Jeanne Stroup and Ruben Lee v. United Airlines: Order On Damages

Case 1:15-cv-01389-WYD-STV Document 220 Filed 10/17/18 USDC Colorado Page 1 of 41
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO
Senior Judge Wiley Y. Daniel
Civil Action No. 15-cv-01389-WYD-CBS
JEANNE STROUP and

RUBEN LEE,
Plaintiffs,
v.
UNITED AIRLINES, INC.,
Defendant.
ORDER ON DAMAGES
I. INTRODUCTION
THIS MATTER came before the Court on an evidentiary hearing on August 14
and 16, 2018, on issues related to damages. The issues presented were those raised
in Plaintiffs’ Post-Trial Brief on Damages (ECF No. 166) and briefing related thereto.
Thus, Defendant United Airlines, Inc. [“United”] filed a response to Plaintiffs’
Post-Trial Brief on Damages on June 29, 2018 (ECF No. 173), a reply was filed on July
20, 2018 (ECF No. 192), and supplements were filed on July 24, 2018 (ECF Nos. 195
and 196), and August 16, 2018 (ECF No. 208). Additional supplemental materials as
ordered at the hearing were filed on August 20, 2018 (ECF No. 210), August 24, 2018
(ECF No. 213), and September 4, 2018 (ECF No. 216).
By way of background, a five day jury trial was held on this age discrimination
case commencing on February 26, 2018. Plaintiffs claimed that United constructively
discharged them from their jobs because of their age. (See Jury Instruction No. 2, ECF
No. 146.) The jury found in favor of Plaintiffs on their claims, and awarded them back
pay. (See Verdict, ECF No. 153). Jeanne Stroup [“Stroup”] was awarded $312,474.
This was reduced by $97,995 based on failure to mitigate, resulting in a back pay award
to Stroup of $214,479. Ruben Lee [“Lee”] was awarded $317,779. This was reduced
by $122,227 based on failure to mitigate, resulting in a back pay award of $195,552.
Plaintiffs now request additional damages, including front pay and liquidated damages.
The issues raised in the briefing regarding damages are as follows: (1) Plaintiffs’
request for an award of liquidated damages in the amount of the back pay awards
based on the jury’s finding that United’s conduct was willful; (2) whether the back pay
awards are subject to offsets, which may impact the amount of liquidated damages to
be awarded; (3) whether to award reinstatement or front pay; (4) if front pay is awarded,
the amount of front pay, if any, and whether offsets are appropriate; (5) whether to
award a tax penalty enhancement to Plaintiffs; and (6) Plaintiffs’ request for an award of
prejudgment and post-judgment interest.
The damages and relief that Plaintiffs initially sought in their Post-Trial Brief on
Damages, in addition to interest, were as follows:
Stroup Lee
Liquidated damages: $214,479 $195,552

Front pay damages $957,947 $468,070
Tax penalty offset $125,416 $39,108
___________________________
Total: $1,297,842 $702,730
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While Plaintiffs still seek the same amount of liquidated damages, the front pay
damages and tax penalty offset amounts have been modified based on rulings made at
the hearing, as discussed below in Section II. Thus, Plaintiffs now seek front pay
damages of $314,711 for Stroup and $206,862 for Lee. (ECF No. 210, Exs. 1, 3, 4.)
The tax penalty offset amounts that Plaintiffs now request are $66,070 for Stroup and
$30,417 for Lee. (Id., Exs. 1 and 2.) This Order resolves Plaintiffs’ request for these
damages and other issues raised in the briefing.1
II. ANALYSIS
A. Liquidated Damages/Requests for Offsets to Back Pay
Plaintiffs correctly assert that because the jury found that United willfully violated
the ADEA, they are entitled to a mandatory award of liquidated damages in an amount
equal to the award of back pay damages. Once a violation of the ADEA is determined
to be willful, an award of liquidated damages is mandatory. Greene v. Safeway Stores,
Inc., 210 F.3d 1237, 1246 (10th Cir. 2000). Since the jury found that United’s conduct
was willful, I must order liquidated damages in an amount equal to back pay. In so
doing, however, “offsets of interim earnings, severance pay, pension benefits and the
like must be taken against back pay before the doubling of liquidated damages.”
Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1555 (10th Cir. 1988) (emphasis
in original); see also Dilley v. SuperValu, Inc., 296 F.3d 958, 966 (10th Cir. 2003).
1
While United also contested the sufficiency of the evidence to support the back pay award and
the jury’s finding of willfulness, I ruled prior to the hearing in an Order of August 7, 2018 (ECF No. 201)
that those arguments would not be addressed. The Order stated that those arguments were not
appropriate for resolution since no judgment had been entered, and that they would need to be raised in
post-trial motions filed after the judgment is entered as they may implicate Fed. R. Civ. P. 50(b) and 59.
(Id.)
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While Plaintiffs argue that United waived the ability to assert offsets because it
did not present them to the jury in connection with the award of back pay, they have not
cited any authority in support of their argument. Their argument also rings hollow in
light of Cooper’s finding that offsets should be made to back pay in connection with a
liquidated damages award to be made by the court. 836 F.2d at 1555. Cooper found
that the trial court erred in not offsetting an arbitrator’s award of back pay but did not err
in offsetting unemployment compensation, as this was within the trial court’s discretion.
Id. Other courts have also held that deduction of collateral sources of income or offsets
is for the trial court to determine as a matter of its discretion. See Leidel v. Ameripride
Servs., Inc., 276 F. Supp. 2d 1138, 1144 and n. 19 (D. Kan. 2003) (citing EEOC v.
Sandia Corp., 639 F.2d 600, 624-26 (10th Cir. 1980)). Accordingly, I do not find a
waiver of United’s ability to assert that certain offsets should be made to the back pay
awards before the Court issues an order on liquidated damages.
I now turn to the substance of United’s argument. It argues that three categories
of damages should be offset from the back pay award: (1) travel/flight privileges in the
amount of $60,000 per Plaintiff; (2) pension payments made to Plaintiffs; and (3)
damages based on failure to mitigate. As to the mitigation issue, the jury found a failure
to mitigate and deduced amounts from the back pay awards for this failure. I find,
therefore, that there is no need for any offset to the back pay awards based on failure to
mitigate, as this was determined by the jury. I now turn to the remaining two categories.
As to travel benefits, United seeks to offset from back pay $60,000 for each
Plaintiff (valued at $15,000 per year for the period from Plaintiffs’ constructive discharge
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to the trial). Plaintiffs’ economist Dr. William Kaempfer testified in support of this
amount, and it was included in his expert opinion about what the jury should award in
back pay. United argues, however, that the evidence was undisputed, and Plaintiffs
stipulated, that they were eligible for travel privileges with their retirement (see Jury
Instr. 3 ¶¶ 15 and 16, ECF No. 146). Thus, United contends that the amount Plaintiffs
seek for travel benefits should be deducted from back pay, even though they did not
attempt to utilize these benefits during the period relevant to back pay. I reject United’s
argument.
