evidence that she needed or has undergone any counselling or psychiatric treatment. Therefore, pursuant to Annis, as a matter of law, plaintiff is not entitled to damages for her alleged emotional distress.” Ortiz-Del Valle v. NBA, 42 F. Supp. 2d 334, 341 (S.D.N.Y. 1999).

“Emotional harm will not be presumed simply because the complaining party is a victim of discrimination. The existence, nature, and severity of emotional harm must be proved. Emotional harm may manifest itself, for example, as sleeplessness, emotional distress, loss of self esteem, excessive fatigue, or a nervous breakdown.” EEOC Policy Guide on Compensatory and Punitive Damages Under the 1991 Civil Rights Act, Fair Employment Practices Manual (BNA) 405:7091 (July 2, 1992) as cited in Atchley v. The Nordam Group, Inc., 1999 U.S. App. LEXIS 11380, *14 (10th Cir. June 4, 1999).

“Given the scant evidence elicited at trial regarding the severity, duration, and consequences of the emotional harm that Ms. Ortiz-Del Valle suffered, a remittitur is appropriate in this case. The remitted award should represent the maximum amount that would not ‘deviate materially’ from awards in similar cases. The case law regarding mental damage awards pursuant to the New York Human Rights Law is not very illuminating since not only have damage awards in discrimination cases spanned a broad spectrum, but many of the decisions provide scant elaboration of the reasons supporting a finding of excessiveness. Taking into account the significant dearth of evidence at trial regarding the extent of plaintiff’s emotional damages, as well as the broad array of damage awards upheld pursuant to New York law, this Court finds that the maximum plaintiff could recover pursuant to New York law is $20,000.” Ortiz-Del Valle v. NBA, 42 F. Supp. 2d 334, 342 (S.D.N.Y. 1999).

In McIntyre v. Manhattan Ford, 682 N.Y.S.2d 167 (1 Dept. 1998), the Appellate Division affirmed a jury award of $600,000 for emotional suffering based upon a two year pattern of sexual harassment that, as the trial court stated, included offensive language, intimidation, abuse, humiliation, ridicule, and unwelcome and improper language and conduct, often of a sexually explicit nature. McIntyre v. Manhattan Ford, 175 Misc. 2d 795, 797 (Sup. Ct., N.Y. Co. 1997). The plaintiff there testified that she was made to feel “humiliated, intimidated and insignificant,” and that she felt like “an animal” and not a human being. She consulted a psychiatrist twenty-one times over a nine month period who confirmed that her experiences caused plaintiff to be confused, distraught, and anxiety ridden. The doctor testified that plaintiff would continue to experience apprehension and anxiety into the future.

Rule 35 Examination
Rule 35(a) of the Federal Rules of Civil Procedure provides:

Order for Examination. When the mental or physical condition. . . of a party . . . is in controversy, the court. . . may order the party to submit to a physical or mental examination by a suitably licensed or certified examiner. . . . The order may be made only on motion for good cause shown and upon notice to the person to be examined . . . and shall specify the time, place, manner, conditions, and scope of the examination and the persons by whom it is to be made.

Waiver of Doctor-Patient Privilege
“The Court finds that Plaintiff has waived the psychotherapist-patient privilege by placing her mental condition in issue and by disclosing Dr. Townsend as an expert witness who will give opinion testimony at trial.” Vann v. Lone Star Steakhouse & Saloon of Springfield, Inc., 967 F. Supp. 346, 349 (C.D.Ill. 1997).

“[C]ourts have recognized that the privilege is waived impliedly when the patient-plaintiff’s mental condition is made an issue in the litigation.” EEOC v. Danka Industries, Inc., 990 F. Supp. 1138, 1142 (E.D. Mo. 1997).

The court found “that in the absence of a separate tort claim for emotional distress, and given the fact that plaintiff only presents a claim for past mental suffering, there is no basis for a Rule 35(a) order requiring a mental examination.” Curtis v. Express, Inc., 868 F. Supp. 467, 469 (N.D.N.Y. 1994).

