Case 2:18-cv-03303-TR Document 165 Filed 12/09/21 Page 1 of 7
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF PENNSYLVANIA
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`ALISON RAY,
` Plaintiff,
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`v.
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`AT&T MOBILITY SERVICES,
`LLC,
` Defendant.
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`CIVIL ACTION
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`No. 18-3303
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`ORDER
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`AND NOW, on December 9, 2021, upon consideration of the parties’ oral arguments on
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`November 19, 2021 and letters dated November 29, 2021 and November 30, 2021, it is
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`ORDERED that:
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`1.
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`On November 19, 2021, the jury returned a verdict in favor of Ray, finding by a
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`preponderance of the evidence that: (1) Ray’s age was a determinative factor in AT&T’s
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`decision to select her during its reduction in force/surplus and terminate her employment, and (2)
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`AT&T either knew or showed reckless disregard for whether its selection of Ray during the
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`reduction in force/surplus and termination of her employment was prohibited by law. As counsel
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`agreed during the final pretrial conference on October 26, 2021, I will determine damages. See
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`10/28/2021 Order (doc. 139), ¶ 1.
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`2.
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`Under the Age Discrimination in Employment Act (ADEA), Ray may receive
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`back pay, liquidated damages, and front pay. See Blum v. Witco Chem. Corp., 829 F.2d 367,
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`373-74, 382-83 (3d Cir. 1987); Maxfield v. Sinclair Int’l, 766 F.2d 788, 796 (1985); 29 U.S.C.
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`§ 626(b).
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`3.
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`First, AT&T claims that Ray failed to mitigate damages. See AT&T Letter, dated
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`Nov. 29, 2021 (doc. 164); Maxfield. 766 F.2d at 794, n.5 (“[T]he ADEA does require mitigation
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`of damages and [courts] have consistently deducted interim earnings from backpay awards.”)
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`(citations omitted); Newtown v. Pa. State Police, No. 18-1639, 2021 WL 4596448, at *2 (W.D.
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`Case 2:18-cv-03303-TR Document 165 Filed 12/09/21 Page 2 of 7
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`Pa. Oct. 6, 2021) (“Recovery of back pay or front pay is not unlimited, and a plaintiff is
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`obligated to mitigate damages.”); see also, Caufield v. Ctr. Area Sch. Dist., 133 F. App’x 4, 10
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`(3d Cir. 2005) (“[M]itigation is a claimant’s duty that arises at the damage stage of a
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`discrimination case when the amount is determined.”). I previously ruled that AT&T did not
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`show by a preponderance of the evidence that Ray failed to mitigate. Trial Tr. (doc. 159) 139:1-
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`142:7 (“Ms. Ray did everything more than most people do in trying to find another job, a
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`comparable job, either marketing or sales. She went to work immediately in the same year. And
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`to suggest that after she was . . . [so-called] surplused, let’s call it fired, that she would then on
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`her own seek out other opportunities in the same company that just fired her, with the same
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`people that just fired her is completely unrealistic. . . . I think she did an extensive job search.
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`She participated in the search process through the process AT&T creates for furloughed
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`employees, and also did jobs on her own such as applying for the Phillies, and she went out to
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`work for Century Link at like 40 percent of the salary she was making. . . . I believe it’s a
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`reasonable inference that Ms. Ray did not fail to mitigate simply because she didn’t reapply for a
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`job that she didn’t even know was open.”); see Anastasio v. Schering Corp., 838 F.2d 701, 707
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`(3d Cir. 1988) (defendant has burden of proving that the plaintiff failed to mitigate damages). I
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`decline AT&T’s suggestion that I reconsider that ruling. See Max’s Seafood Café ex rel. Lou-
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`Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (reconsideration available when the
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`movant demonstrates at least one of three following situations: “(1) an intervening change in the
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`controlling law; (2) the availability of new evidence that was not available when the court
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`[issued its order]; or (3) the need to correct a clear error of law or fact or to prevent manifest
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`injustice”) (citation omitted).
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`Case 2:18-cv-03303-TR Document 165 Filed 12/09/21 Page 3 of 7
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`4.
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`Next, the parties agree that Ray is entitled to back pay but disagree on the amount.
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`See Ray Letter, dated Nov. 29, 2021 (doc. 163); AT&T Letter; Ray Reply Letter, dated Nov. 30,
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`2021 (doc. 165). Back pay “compensates the plaintiff for loss of past wages[.]” Blum, 829 F.2d
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`at 373. It constitutes “the difference between the salary an employee would have received but
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`for a violation of the ADEA, less severance pay, and the salary actually received from other
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`employment.” Berndt v. Kaiser Aluminum & Chem. Sales, Inc., 604 F. Supp. 962, 964 (E.D. Pa.