While Jury Instruction No. 3 states in pertinent part that Plaintiffs were told by
their union representative that if they voluntarily retired they were eligible for travel
benefits, the testimony presented at trial was that Plaintiffs did not believe they had
such privileges, and thus did not attempt to use them. (ECF No. 146.) Thus, Stroup
testified that her union representative told her that he believed she would not receive
travel pass privileges since she retired while under disciplinary procedures. (Trial Tr.,
Stroup Testimony 202:11-22.)2 Stroup also read this on the employee website. (Id.
202:23-203:2.) Thus, Stroup believed that she was not eligible for such passes. (Id.
203:10-13; 261:13-17.) This is despite an apparent glitch in United’s system that made
her eligible for such passes, since she was never told about that. (Id. 261:18-25.)
Similarly, Dr. Kaempfer testified that Plaintiffs believed they were not entitled to that
2
When citing to trial testimony or arguments, I am citing to the trial transcripts from February 26
through March 1, 2018, ECF Nos. 175-179. The testimony is in chronological order.
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benefit, and the United documents he reviewed confirmed their lack of eligibility. (Id.,
Dr. Kaempfer Testimony 437:3-438:20.)
Since the jury ultimately awarded Plaintiffs the amounts of back pay that
Dr. Kaempfer opined was appropriate (after deducting mitigation amounts), it seems
that the jury found credible his testimony that Plaintiffs reasonably believed they did not
have the use of the flight benefits during the period of back pay. Further, United did not
notify Plaintiffs that they had travel privileges until after trial. (See Def.’s Resp. to Pls.’
Post-Trial Br. on Damages, Ex. I, ECF No. 173.) I therefore find that it is not
appropriate to offset the travel benefits from the back pay awards, and United’s request
for such an offset is rejected.
I now turn to the pension payments received by Plaintiffs. Whether to offset the
pension benefits from the back pay awards turns on who is paying the pension
benefits— United or a collateral source. Under the general rule adopted by most courts,
if United is funding the pension, then Plaintiffs’ pension payments should be offset. If,
however, the payments are funded from a collateral source, the pension payments
should not be offset as it would be a windfall to the employer. See Sandia, 639 F.2d at
626 (applying this rule to severance pay and unemployment benefits); Ross v. Unified
Sch. Dist., No. 91-202-GTV, 1993 WL 62442, at **8, 9 (D. Kan. Feb. 6, 1993) (declining
to deduct pension payments that came from a state pension fund, not the defendant);
see also Doyne v. Union Elec. Co., 953 F.2d 447, 451-52 (8th Cir. 1992); EEOC v.
O’Grady, 857 F.2d 383, 389-90 (7th Cir. 1988); EEOC v. Beverage Distributors Co.,
LLC, No. 11-cv-02557-CMA-CBS, 2013 WL 6458735, at *5 n. 10 (D. Colo. Dec. 9,
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2013), aff’d in part and rev’d in part on other grounds, 780 F.3d 1018 (10th Cir. 2015).
Funds supported in part but not entirely by contributions from the employer are
generally considered collateral, and are not subject to offset. Sandia, 639 F.2d at 625;
O’Grady, 857 F.2d at 390; Jackson v. City of Cookeville, 31 F.3d 1354, 1360 (6th Cir.
1994).
The parties dispute whether United fully funds the pension plan applicable to
Plaintiffs or whether it contributes to the plan in part. It is undisputed, however, that
when United declared bankruptcy in April 2005, United and Pension Benefit Guaranty
Corporation [“PBGC”] entered into a settlement which called for United to turn over its
four pension plans to PBGC. (See Decl. of Darren Fehring, Senior Managing Counsel -
Employee Benefits at United, ¶ 6, Ex. A to Def.’s Decl. Related to Pls.’ Pension
Payments [“Fehring Decl.”], ECF No. 213).3 The flight attendant pension plan was not
fully funded pursuant to the settlement; United asserts that the flight attendants had
$3.3 billion in accumulated benefit accruals pre-termination, and $1.4 billion in assets
were transferred from United to the PBGC for the flight attendant pension to fund the
$1.7 billion in PBGC guaranteed benefits. (Fehring Decl. ¶ 12.)4 United asserts that
3
According to its website, PBGC is “a federal agency created by the Employee Retirement
Income Security Act of 1974 (ERISA) to protect pension benefits in private defined benefit plans. PBGC,
What is the Pension Benefit Guaranty Corporation (PBGC)?, https://www.pbgc. gov/what-pension-benefit
-guaranty-corporation-pbgc. “It guarantees the ‘basic benefits’ [the employee] earned before [his or her]
pension plan’s termination date (or the date [the] employer’s bankruptcy proceeding began, if applicable)
up to legal limits set by Congress.” https://www.pbgc.gov/wr/benefits/guaranteed-benefits.
4
PBGC has presented a letter stating that the total in which United’s pension plans was
underfunded was approximately $10.2 billion. (See Pls.’ Resp. to Def.’s Decl. Related to Pls.’ Pension
Payments, ECF No. 216, Ex. 1, 2018-08-30, PBGC Assistant General Counsel Menke-Orshan Letter Re:
Terminated United Air Lines Flight.)
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Plaintiffs received, post separation, a pension benefit funded from the flight attendant
pension that United turned over to the PBGC. (Id. ¶ 5.)
As to who funds the flight attendant pension that PBGC is administering and
which Plaintiffs are receiving payments from, United asserts that the pension “was
funded through United’s direct contributions to the plan, regular payments to the PBGC
made by United or its Flight Attendant [“FA”] pension plan assets, and/or additional
payments made by United to the PBGC.” (Fehring Decl. ¶ 9.) It further asserts that
“[t]he pension payments being drawn from the fund by Plaintiffs would not have come
from any party other than United, the assets of the FA plan, or United or its FA pension
plan’s payments to the PBGC.” (Id. ¶ 11.)
Plaintiffs assert, on the other hand, that PBGC, not United, pays and funds the
vast majority of the pension payments, citing to a letter from John A. Menke, Assistant
General Counsel for PBGC, written in direct response to United’s Declaration provided
in this case. (See Pls.’ Resp. to Def.’s Decl. Related to Pls.’ Pension Payments, ECF
No. 216), Ex. 1, 2018-08-30, PBGC Assistant General Counsel Menke-Orshan Letter
Re: Terminated United Air Lines Flight.) Mr. Menke states in the letter:
. . . [United] currently makes no payments towards the benefits that PBGC

pays to FA Plan participants. The vast majority of the benefits that PBGC
pays to FA Plan participants who are plaintiffs in the Colorado lawsuit
comes not from UAL’s past contributions, or any other payments that
[United] made (or is making), but rather, from PBGC’s insurance funds.
