Pfeiffer v. Essex Wire Corp.

• Decision Date: 08 July 1982
• Docket Number: No. 81-1266,81-1266
• Citation: 682 F.2d 684
• Parties: 29 Fair Empl.Prac.Cas. 420, 29 Empl. Prac. Dec. P 32,899 Frederick PFEIFFER, Plaintiff-Appellant, v. ESSEX WIRE CORP., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 684

682 F.2d 684

29 Fair Empl.Prac.Cas. 420,

29 Empl. Prac. Dec. P 32,899

Frederick PFEIFFER, Plaintiff-Appellant, v. ESSEX WIRE CORP., Defendant-Appellee.

No. 81-1266.

United States Court of Appeals Seventh Circuit.

Argued Jan. 20, 1982.

Decided July 8, 1982.

Donald A. Carr, Carr & O'Rourke Assoc., Chicago, Ill., for plaintiff-appellant.

Peter F. Healey, Reed, Smith, Shaw & McClay, Washington, D. C., for defendant-appellee.

Before PELL, Circuit Judge, FAIRCHILD, Senior Circuit Judge, and GORDON, District Judge. ^*

PELL, Circuit Judge.

This interlocutory appeal, certified under 28 U.S.C. § 1292(b), arises under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (1976 & Supp. II 1978) (ADEA or Act). Following a trial below, the jury awarded the plaintiff actual and compensatory damages of $32,259.56, and punitive damages of $150,000.00. The trial court then determined that it had erred in allowing evidence and giving instructions on the damages issue, and granted the defendant's motion for a new trial. The court then certified the following questions to this court:

A. Whether compensatory damages for pain and suffering are properly recoverable under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 et seq.

B. Whether punitive damages are properly recoverable under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 et seq.

The plaintiff-appellant contends first that the language of the ADEA grants courts the remedial power to impose such damages; second, that the imposition of such damages is consistent with the purpose of the Act as revealed in the legislative history; third, that the availability of liquidated damages does not prohibit recovery of such damages; and fourth, that the administrative conciliation scheme of the Act does not preclude the award of such damages.

I.

The plaintiff, Frederick Pfeiffer, was hired by the defendant's predecessor in 1941. The defendant purchased the company in 1969, and the plaintiff remained as an hourly employee until 1973, when he became a department manager and was transferred to a salaried status. He remained in that status until 1975, when he was discharged. At that time the plaintiff was fifty-four years old. The defendant purportedly replaced the plaintiff with a forty-five year old employee.

Subsequent to his discharge, the defendant remained unemployed for five weeks. During that period he received state unemployment compensation. He then obtained new employment at greater remuneration-both in wages and pension benefits-than he would have received had he remained in the employ of the defendant. In 1977 the plaintiff initiated the instant civil action, alleging that his discharge violated the ADEA.

II.

The plaintiff's first contention is that the express statutory language of the Act grants courts unlimited jurisdiction to award the full panoply of legal and equitable relief, including compensatory damages for pain and suffering and punitive damages. He bases this argument upon the language of the remedial portion of the Act, the text of which is set forth in the margin. ¹

We are not persuaded, however, that the quoted language unambiguously authorizes the grant of broad relief sought by the plaintiff. Initially we note that the language of the statute mentions neither damages for pain and suffering nor punitive damages, and that such damages are omitted from the statutory definition of "amounts owing." Naton v. Bank of California, 649 F.2d 691, 699 (9th Cir. 1981).

Furthermore, the seemingly broad language must be read in the context of the entire section. Dean v. American Security Insurance Co., 559 F.2d 1036, 1038 (5th Cir. 1977), cert. denied, 434 U.S. 1066, 98 S.Ct. 1243, 55 L.Ed.2d 767 (1978). There are two limitations built into section 626(b). The first is contained in the reference to sections 216 and 217 of the chapter, the Fair Labor Standards Act. 29 U.S.C. §§ 201-19 (1976) (FLSA). The second is the definition of amounts owing as unpaid minimum wages or unpaid overtime compensation. We therefore reject the plaintiff's contention that the statute expressly grants the remedies he seeks to invoke, and turn to a fuller examination of the statutory context, as well as the legislative history and purpose, to determine whether the grant of such broad relief was, indeed, the intention of Congress.

III.

