Opinion
Civil Action No. 3:00-CV-1925-G.
January 28, 2005
MEMORANDUM ORDER
This case is on remand from the Court of Appeals. On August 4, 2004, this court denied the motion of the defendant, Haggar Clothing Company ("Haggar"), for judgment as a matter of law. Before the court are the remaining issues on the other relief sought by Palasota — i.e., reinstatement, back pay, front pay, and prejudgment interest. For the following reasons, the court orders Haggar to reinstate Palasota to his former position and to pay him backpay, front pay, and liquidated damages.
I. BACKGROUND
This case involves claims of age and gender discrimination. The plaintiff Jimmy Palasota ("Palasota") was, at the time suit was commenced, a 57 year old male. Original Complaint and Jury Demand ("Complaint") at 2. He was 51 years old at the time of the events complained of. Id. Palasota was employed by Haggar as a Sales Associate from 1968 to May 10, 1996, a total of 28 years. Id. Throughout most of his career with Haggar, Palasota's major account was Dillard's Department Stores ("Dillard's"). Additionally, Palasota serviced some trade accounts and eight J.C. Penney stores in the Dallas/Ft. Worth market. In December, 1995, Dillard's ceased purchasing Haggar products. Subsequently, Haggar created an independent trade account territory specifically for Palasota. On April 29, 1996, Haggar informed Palasota that as a result of a reconfiguration of its sales staff, Palasota's position of Sales Associate was being eliminated, effective May 10, 1996. Complaint at 2. Haggar terminated Palasota on May 10, 1996. Id.
According to Palasota, Haggar's management felt that the company was not reaching the younger market, and in the mid-1990's began efforts to portray a younger, sexier image for the company. Palasota alleged that, as part of Haggar's attempt to change its market image with consumers and retailers, Haggar created the Retail Marketing Associate ("RMA") program to put "a younger look in the field" to sell its clothes to retailers. Palasota also asserted that over the few years prior to his termination, Haggar implemented policies in which responsibilities previously performed by Sales Associates were transferred to persons employed as RMAs. Complaint at 2. As a result of these changes, Palasota averred, the only apparent differences between the Sales Associate positions and the Retail Marketing Associate positions were the title and the pay, because many of the job responsibilities were essentially the same. Id. During this time, Haggar allegedly decreased the number of Sales Associates while increasing the number of Retail Marketing Associates. Id. Palasota alleged that persons employed as Sales Associates were generally males over forty years old, while persons employed as Retail Marketing Associates were generally females under forty years old. Id. at 2-3. Thus, according to Palasota, Haggar's reconfiguration of its sales force over the past few years effectively shifted the sales responsibilities from men over forty years old to women under forty years old. Complaint at 3.
Palasota filed this suit on September 1, 2000, alleging claims against Haggar of age discrimination under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., and sex discrimination under Title VII of the Civil Rights Acts of 1964, 42 U.S.C. § 2000e et seq. Id. at 1.
On January 24, 2002, the nine member jury seated in this case rendered a unanimous verdict, partially in favor of Palasota, finding that Haggar had willfully discriminated against Palasota on the basis of his age and awarding Palasota backpay in the amount of $842,218.96. The jury did not find that Haggar had engaged in sex discrimination. On February 1, 2002, Haggar moved for judgment as a matter of law. On February 6, 2002, Haggar amended its motion. That motion, in both in original and amended form, asked the court to disregard the jury's verdict of age discrimination, willfulness and damages, and enter judgment in favor of Haggar. Defendant's Amended Post Verdict Motion for Judgment as a Matter of Law and Brief in Support at 1. On June 26, 2002, the court granted Haggar's amended motion for judgment as a matter of law. The court ordered that Palasota take nothing on his claims in this case, and that Haggar recover its costs of court. On July 26, 2002, Palasota appealed that order to the United States Court of Appeals for the Fifth Circuit ("the Fifth Circuit"). On July 29, 2002, this court taxed costs of $36,737.90 for Haggar.
On September 3, 2003, the Fifth Circuit reversed this court's ruling on the motion for judgment as a matter of law, reinstated the jury verdict in favor of Palasota, and remanded this case for further proceedings. See generally Palasota v. Haggar Clothing Co., 342 F.3d 569 (5th Cir. 2003) (per curiam), cert. denied, 540 U.S. 1184 (2004). The Fifth Circuit held that Palasota had established that Haggar terminated his employment due to his age. Id. Specifically, the Fifth Circuit stated the following:
Our reading of the record and the district court's opinions convinces us that it erred by: (1) holding that Palasota was required to show that a younger employee was given preferential treatment; (2) ignoring much evidence which supports the jury's verdict, including the February 23, 1996 memo; and (3) discounting the probative value of management's remarks, despite Palasota's establishment of a prima facie case. Under Reeves [v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000)], Palasota's establishment of a prima facie case combined with doubt cast on Haggar's proffered supposed non-discriminatory explanation for termination — that Palasota voluntarily resigned — are sufficient to support liability. 530 U.S. at 147, 120 S.Ct. 2097.Id. at 575.
