Garner v. G. D. Searle Pharms. & Co.

• Decision Date: 14 February 2013
• Docket Number: CIVIL ACTION NO. 2:90cv688-MHT
• Court: U.S. District Court — Middle District of Alabama
• Parties: KATHY GARNER and LOULEE W. KARN, Plaintiffs, v. G. D. SEARLE PHARMACEUTICALS & CO., Defendants.

KATHY GARNER and LOULEE W. KARN, Plaintiffs,

v.G. D. SEARLE PHARMACEUTICALS & CO., Defendants.

CIVIL ACTION NO. 2:90cv688-MHT

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA NORTHERN DIVISION

Dated: February 14, 2013

(WO)

MEMORANDUM OPINION

I. Introduction

On January 4, 2002, the court found in its liability opinion (doc. # 177) that the plaintiff Kathy Garner ("Garner") was sexually harassed and that because of her sex and in retaliation for filing an EEOC complaint, she was subjected to disparate treatment with regard to promotions, discipline, and discharge in violation of Title VII. (Doc. No. 177, p. 2.) The court also found that plaintiff Loulee W. Karn ("Karn") was sexually harassed and constructively discharged in violation of Title VII. (Id.) In addition, the court determined that both Garner and Karn were paid less than male employees for equal work in violation of the Equal Pay Act.¹ (Id.) The court ordered that judgment be entered in favor of Garner and Karn ("Karn") and against defendant G.D. Searle Pharmaceuticals & Co ("Searle").(Doc. No. 179.) In addition, the court determined that, in the event the parties could not reach an agreement on the issue of damages, the court itself would determine, after an additional hearing, how much the plaintiffs should receive in damages. (Doc. No. 177, p. 128.)

Thereafter, the parties filed a joint notice of consent to exercise jurisdiction to determine remedies by the United States Magistrate Judge assigned to this case and motion for limited reference. (doc. # 230) The District Judge then referred all outstanding issues, other than liability, including the issues of the appropriate relief to be afforded the plaintiffs and costs and attorneys' fees, to the undersigned to conduct all proceedings and order the entry of final judgment in accordance with 28 U.S.C. § 636 and FED.R.CIV.P. 73.² (Doc. No. 232, p. 1.)

On September 23, 2010, after completion of discovery and conclusion of an aborted attempt to appeal by Searle, this court conducted an evidentiary hearing to determine remedies. (Doc. No. 291.) The parties thereafter filed post-hearing briefs in support of their positions. (Doc. Nos. 298, 299 & 302.) Upon consideration of the evidence presented and the parties' briefs and argument, the court concludes that the plaintiffs are entitled to an award of both back pay and liquidated damages with respect to the Equal Pay Act claims, as well as an award for back pay and other appropriate relief, including interest, with respectto the Title VII claims.

II. Discussion

To be blunt, the court approaches the question of appropriate damages in this case with some trepidation because at best this is an endeavor fraught with uncertainty. But any problems related to that uncertainty are Searle's to bear.

We have recognized that "[t]rial courts and the parties themselves invariably lack perfect hindsight to forecast what would have happened had there been no unlawful acts." Rodriguez v. Taylor, 569 F.2d 1231, 1238 (3d Cir.1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978); International Broth. of Teamsters v. United States, 431 U.S. 324, 372, 97 S.Ct. 1843, 1873, 52 L.Ed.2d 396 (1977) ("process of recreating the past will necessarily involve a degree of approximation and imprecision"). We have concluded, however, that this "risk of lack of certainty with respect to projections of lost income must be borne by the wrongdoer, not the victim." Goss v. Exxon Office Systems Co., 747 F.2d 885, 889 (3d Cir.1984) (citing Story Parchment Co. v. Paterson Paper Co., 282 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544 (1931)); Mason v. Association for Independent Growth, 817 F.Supp. 550, 555 (E.D.Pa.1993) (same).

Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1100-1101 (3d Cir. 1995).

A. Equal Pay Act

In its liability opinion the court found that Searle "showed reckless disregard for the matter of whether its conduct was prohibited by the Equal Pay Act" and concluded that "a three-year statute of limitations applies to the equal pay claims in this case."³ (Doc. No. 177,pp. 116-117.) In addition, the court was

convinced that Searle violated the provisions of the Equal Pay Act and paid Garner and Karn less than male sales representatives for equal work. As affected employees under the Equal Pay Act, Garner and Karn are entitled to recover the additional amount (subject to the court's after-acquired evidence finding as to Garner) they should have received had they been paid equally. In addition, because the court is also convinced that Searle did not act in good faith, they are also entitled to liquidated damages in an amount equal to their compensation for underpayment. . . .