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`1985). A back pay award should not be offset by pension plan payments. Maxfield, 766 F.2d at
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`794-95. The relevant calculation period “begins with wrongful termination and ends at the time
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`of trial.” Blum, 829 F.2d at 373 (citing Berndt, 604 F. Supp. at 964); see also EEOC v. Unitek,
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`USA, LLC, No. 08-4592, 2010 WL 1626617, at *1 (E.D. Pa. Apr. 19, 2010) (citing Model Jury
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`Instruction 8.4.2 (“Back pay damages, if any, apply from the time [plaintiff] was [describe
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`adverse employment action] until the date of . . . verdict.”)).
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`5.
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`Ray’s lost earnings through the date of the verdict total $565,809, including an
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`annual pension contribution of $9,524. See Ray Letter, at 1. The parties also agree that Ray
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`received $68,991 in severance in consideration for signing AT&T’s “General Release.” See id.
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`Offsetting the severance payment, Ray is entitled to $496,818 in back pay.1
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`1 Ray argues that the severance payment should not be offset from the amount
`recoverable in back pay. She claims that “AT&T received valuable consideration for the
`payment in the form of her release of her age discrimination claim under the [Pennsylvania
`Human Rights Act], which would have entitled her to compensatory damages for pain and
`suffering, and thus the amount should not serve as an offset to the backpay award.” Ray Letter,
`at 1; see AT&T Severance Pay Plan (doc. 13-5, ex. 4); General Release and Waiver, AT&T Inc.
`Severance Pay Plan (Non-California) (doc. 13-5, ex. 8). And offsetting the amount paid to her
`through the severance plan from her award of back pay relies on caselaw that predates the Older
`Workers Benefit Protection Act (“OWBPA”) and “would constitute a windfall to [AT&T] and
`undercut the purposes of the ADEA.” Ray Reply Letter, at 1-2; see, e.g., Berndt v. Kaiser
`Aluminum & Chem. Sales, Inc., 604 F. Supp. 962, 964 (E.D. Pa. 1985) (pre-OWBPA case
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`Case 2:18-cv-03303-TR Document 165 Filed 12/09/21 Page 4 of 7
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`requiring severance payments to be offset from back pay award). She urges that I view her
`severance payment as a collateral benefit, such as pension plan benefits or unemployment
`compensation, that typically are not deducted from the back pay award. See Ray Reply Letter, at
`1-2. I disagree.
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`The ADEA “was enacted . . . to further the dual goals of compensating discrimination
`victims and deterring employers from practicing discrimination.” Long v. Sears Roebuck & Co.,
`105 F.3d 1529, 1541 (3d Cir. 1997). Although “[a]n ADEA claimant is entitled to be made
`whole for losses sustained as a result of a wrongful termination,” they are “generally not entitled
`to a recovery in excess of make-whole damages.” Starceski v. Westinghouse Elec. Corp., 54
`F.3d 1089, 1100 (3d Cir. 1995); see also McKennon v. Nashville Banner Pub. Co., 513 U.S. 352,
`362 (1995) (“Resolution of . . . [the] question [of back pay] must give proper recognition to the
`fact that an ADEA violation has occurred which must be deterred and compensated without
`undue infringement upon the employer’s rights and prerogatives. The object of compensation is
`to restore the employee to the position he or she would have been in absent the
`discrimination[.]”) (citation omitted).
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`In 1990, Congress amended the ADEA with the OWBPA, which imposed, inter alia,
`requirements on employers seeking a release of ADEA claims. See Oubre v. Entergy Ops., Inc.,
`522 U.S. 422, 426-27 (1998). Post-OWBPA litigation saw employers argue that a plaintiff who
`had received a severance payment in exchange for a release of claims (including federal and state
`law claims) must tender back the severance payment upon a subsequent finding that the ADEA-
`portion of the release was ineffective under OWBPA, otherwise the plaintiff’s retention of the
`severance payment served to ratify the release and thus precluded bringing an ADEA claim. See
`Oubre, 522 U.S. at 428; Long, 105 F.3d at 1537-38. The Court in Long rejected that reasoning,
`holding that “neither ratification nor tender back was meant to apply in the ADEA context.”
`Long 105 F.3d at 1537. The Court declined to entertain the argument that an employee, by
`retaining the severance payment, would “receive a ‘double recovery’ by first accepting a
`severance payment and later winning a judgment,” because “[a]n employer found liable will be
`entitled to a set-off of any severance benefits paid.” Id. at 1543 (emphasis added) (citing Oberg
`v. Allied Van Lines, Inc., 11 F.3d 679, 684 (7th Cir. 1993)); see also Oubre, 522 U.S. at 428
`(holding that an employee’s retention of a severance payment did not “amount to a ratification
`equivalent to a valid release of her ADEA claims, since the retention did not comply with the
`OWBPA any more than the original release did”).
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`Rejecting a severance set-off would be inconsistent with the reasoning in Long.