The Fifth Circuit concluded its opinion by noting that "[i]n granting the Judgment as a Matter of Law, the district court was not required to and did not reach the questions whether the evidence supported the jury's finding of willful discrimination and the award of backpay. Therefore we do not reach those issues." Id. at 578.
Upon remand, Haggar filed a motion for judgment as a matter of law on March 29, 2004. In that motion, Haggar contended that the jury's backpay award must be reduced, that Palasota's backpay should be calculated by using his $85,600 per year earnings, and that Palasota was not entitled to receive any backpay after October 9, 1997. Brief in Support of Defendant's Motion for Judgment as a Matter of Law on Remand at 6-11. Haggar also argued that the jury's willfulness finding should be set aside. Id. at 11-19. Haggar maintained that, in the event the court upheld the willfulness finding and awarded liquidated damages, Palasota was not entitled to recover prejudgment interest on any damages, included backpay. Id. at 19.
Palasota filed a supplemental brief in support of judgment, also on March 29, 2004. There, he urged that the court should enter judgment in his favor on the jury's verdict concerning backpay damages and willfulness. Plaintiff's Supplemental Brief in Support of Judgment ("Plaintiff's Supplemental Brief") at 3. Palasota contended that the court must adjust the backpay award to account for the delay of entry of the verdict and the date of a judgment against Haggar. Id.
Palasota also seeks attorney's fees. He recognizes, however, that under Rule 54(d), F.R. CIV. P., this issue is not addressed until judgment is entered. Plaintiff's Supplemental Brief at 26.
On August 4, 2004, this court denied Haggar's motion for judgment as a matter of law. Memorandum Order (August 4, 2004). Specifically, this court found that Palasota was entitled, in conformity with the objectives of the ADEA, to recover $842,218.96 as backpay to restore him to the position he would have been in but for the discrimination. Id. at 7-10. The court also determined that Palasota had presented substantial evidence at trial in support of his contention that Haggar willfully discriminated against him on the basis of age. Id. at 10-11.
On September 1, 2004, this court conducted an evidentiary hearing on the remaining issues on the other relief sought by Palasota — i.e., reinstatement, back pay, front pay, and prejudgment interest. See generally Transcript from Palasota v. Haggar Clothing Company Hearing of September 1, 2004 ("Transcript"). Subsequent to that hearing, the parties conferred through their counsel with a court-appointed mediator to determine if a compromise on these remaining issues could be reached. An agreement proved impossible.
II. ANALYSIS A. Reinstatement and Front Pay
The Fifth Circuit has held that, where feasible, reinstatement is the preferred remedy for a discriminatory discharge. See Julian v. City of Houston, Texas, 314 F.3d 721, 728 (5th Cir. 2002); Giles v. General Electric Company, 245 F.3d 474, 489 n. 27 (5th Cir. 2001); Rutherford v. Harris County, Texas, 197 F.3d 173, 188 (5th Cir. 1999); Brunnemann v. Terra International, Inc., 975 F.2d 175, 180 (5th Cir. 1992); Walther v. Lone Star Gas Company, 952 F.2d 119, 127(5th Cir. 1992); Deloach v. Delchamps, Inc., 897 F.2d 815, 822 (5th Cir. 1990); Goldstein v. Manhattan Industries Inc., 758 F.2d 1435, 1448 (11th Cir.), cert. denied, 474 U.S. 1005 (1985). In the context of wrongful discharge under Title VII, the Eleventh Circuit, relying on Fifth Circuit precedent, has held that a successful plaintiff is "presumptively entitled to reinstatement under the `make whole' policy." Nord v. United States Steel Corporation, 758 F.2d 1462, 1473 (11th Cir. 1985). However, reinstatement is not feasible in all circumstances. Reinstatement would not be feasible, for example, when discord and antagonism exist between the parties. Brunnemann, 975 F.2d at 180. In the absence of discord and antagonism, however, the general rule — that reinstatement is the preferred remedy — applies. Thus, Haggar's argument that reinstatement would be unworkable in this case, even though there is no great hostility or animosity held by Haggar toward Palasota, does not preclude this court from ordering reinstatement. See, e.g., id.