(Id.) (emphasis in original). The letter concludes that Plaintiffs in this case are in what
PBGC has characterized as “Priority category 4", and that “those benefits are paid by
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PBGC out of its own insurance funds, with the exception of the $13.2% of the costs that
were defrayed by PBGC’s recovery from the [United] bankruptcy.” (Id.)
I find the letter from PBGC credible, and discredit United’s Declaration as entirely
self-serving. Since PBGC is actually funding almost all of the pension payments to
Plaintiffs, United is not entitled to an offset for the pension payments in connection with
back pay. Sandia, 639 F.2d at 625; O’Grady, 857 F.2d at 390. I find this is consistent
with the remedial purposes of the ADEA.
Indeed, as Judge Carrigan noted in a case from this court, “[t]here is a strong
argument. . . that regardless of the source of the money, the pension benefits are
collateral because they are paid for a different purpose than to protect the employer
from liability for wrongfully discharging an employee.” Wise v. Olan Mills Inc. of Texas,
495 F. Supp. 257, 260 (D. Colo. 1980). Thus, “it may be unduly beneficial to the
defendant to deduct the payments simply because the wrongful termination, together
with plaintiffs’ vested right to benefits under the plan, made the plaintiff eligible for
retirement benefits.” Id.; see also Ross, 1993 WL 62442, at *8 (“the majority of recent
cases have concluded that pension benefits. . .are not to be deducted from back pay
awards” and finding that Sandia “strongly supports” this).5
5
Other cases holding to similar effect include U.S Can Co. v. N.L.R.B., 254 F.3d 626, 634 (7th
Cir. 2001) (stating that an “employer would indeed gain from its wrong—and the employee would lose out
if the employer were allowed to subtract, from the back-pay obligation, pension and welfare benefits that
serve as deferred compensation for work performed”); U.S. Equal Employment Opportunity Comm’n v.
CONSOL Energy, Inc., No. 13CV215(STAMP), 2016 WL 538478, at *13 (N.D.W.V. Feb. 9, 2016)
(“pension benefits are generally considered to be a collateral source even if the employer contributed to
the fund, because pensions are ‘a term of employment rather than an attempt by the employer to
indemnify itself against liability’”) (quoting Russo v. Matson Navigation Co., 486 F.2d 1018, 1020 (9th Cir.
1973)).
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Accordingly, I find that Plaintiffs are entitled to the full amount of back pay
awarded by the jury, and to an award of liquidated damages in the same amount.
Stroup was awarded $214,479 in back pay, and she will receive an award of liquidated
damages in that amount. Lee was awarded $195,552 in back pay, and he will receive
an award of liquidated damages in that amount.
B. Front Pay/Reinstatement
1. Whether to Require Reinstatement or to Award Front Pay
I next address whether Plaintiffs should be reinstated or whether an award of
front pay is appropriate. The Tenth Circuit holds that reinstatement is the preferred
remedy under the ADEA. EEOC v. Prudential Fed. Savings and Loan Ass’n, 763 F.2d
1166, 1172 (10th Cir. 1985). The Tenth Circuit’s views as to reinstatement and front
pay are not, however, “‘unduly restrictive.’” Thornton v. Kaplan, 961 F. Supp. 1433,
1439 (D. Colo. 1996) (quoting Carter v. Sedgwick Cnty., Kan., 36 F.3d 952, 957 (10th
Cir. 1994)). The district court is “vested with considerable discretion in formulating
remedies. . . .” Carter, 36 F.3d at 957.
Reinstatement may not be appropriate “when the employer has exhibited such
extreme hostility that, as a practical matter, a productive and amiable working
relationship would be impossible.” Prudential Fed. Savings and Loan Ass’n, 763 F.2d at
1172; see also Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1553 (10th Cir.
1988) (affirming reinstatement where trial court found tension and animosity between
the parties in the working environment). “Under such circumstances, an award of future
damages in lieu of reinstatement furthers the remedial purpose of the ADEA by
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ensuring that the aggrieved party is returned as nearly as possible to the economic
situation he would have enjoyed but for the defendant’s illegal conduct.” Prudential
Fed. Savings and Loan Ass’n, 763 F.2d at 1173. The Tenth Circuit noted that “[i]f this
were not the case, an employer could avoid the purpose of the Act simply by making
reinstatement so unattractive and infeasible that the wronged employer would not want
to return.” Id.
In this case, Plaintiffs assert that reinstatement is not a feasible remedy due to
the hostility United has shown towards them. After conducting a thorough review of the
trial and hearing transcripts, including Plaintiffs’ testimony and the testimony of United
employees, as well as hearing argument on this from counsel for the parties, I agree
with Plaintiffs that reinstatement is not appropriate in this case. I first note that this case
was bitterly contested and quite adversarial in nature. As one example, United obtained
all of Plaintiffs’ phone records (1600 pages), sought to introduce these records into trial,
and questioned Plaintiffs about their texts to each other (see Trial Tr., Stroup Testimony
150:16-151:14, 201:10-12, 268:20-270:25). Plaintiffs’ counsel represented that
Plaintiffs felt very betrayed by this, as the records were very personal information. (See
Tr. August 16, 2018 Hearing, ECF No 214 [“Aug. 16 Hr’g Tr.”], 43:8-21.)
Moreover, starting with the disciplinary process and continuing throughout the
litigation, Plaintiffs described an extremely stressful experience with United and one that
they perceived as hostile. As to the disciplinary process, Plaintiffs testified that they
were shocked and baffled by United’s termination decision given their years of service
and exemplary record at United, and that they had expected at most a letter of warning
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for the relatively minor transgressions they had committed. (See Trial Tr., Stroup
Testimony 55:3-13, 76:16-77:4, 105:6:22, 117:12-18, 122:7-123:22, 226:25-227:4,
259:3-17; Lee Testimony 829:5-830:2; see also Ken Kyle [“Kyle”] Testimony 587:1-12.)
This is supported by the fact that their union representative believed that the infractions
were not severe and would not result in termination; in fact, Kyle told Stroup that at most
Plaintiffs may receive a letter of warning, especially with their record at United. (Id.,
Stroup Testimony 105:25-106:12; see also Lee Testimony 209:10-16, 335:1-8.) There
was also evidence that other United employees did many of the same actions that
Plaintiffs were terminated for and were not disciplined in this manner. (Id., Stroup
Testimony 52:1-7, 52:21-54:10, 195:2-21, 210:12-19, 238:4-16, 257:6-15; Kyle
Testimony 595:2-23.)
