United States District Court, W.D. Tennessee, Western Division
ORDER REGARDING BACK PAY AND PREJUDGMENT INTEREST
S. THOMAS ANDERSON, District Judge.
On March 12, 2015, the jury in this matter found that the Defendant, through Supervisor Monica Lipford, illegally retaliated against Plaintiff Ricky Taylor because of his prior protected activity when his job was terminated. The jury awarded the Plaintiff $125, 000 in compensatory damages. The Court instructed the jury not to consider back pay or reinstatement in their determination of compensatory damages, as those restitutionary measures are within the discretion of the Court. On March 19, 2015, the Court entered an Order awarding back pay and reinstatement "in accordance with the jury's finding of liability, 42 U.S.C. § 1981a(a)(1), and 42 U.S.C. § 2000e-5(g)." (ECF No. 61). Five days later, the Plaintiff filed his Motion for an Award of Prejudgment Interest. (ECF No. 62). The Defendant responded in opposition on April 7, 2015. (ECF No. 65).
Rather than ruling on piecemeal motions regarding the calculation of back pay, the Court directed the parties to confer as to calculation of back pay and submit memoranda addressing any disputed issues. (ECF No. 66). The Court then held a hearing on May 26, 2015, at which the parties noted their agreement on a majority of issues regarding back pay and prejudgment interest. Nevertheless, they detailed five disputed issues regarding back-pay calculations that require resolution by Court-order. Those issues are addressed in this Order.
I. Back Pay
The jury found that the Defendant illegally retaliated against Taylor, and therefore Taylor is entitled to back pay. Above all, "[a] victim of discrimination is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed.'" An award of back pay "should completely redress the economic injury the plaintiff has suffered as a result of discrimination. It should include the salary, including any raises, which plaintiff would have received but for the discrimination, as well as sick leave, vacation pay, pension benefits and other fringe benefits she would have received but for discrimination." Finally, "[a]ny ambiguity in what the claimant would have received but for discrimination should be resolved against the discriminating employer." Although the parties agree on many additions to and deductions from the gross award of back pay, the following issues are in dispute.
A. Unemployment Benefits
Generally, "[u]nemployment benefits... should not be deducted from backpay awards." The Defendant acknowledges this general rule but argues that unemployment compensation for federal government employees, including employees of the United States Postal Service, is "governed by 5 U.S.C. § 8501 et seq., " which mandates that employing agencies pay 100% of the compensation through a self-insurance system. Therefore, the Defendant argues that the back-pay award should be offset by the amount of unemployment benefits actually paid by the Defendant. The Defendant cites Viveros v. Donahoe, in which the Central District of California held that there would be "no windfall to the Postal Service if the unemployment payments offset [the plaintiff's] damage award, since the Postal Service pays both the damage award and unemployment benefits." The court also held that the collateral-source rule, a doctrine not briefed by the parties here, did not apply "since the unemployment benefits [the plaintiff] received were ultimately paid by the Postal Service, " rather than a third party. Taylor responds by restating the general rule and pointing out that the Defendant has not produced any evidence to show that it is self-insured 100% with the State of Tennessee or that it actually paid the unemployment compensation. Taylor also states that if his back pay is reduced by unemployment benefits paid by the Postal Service, he should be reimbursed for the amount he contributed to the insurance fund.
Although it appears that the Postal Service indirectly paid at least a portion of Taylor's unemployment compensation, the Court follows the general rule that unemployment compensation should not be deducted from back-pay awards. The Defendant presented some evidence at a hearing showing that the Defendant paid only a portion of the unemployment compensation, but nearly two months after the jury's verdict and more than a month after the Court directed the parties to confer on calculation, the Defendant has not produced information sufficient for the Court to deduct unemployment benefits from the award. The ambiguity is resolved in Taylor's favor: unemployment benefits will not be deducted from the back-pay award.
B. Union Dues
The Defendant also wishes to deduct $1, 941.07 in unpaid union dues to the National Association of Letter Carriers. Taylor disagrees, arguing that the Defendant has put forth no evidence that Taylor's employment was conditioned on his membership in the union. The Court agrees. Deducting union dues would only provide a windfall to the Defendant: if the union dues are owed by Taylor, they are owed to the union, not the Defendant. Furthermore, the union may seek such funds from Taylor if they are rightfully owed to the union. Union dues shall not be deducted from the award of back pay.
C. Unpaid Overtime
First, "lost overtime pay should be included in back pay'" because it places the victim of discrimination in the situation he would have occupied had discrimination not occurred. At the hearing regarding back pay, the Defendant asserted that Taylor was not on an "overtime desired" list at the time of his termination. Taylor points to his deposition, in which he declared that he was indeed on the overtime desired list. The Court finds the Defendant's argument unpersuasive. Regardless of Taylor's status, he and other employees at the station worked significant overtime before he was terminated. Taylor is entitled to overtime compensation.
Next, the Defendant challenges the calculation of overtime. For purposes of calculating overtime, Taylor attached the Postal Services Employee and Labor Relations Manual to its memorandum regarding back pay. The Manual provides that "[o]vertime hours... are determined by averaging the number of hours that other employees of the office with the same employment status were assigned during the back pay period." Although this method is not dispositive, when combined with Taylor's consistent overtime work before termination, the Court finds the method reasonable. The ...