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EEOC v. UNITED STATES STEEL CORP.

November 21, 1989

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and PENNSYLVANIA HUMAN RELATIONS COMMISSION, Plaintiffs,
v.
UNITED STATES STEEL CORPORATION, Defendant


Alan M. Bloch, United States District Judge.


The opinion of the court was delivered by: BLOCH

ALAN M. BLOCH, UNITED STATES DISTRICT JUDGE.

 On October 1, 1987, this Court issued an order affirming the Magistrate's original report and recommendation. EEOC v. United States Steel Corp., 671 F. Supp. 351 (W.D.Pa. 1987). This order permanently enjoined United States Steel (USS) from: (1) terminating or reclassifying 70/80 retirement pensions with respect to any individual who has filed a claim or charge under the Age Discrimination in Employment Act (ADEA) with the Equal Employment Opportunity Commission (EEOC) or in a judicial proceeding; (2) requiring employees to sign Form PF-116-B or PF-116-C in order to be eligible for a 70/80 mutually satisfactory pension; and (3) continued withholding of pension benefits of individuals whose 70/80 pensions have been terminated or reclassified because they filed, or permitted to be filed on their behalf, a charge or claim under the ADEA. Id. at 352-53.

 On October 2, 1987, a status conference was held for this case. During this conference, the defendant raised questions as to the res judicata effect of individual actions on the present case. Motions and briefs were filed on this issue. The case was again referred to the Magistrate. On November 30, 1988, the Magistrate issued his report and recommendation. The Magistrate's November 30th report recommends that "former employees Avera, Bryar, Bush, Fasekas, Lewis, Mularski, Naylor, Cole, Nix, Cunningham and DiVirgilio's claims have been satisfied; and that former employees Hallas, Mitchell, Coventry, Ward and Thayer should be retroactively reinstated to the 70/80 pension plan." Magistrate's Report and Recommendation at 1 (Nov. 30, 1988) [hereinafter Magistrate's Report].

 The EEOC does not object to the Magistrate's report, but instead requests that the report be clarified as to the issue of pre-judgment interest. USS objects to the report "only to the extent that it denies the motions to bar the claims of Mitchell, Coventry, Ward and Thayer." Defendant's Objections to the Magistrate's Report and Recommendation at 2 [hereinafter Defendant's Objections]. USS does not object to the recommendation with regard to Hallas, and states that it has taken action to honor Hallas' claim.

 I. Non-contested Portions of the Magistrate's Report

 The Magistrate's Report states that employees E. Avera, W. Bryar, J. Bush, P. Fasekas, L. Lewis, E. Mularski, and W. Naylor have been granted retroactive entitlement to 70/80 benefits. The Report also states that E. DiVirgilio has settled his claim. Additionally, the Report states that J. A. Cole has received, and never was denied, a 70/80 pension; that O. M. Nix never applied for a 70/80 pension; and that a 70/80 pension has been retroactively granted for S. A. Cunningham. The Magistrate found that as to all of these employees, their claims have been satisfied.

 Neither party has objected to the Magistrate's findings as to these employees. Accordingly, this Court will accept the Magistrate's findings in this regard, but modified in accordance with the discussion on pre-judgment interest immediately following.

 In regard to the claim of Hallas, USS states that it has taken action to honor his claim. This Court agrees with the Magistrate that Hallas should be retroactively restored to the 70/80 pension plan. Thus, to the extent that Hallas' claim is not moot, e.g., pre-judgment interest, USS is ordered to restore him to the 70/80 pension plan.

 II. Pre-judgment interest

 The EEOC terms its response to the Magistrate's November 30 report as a "request for clarification." Specifically, the EEOC requests that pre-judgment interest be awarded, based on prevailing IRS rates, from July, 1983, or the original date each individual applied for and was denied a 70/80 pension, until the present. USS responds that the EEOC's request for clarification is actually an objection to the Magistrate's report of August 18, 1987. USS contends that the EEOC's request is untimely and should therefore be denied.

 Pre-judgment interest may be awarded in ADEA cases. Gelof v. Papineau, 829 F.2d 452, 456-57 (3d Cir. 1987). An award of pre-judgment interest lies within the Court's discretion. Pre-judgment interest should be granted when warranted by considerations of fairness, and denied when it would be inequitable. Brock v. Richardson, 812 F.2d 121, 126 (3d Cir. 1987) (case involved the Fair Labor Standards Act (FLSA)). The ADEA specifies that the enforcement provisions of the FLSA are applicable to ADEA actions. 29 U.S.C. § 626(b). The Third Circuit has held that under the FLSA, backpay awards should be presumed to carry pre-judgment interest, unless the equities in a particular case require otherwise. Richardson, 812 F.2d at 127. Therefore, pre-judgment interest should be presumed in backpay awards under the ADEA.

 USS argues that the EEOC's argument is precluded by its failure to object to the Magistrate's August 18, 1987 report within ten days as required by 28 U.S.C. § 636(b). (The EEOC has not sought a modification of this Court's 1987 order.) However, the Magistrate's report expressly stated that the report only concerned the question of liability; the question of damages was reserved for future proceedings. 671 F. Supp. at 356, 359; see also Tr. 10/2/87 at 2, EEOC v. United States Steel, No. 84-702 (W.D.Pa.) ("what remains to be done is to determine the possible compensation that might be due"). The question of compensation is still a live issue.

 In the present case, pre-judgment interest shall be awarded. USS acted intentionally to deprive its employees of their federally protected rights. The equities in this case support such an award as a means of deterring similar future conduct. Accordingly, employees entitled to retroactive pension benefits are also entitled to pre-judgment interest on these benefits. Such interest shall be awarded from the date each such individual applied for and was denied a 70/80 mutually ...


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