However, there was no progressive discipline for Plaintiffs (Trial Tr. Stroup
Testimony 85:16-20; see also Kyle Testimony 567:7-14—progressive discipline applies
to minor infractions or less serious infractions), and Plaintiffs felt there was little to no
consideration of their exemplary records at United. (Id., Stroup Testimony 57:13-59:9,
63:16-64:12, 65:3-6; Lee Testimony 828:18-829:4; see also Dean Whittaker
[“Whittaker”] Testimony 851:22-852:3.) Kyle, Plaintiffs’ union representative, was
“surprised and disappointed” at United’s termination decision. (Id., Kyle Testimony
590:19-20.) Moreover, Whittaker, the person who made the termination decision, never
responded when Stroup requested a written explanation of the termination decision.
This is despite the fact that Stroup was not even sure she had actually been terminated
and was trying at that time to make a decision between termination and forced
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retirement. (Id., Stroup Testimony 126:18-129:1.) Whittaker also did not respond to
calls and emails from Lee about the termination. (Id., Lee Testimony 786:24-787:22.)
Stroup felt she was treated “completely unfairly”, harshly, and poorly by United,
and that “[i]t almost felt as if I was betrayed. I had been with them for so long; a good
employee for so long, and then this happened. And it just didn’t make sense.” (Trial
Tr., Stroup Testimony 141:6-16, 225:16-21.) Lee also felt he was treated unfairly, and
that United’s action “just didn’t make sense”. (Id., Lee Testimony 819:8-20.) Lee found
very unsettling Whittaker’s statement at one of the disciplinary meetings that customers
were suffering when he was watching his iPad on the flight that United observed, since
Lee felt that wasn’t the case. (Id. 333:4-24.) Lee further noted that Deepesh Bagwe’s
[“Bagwe”] review of Plaintiffs’ performance on the flight he observed was supposed to
be an “excellence review”, where an employee is told about both the good things they
did and things they could improve on. Instead, Bagwe focused only on the bad and
ignored all the things Plaintiffs had done well on the flight. (Id. 333:25-334:17.)6 Lee
testified he felt targeted (id. 803:12-19), and that United did not care about him at all
throughout the process. (Id. 830:306.)
At trial, United’s counsel grilled Plaintiffs about being untruthful (Trial Tr., Stroup
Testimony 162:24-163:20, 191:11-194:2, 358:4-365:9: Lee Testimony 361:22-363:2,
364:11-365:6, 745:22-748:13, 777:2-792:18, 831:3-10), questioned United witnesses
6
Bagwe acknowledged that every single aspect of his excellence review was negative, he
reported nothing positive in his report. (Id. 658:13-20.) He further acknowledged that while he had done
approximately 50 flights where he was asked to observe the flight attendants, this was the only time he
had ever been asked to observe specific flight attendants. (Id. 672:7-673:19.) It was also the only time
that his observations resulted in a decision to terminate employment. (Id. 673:20-674:1.)
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about this (id., Mark Dodge [“Dodge”] Testimony 895:21-896:14, Whittaker Testimony
1030:4-1034:6), and discussed this in United’s closing argument. (Id. 1213:18-23,
1215:8-18.) United’s counsel also elicited questions about Plaintiffs’ conduct presenting
serious safety issues, and discussed this in closing argument. (Id., Stroup Testimony
173:25-174:19, 175:16-176:5, 179:1-180:6; Dodge Testimony 854:16-856:3; Whittaker
Testimony 966:15-22, 1016:16-21, 1019:11-1020:6; Closing Argument 1211:5-1212:5,
1213:18-19, 1214:2-5.) This is despite the fact that (1) the Letters of Charge did not
assert safety or untruthfulness as a basis of discipline (id., Stroup Testimony 81:5-10;
Lee Testimony 314:4-18, 325:14-25, 828:2-17; Dodge Testimony 849:8-10; Whittaker
Testimony 855:3-5, 929:16-25), and (2) per United policy, employees could only be
disciplined on the basis of the grounds in the Letters of Charge, which are issued after
the meetings with the employees (id., Stroup Testimony 100:10:20; Lee Testimony
828:2-5; Kyle Testimony: 547:17-25; 587:13-24.)7
Further, in opening statements at trial, United’s counsel told the jury that Plaintiffs
did not care about the flight at issue that they were attending. This assertion was
extremely offensive to Plaintiffs. (Trial Tr., Stroup Testimony 103:15-104:2; Lee
Testimony 284:11-16.) United’s counsel further argued to the jury in closing statements
that Plaintiffs “weren’t functioning for the safety, welfare, and comfort of their
passengers”, putting the Plaintiffs and their passengers’ lives “at risk”. (Id., Closing
7
The United supervisor who wrote the Letters of Charge stated that while he thought there were
some inconsistencies in Plaintiffs’ reports at the disciplinary meetings, it was tough to say when someone
is actually being dishonest and that he did not think it was necessary to put that in the Letters of Charge.
(Dodge Testimony 847:21-23, 849:11-20.)
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Argument 1211:1-5.) United’s counsel even went so far as to refer to the Shoe Bomber,
telling the jury in closing that the flight attendants were alert in that case and made a
world of difference. It then asked the jury what if a terrorist flight or something horrible
had happened on the flight at issue (id. 1211:6-1213), implying that Plaintiffs’ conduct
was so dangerous that they could have been responsible for something bad happening
to the passengers in that event. These kinds of statements appear calculated to inflame
the passion of the jury and would also likely be extremely offensive to Plaintiffs.
At the hearing on August 14, 2018, Stroup said she would not want to be
reinstated. (Tr., August 14, 2018 Hearing, ECF No 212 [“Aug. 14 Hr’g Tr.”], 127:22-23.)
Having gone through the litigation and the trial, she testified she would feel like she was
going into a hostile environment. No one would view her the same; their opinions would
be skewed. (Id. 156:8-16.) She stated that she “would never be able to go back into
that environment and feel like I could be accepted.” (Id., 156:16-18, 158:6-8.) Stroup
further testified:
I know that there was already a feeling of betrayal. I feel like I was
betrayed by my life-long employer, and to go back to the hostility that they
created throughout the entire litigation process and how much they acted
like I was this horrible person when I know I’m a great person, and was a
great worker, I wouldn’t be able to go back and feel comfortable with how
they look at me. That would – that would cause anxiety for me.