“Courts tend to compel an employment discrimination plaintiff to undergo a mental examination only when the case involves, in addition to a claim of emotional distress, one or more of the following: (i) a separate tort cause of action for negligent or intentional infliction of emotional distress; (ii) an allegation of severe ongoing mental injury or a psychiatric disorder; (iii) the plaintiff’s intent to offer expert testimony to support her emotional distress claim; or (iv) the plaintiff’s concession that her mental condition is in controversy. . . . [Here, plaintiff] does not allege intentional or negligent infliction of emotional distress, does not allege a specific psychological or psychiatric disorder, and has confirmed that she has no intention of offering expert testimony to prove her emotional distress. ESSROC contends that a mental examination is warranted because [plaintiff] claims that the discrimination caused her to feel anxious and to have trouble sleeping. Under the case law interpreting Rule 35(a), such afflictions are not so severe as to warrant an order compelling a mental examination. The Court concludes that [plaintiff] has not put her mental condition ‘in controversy’ for purposes of Rule 35(a).” Hardy v. ESSROC Materials, Inc., 1998 U.S. Dist. LEXIS 2390, at *3-5 (E.D.Pa. Feb. 18, 1998).

In discovery of information to establish a pre-existing condition “[w]e would agree that much of the discovery (e.g., domestic abuse, earlier illness, and personal relationships, etc.) was not relevant or was so remote in time, that it should not have been allowed.” Jenson v. Eveleth Taconite Co., 130 F.3d 1287, 1292-93 (8th Cir. 1997).

Procedure For Rule 35 Exam
“A majority of cases hold that a psychiatric examination is not an adversarial proceeding and that a plaintiff is not entitled to have her attorney or her own physician present.” Jackson v. Entergy Operations, 1998 U.S. Dist. LEXIS 752 *3, n1 (E.D.La. May 4, 1998). Cf.Vreeland v. Ethan Allen, 151 F.R.D. 551 (S.D.N.Y. 1993) (“this Court has found generally that, assuming no inappropriate conduct, the presence of the attorney [at a Rule 35 Exam] is more likely to produce a higher quality of justice and fairness in the ensuing trial and permit more cogent cross-examination of the expert”).


The Supreme Court’s Kolstad Decision
In its June 22, 1999 decision Kolstad v. American Dental Ass’n, the Supreme Court addressed the rule on punitive damages for discrimination cases. The Court held that a Title VII plaintiff can get punitive damages without having to prove that the defendant’s conduct was “egregious.” The Court also created a new rule which provides that an employer will not be held vicariously liable for punitive damages provided that it made “good faith efforts” to comply with the law. The Court reasoned as follows:

The very structure of Section 1981a suggests a congressional intent to authorize punitive awards in only a subset of cases involving intentional discrimination. Section 1981a(a)(1) limits compensatory and punitive awards to instances of intentional discrimination, while Section 1981a(b)(1) requires plaintiffs to make an additional ‘demonstration’ of their eligibility for punitive damages. Congress plainly sought to impose two standards of liability – one for establishing a right to compensatory damages and another, higher standard that a plaintiff must satisfy to qualify for a punitive award.

[W]e reject [the] conclusion that eligibility for punitive damages can only be described in terms of an employer’s ‘egregious’ misconduct. The terms ‘malice’ and ‘reckless’ ultimately focus on the actor’s state of mind. While egregious misconduct is evidence of the requisite mental state, Section 1981a does not limit plaintiffs to this form of evidence, and the section does not require a showing of egregious or outrageous discrimination independent of the employer’s state of mind. Nor does the statute’s structure imply an independent role for ‘egregiousness’ in the face of congressional silence. On the contrary, the view that Section 1981a provides for punitive awards based solely on an employer’s state of mind is consistent with the 1991 Act’s distinction between equitable and compensatory relief. Intent determines which remedies are open to a plaintiff here as well; compensatory awards are available only where the employer has engaged in ‘intentional discrimination.’

