EEOC v. Delight Wholesale Co., 90-0022-CV-W-5.

• Decision Date: 13 June 1991
• Docket Number: No. 90-0022-CV-W-5.,90-0022-CV-W-5.
• Citation: 765 F. Supp. 583
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. DELIGHT WHOLESALE COMPANY, Defendant.
• Court: U.S. District Court — Western District of Missouri

765 F. Supp. 583

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. DELIGHT WHOLESALE COMPANY, Defendant.

No. 90-0022-CV-W-5.

United States District Court, W.D. Missouri, W.D.

June 13, 1991.

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John H. Edmonds, Gail D. Cober, Karen Khan, Detroit, Mich., and Aileen S. Castellani, Asst. U.S. Atty., Kansas City, Mo., for plaintiff.

Roland B. Miller, III, Jack D. Rowe, Lathrop, Norquist & Miller, Kansas City, Mo., for defendant.

ORDER

SCOTT O. WRIGHT, District Judge.

Before the Court are the parties' briefs concerning back pay and other equitable relief. Plaintiff United States Equal Employment Opportunity Commission (EEOC) brought this action under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.A. § 2000e, et seq. EEOC alleged that Defendant Delight Wholesale discriminated against its employee, Carol Childers, based on her sex. EEOC premised its complaint on defendant's alleged unlawful employment practices, which included unequal pay for equal work, demotion, failure to promote, and constructive discharge.

This case was tried before an advisory jury October 29 through November 1, 1990. After the jury returned its answers to special interrogatories, the Court adopted the jury's findings, holding the defendant liable. The Court found that: (1) defendant unlawfully demoted Ms. Childers based on her sex; (2) defendant paid Ms. Childers less for substantially the same work performed by a man; (3) defendant constructively discharged Ms. Childers based on her sex. Judgment in favor of plaintiff was entered on the Title VII claims.

The Court subsequently heard evidence on the issue of damages and the parties submitted briefs on the issue. The parties attempted unsuccessfully to settle the damages issue. After the frustrated settlement negotiations, the Court took up the issue of damages. The following analysis describes the factors the Court considered in computing the damages, deductions, pre-judgment interest, and other equitable relief. Appendix B sets forth the calculation and the findings of damages.

I. BACKGROUND

This order addresses the damages issue. The following analysis flows from the evidence presented at trial, the parties' jointly stipulated facts, and the briefs submitted on damages. The key facts presented by the parties place three time periods in dispute. The Court refers the parties to Appendix A, attached to this order. Appendix A provides a timeline of Ms. Childers' employment history and indicates the three periods in dispute. Before setting upon the task at hand, the damages calculation, some preliminary issues will be addressed.

Defendant opposes the finding of liability in this case. However, that issue was addressed during trial and the Court ruled that defendant was liable. That issue is not now before the Court.

Another background issue concerns EEOC's delay in pursuing this cause. The charging party, Ms. Childers, filed her discrimination charge against defendant on May 6, 1986. EEOC notified Delight Wholesale of the charge one week later. Within one month, Delight Wholesale furnished information requested by EEOC. More than a year passed before EEOC, on December 16, 1987, notified defendant that its Detroit office would handle the case in an effort to expedite the investigation. The EEOC's next communication with Delight Wholesale was made a year later, on December 12, 1988. At that time, EEOC requested further information which defendant furnished on January 5, 1989. On March 6, 1989, EEOC informed defendant that its investigation of the charge revealed issues of constructive discharge and pay discrimination. The EEOC issued a determination letter on August 15, 1989.

Defendant contends that it has been unduly prejudiced by the three-year delay in EEOC's investigation of Ms. Childers' charge. Delight Wholesale states that it was prejudiced at trial because only one of its witnesses was still employed by defendant, the documents and sales records were lost, and the company ownership had completely changed hands. Moreover, defendant submits that it is prejudiced by the effect EEOC's delay has on the damages and the prejudgment interest claimed on behalf of Ms. Childers who was employed by defendant for only four months. Delight Wholesale also claims that it currently faces precarious financial circumstances.

In opposition, EEOC states that this Court ruled prior to trial on the issue of delay, as it pertains to defendant's laches defense. EEOC claims that defendant suffered no prejudice by the delay. EEOC points out that Delight Wholesale submitted all necessary evidence at trial and presented essential witnesses who sufficiently recalled the facts.

Prior to trial, the Court did deny defendant's motion to dismiss based on laches. Defendant presented considerable evidence at trial, without indicating that a key witness or important evidence was unavailable. The pretrial ruling does not preclude consideration of EEOC's delay within the Court's determination of the Title VII damage award.