`Although Ray relinquished her state law claims as part of her severance agreement (which could
`have resulted in an award of compensatory damages far exceeding the amount that she received
`as part of her severance plan), failing to offset the back pay by an amount equal to the severance
`payment would result in the “double recovery” that the Court in Long rejected and would
`frustrate the objectives of the ADEA and OWBPA. See Long, 105 F.3d at 1543; see, e.g.,
`Rangel v. El Paso Nat. Gas Co., 996 F. Supp. 1093, 1098-99 (D.N.M. 1998) (not requiring tender
`back of a severance payment in exchange for offsetting it from the damages award); but see
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`6.
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`The parties do not dispute that Ray is entitled to liquidated damages. Ray Letter,
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`at 1. Liquidated damages apply “in cases of willful violations.” Trans World Airlines, Inc. v.
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`Thurston, 469 U.S. 111, 125, 128 (1985) (defining a violation to be “willful” if “the employer
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`either knew or showed reckless disregard for the matter of whether its conduct was prohibited by
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`the ADEA”) (citation omitted); see Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1099
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`(3d Cir. 1995) (citation omitted). The jury made such a finding. See Verdict Slip (doc. 156);
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`Thurston, 469 U.S. at 128. Ray is entitled to liquidated damages of $496,818. See Blum, 829
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`F.2d at 382 (“Liquidated damages are described as an amount equal to the amount deemed to be
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`‘unpaid minimum wages or . . . unpaid overtime compensation’” – i.e., back pay – and “no court
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`of appeals has allowed front pay (or front benefits) to be included in the liquidated damage
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`calculation[.]”) (citing Fair Labor Standards Act, 29 U.S.C. § 216(b) (incorporated by reference
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`in ADEA, 29 U.S.C. § 626(b))).
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`7.
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`Finally, “back pay coupled with reinstatement is the preferred remedy to avoid
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`future damages in ADEA cases.” Blum, 829 F.2d at 373 (citing Maxfield. 766 F.2d at 796). But
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`when reinstatement is not possible, due to, for example, “irreparable animosity between the
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`parties or . . . a reduction in the employer’s work force,” an award of front pay is necessary “to
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`make the plaintiff whole for future expected losses.” Id. at 373-74 (citing Maxfield. 766 F.2d at
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`Kulling v. Grinders for Indust., Inc., 185 F. Supp. 2d 800, 815 (E.D. Mich. 2002) (declining to
`offset plaintiffs’ back pay award by the severance payments because, applying Howlett v.
`Holiday Inns, Inc., 120 F.3d 598, 602 (6th Cir. 1997), a pre-Oubre case, it “need not attempt the
`near-impossible task of apportioning Plaintiffs’ severance payments among their ADEA and
`other potential claims, and then determining the appropriate amounts to setoff against the back
`pay damages Plaintiffs have been awarded under the ADEA”).
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`796). I have already found that reinstatement is not possible based on AT&T’s actions.2 See
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`Hearing Tr. 139:6-10. To calculate front pay, I must consider “the expected future damages
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`caused by defendant’s wrongful conduct from the date of judgment to retirement.” Blum, 829
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`F.2d at 374.
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`8.
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`The parties agree that the difference between Ray’s final annual earnings at
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`AT&T and her most recent annual earnings in her current employment is $112,975. They
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`disagree as to the amount of Ray’s future earnings, which Ray calculates as $1,260,059 (based
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`on her current age of 53 years, and a retirement age of 65 years). According to AT&T, the front
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`pay award: (1) is “outsized” and “does far more than reestablish her place in the job market”; (2)
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`does not take into account her decision to “pursue a career in marketing,” rather than remain in
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`sales, following the surplus; (3) incorporates a speculative annual compensation rate; and (4)
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`neglects to account for the likelihood that she would retire before the age of 65. AT&T Letter, at
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`1-2.
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`9.
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`AT&T’s arguments simply recast its mitigation arguments, which I have already
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`rejected. See Trial Tr. at 139:1-142:7. Ray credibly testified that she plans to retire at the age of
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`65, see Trial Tr. 122:5-10, and I found that she “did everything more than most people do in
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`trying to find another job, a comparable job, either marketing or sales,” id. 139:3-5. Her
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`mitigation allays any concerns that the award is unjustified or speculative. See Maxfield, 766
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`F.2d at 796 (“[A]n award for future lost earnings is no more speculative than awards for lost
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`earning capability routinely made in personal injury and other types of cases. The plaintiff’s
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`2 To the extent that AT&T suggests that I should reconsider my finding as to
`reinstatement, see AT&T Letter, at 2, I decline. See Max’s Seafood Café, 176 F.3d at 677.
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`duty to mitigate damages should serve as an effective control on unjustified damage awards.”)
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`(citation omitted). Ray is entitled to $1,260,059 in front pay.
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`10.
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`Ray is entitled to the damages totaling $2,253,695comprised of:
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`a. Back Pay: $496,818;
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`b. Liquidated Damages: $496,818;
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`c. Front Pay: $1,260,059; and
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`d. The Clerk is directed to enter judgment for Ray totaling $2,253,695.
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`BY THE COURT:
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`/s/Timothy R. Rice
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`TIMOTHY R. RICE
`U.S. MAGISTRATE JUDGE
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