Miller v. Raytheon Co., No. 11-10586 (5th Cir. May 2, 2013)

| May 3, 2013 | Daily Developments in EEO Law |

In a review of a $17 million jury verdict in an age discrimination case (significantly reduced by the district court judge), the Fifth Circuit issues an important decision about who gets to decide the award for future pension benefits – the bench or jury – and whether the monetary equivalent of such benefits is subject to doubling as “liquidated damages” under the ADEA. It also deviates from recent case law of other circuits in holding that a $100,000 emotional distress damage award cannot be sustained without medical testimony.

Miller v. Raytheon Co., No. 11-10586 (5th Cir. May 2, 2013): After 30 years’ employment, executive Richard Miller had his job eliminated under him as part of a reduction in force. His supervisor, named Lyells, apparently only considered employees over 40 for termination, while “[t]he only employee in Miller’s decisional unit not recommended for termination was the 34-year-old. Lyells offered that younger employee retraining and identified a new task for her.” When Miller applied for other open positions in the company, he was advised (incorrectly) that there were no positions meeting his qualifications. Miller was also apparently held back by an allegedly unfair evaluation from the prior year. “When Miller asked [HR executive] Wilson why he would not be considered for a job in the supply chain group, Wilson simply responded, ‘Because you wouldn’t be considered.'”

A jury awarded $17 million in total damages, much of it in punitive damages under Texas state law. The district court judge substantially narrowed the award: he “remitted the jury’s award of $1 million in mental anguish damages to $100,000; declined to award punitive damages in order to prevent a double recovery; and awarded Miller $186,628, approximately one year’s front pay.” The court also awarded roughly $500,000 in attorneys’ fees and costs, about two-thirds of the amount requested in the fee petition.

The Fifth Circuit substantially affirmed the judgment, but remanding some remedy issues for the trial judge to reconsider. It found that there was sufficient evidence to support the verdict, both for liability and for proof of “willfulness” to support liquidated damages under the ADEA (resulting in double damages).

It grappled with the complex problem of whether a boost in the plaintiff’s retirement pay – an enhanced benefit -constituted back pay (decided by the jury) or front pay (decided by the judge). The label was important not only determining for who decides, but because back pay (but not front pay) is subject to liquidated damages.

In this instance, the Court held that the benefit constituted front pay, and remanded the issue back to the trial judge:

“Although Miller became 55 a few months before trial occurred, he had not been employed by Raytheon for nearly two years. Whether he would have stayed with the company during that period and actually qualified for the enhancement is in this case a forward-looking determination from the point of his termination and thus a judgment call like the equitable decision to award front pay. This reinforced by Miller’s testimony that he intended to work until age 70. Any claim for present damages based on enhanced pension benefits he would not receive until up to fifteen years later would have had to be discounted to present value in order to represent Miller’s actual loss.”

The panel observed in a footnote, though, that not everything having to do with retirement benefits was necessarily a front-pay issue: 

“[We decline to set out an inflexible rule on the treatment of ‘pension benefits’ as damages or front pay under ADEA. The term is ambiguous. In some cases, it refers to employer contributions to a 401(k) plan; in others, to the right to receive certain benefits in the future; in others, the accrual of seniority entitlements to enhanced payments.”

The panel also tossed the remitted $100,000 emotional distress award made under Texas state law (the federal ADEA does not provide such damages for age discrimination). The court summarized that “Miller and his wife testified that the layoff made Miller feel ‘sucker-punched’ and caused him chest pain, back pain, sleep disturbances, and emotional problems.” It held that the client’s own “self-serving” testimony was insufficient to support even the remitted award:

“Miller presented no expert medical or psychological testimony of the extent of his mental anguish. While Miller testified that he suffered chest pain, back pain, sleep disturbances, he also admitted that he did not take any over-the-counter pain or sleep medications. Nor did Miller seek the assistance of any health care professional or counselor.”

Other federal courts of appeals though have upheld such awards without expert medical or treating doctor testimony, so the outcome here is a bit in conflict. Trainor v. HEI Hospitality, 699 F.3d 19 (1st Cir. 2012) (affirming emotional distress damages, unsupported by medical testimony, remitted to $200,000); Lore v. City of Syracuse, 670 F.3d 127 (2d Cir. 2012) ($150,000 emotional distress award upheld on plaintiff’s own and mother’s testimony).

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