(Id. 158:6-23.) Stroup also stated that Dodge, her supervisor, was not telling the truth
about her in his testimony, and that she would not be able to trust him or that
environment again. (Id. 155:6-22.) She held the same beliefs as to Whittaker and
Bagwe. (Id. 155:23-156:1.)
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Lee said at the hearing that he absolutely did not want to go back to work for
United because he would be “a major target” and “[i]t just would not be a good
environment.” (Aug. 14 Tr., 190:15-22.) He testified that “it would not be a good
environment for me. I think the stress and the looking over my shoulder, constantly,
would be just a little much, and I’m too old for that. I’m sorry. Just don’t feel that it
would be advantageous to my survival, there, within the ranks.” (Id. 191:5-9.) He also
stated that he anticipated the environment would be hostile, and he “lost a lot of trust for
United Airlines”; “I don’t trust them, okay flat out. I just know for a fact I would be a
target.” (Id. 191:10-14.) As to the emotional impact of going back, Lee said his “anxiety
would be through the roof”. (Id. 191:19-23.) He further testified:
It would be hard. It would be hard. The reason I liked what I did. I think I
was very good at it. And I know that to go back in there and be looked at
a little differently, if not a lot differently, because I have possibly cost
someone a lot of money, it wouldn’t be good. I would be looked at
differently and I am just not used to that.
(Id. 192:4-9.)
Finally, at the August 16 hearing, United’s counsel represented that despite the
fact that reinstatement is the preferred remedy, United “has serious reservations about
bringing anyone back to work, especially as a flight attendant who is the face of the
company and interacts with its customers, if that person doesn’t want to be there. (Aug.
16 Hr’g Tr., 47:11-16.) She questioned “what the plaintiffs would or would not say to
others”, and stated that United “has no interest” in allowing information about the verdict
and Plaintiffs’ representations as to the verdict “to spread.” (Id. 47:17-24.) United’s
counsel further stated that “any employer in this situation should have legitimate
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concerns about the employee’s truthfulness, which is especially important when dealing
with an unsupervised workforce.” (Id. 49:13-16.)
I find from the foregoing that Plaintiffs have demonstrated such hostility and a
lack of trust between them and United that a constructive or “warm” working relationship
would not be possible. Fitzgerald v. Sirloin Stockade, Inc., 624 F.2d 945, 957 (10th Cir.
1980) (reinstatement not appropriate where “it seems improbable that there could be a
warm relationship” between the parties). Statements made from United’s counsel
appeared to affirm that. Accordingly, I find that reinstatement is not feasible in this
case. See id.; Acrey v. Am. Sheep Indus. Ass’n, 981 F.2d 1569, 1576 (10th Cir. 1992)
(affirming front pay award when defendant had been hostile towards plaintiff, the
relationship was irreparably damaged, there was “an absence of mutual trust”, and a
working relationship between the parties was not feasible); Spulak v. K Mart Corp., 894
F.2d 1150, 1157-58 (10th Cir. 1990) (front pay appropriate rather than reinstatement
where antagonism between parties had increased because of litigation which was
“‘bitterly contested from start to finish’”, and based on Spulak’s assertion that he would
have problems returning to work because he had been humiliated and feared retaliatory
conduct); see also Anderson v. Phillips Petroleum Co., 861 F.2d 631, 638 (10th Cir.
1988) (front pay may be appropriate where the employment relationship “has been
irreparably damaged by animosity caused by the lawsuit”).
2. Amount of Front Pay To Be Awarded
As noted in Section I, supra, Plaintiffs initially requested front pay in the amount
of $957,947 for Stroup and 468,070 for Lee. (See Dr. Kaempfer’s Evaluations of Front
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Pay Economic Loss, Exs. 1 and 2, Pls.’ Post-Trial Br. on Damages; Aug. 14 Hr’g Exs.
17 and 18.) Both Plaintiffs asserted damages through age 70. (Id.) The front pay
amounts opined to by Dr. Kaempfer included, among other things, (1) damages for lost
earnings going forward in the amount of $488,352 for Stroup and $185,972 for Lee; (2)
the loss of travel benefits in the amount of $355,436 for Stroup and $239,623 for Lee;
(3) future benefits losses of $114,160 for Stroup and $42,475 for Lee; and (4) FICA
contributions in the amount of $49,545 for Stroup and $22,045 for Lee. (Id.) The front
pay award did not include pension payments. (Aug. 14 Hr’g Tr., Kaempfer Testimony
95:21-96:6.) Plaintiffs testified at the hearing in support of their request for front pay as
did economics expert Dr. Kaempfer.
I note that front pay is “‘simply money awarded for lost compensation during the
period between judgment and reinstatement or in lieu of reinstatement’ to make the
plaintiff whole.” McInnis v. Fairfield Communities, Inc., 458 F.3d 1129, 1145 (10th Cir.
2006) (quotation omitted). The determination of the amount of front pay is within the
discretion of the court. Id. Factors relevant in assessing such an award include “work
life expectancy, salary and benefits at the time of termination, any potential increase in
salary through regular promotions and cost of living adjustment, the reasonable
availability of other work opportunities, the period between which Plaintiff may be
reemployed with reasonable efforts, and methods to discount any award to net present
value.’” Id. (quotation omitted).
“‘In formulating a front-pay award” the court “may consider all evidence
presented at trial concerning the individualized circumstances of both the employee and
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employer, but it must avoid giving the plaintiff a windfall.’” McInnis, 458 F.3d at 1145
(quotation omitted). The fact that future damages “may be difficult of computation
should not exonerate a wrongdoer from liability.” EEOC v. Prudential Fed. Savings and
Loan Ass’n, 763 F.2d 1166, 1172 (10th Cir. 1985).
I held at the hearing, and now reaffirm, that Plaintiff Stroup’s request for front pay
through age 70 is not appropriate. United represents, and Plaintiffs have not disagreed,
that both Dr. Kaempfer’s initial expert report and supplemental expert report provided
prior to trial stated that he calculated front pay for Stroup only up to age 65. (See Aug.
14 Hr’g Ex. 15 at 4.) Dr. Kaempfer’s modification of front pay to age 70 in his front pay
analysis dated March 28, 2018, after the trial, is untimely and must be disregarded.
