credible witness at the April 21 hearing, though it is Plaintiff's credibility that is particularly relevant to the decision we announce today. With respect to Plaintiff, we base this finding on (1) the fact that he applied for unemployment benefits prior to being terminated by Tri-Star and indicated on this application that he had already been fired, (2) inconsistencies between his deposition testimony and his testimony at the hearing, and (3) inconsistent testimony at the hearing regarding the hives he experienced after his discharge. See Rec. at 29, 48, 64, 88, 90-91; Defs.' Ex. 1. That said, we begin our analysis.
First, we find no credible evidence that Plaintiff's discharge caused him more than minimal emotional distress. Indeed, Plaintiff spoke far more convincingly of the mental anguish caused by his final year of employment at Tri-Star. See Rec. at 82, 91. We therefore award Plaintiff the nominal sum of $ 1 for any emotional distress caused by his discharge and limit the bulk of his award under Count I of the Second Amended Complaint to back pay. At the time of his discharge, Plaintiff earned $ 1,000 per week in salary plus $ 360 per month for health insurance and $ 90 per week in car allowance. Plaintiff's award should not include the car allowance because he no longer used his car for business-related purposes after his discharge. The question is whether and to what extent the rest of Plaintiff's back pay award is limited by his failure to mitigate damages.
Tri-Star argues first that Plaintiff's efforts to secure employment in the three months immediately following his discharge were not reasonably diligent. Tri-Star has failed, however, to present any evidence of substantially equivalent employment available during this time, thus it has failed to satisfy its burden in this regard. See, e.g., Booker, 64 F.3d at 864 (upholding finding that plaintiff failed to mitigate damages where record included exhibit containing "numerous postings" for substantially equivalent positions). Plaintiff is therefore at least entitled to recover back pay for the period up until he abandoned his search in December 1993.
Tri-Star next argues that Plaintiff failed to exercise reasonable diligence by abandoning his job search in December 1993 in favor of forming his own business. Tri-Star emphasizes that Plaintiff abandoned his job search after just three months, had no written business plan for Trinity and invested no capital in the business. Tri-Star also contends that Trinity "has not been profitable." Defs.' Prop. Findings of Fact, P 4. Plaintiff responds that "given his extensive knowledge and experience in this specialized industry, [he] reasonably believed that the establishment of his own business would be a viable alternative to continuing his theretofore fruitless efforts in seeking outside employment." Pl.'s Prop. Findings of Fact, P 13. We therefore should not penalize this "laudable effort" which suffered a net loss in the first year but has since realized modest profits. See Taylor, 890 F. Supp. at 373.
After carefully weighing the evidence in the record before us, we conclude that it was not a reasonable method of mitigating damages for Plaintiff to abandon his job search in favor of forming Trinity Packaging in December 1993. First, it is the firm impression of this Court that Plaintiff had given up all hope of finding a job equivalent to the position he held at Tri-Star as of December 1993. Despite Plaintiff's claim that he did not discontinue his search at this time and that "if a job came along today, [he] would take it," he testified clearly that he felt that he had "exhausted any opportunities" after a mere two months of looking and that his time would be better spent building his own business. Rec. at 37, 56, 103-104, 112.
While such a decision can no doubt be a reasonable method of mitigating damages, as the Third Circuit clearly held in Carden, we find Plaintiff's particular efforts in this case to have been insufficient. See generally Hansard v. Pepsi-Cola Metropolitan Bottling Co., 865 F.2d 1461, 1468 (5th Cir. 1989). In so doing, we give strong weight to Plaintiff's statement that he invested "zero" start-up capital in the business. Rec. at 59. Indeed, Plaintiff admitted that failing to capitalize a new business venture "can be" a "formula for failure" but claimed that he "had the guts to do it." Rec. at 59-60. Moreover, even crediting as true Plaintiff's later testimony regarding the use of retirement funds to purchase telephone equipment, this minimal capitalization distinguishes Trinity from the "laudable effort" of the plaintiff in Taylor. In Taylor, the plaintiff made two ultimately unsuccessful efforts to open a gift shop, investing start-up capital borrowed from relatives on the first occasion and borrowed from her son on the second. 890 F. Supp. at 367; see also Smith v. Great American Restaurants, Inc., 969 F.2d 430, 434 (7th Cir. 1992)(holding that plaintiff fulfilled duty to mitigate where, following termination, she leased a small restaurant facility and started a restaurant using her savings and a gift from her son). While Plaintiff did testify that he attempted to secure loans for start-up capital, we do not credit this testimony in the absence of any documentary support.
We therefore conclude that Plaintiff's decision to discontinue his job search efforts in favor of starting a business founded on "guts" rather than capital was not a reasonable method of mitigating damages under the circumstances. Plaintiff testified that he embarked on this course of conduct in December 1993 after he returned from Minnesota. Because we lack more precise information as to when Plaintiff made this decision and the burden is on Tri-Star to prove the extent to which a back pay award is reduced, we will award back pay through the entire month of December 1993.
