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Court Upholds $923,656 Back-Pay Award

On May 31, the Eleventh U.S. Circuit Court of Appeals upheld a lower court’s decision awarding $923,656 in back pay to a terminated employee of the Federal Railroad Administration (FRA), an agency of the U.S. government. The decision shows the damages available to employees that prove retaliation based on the filing of an Equal Employment Opportunity Commission (EEOC) charge and the requirements for proving damages for discrimination.

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Donald Gryder was a power and equipment inspector for the FRA, which is an agency of the U.S. Department of Transportation (DOT). In 1997, he filed a discrimination charge with the EEOC claiming that the FRA fired him in retaliation for complaints he had previously filed with the agency. In 2003, a jury entered an advisory verdict awarding him $250,000 in lost wages and benefits.

However, the district court that tried Gryder’s case found that the FRA would have discharged him in the absence of any retaliatory bias and set aside the jury’s verdict. Gryder appealed, and the Eleventh Circuit threw out the lower court’s decision, ordering it to award him damages.

On September 15, 2010, the district court ordered the secretary of transportation to reinstate Gryder to his previous job (or an equivalent position) and awarded him $923,656 in back pay. The secretary of transportation appealed, arguing that the court had abused its discretion and failed to properly calculate the back pay and damages available to Gryder.

Although Gryder won a large back-pay award, he appealed, claiming that the court had reduced his back pay by $20,000 per year based on the part-time work he had obtained since his termination. He further claimed that the court had failed to address his claims for back payment of annual bonuses, annual leave, sick leave, and contributions to the government’s thrift savings plan. Additionally, he claimed that the court should have increased his back-pay award to make up for the tax consequences he suffered for receiving the huge lump-sum payment of back wages.

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Court of appeals weighs in — again
In reaching its decision, the Eleventh Circuit stated that the purpose of federal discrimination law is to “make whole” victims of unlawful discrimination. The law gives broad discretion to a federal court to fashion the most complete relief possible for an employee who proves he is a victim of discrimination. The court held that “successful Title VII [of the Civil Rights Act of 1964] claimants . . . are presumptively entitled to back-pay. . . . Back-pay is the difference between the actual wages earned and the wages the individual would have earned in the position that, but for the discrimination, the individual would have attained.” It is the employee’s duty at trial to present evidence from which a court can make a reasonable calculation of back pay.

However, as the court noted, Title VII requires employees to mitigate their damages through reasonable efforts by seeking employment that is “substantially equivalent” to the position they lost at the hands of their employer. At trial, the burden of proving lack of diligence in seeking and finding equivalent employment is on the employer. When an employee takes a job in a dissimilar line of work or accepts a lower-paying job, his earnings still must be deducted from any back-pay award.

The court also held that in addition to back pay, a prevailing employee is presumptively entitled to either reinstatement or front pay. Although a court presumes that reinstatement is the appropriate remedy in a wrongful discharge case, it may award front pay in lieu of reinstatement if “extenuating circumstances warrant such relief.”

In this case, the appeals court upheld the lower court’s decision to deduct $20,000 a year from Gryder’s award based on what he could have earned by working part-time after his termination from the FRA. The lower court found that he could have continued working part-time for several years and therefore reduced the back-pay award in each year by the amount he could have earned.

Gryder also challenged the lower court’s denial of thrift savings plan contributions and its failure to include overtime, performance bonuses, and payments for sick leave, but again, the appeals court upheld the lower court’s decision. That’s because at trial, Gryder presented only his own speculative testimony and calculations and didn’t provide the court with sufficient evidence of losses attributable to those benefits to support an award.

Additionally, Gryder failed to present any evidence that he would have been promoted had he remained at the FRA. Therefore, the court denied an increase in his back pay based on his claim that he would have been promoted and would have received a higher wage. Despite upholding the large back-pay award in Gryder’s favor, the court denied his claims for additional compensation for unpaid benefits. Donald E. Gryder v. L. Fred Dennin, III, Federal Railroad Administration, Regional Director, et al ., 2011 U.S. App. LEXIS Case No. 11104 (11th Cir., May 31, 2011).

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This case is a good reminder that terminations can be extremely expensive. The large back-pay award doesn’t include the next step in this case, which will likely be a request by Gryder’s attorneys for attorneys’ fees. It’s important to note that the award doesn’t take into account the amount that the government spent in defending against Gryder’s claims. We’re reminded of Davy Crockett’s good advice: “First be sure you’re right, then go ahead.”

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