Courts have considerable discretion to fashion an equitable award, taking the delay into account. Compare Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 2375, 45 L.Ed.2d 280 (1975) (district court's equitable authority to determine damages in light of delay and prejudice to defendant) and EEOC v. Westinghouse Elec. Corp., 592 F.2d 484, 485-86 (8th Cir.1979) (district court's discretionary and equitable authority to dismiss suit due to undue delay and substantial prejudice to defendant).

If EEOC had investigated and brought this suit in a more timely fashion, the Court might have ordered defendant to reinstate plaintiff in the position she should have had. At that point, defendant would not have faced potential damages for years of work plaintiff did not perform, nor would defendant have faced more than four years of prejudgment interest. EEOC's delay in this cause is a proper consideration at this stage of the proceeding.

II. ANALYSIS

A. Computation of Damages

Computation of damages in this case entails four areas of inquiry. The first question involves the method of calculating the backpay award; the Court must determine the relevant time period and the comparative wage for calculating backpay. Second, the computation must take into effect plaintiff's reasonable duty to mitigate; backpay damages must be offset by the amount which plaintiff did earn or could reasonably have earned in mitigation. The third point for the Court to consider is whether prejudgment interest should be awarded and, if so, the rate and method for its calculation. And, finally, the Court must consider whether front pay or reinstatement is appropriate. Each of these four questions is taken up below. The Court's final computation is set forth in Appendix B.

The underlying premise in computing a plaintiff's Title VII award is the concept of making the injured party whole again. See e.g., Albemarle Paper Co., 422 U.S. at 418, 95 S.Ct. at 2372; EEOC v. Riss Int'l Corp., 35 Fair Empl. Prac. 423, 1982 WL 277 (W.D.Mo.1982). Under this premise, the appropriateness of backpay relief for unlawful employment discrimination is presumed. Albemarle Paper Co., 422 U.S. at 421, 95 S.Ct. at 2373; King v. Staley, 849 F.2d 1143, 1144 (8th Cir.1989). However, the presumption of back pay is balanced by three factors:

(1) whether plaintiff has reasonably mitigated damages, see Brooks v. Woodline Motor Freight, Inc., 852 F.2d 1061, 1065 (8th Cir.1988);

(2) whether plaintiff's conduct in the suit has unduly prejudiced defendant, see Albemarle Paper Co., 422 U.S. at 405, 424-25, 95 S.Ct. at 2374-75;

(3) the general goal to eradicate discrimination throughout the economy, see Albemarle, 422 U.S. at 421, 95 S.Ct. at 2373.

Each of these factors weighs in the Court's analysis below.

1. Computation of Backpay

In computing backpay damages, a court should calculate the amount of money the claimant could have reasonably earned if the discrimination had not occurred. This figure should include the base pay, raises, and bonuses or benefits the claimant would have reasonably expected to earn. See EEOC v. Financial Assurance, Inc., 624 F.Supp. 686, 692-93 (W.D.Mo.1985). The backpay award should be based on the salary for the position comparable to the one the claimant was unlawfully denied. King, 849 F.2d at 1145. This is called the "comparative" salary.

In the present case, Ms. Childers was unlawfully denied the position of single unit sales (SUS) manager based on her sex. The proper comparative wage is not what Ms. Childers was earning at the time of her discharge but, rather, it is the amount she would have earned but for the discrimination. Defendant's assertions to the contrary are without merit. In order to make Ms. Childers whole, the backpay award must be based on the salaries paid the two men who held the SUS manager position that had been denied Ms. Childers. See Riss Int'l Corp., 35 Fair Empl.Prac. at 425 (successor's earnings and benefits are hypothetical comparative wage). Appendix B to this opinion incorporates the appropriate comparative wage.

Both parties have proffered their own versions of how backpay should be calculated. Defendant computes the backpay from June 6, 1986, the date of constructive discharge. In contrast, EEOC bases its computation on Ms. Childers' earnings for the entire year, including the time before the unlawful discrimination occurred. At other places in its briefs, EEOC identifies the constructive discharge as the date of discrimination. Based on the findings of liability, the Court concludes that Ms. Childers' backpay award should be computed commencing May 5, 1986, the date when defendant unlawfully demoted Ms. Childers and paid her less than the SUS manager received for comparable work.

2. Deductions from Backpay Award

The plaintiff in a Title VII case has a duty to mitigate damages. See Brooks v. Woodline Motor...