Moreover, there was no evidence presented at trial to support front pay for Stroup up to
age 70. Accordingly, I will consider Stroup’s request for front pay only through age 65.8
I also decline to award travel benefits as part of front pay. United provided letters
to Plaintiffs after trial affirming that they are eligible for United’s Retiree Pass Travel
Program and have travel benefits going forward. (See Def.’s Resp. to Pls.’ Post-Trial
Br. on Damages, Ex. I, ECF No. 173.) Further, United presented testimony at the
hearing on August 14, 2018, from Robert Krabbe [“Krabbe”] that what is contained in
the letters to Plaintiffs is consistent with United’s retiree pass program, which program is
applicable to all retired flight attendants and is protected by the terms of the Collective
8
This is consistent with my ruling at a hearing before trial that due to Plaintiffs’ failure to
supplement Dr. Kaempfer’s reports within 30 days of trial, as required under Rule 26, Plaintiffs were
limited to what was in his original report. See Def.’s Resp. to Post-Trial Br. on Damages, Ex. O at 41:18-
42:13 (the court stating at the hearing that expert disclosures must be made at least 30 days prior to trial
and that Dr. Kaempfer’s testimony would be limited to what was in his initial report).
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Bargaining Agreement. (Aug. 14 Hr’g Tr., Krabbe Testimony 104:16-105:9, 105:18-23,
106:11-107:10.) Based on this testimony, the parties reached a stipulation at the
hearing that Plaintiffs are covered by United’s retiree pass travel programs. (Id. 105:24-
106:3, 107:11-15.)
My ruling at the hearing that FICA contributions will not be allowed in connection
with an award of front pay is also reaffirmed. The Tenth Circuit has held that such
contributions are not generally included in a front pay award. Rupp v. Purolator Courier
Corp., 45 F.3d 440, 1994 WL 730892, at *2 (10th Cir. 1994) (unpublished); see also
Gregory v. Crown Transp., 776 P.2d 1163, 1165 (Colo. 1989). Rupp held that the
district court erred in including employer’s FICA contributions in front and back pay
awards as these amounts would not have been paid to Rupp if he had stayed with his
employer; instead, they would have been sent to the government. 1994 WL 730892, at
*2. The Rupp court found “untenable the expert’s view that from an ‘economic
standpoint’ this amount was ‘paid’ by the employee in the form of reduced wages”,
holding that “including this amount in Rupp’s award amounts to a windfall benefit he
never would have received had he stayed with the company.” Id. I find this case
persuasive.
Plaintiffs argue, however, that they should receive FICA contributions in front pay
because Stroup is an independent contractor and her employer, IVP, does not pay her
FICA taxes. Instead, she pays them herself. As to Lee, because his business’s
earnings are attributed to him, it is argued that the business’s payment of his FICA
taxes reduces the business’s earnings and thus his earnings. Thus, both Plaintiffs
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contend that they are worse off economically than when at United (who paid their FICA
taxes), and that front pay must include FICA to put them in the same position as they
would have been if they had stayed at United. Plaintiffs have not, however, provided
any authority that supports their argument that FICA contributions are appropriate from
the Tenth Circuit or this court. The only authority they cite is from courts in other
jurisdictions that I find unpersuasive and distinguishable.9 Accordingly, FICA
contributions will not be included in the front pay award.
I now turn to how much front pay, if any, should be awarded Plaintiffs. By letter
of August 20, 2018, Dr. Kaempfer provided a revised calculation of front pay. It
removed FICA benefits and travel flight benefits as a front pay loss and reduced the
front-pay loss period for Stroup to age 65 (ECF No. 210, Exs. 1, 3, 4), consistent with
my rulings at the August hearing. The new front pay awards that Plaintiffs are seeking
after deducting the amounts I have ruled should not be included are $314,711 for
Stroup and $206,862 for Lee. (Id.)
United argues that the front pay awards should be reduced or eliminated based
on Plaintiffs’ failure to mitigate (and/or the mitigation of damages), and that Plaintiffs’
pension payments that they are receiving should be offset from the awards. I first
address the pension payments. I find that the pension payments should not be
deducted from front pay for the same reasons I found in connection with the back pay
9
Green v. U.S. Steel Corp., 640 F. Supp. 1521, 1535-36 (E.D. Pa. 1986), involved a failure to hire
case where the court awarded FICA/social security benefits that the employer would have made on the
plaintiffs’ behalf if they had been fired. DuPont v. State of New York, No. 108040, 2008 WL 2367864, at
*17-29 (N.Y. Ct. Claims 2008) (unpublished), involved an assessment of damages in a medical
malpractice case for an infant who was born with severe health problems that would need care for the rest
of her life.
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awards. Plaintiffs have presented credible evidence that PBGC is the primary entity
funding the pension plan that Plaintiffs are receiving funds from, not United. (See Pls.’
Resp. to Def.’s Decl. Related to Pls.’ Pension Payments, Ex. 1, 2018-08-30, PBGC
Assistant General Counsel Menke-Orshan Letter Re: Terminated United Air Lines
Flight.) Accordingly, I do not believe an offset of these benefits is appropriate. Sandia,
639 F.2d at 625; O’Grady, 857 F.2d at 390; Jackson, 31 F.3d at 1360.
The parties have, however, cited to a Seventh Circuit decision which requires the
court to “examine the nature of the particular employer’s pension plan to determine
whether a deduction is appropriate.” Graefenhain v. Pabst Brewing, 870 F.2d 1198,
1210 (7th Cir. 1989). It held that “[t]o decide the extent to which pension benefits
received by a private sector employee should be offset against a front pay award, the
court must determine whether the employee has reaped a greater benefit by receiving
his pension payments early rather than at a later date.” Id. “The employee is only
entitled to a set-off for the difference between the amount the employee did receive and
the amount he would have received but for his unlawful termination.” Id. (emphasis in
original). The Seventh Circuit found that resolution of this question “require[s] a detailed
examination of the way in which” the pension program is administered and “a finding as
to whether the present value of” the pension the employee receives is “equal to, greater
than, or less than he would have received if he retired as planned.” Id.10
10
Graefenhain noted that “[i]f the employee received less in the way of pension benefits due to
his discharge . . ., it is arguable that his front pay award should be increased to compensate him for the
lost benefits.” Id. n. 8 (emphasis in original).
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I am not convinced the Graefenhain analysis applies given my finding that PBGC
was the primary entity funding the pension plans, rather than United. Thus, I find that
the payments are made from a collateral source. Even if Graefenhain does apply, I
have been provided no evidence as to the particulars of the Plaintiffs’ pension plan or
whether Plaintiffs are receiving a greater benefit from the receipt of their pensions as a
result of their constructive discharge from United. I decline to offset the pension
payments in connection with front pay in the absence of such evidence. See Ross v.
Unified Sch. Dist. No. 231, No. 91-2302-GTV, 1993 WL 62442, at *9 (D. Kan. Feb. 16,
1993) (declining to offset pension benefits where there was “no evidence presented
from which the court could conclude that plaintiff has been overcompensated by
receiving his pension benefits earlier rather than later”); Stein v. Forest Preserve Dist. of
Cook Cnty., Ill., No. 92 C 5567, 1994 WL 160563, at *4 (N.D. Ill. April 28, 1994) (finding
no reason to allow an offset as to pension payments when the court “did not do so in
conjunction with the back pay award and stating that even if the court were to rule
differently on the offset to front pay, the defendant “has failed to present the Court with
either the proper information or the arguments required by Seventh Circuit cases to do
so”) (citing Graefenhain, 870 F.2d at 1210).
