Kelly v. Matlack, Inc.

• Citation: 903 F.2d 978
• Decision Date: 29 May 1990
• Docket Number: 89-1578,Nos. 89-1536,No. 89-1536,No. 89-1578,89-1536,s. 89-1536
• Parties: 52 Fair Empl.Prac.Cas. 1780, 53 Empl. Prac. Dec. P 39,959, 59 USLW 2011 Mary Jane KELLY, Appellant in, v. MATLACK, INC., Appellant in
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 978

903 F.2d 978

52 Fair Empl.Prac.Cas. 1780,

53 Empl. Prac. Dec. P 39,959, 59 USLW 2011

Mary Jane KELLY, Appellant in No. 89-1578, v. MATLACK, INC., Appellant in No. 89-1536.

Nos. 89-1536, 89-1578.

United States Court of Appeals, Third Circuit.

Argued Dec. 12, 1989.

Decided May 29, 1990.

James A. Matthews, Jr., Francis M. Milone (argued), Lisa Bazemore, Morgan Thomas Martin (argued), Philadelphia, Pa., for appellee/cross-appellant, Mary Jane Kelly.

Lewis & Bockius, Philadelphia, Pa., for appellant/cross-appellee, Matlack, Inc.

Before SLOVITER, GREENBERG, and SEITZ, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Once again, we are faced with the difficult task of reviewing the record in an action filed by a terminated employee who convinced the jury that her termination violated the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621-634 (1982) (ADEA). ¹ The employer, Matlack, Inc., has limited its appeal to two issues: whether there was sufficient evidence to support the jury's finding of willfulness, which resulted in the award of liquidated (double) damages, and whether there was evidence to support the jury's determination that the employee's lost fringe benefits were equal to 30% of her wages. The successful employee, Mary Jane Kelly, cross-appeals from the denial of her motion to correct the judgment with respect to the base for the fringe benefit computation. She also appeals the district court's denial of her motion for a contingency enhancement of the attorney's fee awarded.

I. Facts and Procedural History

In reviewing the evidence, we must assume that the jury found the disputed facts favorably toward Kelly, the verdict winner.

Kelly, a college graduate, worked for Matlack beginning in 1975 as assistant tax manager in its Lansdowne, Pennsylvania office. Kelly's position involved accounting-type functions in connection with the company's payment of road and fuel taxes to various states in which the trucks of Matlack, a carrier, traveled. Kelly also met with state auditors who inspected the books to determine if there was any penalty due for incorrect payment. Throughout the more than ten years Kelly worked for Matlack, her performance was regularly rated as excellent and her responsibilities, which included supervision of two clerks, increased.

In January 1986, Matlack's Lansdowne facility was closed and its administrative operations were moved to Wilmington, Delaware and consolidated with those of Rollins Leasing Company, an affiliated corporation. A new corporation was established to handle these services. Frank Minner, Matlack's Vice-President and Treasurer, assured the Matlack employees that there would be positions for all interested employees at the Wilmington facility.

In the merged corporation, Matlack was to be treated as a client of Rollins for accounting purposes, and Kelly's particular position disappeared. Those duties were to be subsumed into the work already being performed by Marie Episcopo, Rollins' manager of Fleet Taxation, and the clerks whom she supervised. Episcopo's group used a more sophisticated computer system than that used by Matlack. In 1986, Kelly was 57 years old; Episcopo was 33.

Kelly was told by Frank Minner and by Tom George, Director of Fleet Services, that she would be given a new position in Wilmington. There had been discussion of creating the position of Audit Manager to deal with the state tax auditors in their inspection of the company's books and of placing Kelly in that position. Kelly was told by Minner that she would have that position. In December of 1985, she requested a meeting with Minner to talk about the position because she had not been given any specifics.

On December 16, 1985, the two met in a meeting that lasted approximately 10 minutes. Minner told her that there was no funding for the audit position and that she was terminated. Minner admits that this was not his reason for the decision to terminate her. Minner testified that Kelly started asking about her salary, and that he made an instantaneous decision to fire her, based in part on what he had heard about her dissatisfaction with moving to Wilmington, her inexperience with the more sophisticated computer system used by Rollins, and her apparent dissatisfaction with her salary. He lied to her about his reason because he thought "it was the simplest way out" because she "was very proud of what she had done" and he "didn't want to crush her." App. at 338.

When Kelly filed a claim of discrimination with the Equal Employment Opportunity Commission, Matlack told the EEOC that Kelly was terminated because it had decided not to create an audit department, that Kelly was a proponent of manual workmanship, and that she disliked and distrusted computers. Again, these were pretextual reasons.

