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SINCLAIR v. INA CORP.

October 31, 1984

HUGH M. SINCLAIR Plaintiff
v.
INSURANCE COMPANY OF NORTH AMERICA and INA CORPORATION, et al.



The opinion of the court was delivered by: GILES

 Reinstatement

 Considering all the evidence presented, I conclude that reinstatement is appropriate. No evidence was adduced that CIGNA Corporation harbors such hostility towards plaintiff that it would either be futile or unfair to order reinstatement. The defendants' corporate officer who terminated plaintiff, Mr. Heth, is retired. Moreover, at trial, both plaintiff and Mr. Heth, testified that they had been friends for many years. The jury's finding of a willful violation means no more than that the defendants' consideration of age as a determining factor in the termination was voluntary. Its finding does not equated to a finding of malice or employer hostility.

 There was evidence that when the CIGNA merger came about, Mr. Heth or other of defendants' officials strongly urged plaintiff to retire voluntarily under the companys' early retirement plan at age 55. The merger gave Mr. Heth, who became responsible for the elimination of duplicative and inefficient jobs, the opportunity to eliminate plaintiff's position. The evidence suggests that had plaintiff not been eligible for early retirement, his job title would not have been eliminated. His position was not duplicative of any in the merged Connecticut General Insurance Company. Plaintiff was president of a small subsidiary of INA, responsible for the management of no more than six persons. His duties were not eliminated but delegated to others in the subsidiary and the parent company. Mr. Heth testified that he felt plaintiff was not happy with his work. Consequently he was firmly convinced that it was in the plaintiff's and company's best interests for plaintiff to retire early and suggested this to plaintiff as a friendly gesture. Plaintiff was given the opportunity to make other employment plans, given severance pay of one year's salary and has received pension benefits totalling $ 33,586.00 from the date of separation to the present. Consequently, defendants' actions causing plaintiff to leave the company was not with the kind of animosity which would compel a court to abandon the normal remedy for illegal discharge -- reinstatement.

 Defendants advised the court and plaintiff before and during trial that they would make an offer of reinstatement to a comparable job and salary should the jury determination be adverse. Likewise, before trial, plaintiff apprised the court that he would accept reinstatement to a comparable position. There was no evidence presented at trial that a comparable job no longer exists within CIGNA for which plaintiff is qualified. The court will retain jurisdiction to assure that the job offered is comparable should defendants elect not to return plaintiff to the position he last held. Reinstatement having been determined appropriate, plaintiff's claims for future damages are deemed moot.

 Back Pay

 A victim of age discrimination is entitled to be made whole, that is, to be returned to the same economic status had there not been discrimination. In this case, plaintiff suffered no monetary loss between the date of termination and the present. It was stipulated that had he remained in defendants' employ he would have earned $ 70,850 per year for two years or a total of $ 141,700 in salary, $ 3000 in bonuses, $1,500 in tax preparation fees (1983 only), and $ 1,904.99 in matched savings, for a total anticipated wage -- covering the period October, 1982 through October, 1984 -- of $ 148,104.99 or an average of $ 74, 052.50 per year. *fn2"

 Plaintiff experienced no hiatus in securing other employment. From his new employer, plaintiff has earned $ 63,400.62 per year or $ 126,800.04 for the back pay period. Consequently, plaintiff had a loss of earnings of $ 10,652.48 per year or $ 21,304.96 for the two years. Immediately upon leaving the defendants, plaintiff began receiving a severance pay of $ 70,850.00, spread over the succeeding 52 weeks. The severance pay was not money which the plaintiff would have earned had he remained employed by defendants. It was unearned. Thus, it must be credited against the loss of earnings caused to the employee. Since the $ 70,850.00 exceeds plaintiff's total loss of earnings of $ 21,304.96, he has not suffered any back pay loss and would not until the $ 70,850.00 contribution of the employer was exceeded by interim earning differentials.

 Plaintiffs asks this court to adopt a year-by-year approach in determining back pay loss, citing Leftwich v. Harris-Stowe State College, 702 F.2d 686, 693 (8th Cir. 1983). In Leftwich, the victim of employment discrimination had suffered earning loses in the first two years following termination. In the third year in his new job, the plaintiff earned an amount which exceeded the past employer's salary by roughly the sum lost in the first two years. The district court held that under the "make-whole" principle the employee had experienced no loss over the three year period. The Eight Circuit disagreed and, without explanation, held that "when ... a plaintiff's interim earnings in any year exceed the wages he or she lost due to the discrimination, that "excess" must not be deducted from any back pay for other years to which the plaintiff is entitled." This approach may have some utility where a court cannot be certain that the subsequent year excess earnings were attributable to cost of living increases or some other factor which would negate any real excess earnings. This situation is not present in this case. Because applying Leftwich here would result in a departure from the "make-whole" principle, I will not follow it. *fn3"