Turning to mitigation, or in the case of Stroup, the alleged failure to mitigate,
Dr. Kaempfer found that Stroup’s potential replacement earnings are $26,351 per year
per the Census data for median earnings of women similarly situated to her. (Aug. 14
Hr’g Ex. 18.) He used this number to calculate her front pay since it is more than she
has earned since leaving United. (Aug. 14 Hr’g Tr., 58:18-24.) Dr. Kaempfer testified
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that this is a conservative estimate, as Stroup has not actually earned that much. (Id.,
94:21-24.)
United contends that the jury found a failure to mitigate as to Stroup in
connection with back pay and asserts that Stroup has made no effort to mitigate her
damages going forward. United notes that Stroup testified she is no longer seeking
employment (she stopped looking in May 2016) and has chosen to spend her time
working with her husband and traveling frequently for pleasure. (See Trial Tr., Stroup
Testimony 220:7-18, 221:21-223:4.) Therefore, United argues that Stroup should be
awarded no front pay. Alternatively, United argues that the profit from Stroup’s family
volleyball business (IVP) should be attributed to her and reveals far greater income than
what she could have earned at United. United points to Stroup’s testimony that she
works between 30 to 50 hours a week with IVP, and argues that it appears from the tax
returns that the business pays no wages for labor. (Id. 219:4-19; Def.’s Resp. to Pls.’
Post-Trial Br. on Damages, Ex M. p. 19, ECF No. 174-2.)11 United asserts that the
history of IVP’s profit projected forward shows that Stroup should be deemed to have
fully mitigated her damages and is not entitled to front pay.
I first find that there is no evidence to support United’s contention that the profit
attributed from Stroup’s husband’s family volleyball business should be attributed to
Stroup. Stroup and her husband’s 2017 tax return show that she earned what IVP paid
11
According to United, Stroup’s attorneys have confirmed that there are no documents which
show precisely how much she is working in order to establish some basis for calculating a rate of pay.
(See id.,, Ex. N.) Moreover, United notes that Stroup testified at the hearing on August 14, 2018, that she
sometimes receives her pay in cash or by check, and did not have amounts available for the work she had
done this year as a volleyball referee at IVP.
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her whereas her husband earned what the business earned. (See Aug. 14 Hearing Ex.
6, at 3, 7-8.) Dr. Kaempfer testified that the revenues of IVP are irrelevant to Stroup’s
income. (Aug. 14 Hr’g Tr. 94:4-6.) Moreover, had United not made a decision resulting
in Stroup’s constructive discharge, she and her husband would have had both his IVP
earnings and her United salary. Now, Plaintiff receives her pay from IVP, while her
husband still receives its profit. (See ECF No. 193-1, 2017 Tax Returns of Stroup.)
There is nothing inconsistent or improper about that.
While United argues that IVP artificially kept Stroup’s salary low to enable her to
get a front pay award, it has provided no evidence to support that, only speculation.
There is also no basis to determine that Stroup and/or IVP improperly reported what she
earned on the tax returns. I find that attributing IVP earnings to Stroup would unlawfully
punish her for United’s unlawful conduct, and that there is no evidence to support this.
I also reject United’s argument that Stroup failed to mitigate in regard to front
pay. While the jury found a failure to mitigate in connection with back pay, I find no
failure to mitigate going forward. Stroup unsuccessfully applied for a flight attendant
position at another airline, and testified that she worked at several jobs after retiring
from United. These jobs were very dissimilar to her job at United and paid her much
less without the same benefits and advantages. (See Trial Tr., Stroup Testimony 132:9-
137:14, 140:15, 153:22-6.) Accordingly, she decided to work part time at IVP, her
husband’s volleyball company, because it “feel[s] like a good fit for me”. (Id. 137:16-22,
143:12-14.)
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Stroup testified that she did not think she could find full-time employment at $15
an hour, which is approximately what she is making at IVP. (Aug. 14 Hr’g Tr. 135:10-
11, 136:7-9.) When asked whether she could find a job making more than $10,000 a
year, which again is approximately what she is earning at IVP, she stated that her
efforts at job searching since she was fired from United showed it was “very difficult.”
(Id. 136:8-12.) When asked whether she had done anything since May 2016 to confirm
whether it would be difficult to get a full time job, Stroup stated that she “often looks at
job websites and see[s] that nothing has changed. There’s hardly any full-time
employment offered out there. Sometimes there’s full-time for a nurse. I’m not a
nurse.” (Id. 136:13-18.) Further, she testified that full-time employment “was not
offered very often. If it was it was usually specific to a trade, something that I didn’t
have. A lot of full-time positions for hygienists or radiologist assistants or something
that I didn’t, wasn’t qualified for”. (Id. 154:7-12.) Finally, Stroup testified that she
“diligently looked for reemployment for quite sometime”, even though she was not
currently trying to gain regular full-time employment. (Id. 143:7-22.)
While Stroup stated that she was capable of earning more than $12.66 an hour
(per Dr. Kaempfer’s testimony giving Plaintiff credit for $26,351 a year), she was
referring to her job at IVP where she makes approximately $15 an hour. She did not
think she would be capable of earning that right now at another job. (Trial Tr., Stroup
Testimony 144:3-145:3.) I find that credible given the fact that Stroup’s earnings at
other jobs she worked at following United were less than $12.66 an hour. (Id. 134:9-
136:16.)
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Importantly, United did not present any evidence showing that Stroup could have
obtained an available, substantially equivalent position to her flight attendant position
after her constructive discharge from United. See Carden v. Westinghouse Elec. Corp.,
850 F.2d 996, 1006 (3rd Cir. 1988) (“defendants must prove that the plaintiff did not
exercise reasonable diligence in seeking employment substantially equivalent to the
position [she] lost”); Beverage Distributors Co., 2013 WL 6458735, at *13-17 (holding
that the defendant failed to meet its burden on mitigation because it failed to present
any evidence that available positions existed for which the plaintiff was qualified and
which were comparable to his prior position).