The case was presented to the jury on special interrogatories. Plaintiff asked for back pay, front pay, and lost fringe benefits. The parties stipulated that Kelly's back pay for the relevant period was $38,400 and that her front pay until normal retirement date was $46,128. The jury found that age was a determinative factor in Kelly's termination and that Matlack's violation of the ADEA was willful. In response to a special interrogatory, the jury also found that the value of lost fringe benefits was "thirty percent (30%) of pay." App. at 414-15. Thereupon, the court entered judgment for Kelly in the amount of $159,566.

The district court denied Matlack's motion for a judgment notwithstanding the verdict or a new trial. The court awarded Kelly attorney's fees and costs in the amount of $53,299.96 based on its calculation of the lodestar, allowing an hourly rate of $200.00/hour for 248.15 hours. It rejected plaintiff's claim that she was entitled to a fee enhancement by a contingency factor of two (which the court construed as a request to double the lodestar). It also denied Kelly's Rule 60(a) motion to correct the judgment to add 30% to the gross wage loss rather than to the wage loss that had been stipulated. The court ruled that Kelly had not objected at trial to the stipulated amount of pay or to the calculation of the award, and that Kelly's objection to the basis of the calculation was not within the purview of a Rule 60(a) motion. As noted above, we have before us Matlack's timely appeal on the willfulness issue and the amount of fringe benefits, and Kelly's cross-appeal on the attorney's fees and the calculation of the amount of fringe benefits awarded.

The standard of review for the denial of a JNOV motion is limited. "Because a jury determined the issue, our scope of review is limited to examining whether there is sufficient evidence to support the verdict, drawing all reasonable inferences in favor of the verdict winner." Blum v. Witco Chemical Corp., 829 F.2d 367, 372 (3d Cir.1987); see Bartek v. Urban Redevelopment Auth., 882 F.2d 739, 742 (3d Cir.1989). Review of a motion for a new trial is for abuse of discretion. See Honeywell v. American Standards Testing Bureau, 851 F.2d 652, 655 (3d Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 795, 102 L.Ed.2d 787 (1989). The standard of review on plaintiff's cross-appeal of the denial of the Rule 60(a) motion to correct is under an abuse of discretion standard, see Lasky v. Continental Products Corp., 804 F.2d 250, 256 (3d Cir.1986), which also applies to the calculation of counsel fee.

II.

Matlack's Appeal

A. Willfulness

Under the ADEA, a successful plaintiff is entitled to double damages under the liquidated damages provision only when the factfinder has determined that the violation of the Act was willful. 29 U.S.C. Sec. 626(b) (1982). This court confronted the standard of conduct to be applied to the willfulness determination in Dreyer v. Arco Chemical Co., 801 F.2d 651 (3d Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1348, 94 L.Ed.2d 519 (1987). We found guidance in the opinion of the Supreme Court in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985), where the Court stated that Congress intended "a two-tier liability scheme" and that double damages should not be awarded in every ADEA case. Thurston, 469 U.S. at 128, 105 S.Ct. at 625. The standard for willfulness for liquidated damages announced in Thurston looked to whether the employer "knew or showed reckless disregard for" whether its conduct in promulgating a corporate policy had a disparate impact on protected employees. Id. In Dreyer, we reasoned that the Thurston standard "is not easily incorporated in cases alleging disparate treatment in a discrete employment situation" because in such situations, which necessarily involve intentional conduct, the employer will have known or should have known that the conduct violated the Act. Dreyer, 801 F.2d at 656-58. We concluded that in order to effectuate the two-tiered standard to sustain liquidated damages "there must be some additional evidence of outrageous conduct." Id. at 658 (adopting the standard of the Restatement (Second) of Torts Sec. 908(2) for punitive damages).

Defendant incorrectly construes this statement as imposing a quantitative requirement for a finding of willfulness. In fact, we were also applying a qualitative analysis. Although willfulness will probably be proved in most cases by evidence additional to that required to show an ADEA violation, in an appropriate case, one act, if it meets the qualitative standard, could show both intentional age discrimination and willfulness. See Dreyer, 801 F.2d at 658 ("The circumstances of the violation itself may be so egregious ... that double damages may be warranted."). We suggested looking at " 'the character of the defendant's act, [and] the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause.' " Id. (quoting Restatement (Second) of Torts Sec. 908(2) (test for punitive damages)).

In Dreyer, we eschewed providing a litany of situations which...