 Even if I did follow Leftwich, its rule would not aid plaintiff here. Defendants have given plaintiff $ 70,850.00 in severance dollars. In Leftwich, there was no severance pay and a loss of earnings. In the instant case, by reason of the termination, plaintiff received a gain of $ 60,197.48 in the first year over what he would have earned in salary had he remained employed by defendants. *fn4" Plaintiff argues that he should be allowed to keep this under the Leftwich decision and still claim for a wage differential in the second year. I disagree. That rule on its face applies only to wage differentials. It anticipates that the employee will have received a loss by reason of the termination, not a gain. In applying the Leftwich rule, by its terms, it would be incongruous to treat severance pay as wages which the employee lost due to the discrimination. Had he remained employed he would not have received severance pay. Since the severance pay cannot be deemed earnings for back pay purposes, it must be treated as a voluntary contribution by the employer and credited against the employer's back pay liability. In short, plaintiff has misread and misapplied Leftwich. As of the time of trial, two years after termination by defendants, plaintiff still had a gain of $ 49,545.04. *fn5" This court is guided by Rodriguez v. Taylor, 569 F.2d 1231 (3d Cir. 1977), cert. denied, 436 U.S. 913 (1978). The Third Circuit has stated:

 
The make-whole standard of relief should be the touchstone for the district courts in fashioning both legal and equitable remedies in age discrimination cases. Victims of discrimination are entitled to be restored to the economic position they would have occupied but for the intervening unlawful conduct of employers.

 569 F.2d at 1238. While defendants are entitled to use of the $ 70,850 as credit against their back pay liability, plaintiff will not have to disgorge his "gain" as a condition of reinstatement. *fn6"

 Because the credit exceeds the back pay claim by $ 49,545.04, plaintiff is not entitled to a back pay award. Consequently, plaintiff is not entitled to any liquidated damage sum. He is entitled to reasonable counsel fees and costs.

 An appropriate order follows.

 JUDGMENT ORDER

 AND NOW, this 31st day of October, 1984, in accordance with the foregoing Memorandum, it is hereby ORDERED that Judgment is entered in favor of plaintiff and against defendants, to wit:

 1. Defendants shall reinstate plaintiff within ten (10) days of the entry of this Order to the same job that he held before termination or to a comparable job.

 2. Defendants shall restore plaintiff to the seniority, salary and benefit levels that he would have attained but for the termination.

 3. Defendants shall restore plaintiff fully to the rights under the pension and disability plan without diminution for any interim early retirement payments which may have been received to date.

 4. Pay to plaintiff reasonable counsel fees and costs in an amount to be determined.

 MEMORANDUM

 GILES, J.

 In this case brought under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (ADEA), plaintiff seeks counsel fees and costs as the prevailing party. A jury found that plaintiff was the victim of age discrimination and that the discrimination was willful. The court molded a verdict for back pay and reinstatement. However, back pay was not part of the judgment because plaintiff received severance pay from defendants and interim pay from other comparable employment after his employment with defendant ended. Thus, plaintiff sustained no actual monetary loss despite the discharge.

 The court will determine reasonable counsel fees and costs in accordance with the standards established in Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corporation, 487 F.2d 161, 167-69 (3d Cir. 1973) (Lindy I) and Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corporation, 540 F.2d 102, 112-118 (3d Cir. 1976) (Lindy II) and as reiterated in Ursic v. Bethlehem Mines, 719 F.2d 670 (3d Cir. 1983). The essential factors to be determined are the hours reasonably devoted by counsel to the prosecution of the claim, the hourly rate of the attorneys, the extent to which the plaintiff's claim is contingent and the quality of the attorney's work. Once a "lodestar" figure has been derived by multiplying the hours reasonably spent on the matter times the applicable hourly rate, the court must then consider whether the "lodestar" should be increased or decreased by examining the quality of counsel's efforts and the contingency of the claim.

 Plaintiff's counsel seek a "lodestar" determination of $65,090.72 for lawyer time adjusted upward by a factor of two, or $130,181.44, together with $5,050.50 for paralegal services and $8,105.87 in costs for a total of $143,337.81. Defendants respond that the claim for fees is grossly excessive for work that was unnecessary and the costs unjustified. I agree. The counsel fee claim reflects work in four principal areas which were unnecessary and contrary to reason and/or law: (1) demands for statistical information far beyond a scope reasonably calculated to lead to the discovery of evidence needed to prove the claim of individual discrimination; (2) efforts to have admitted certain newspaper or periodical articles contrary to the clear rules of evidence; (3) efforts undertaken to pursue a claim for future loss of earnings to be submitted to the jury or as part of the damage calculation by the court despite the outstanding offer of reinstatement by defendants should the jury verdict be adverse to them and plaintiff's stated desire to accept such an offer should he prevail; ...


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