We note preliminarily that five circuits have considered the issues now before us. All have rejected the plaintiff-appellant's position, and held that recovery under the ADEA is limited to unpaid wages and, in the case of willful violation, an additional equal amount as liquidated damages. Naton v. Bank of California, 649 F.2d 691 (9th Cir. 1981) (pain and suffering); Slatin v. Stanford Research Institute, 590 F.2d 1292 (4th Cir. 1979) (pain and suffering); Walker v. Pettit Construction Co., 605 F.2d 128 (4th Cir. 1979) (punitive); Vazquez v. Eastern Air Lines, Inc., 579 F.2d 107 (1st Cir. 1978); Dean v. American Security Insurance Co., 559 F.2d 1036 (5th Cir. 1977), cert. denied, 434 U.S. 1066, 98 S.Ct. 1243, 55 L.Ed.2d 767 (1978) (pain and suffering and punitive); Rogers v. Exxon Research & Engineering Co., 550 F.2d 834 (3d Cir. 1977), cert. denied, 434 U.S. 1022, 98 S.Ct. 749, 54 L.Ed.2d 770 (1978) (pain and suffering).

A. The Statutory Context

1. The Effect of Reference to the FLSA

When the ADEA was formulated by Congress, several alternatives were considered. The version ultimately adopted, as proposed by Senator Javits, eschewed various schemes of enforcement in favor of selective adoption of the FLSA enforcement provisions. 113 Cong.Rec. 7076, 31250 (1967); see Vazquez, 579 F.2d at 109-10.

The FLSA created a private right of action to recover unpaid minimum wages and an equal amount as liquidated damages. 29 U.S.C. § 216(b) (1976). It also provided criminal penalties for violation. Id. § 216(a). No provision was made for compensatory or punitive damages, and courts have universally struck down requests for such damages. See, e.g., Overnight Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942) (punitive damages); Martinez v. Behring's Service, Inc., 501 F.2d 104, 105 (5th Cir. 1974); Powell v. Washington Post Co., 267 F.2d 651 (D.C.Cir.1959), cert. denied, 360 U.S. 930, 79 S.Ct. 1449, 3 L.Ed.2d 1544 (pain and suffering). Congress can be presumed to have had the knowledge of the interpretation given the FLSA when it enacted the ADEA, Lorillard v. Pons, 434 U.S. 575, 581, 98 S.Ct. 866, 870, 55 L.Ed.2d 40 (1978), and therefore if it intended punitive and pain and suffering damages to be obtainable under the ADEA, that availability must be the result of the selective changes made in the remedial provisions of the FLSA to obtain the final version of the ADEA.

Three pertinent changes were made. First, the ADEA eliminated the criminal penalty of § 216(a) of the FLSA. Second, it limited the availability of liquidated damages, obtainable in any private suit under FLSA, to cases where an ADEA claimant could demonstrate that the violation was willful. These two changes suggest Congress intended to limit the scope of remedies under the ADEA. The third change, however, was the addition of the expansive language relied on by the plaintiff, which provides for "such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter." We turn, therefore, to the inquiry whether the limitation to FLSA remedies will effectuate the purposes of the ADEA. See Vazquez, 597 F.2d at 110-11.

2. The Administrative Conciliation Scheme

Several circuits have followed the lead of the Court of Appeals for the Third Circuit in Rogers v. Exxon Research & Engineering Co., 550 F.2d 834 (3d Cir. 1977), cert. denied, 439 U.S. 1022, 98 S.Ct. 749, 54 L.Ed.2d 770 (1978), and determined that award of damages beyond unpaid wages and liquidated damages would hamper the administrative conciliation process envisioned by the statute. Naton, 649 F.2d at 699; Slatin, 590 F.2d at 1296; Dean, 559 F.2d at 1038-39. The process of ADEA enforcement requires initial recourse to conciliation by the Department of Labor, subsequent recourse to a private suit if conciliation fails, and termination of that private right if the Secretary of Labor brings suit. 29 U.S.C. §§ 626(b) and (c)(1).

The Rogers court noted the deleterious effect availability of damages beyond the FLSA limit would have on such administrative conciliation: that such entitlement without guidelines is a vague and amorphous concept uncommon in administrative actions; that introduction of such an element of uncertainty would impair the conciliation process; that the Act itself does provide an objective test, the amount of lost earnings; and, apparently most significantly, that the possibility of recovering a large verdict will make a claimant less than enthusiastic about accepting a settlement for only out-of-pocket losses, clearly not only jeopardizing the conciliation process but ultimately increasing the volume of litigation in the courts. 550 F.2d at 841. We agree that the introduction of damages for pain and suffering and of punitive damages would be a serious impediment to administrative conciliation, and would thereby thwart the Congressional intent evidenced by the ADEA remedial scheme.

B. The Legislative History and the 1978 Amendments

Other than by reference to the FLSA as noted above, the legislative history of the passage of the ADEA is not particularly illuminating. In 1978, however, the Act was amended. In the process of endorsing the correctness of the Lorillard decision, the Congressional Conference Committee considered the damages provisions of the Act. That report, which represents the "considered and collective understanding of those Congressmen involved in drafting and studying (the) proposed legislation," Zuber v. Allen, 396 U.S. 168, 186, 90 S.Ct. 314, 324, 24 L.Ed.2d 345 (1969), stated:

Under section...