(Id., at 127-28.)

Although the court determined that the plaintiffs are entitled to liquidated damages, the plaintiffs argue that they should receive prejudgment interest without liquidated damages with respect to their Equal Pay Act claims. Specifically, Garner asserts that she is entitled to $45,273.84 in back pay during her employment between June 27, 1987, to January 31, 1990, based on the pay differential compared to James Gruber, plus interest through September 23, 2010. (Doc. No. 298, p. 1.) Karn asserts that she is entitled to $47,632.05 in back pay during her employment between December 22, 1987, and June 15, 1989, based on the pay differential compared to Joe Gagliano, plus interest through September 23, 2010. (Id., p. 2.) It is no surprise that the defendants, however, argue that prejudgment interest is not permitted in Equal Pay Act cases.

The Equal Pay Act of 1963 amended § 206 of the Fair Labor Standards Act ("FLSA") to prevent pay discrimination based on sex, and the FLSA's statute of limitations and liquidated damages provisions apply to Equal Pay Act claims. Perez v. Sanford-OrlandoKennel Club, Inc., 515 F.3d 1150, 1164 (11th Cir. 2008) (citing 29 U.S.C. §§ 206(d)(3), 216(b), 260). When an employer has violated the Equal Pay Act, the employer "shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). There is, however, a good faith defense, which permits the court to reduce or deny an award of liquidated damages "if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation" of the Equal Pay Act. See 29 U.S.C. § 260. The employer bears the burden of establishing both the subjective and objective components of the good faith defense against liquidated damages. See Perez, 515 F.3d at 1163.

In this case, the court has determined the plaintiffs are entitled to recover the additional amount they would have received had they been paid equally, as well as liquidated damages in an amount equal to their underpayment. Because the court determined that Searle failed to establish good faith, the plaintiffs are entitled to liquidated damages under 29 U.S.C. § 216(b). The plaintiffs, however, seek prejudgment interest without liquidated damages.

Most courts will not award both liquidated damages and prejudgment interest. See Brooklyn Bank v. O'Neil, 324 U.S. 697, 715 (1945). In this Circuit, a plaintiff may not recover prejudgment interest in a private FLSA action. See Lindsey v. American Cast IronPipe Co., 810 F.2d 1094, 1101 (11th Cir. 1987)⁴ ; Townley v. Floyd & Beasley Transfer Co., Inc., No. 88-AR-0907-S, 1989 WL 205341, *3 (N.D. Ala. 1989) ("The law in this circuit is clear that a successful FLSA plaintiff is not entitled to an award of pre-judgment interest."). Thus, the court concludes that the plaintiffs are not entitled to an award of prejudgment interest under the Equal Pay Act. See Perez, supra. Consequently, this court must only determine the additional amount the plaintiffs would have received had they been paid equally.

The court has wide discretion in fashioning a remedy. Jepsen v. Florida Bd of Regents, 754 F.2d 924, 927 (11th Cir. 1985) (citing Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)). When determining whether the starting salaries of the plaintiffs were comparable to their comparators, the court in its liability opinion found that the "best way . . . is to compare the placement of Garner and Karn within the pay grade 3 salary range upon their dates of hire." (Doc. No. 177, p. 99-100.) With respect to the plaintiffs' and their comparators' starting salaries, the court specifically determined that

Garner received a starting salary of $28,500. This placed her $500 below the midpoint of the 1987 salary range for pay grade 3. In contrast, Gruber and Swalley received starting salaries of $33,000. This placed them only $100 below the midpoint of the1990 salary range for pay grade 3. Thus, when comparing their relative placements within the applicable salary ranges, Garner was paid $400 less than Gruber and Swalley. Similarly, when Karn was hired in 1987, she received a starting salary of $32,000. This placed her $100 above the 3/4 mark in the salary range for pay grade 3 for that year. Therefore, when comparing their rank within the applicable salary range, Karn was paid $200 less than Gagliano

(Doc. No. 177, p. 100.) Thus, Garner's starting salary was $400 less than Gruber's starting salary and Karn's starting salary was $200 less than Gagliano's starting salary.

The evidentiary materials indicate that both the plaintiffs and their comparators for purposes of the Equal Pay Act received merit raises. On March 1, 1988, Garner's salary was increased to $30,000, which continued until the date of her discharge on January 31, 1990. This placed her $300 below the midpoint of the 1988 salary range for pay grade 3. (Trial Record, Defendant's Ex. 48.) On December 1, 1990, Gruber's salary was increased to $34,700. This placed him $1600 above the...