There will be circumstances where intentional discrimination does not give rise to punitive damages liability under this standard. In some instances, the employer may simply be unaware of the relevant federal prohibition. There will be cases, moreover, in which the employer discriminates with the distinct belief that its discrimination is lawful. The underlying theory of discrimination may be novel or otherwise poorly recognized, or an employer may reasonably believe that its discrimination satisfies a bona fide occupational qualification defense or other statutory exception to liability.

That conduct committed with the specified mental state may be characterized as egregious, however, is not to say that employers must engage in conduct with some independent ‘egregious’ quality before being subject to a punitive award.

The inquiry does not end with a showing of the requisite ‘malice or . . . reckless indifference’ on the part of certain individuals, however. The plaintiff must impute liability for punitive damages to respondent.

Recognizing Title VII as an effort to promote prevention as well as remediation, and observing the very principles underlying the Restatements’ strict limits on vicarious liability for punitive damages, we agree that, in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer’s ‘good faith efforts to comply with Title VII.’

[A]n employer’s conduct need not be independently ‘egregious’ to satisfy Section 1981a’s requirements for a punitive damages award, although evidence of egregious misconduct may be used to meet the plaintiff’s burden of proof.

Kolstad v. American Dental Ass’n, 119 S. Ct. 2118 (1999).

Is the Award Excessive?
“We have held that ‘the standard of appellate review of damage awards, whether compensatory or punitive,’ is whether the award is so high as to shock the judicial conscience and constitute a denial of justice.'” Ismail v. Cohen, 899 F.2d 183, 186 (2d Cir. 1990).

“The award of $400,000 is less than one thousandth of Southern Union’s approximately $500,000,000 net worth and the ratio of punitive to compensatory damages (not including the separate awards of backpay and front pay) is less than 6:1, a ratio that in these circumstances does not set off any alarm bells. We have approved large punitive damages awards in the past to deter employment discrimination. The punitive damages awarded here cannot be considered so excessive as to shock the Court’s conscience.” Morse v. Southern Union Company, 174 F.3d 917, 925-26 (8th Cir. 1999).


Unconditional Offer Under Ford Motor
“To toll the accrual of backpay liability, an employer need only offer reinstatement to ‘a job substantially equivalent to the one he was denied,’ not a job equivalent to the one to which the employee must prove he was entitled if he is to prevail in his suit.” Lightfoot v. Union Carbide Corp., 110 F.3d 898, 908 (2d Cir. 1997), quoting Ford Motor Co. v. EEOC, 458 U.S. 219, 232 (1982). But see Mertig v. Milliken & Michaels of Del., Inc., 923 F. Supp. 636, 648 (D. Del. 1996) (“an applicant or discharged employee is not required to accept a job by the employer on the condition that the employee’s claims against the employer be compromised”); Wilcox v. Stratton Lumber, Inc., 921 F. Supp. 837 (D. Me. 1996) (backpay entitlement was not cut off when plaintiff rejected defendant’s offer of reinstatement because plaintiff reasonably feared continued harassment).

Offer of Judgment
Rule 68 of the Federal Rules of Civil Procedure provides that if a timely pretrial offer of settlement is not accepted and “the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.” The principal purpose of the Rule is to encourage settlement and avoid litigation.

“Defendant may condition offer of judgment on acceptance by multiple plaintiffs.” Lang v. Gates, 36 F.3d 73, 75 (9th Cir. 1994).

“[A] Rule 68 offer for judgment in a specific sum together with costs, which is silent as to attorneys’ fees, does not preclude the plaintiff from seeking fees when the underlying statute does not make attorneys’ fees a part of costs.” Nuson v. COMH Woodburn, Inc., 122 F.3d 830 (9th Cir. 1997).


