Dailey v. Societe Generale

Decision Date05 March 1997
Docket NumberNo. 246,D,246
Parties74 Fair Empl.Prac.Cas. (BNA) 1428, 70 Empl. Prac. Dec. P 44,765, Unempl.Ins.Rep. (CCH) P 22,175 Anne DAILEY, Plaintiff-Appellee, v. SOCIETE GENERALE, Defendant-Appellant. ocket 96-7249.
CourtU.S. Court of Appeals — Second Circuit

Laura S. Schnell, New York City (Vladeck, Waldman, Elias & Engelhard, P.C., Margaret L. Watson, on the brief, New York City), for Plaintiff-Appellee.

Michael A. Kalish, New York City (Winthrop, Stimson, Putnam & Roberts, New York City), for Defendant-Appellant.

Before FEINBERG, WALKER, and CABRANES, Circuit Judges.

WALKER, Circuit Judge:

Defendant Societe Generale (the "Bank") appeals from two opinions and orders of the United States District Court for the Southern District of New York (John G. Koeltl, District Judge ), resolving various post-trial motions following a jury verdict in favor of plaintiff Anne Dailey ("Dailey") on her Title VII retaliation claim, as well as from the corresponding judgments entered by the district court. The first opinion, dated June 20, 1995 and reported at 889 F.Supp. 108 (S.D.N.Y.1995) ("Dailey I "), declined to deduct unemployment insurance from the jury's back pay award, and the second, dated February 14, 1996 and reported at 915 F.Supp. 1315 (S.D.N.Y.1996) ("Dailey II "), denied defendant's motion for judgment as a matter of law on the ground that plaintiff had failed to mitigate her damages, denied defendant's motion for a new trial on damages, and granted plaintiff's request for attorney's fees incurred in connection with various post-trial motions. The Bank now appeals each of these rulings.

For the following reasons, we affirm substantially all of the district court's decisions, and we vacate and remand only for consideration of plaintiff's supplemental fee application.

BACKGROUND

In March of 1994, Dailey filed a complaint in federal district court, alleging that the Bank violated Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII"), New York State Human Rights Law, N.Y. Exec. Law § 296 et seq. ("Human Rights Law"), and the Administrative Code of the City of New York § 8-107 et seq. ("Administrative Code") by discriminating against her on the basis of her sex and by retaliating against her for having complained of sex discrimination while at the Bank. During the course of a five day jury trial, the following evidence was presented.

In November of 1990, Dailey was hired by the Bank to serve in a managerial position as both a Vice President in the Financial Institutions Group and a Manager of the Correspondent Banking Group. Her starting base salary was $85,000. From her first day of work on November 26, 1990 through August 20, 1992, Dailey reported directly to Alan White ("White"), the First Vice President and Manager of the Financial Institutions Group. During Dailey's first year at the Bank, White rated her performance as "superior" in two performance evaluations. These favorable evaluations led to an eight percent increase in Dailey's salary in the fall of 1991 and an $18,900 bonus in early 1992.

In August of 1992, White was fired from the Bank for his perceived responsibility for a transaction known as "Amerifund" in which the Bank lost over nine million dollars. Dailey Jay Sands ("Sands") replaced White as Dailey's supervisor. In sharp contrast to White's 1991 performance evaluations of Dailey, Sands rated Dailey's performance as falling below expectations in November of 1992. Surprised by the poor evaluation, in early December of 1992 Dailey met with Kevin Hughes ("Hughes"), the Manager of Human Resources, to whom she had previously expressed her concern that there was a gender-based disparity in compensation at the Bank that resulted in Dailey being paid less than similarly situated male employees. Dailey testified at trial that she explained to Hughes her view that Sands's evaluation was undeserved given her superior performance, and was a likely product of the fact that he was simply uncomfortable working with women. Hughes assured Dailey that he would investigate the matter. Several weeks later Dailey asked Hughes whether any progress had been made with respect to Sands's appraisal and again expressed her concerns that the matter was gender-related.

who had worked on the Amerifund matter with White, was placed on a six month period of probation.

In late December 1992 or early January 1993, Hughes told Dailey that he had negotiated an arrangement with the Bank's senior management whereby Dailey would resign from the Bank, would be paid six months salary as severance pay, and would be entitled to use outplacement services to aid her in obtaining a new position. In exchange, Dailey would sign a release relinquishing any right to institute legal action against the Bank.

