E.E.O.C. v. Erie County

• Decision Date: 12 December 1984
• Docket Number: No. 354,D,354
• Citation: 751 F.2d 79
• Parties: 36 Fair Empl.Prac.Cas. 830, 26 Wage & Hour Cas. (BN 1656, 35 Empl. Prac. Dec. P 34,844 The EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. The COUNTY OF ERIE and the Erie County Medical Center, Defendants-Appellants. ocket 84-6225.
• Court: U.S. Court of Appeals — Second Circuit

Page 79

751 F.2d 79

36 Fair Empl.Prac.Cas. 830,

26 Wage & Hour Cas. (BN 1656,

35 Empl. Prac. Dec. P 34,844

The EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. The COUNTY OF ERIE and the Erie County Medical Center Defendants-Appellants.

No. 354, Docket 84-6225.

United States Court of Appeals Second Circuit.

Argued Nov. 13, 1984.

Decided Dec. 12, 1984.

Roger J. Wittig, Asst. County Atty., Buffalo, N.Y. (Eugene F. Pigott, Jr., Erie County Atty., Buffalo, N.Y. on brief), for defendants-appellants.

Robert L. Zisk, Washington, D.C. (Francis X. Lilly, Solr. of Labor, Joseph M. Woodward, Jay S. Berke, Linda Jan S. Pack, U.S. Dept. of Labor, Johnny J. Butler, Acting Gen. Counsel, Philip B. Sklover, Vella M. Fink, Karen MacRae Smith, E.E.O.C., Washington, D.C., on brief), for plaintiff-appellee.

Before OAKES and KEARSE, Circuit Judges, and POLLACK, District Judge. ^*

KEARSE, Circuit Judge:

Defendants County of Erie and Erie County Medical Center (the "Hospital"), unsuccessful defendants in this gender discrimination case brought by the government under Sec. 17 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. Sec. 217 (1982), and the Equal Pay Act, 29 U.S.C. Sec. 206(d) (1982), on behalf of female members of the cleaning staff of the Hospital and its predecessor, appeal from so much of a final judgment of the United States District Court for the Western District of New York, John T. Elfvin, Judge, as orders them to pay prejudgment interest on the backpay awards made by the court to those female employees. On appeal, defendants contend that the court had no power to order them to pay prejudgment interest and that even if it had the power, it abused its discretion both in making such an award and in choosing a rate of interest related to the prime rate of interest quoted by commercial banks to large businesses. Finding no merit in defendants' arguments, we affirm the judgment.

BACKGROUND

After protracted litigation of this lawsuit, which was begun in 1971, defendants were found to have violated the Equal Pay Act by paying female cleaners less than male employees doing substantially equal work. In a final judgment entered on June 22, 1984, defendants were ordered, inter alia, to pay back wages to female cleaners from October 13, 1969, until such date as the underpayments to those employees ceased. The court held that, in order to make the previously underpaid employees whole, an award of prejudgment interest was appropriate at a rate that "takes into account the effects of inflation over the greater than ten-year period during which the cleaners were underpaid." The court therefore awarded prejudgment interest at the "adjusted prime rate" established by the Secretary of the Treasury pursuant to 26 U.S.C. Sec. 6621 (1982), calculated as to each employee from the midpoint of the period for which back wages were due. The court determined that the overriding consideration was to make the injured employee whole and therefore decided to give "limited weight" to the fact that the employer had not acted in bad faith.

Defendants have appealed from so much of the court's judgment as orders them to make such interest payments. They contend that the district court lacked the power to order them to pay prejudgment interest because the Equal Pay Act does not

expressly provide for an award of prejudgment interest and because they are government entities. They contend that even if the court had the power, it abused its discretion in making such an award and in setting the rate of interest at the adjusted prime rate. We have considered all of defendants' arguments and find them unpersuasive.

DISCUSSION

Defendants' most fundamental contention is that prejudgment interest cannot be awarded against a state or local government absent express statutory authorization. This argument lacks merit. The Supreme Court has upheld backpay awards against a state government in an employment discrimination suit under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000e et seq., pointing out that "the Eleventh Amendment, and the principles of state sovereignty which it embodies, ... are necessarily limited by the enforcement provisions of Sec. 5 of the Fourteenth Amendment." Fitzpatrick v. Bitzer, 427 U.S. 445, 456, 96 S.Ct. 2666, 2671, 49 L.Ed.2d 614 (1976). The Court has also noted that the Equal Pay Act applies to municipal employees, see County of Washington, Oregon v. Gunther, 452 U.S. 161, 164 n. 3, 101 S.Ct. 2242, 2245 n. 3, 68 L.Ed.2d 751 (1981), and has ruled in other contexts that the express statutory provision for the award of prejudgment interest is unnecessary, see Rodgers v. United States, 332 U.S. 371, 373, 68 S.Ct. 5, 6, 92 L.Ed. 3 (1947) ("[T]he failure to mention interest in statutes which create obligations has not been interpreted by this Court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest.").

In determining whether prejudgment interest should be awarded when Congress has been silent on the subject, the court should determine the "relative equities between the beneficiaries of the obligation and those upon whom it has been imposed," and "weigh [ ] these relative equities in accordance with the historic judicial principle that one for whose financial advantage an obligation was assumed or imposed, and who has suffered actual money damages by another's breach of that obligation, should be fairly compensated for the loss thereby sustained." Id. at 373, 68 S.Ct. at 6. Following that course here, we note that one of the principal purposes of the Equal Pay Act is to make whole employees who have unlawfully been deprived of wages. See, e.g., Marshall v. Board of Education, 470 F.Supp. 517, 519 (D.Md.1979), aff'd, 618 F.2d 101 (4th Cir.1980). In 1974, amendments to the Equal Pay Act redefined "employer" to include public agencies that are political subdivisions of a state, see 29 U.S.C. Secs. 203(d), (x); Pub.L. No. 93-259, Sec. 6, 88 Stat. 55, 58-62 (1974); and as a practical matter, we cannot see that an employee whose wages have unlawfully been withheld is any the less injured because her employer was a municipal entity rather than a private entity. We thus see no valid reason to distinguish between municipal employers and private employers in determining what award should be made to the victims of the employer's discriminatory practices in violation of the Equal Pay Act. See Marshall v. Board of Education, 470 F.Supp. at 519; Brennan v. Board of Education, 374 F.Supp. 817 (D.N.J.1974).

Accordingly, the present appeal is largely governed by this Court's recent decision in Donovan v. Sovereign Security, Ltd., 726 F.2d 55 (2d Cir.1984), an action to...