When reinstatement is not feasible, the equitable remedy of front pay is available at the court's discretion. Walther, 952 F.2d at 127; Reneau v. Wayne Griffin Sons, Inc., 945 F.2d 869, 870 (5th Cir. 1991); Deloach, 897 F.2d at 822. Because front pay is an equitable remedy, the court — rather than the jury — determines the amount of the award. Walther, 952 F.2d at 127; Reneau, 945 F.2d at 870; Deloach, 897 F.2d at 823-24.
After the jury's verdict was returned, the court heard evidence regarding the feasibility of reinstatement. Because of the strong preference in the ADEA and case law for reinstatement, and after weighing the evidence presented by both parties, the court concludes that reinstatement is feasible in this case. To supplement reinstatement, and to encourage an employer to reinstate a victim of discrimination promptly, front pay may be construed as "an extension of defendant's back pay liability until the employer makes an offer of reinstatement." Johnson v. Chapel Hill Independent School District, 853 F.2d 375, 382-83 (5th Cir. 1988); see also Valdez v. Church's Fried Chicken, Inc., 683 F. Supp. 596, 636-37 (W.D. Tex. 1988). Accordingly, Haggar is ordered to reinstate Palasota to the first available sales associate vacancy which becomes available in the Dallas area. In the interim between the entry of judgment and Haggar's reinstatement of Palasota to his former position, Haggar shall pay Palasota the monthly sum of $14,583.33. In addition to the back pay determined by the jury, Palasota is also entitled to recover $524,999.98 from Haggar as front pay. See Johnson, 853 F.2d at 382-83; Valdez, 683 F. Supp. at 636-37. The court also finds that the backpay award should not be enhanced to account for the delay in rendering judgment on the jury's verdict.
Palasota testified that he earned $175,000 per year during his last year at Haggar. Transcript at 62:15-17. $175,000 divided by 12 equals monthly earnings of $14,583.33.
($175,000 divided by 12 months) × (number of months between the date of receipt of jury verdict through the date of this memorandum order) = $14,583.33 × 36 months = $524,999.98.
B. Liquidated Damages
Under the ADEA, a prevailing plaintiff is entitled to recover liquidated damages if the discrimination is found to be willful. Wilson v. Monarch Paper Company, 939 F.2d 1138, 1147 n. 9 (5th Cir. 1991) (citing Hansard v. Pepsi-Cola Metropolitan Bottling Company, 865 F.2d 1461, 1470 (5th Cir. 1989)). The legislative history of the ADEA indicates that Congress intended for liquidated damages awarded under that statute to be punitive in nature. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125 (1985). A liquidated damages award may not exceed a plaintiff's back pay award, but a finding of willful discrimination under the ADEA mandates liquidated damages in an amount equal to the back pay award. Tyler v. Union Oil Company of California, 304 F.3d 379, 401 (5th Cir. 2002); see also Smith v. Berry Company, 165 F.3d 390, 395 (5th Cir. 1999); Julian, 314 F.3d at 730 n. 36. Accordingly, Haggar is ordered to pay Palasota liquidated damages of $842,218.96.
C. Prejudgment Interest
The decision to award prejudgment interest on awards of backpay in Title VII cases lies within the discretion of the trial court. Hadley v. VAM P T S, 44 F.3d 372, 376 (5th Cir. 1995). The award of prejudgment interest, an item that should be included in backpay, is merited when prejudgment interest is necessary to make a victim of discrimination whole. Sellers v. Delgado Community College, 839 F.2d 1132, 1140 (5th Cir. 1988). According to the Fifth Circuit, however, "[i]n an ADEA case where liquidated damages are awarded, a court may not award prejudgment interest on either the backpay or the liquidated damage award." McCann v. Texas City Refining, Inc., 984 F.2d 667, 673 (5th 1993). Because Palasota is receiving liquidated damages, he is not entitled to prejudgment interest.
D. Attorney's Fees
A prevailing party in an ADEA case is entitled to an award of attorney's fees. Tyler, 304 F.3d at 404. To recover such fees, Palasota may submit a separate motion as provided for in F.R. Civ. P. 54(d)(2).
III. CONCLUSION
For the reasons discussed above, Haggar's motion for judgment as a matter of law is DENIED. Haggar is ORDERED: (1) to pay Palasota backpay in the amount of $842,218.96; (2) to reinstate Palasota; (3) to pay Palasota $14,583.33 monthly, until Haggar reinstates Palasota to the first available sales associate vacancy in the Dallas area; (4) to pay to Palasota an additional lump sum of $524,999.98 (36 months × $14, 583.33) as front pay; and (5) to pay Palasota liquidated damages of $842,218.96.Within 15 days of this date, counsel for Palasota shall submit a proposed form of judgment in conformity with this memorandum order.