Dailey testified that after thinking over the Bank's proposal, she decided to reject it because of her concern that it would take her longer than six months to find another position and therefore the six months severance package would be inadequate. When Dailey conveyed this concern to Hughes, he was able to modify the terms of the severance arrangement to allow Dailey's salary to be extended, at the Bank's discretion, month-to-month for up to six more months following the initial six month period, based upon reports from Dailey that she was doing her best to secure alternate employment.

Dailey testified that, after Hughes communicated this modification to Dailey, he said that he would no longer negotiate with management on Dailey's behalf, and threatened that, if Dailey refused the second offer, he would cut off her access to outplacement services and would "cut her off at the knees." Dailey nonetheless told Hughes that she would not accept the modified offer. At that point, Dailey testified, Hughes became very angry and told her that the upcoming Friday would be her last day at the Bank. Hughes also directed Dailey to report to outplacement services on the following Monday. After using these services for approximately two weeks, the Bank told the outplacement firm that it would no longer pay for Dailey to use its services. Accordingly, the outplacement firm told Dailey not to return. On January 29, 1993, Dailey was removed from the Bank's payroll.

Hughes gave a different account. He testified that Dailey never complained to him about sex discrimination at the Bank. According to Hughes, it was Dailey who first expressed the desire to leave the Bank and Hughes encouraged her to stay. Hughes testified that his negotiations for a severance package were at Dailey's behest and that he never told her that he would "cut her off at the knees" or otherwise retaliate against her if she did not accept it.

The jury returned a special verdict in favor of Dailey on her retaliation claim under Title VII and the Human Rights Law, but in favor of the Bank on the underlying sex discrimination claim. The jury awarded Dailey $300,000 in back pay and $100,000 in compensatory damages for pain, suffering, humiliation and mental anguish. The compensatory damages were reduced to $17,500 pursuant to stipulation.

Post-trial motions followed. The Bank moved to have the $9,900 Dailey received in unemployment compensation following her departure from the Bank deducted from the back pay award; for judgment as a matter of law setting aside the back pay damage award pursuant to Fed.R.Civ.P. 50(b); and for a new trial pursuant to Fed.R.Civ.P. 59(a) on plaintiff's retaliation claim and, in the alternative,

for a new trial solely on plaintiff's back pay award. Both the Bank and Dailey cross-moved for attorneys' fee and costs. The Bank's motions were denied. The district court awarded Dailey costs and ninety percent of her requested attorneys' fees. From these rulings, the Bank takes its appeal.

DISCUSSION

On appeal, the Bank challenges: (1) the district court's denial of the Bank's motion for judgment as a matter of law on the ground that Dailey failed to mitigate her damages; (2) the district court's denial of the Bank's motion for a new trial on damages on the grounds that the jury's finding that Dailey mitigated her damages and its calculation of Dailey's expected salary were unsupported; (3) the district court's denial of the Bank's motion to deduct unemployment compensation from the back pay award; and (4) the district court's calculation of attorneys' fees to be awarded to Dailey pursuant to her supplemental fee application.

I. Mitigation

The evidence presented at trial established that after Dailey left the Bank, she tried to find a comparable position in banks in New York. However, after a six month search without a single offer and with her funds depleted, Dailey moved to Loretto, Pennsylvania, where, in autumn of 1993, she enrolled full-time in a physicians' assistant program at St. Francis College. Dailey testified that she was able to fund her education first with student loans, and then by a federal grant which covered her full tuition in exchange for her agreement to work in a medically underserved area of the country upon graduation.

In its post-trial motion for judgment as a matter of law pursuant to Rule 50(b), the Bank argued that plaintiff's discontinuation of her job search after six months and her subsequent full-time enrollment in school constituted an objectively unreasonable effort to mitigate her damages. The Bank also asserted that the jury's back pay calculation was erroneous to the extent that it included back pay for the period during which Dailey attended school.

Concluding that the jury was justified in finding that plaintiff had made a sufficient effort to mitigate her damages, the district court observed that, with respect to the first six-months of her job search, there was evidence that plaintiff (1) used defendant's outplacement services until they were cut off by defendant; (2) contacted many people in the banking...

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