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Donlin v. Philips Lighting No. America Corp., No. 07-4060 (3d Cir. Apr. 23, 2009)

| Apr 23, 2009 | Daily Developments in EEO Law |

In a Title VII failure-to-hire case, alleging gender discrimination, the plaintiff prevails at trial and preserves her win on appeal in the Third Circuit. More ominously, the panel vacates the make-whole relief, holding that the employee’s own estimate of her back and front pay was inadmissible opinion testimony under Federal Rule of Evidence 701.  Nonetheless, the panel reaffirms generous standards for awarding make-whole relief.

Donlin v. Philips Lighting No. America Corp., No. 07-4060 (3d Cir. Apr. 23, 2009):  The facts are simple enough — the plaintiff was a temp filling shipping orders at a Phillips facility.  When an opening for full-time employment arose, she applied and was turned down. At trial, the jury found Phillips liable and recommended an award to the plaintiff of $63,050 in back pay and $395,795 in front pay, for a total of $458,845.

In a motion for new trial and on appeal, the defendant challenged the description of its defense in the jury charge, stating that judge erroneously instructed that the defendant had based its decision “on her record of attendance, production, and accuracy” (emphasis in original), even though it claimed that it had not cited accuracy as a basis.  The panel affirms that the charge accurately instructed the jury on the defense.  The panel also affirms the decision not to submit punitive damages to the jury, finding insufficient evidence of malice, and affirms $75,818 in fees and costs

But twenty-five pages of the opinion are devoted to the make-whole remedy.  The key argument by defendant is that the district court in allowing Donlin to estimate her own damages:

“Specifically, Philips avers that the District Court erred under Rule 701 of the Federal Rules
of Evidence in allowing Donlin to provide specialized or technical testimony regarding her compensatory damages. As to back pay, the District Court allowed Donlin to testify not only
about her actual earnings, but also about her estimated lost earnings and pension benefits. With regard to front pay, Donlin’s testimony detailed the number of years she intended to
work and the annual salary differential between Philips and the other companies where she was employed. In addition, Donlin estimated her future pension value, performed a probability of
death calculation, and reduced her front pay award to its present value.”

In 2000, Rule 701 was amended expressly to require that lay opinion evidence “not [be] based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” While this rule would not necessarily prevent a lay witness from testifying about valuation from personal knowledge, generally speaking such non-expert testimony “requiring future projections of a business or operation [should] come from someone who has intimate and thorough knowledge of the business gathered from either a lengthy tenure or a position of authority.” Thus, a long-tenured employee could offer a lay opinion based on an “in-depth knowledge of the company’s salary structure, advancement opportunities, pay raises, or employment patterns.”

The court holds that a witness like Donlin, who was a temp for less than a year, lacked sufficient personal knowledge.  (The panel questions — in light of the 2000 amendment — the vitality of a prior decision, Paolella v. Browning-Ferris, Inc., 158 F.3d 183 (3d Cir. 1998), sanctioning such testimony.)  In sum,

“Donlin’s testimony crossed the line into subject areas that demand expert testimony. Specifically, we find that Donlin’s testimony regarding the pension component of her back pay damages was improper. On the issue of front pay, Donlin’s lay testimony was inappropriate with regard to her estimate of the annual pay raises at Philips, her estimated pension value, and the discounts she made for the probability of death and to find the present value of the award. Because this testimony was of a specialized or technical nature and was not within Donlin’s personal knowledge, the District Court abused its discretion in allowing her to offer it.”

Finding the error not harmless, the court remands for a new trial on damages.

The panel also offers guidance on other remedial issues likely to reoccur on retrial, and these largely favor the plaintiff.  For instance, it affirms the district court’s analysis that the plaintiff’s re-employment, eight months later, did not vitiate her eligibility for make-whole relief.  “From a legal perspective, the fact that Donlin found a job is insufficient by itself to demonstrate that she reestablished herself in the workplace such that she should be ineligible for back pay damages; the law requires that she find new employment that is ‘better or substantially equivalent.’ . . . . Donlin earned less in her new job, even taking into account her overtime compensation and pay raise.”

The panel also upholds the lower court’s discretion to award up to ten years’ worth of front pay. “We have not yet spoken precedentially regarding the precise length of time that is appropriate for an award of front pay. Indeed, in one case, a front-pay award of X years may be appropriate, while on different facts, a front-pay award for that same term of years would be inappropriate. These decisions are left to the sound discretion of the district court and every case must be considered on its particular facts. We note, however, that other courts of appeals have affirmed front-pay awards of 10 years or more.”

It also holds that the employee’s duty to mitigate — reducing damages for “interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against,” 42 U.S.C. § 2000e-
5(g)(1) (emphasis added) — did not preclude the employee from seeking different, though lower-paying employment:  “simple math reveals that Donlin’s decision to work closer to home did not constitute a failure to mitigate. When Donlin left [subsequent employer] Romark, she was making $14.70 per hour, but when she moved to Mission [the next employer], she was making only $13.00 per hour. Despite the wage differential between the positions at Romark and Mission, when factoring the increased cost of Donlin’s commute to Romark into her overall compensation, we find that the positions were substantially equivalent and, therefore, Donlin’s decision to take a lower-wage job at Mission was reasonable.”

Finally, the panel holds that the plaintiff’s comparator, a male (named Matusick) with fifteen years’ experience, was an appropriate basis of comparison for calculating make-whole relief.  “Although Matusick was long-tenured, the record evidence shows that Philips did not increase its employees’ salaries based on seniority. Additionally, there was evidence that Donlin and Matusick worked the same shift and worked similar amounts of overtime, both of which were key factors affecting compensation.”

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