II. The WPCL Claim Against Tri-Star and Whitney
Under the WPCL, Plaintiff may recover unpaid wages, interest, attorney's fees and, if no good faith dispute of the claim is asserted by the defendant, liquidated damages in an amount equal to twenty-five percent of the total wages due. 43 Pa. Cons. Stat. Ann. § 260.1 et seq. (Purdon's 1992). All allegations against Defendants Tri-Star and Whitney having been deemed admitted, Plaintiff is entitled to recover the $ 3714 in unpaid wages, interest on these wages, reasonable attorney's fees, and liquidated damages in the amount of $ 928.50.
CONCLUSIONS OF LAW
1. Subject matter jurisdiction is proper pursuant to 28 U.S.C. § 1332.
2. All well-pleaded allegations of the Second Amended Complaint are deemed admitted pursuant to a default judgment entered against Defendants Whitney and Tri-Star under Rule 37(b)(2)(C) of the Federal Rules of Civil Procedure.
3. Back pay and damages for emotional distress are available under the PHRA.
4. For the minimal emotional distress Plaintiff suffered as a result of his discharge, we award $ 1.
5. Plaintiff is entitled to recover back pay for the period during which he fulfilled his duty to mitigate damages.
6. Defendant Tri-Star did not present any evidence of substantially equivalent employment available to Plaintiff in October, November or December of 1993.
7. Plaintiff did not exercise reasonable diligence in abandoning his job search in December 1993 to start his own business.
8. Plaintiff is therefore entitled to back pay for the period beginning October 5, 1993, and ending December 31, 1993.
10. When Plaintiff was terminated on October 5, 1993, he earned $ 1,000 per week in salary, $ 90 per week car allowance, and $ 360 per month for health insurance.
11. Plaintiff is not entitled to recover the weekly car allowance because he no longer used his car for business-related purposes after his discharge.
12. Plaintiff's total back pay award for this period is therefore $ 13,000 in salary and $ 1,080 in health care benefits, or a total of $ 14,080.
13. Plaintiff is entitled to pre-judgment interest on the back pay award. Such interest should be calculated at the applicable statutory rates for overpayments set forth in 26 U.S.C. § 6621, paid from the respective dates that the lost wages accrued, and compounded quarterly. See Kraemer v. Franklin and Marshall College, 941 F. Supp. 479, 487 (E.D. Pa. 1996).
14. Plaintiff may recover reasonable attorney's fees.
15. Under the WPCL, Plaintiff may recover unpaid wages, interest, attorney's fees and, if no good faith dispute of the claim is asserted by the defendant, liquidated damages in an amount equal to twenty-five percent of the total wages due.
16. Plaintiff is entitled to recover $ 3,714 in unpaid wages, interest on this amount to be calculated at the applicable statutory rates for overpayments set forth in 26 U.S.C. § 6621 and compounded quarterly, reasonable attorney's fees, and liquidated damages in the amount of $ 928.50.
An appropriate Order follows.
AND NOW, this 22nd day of August, 1997, default judgment having been entered pursuant to Rule 37(b)(2)(C) of the Federal Rules of Civil Procedure on both counts of the Second Amended Complaint against Defendants Jani B. Whitney and Tri-Star Packaging, Inc., and upon consideration of the witnesses and exhibits presented by the parties at the April 21, 1997, damages hearing in this matter and the proposed findings of fact and conclusions of law submitted by the parties thereafter, it is hereby ORDERED in accordance with the attached Memorandum as follows:
(1) Pursuant to the default judgment entered on Count I of the Second Amended Complaint against Defendant Tri-Star Packaging, Inc., Plaintiff is AWARDED $ 1 in damages for emotional distress, $ 14,080 in back pay, interest on the back pay award to be computed in accordance with the attached Memorandum, and reasonable attorney's fees;
(2) Pursuant to the default judgment entered on Count II of the Second Amended Complaint against Defendants Jani B. Whitney and Tri-Star Packaging, Inc., Plaintiff is AWARDED $ 3714 in unpaid wages, interest on this amount to be calculated in accordance with the attached Memorandum, reasonable attorney's fees, and liquidated damages in the amount of $ 928.50;
(3) Plaintiff and Defendant Tri-Star shall jointly submit a schedule calculating pre-judgment interest on both the back pay and unpaid wages awards in accordance with the attached Memorandum within fourteen (14) days of the date of entry of this Order;
(4) Plaintiff is granted leave to file a petition for attorney's fees within twenty-one (21) days of the date of entry of this Order.
BY THE COURT:
J. CURTIS JOYNER, J.