Statutory Framework
“If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of opinion or otherwise.” Rule 702, Federal Rules of Evidence. See also Drago v. Aetna Plywood, Inc., 1998 U.S. Dist. LEXIS 12249 *9 (N.D. Ill. Aug. 3, 1998) (“The district court has wide discretion in determining the competency of a witness as an expert and the relevancy of his or her testimony with respect to a particular subject.”).

Use of Experts to Limit Pecuniary Award
Plaintiff’s backpay is limited to 21 months where defendant’s expert testified that virtually all job searches in plaintiff’s position who genuinely sought work would be employed within one to two years of leaving a previous job. Thomas v. NFL Players Ass’n, 941 F. Supp. 156, 163 (D.D.C. 1996).

backpay reduced by $100,000 where defendant’s expert showed that plaintiff did not exercise reasonable diligence in seeking comparable employment in view of actual number of applications made relative to the number of positions available. Carey v. Mt. Desert Island Hospital, 156 F. 3d 31, 41 (1st Cir. 1998).

Challenging the Economic Expert on Damages
-previous experiences as an expert
-inconsistent testimony in previous cases

Methodology. Has the expert accounted for mortality, work-life expectancy, leaving the workforce, the fact that everyone doesn’t get a promotion, business conditions, offset stream, the company’s compensation practices, discount rate, labor market conditions, etc.? See, e.g., Boucher v. U.S. Suzuki Motor Corp., 73 F.3d 18, 22 (2d Cir. 1996) (“Where lost future earnings are at issue, an expert’s testimony should be excluded as speculative if it is based on unrealistic assumptions regarding the plaintiff’s future employment prospects.”); McCall v. Myrtle Beach Hospital, Inc., 1997 U.S. App. LEXIS 23745 *21 (4th Cir., Sept. 10, 1997) (testimony of plaintiff’s economic expert rejected where his projections used a 7.5% yearly salary increase based on the consumer price increase for medical care rather than 3% salary cap that was in place at the hospital).

Has the expert obtained an adequate history of plaintiff? See, e.g., Williams v. Rene, 72 F.3d 1096, 1102 (3d Cir. 1995) (expert testimony of actuary not admissible where there was no evidence on which he could properly base an opinion that the plaintiff’s gross earnings would triple in the remaining 17 years of his service before retirement); Neal v. Honeywell, Inc., 995 F. Supp. 889, 892 (N.D. Ill. 1998) (“But what about the experts? The jury accepted the testimony of neither; hardly surprising in light of the often highly suspect assumptions made by each.”).

Is the expert’s theory accepted by the courts and/or consistent with standards generally utilized? See, e.g., Earl v. Bouchard Transp. Co., 735 F. Supp. 1167, 1175 (E.D.N.Y.) (“Statistical charts, such as the mortality tables and the work-life expectancy tables prepared by the United States Department of Labor . . . are often deemed authoritative.”), aff’d in part, rev’d in part on other grounds, 917 F.2d 1320 (2d Cir. 1990). See also Bureau of Labor Statistics reports on worker displacement which contain statistical information on re-employment of laid-off workers by age and occupation.

Challenging the Medical Expert on Damages
-accredited medical specialty
-expertise applicable to plaintiff’s case
-social, business, or family connection with plaintiff
-testimony for same counsel before

-failure to conduct exam in a proper manner (e.g., length of exam, setting, etc.)
-failure to account for relevant information
-failure to administer psychological tests materials and documents reviewed
-treaties and authorities consulted
-knowledge of patient’s medical history


*Louis Pechman is a partner in Berke-Weiss & Pechman LLP, New York, New York. The assistance of Colleen Sorrell, a student at the Fordham University School of Law, is gratefully acknowledged. This outline was prepared for the Practising Law Institute, October/November 1999 program on Continuing Legal Education for Senior-Level Lawyers.