A plaintiff “must make only reasonable, good faith efforts to mitigate damages
and is not held to the highest standards of diligence.” Beverage Distributors Co., 2013
WL 6458735, at *2; see also Brooks v. Woodline Motor Freight, 852 F.2d 1061, 1065
(8th Cir. 1988) (“[The] burden [to use reasonable efforts to mitigate] is not onerous and
does not require success.”) The Tenth Circuit has held that a plaintiff “did not act
unreasonably by accepting several part-time jobs and stopping her search for full-time
employment after she had fruitlessly searched for full-time employment for many
months. Stockard v. Red Eagle Res. Corp., 972 F.2d 357, 1992 WL 180131, at *3 (10th
Cir. July 27, 1992) (unpublished). Similarly, the Tenth Circuit has stated that “mitigation
requires not success in finding alternate employment, but only a reasonable exertion to
mitigate damages.” Whatley v. Skaggs Co., Inc., 707 F.2d 1129, 1138 (10th Cir. 1983).
I find that Stroup made a reasonable exertion to mitigate her damages going forward.
-27-
In so finding, I note that Stroup is currently 60 years old (her date of birth is
September 6, 1958, ECF No. 86), and it may be very difficult at her age to obtain
employment comparable to what she had at United. This is particularly true as Stroup
has a high school education and worked her entire career at United. As one court
noted, the court should take into account the fact that due to “the nature of age
discrimination,” an employee “is generally not in a position to obtain the same sort of job
[she] had held previously”: “the central fact of age discrimination [is that] an older
employee, while able to work very capably, is generally not attractive to employers.
Lavely v. Trs. of Bos. Univ., No. 83-955, 1987 WL 17539, at *8 (D. Mass. Aug. 28,
1987); accord Jones v. Cassens Transp., 538 F. Supp. 929, 949 (E.D. Mich. 1982)
(“[Older employees] cannot be required…to…attempt[] to launch new careers” in “jobs
for which they [can] present no experience…and for which the new employer would be
expected to train them for the few years of service they could offer before retirement.”).
Based on the foregoing, I find that Plaintiff Stroup has mitigated her damages
going forward and is entitled to an award of front pay in the amount of $314,711. This
amount reflects Dr. Kaempfer’s calculation consistent with my rulings reducing Stroup’s
front-pay loss period to age 65 and removing flight benefits and FICA benefits as front
pay losses. (See ECF No. 210-1.)
I now turn to Plaintiff Lee. Lee is currently 66 years old (his date of birth is
January 24, 1952, ECF No. 86). He has had his own painting business, Nova Painting,
since before he left United's employment. (Trial Tr., Lee Testimony 343:25, 392:6-8,
397:1-5.) He is the owner of the business, and is working exclusively at that job. (Id.
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392: 9-10; Aug. 14 Hr’g Tr. 178:12-18.) Lee earned $27,786 in net income at that job in
2014, and $33,121 in 2015. (Trial Tr., Lee Testimony 392:11-15.) His painting
company is thus profitable. (Id. 398:4-7.) Lee admitted that he could look for another
job but elected not to since all his time is spent at his business, which I find is
essentially a full-time job. (Aug. 14 Hr’g Tr. 177:23-178:14; Trial Tr. 398:2-5.) Lee’s
sales have increased every year since leaving United, and he testified he would like to
operate the business for several more years. (Trial Tr. 393:1-3, 399:22-400:1.)
The issue becomes how to value Plaintiff’s business and the income he makes,
and how this applies to mitigation. I find instructive the Third Circuit’s decision in
Carden cited by United. 850 F.2d at 1005. Carden first held that “a self-employed
person is ‘employed’ for the purposes of mitigating damages if establishing a business
of his own was a reasonable alternative to finding other comparable employment.” Id.
at 1005. The burden to prove that it was not falls on the defendant. Id.; see also Taylor
v. Central Pa. Drug and Alcohol Servs. Corp., 890 F. Supp. 360, 372 (M.D. Pa. 1995). I
find that given the success of Lee’s business, this was a reasonable alternative to
finding other comparable employment and he is thus “employed” for purposes of
mitigation of damages. United has not shown to the contrary.
The next question is how to value Lee’s self-employment as mitigation. Plaintiffs
argue that the court should use Lee’s net profits as the basis to determine how much
Lee makes, relying on Dr. Kaempfer’s testimony. Dr. Kaempfer used the highest
number that Lee has earned in net profits, $33,121. United asserts, on the other hand,
that for each successive year since Lee left United, the gross receipts of his painting
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company have increased12, and argues that the court take that into account, not just rely
on net income. Further, United asserts that front pay is not appropriate as Lee testified
that if he were reinstated as a flight attendant at United, he would be making about the
same amount of money that he makes now at his painting business. (Aug. 14 Hr’g Tr.
172:20-22.) In fact, United contends that Lee is actually making more money with his
business than he made at United, and much more than Dr. Kaempfer used as his
replacement income for purposes of front pay.
Turning to my analysis, the Third Circuit in Carden noted that salary is readily
determined “[w]here the post discharge employment is evidenced by another salary” but
“[i]t is not so readily determined where the discharged employee establishes his own
business. 850 F.2d at 1005. I agree. I find, however, that the number that
Dr. Kaempfer used to estimate Lee’s replacement income for purposes of front pay,
$33,121, is reasonable and appropriate and thus adopt it for the calculation of front pay
in this case.
Dr. Kaempfer opines that Lee’s front pay losses (removing flight benefits and
FICA benefits per my rulings) were $206,862. (ECF No. 210, see also Aug. 14 Hr’g Ex.
17.) This includes front pay up to age 70. (Aug. 14 Hr’g Tr. 25:25-26:5; Aug. 14 Hr’g
Ex. 17.) The front pay calculation was discounted by the mitigation Lee is undertaking
with his painting business. (Id. 29:7-30:1.) Dr. Kaempfer’s report states that Lee’s
12
Lee’s gross receipts were $49,873 in 2012, $53,701 in 2013, $139,280 in 2014, $162,049 in
2015, and $223,399 in 2016. (Trial Tr., Lee Testimony 393:10-396:25; Aug. 14 Hr’g Tr. 89:15-90:9.) His
gross income was $54,547 in 2014, $64,960 in 2015, $79,833 in 2016, and $64,122 in 2017. (Aug. 14
Hr’g Tr. 89:15-90:9; see also Aug. 14 Hr’g Ex. K.)
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potential replacement earnings are $26,351 per year per the Census data for median
earnings of men similarly situated to Lee. (Aug. 14 Hr’g Ex. 17.) However, he notes
that by 2015, Lee’s net income of $33,121 from his business exceeded this earnings
level; therefore, Dr. Kaempfer used $33,121 as Lee’s replacement earnings from 2018
for the remainder of Lee’s expected work life. (Id.) This is the highest amount of net
earnings that Lee has made in his business. (Aug 14 Hr’g Tr. 33:10-15). Dr. Kaempfer
testified that this is a conservative estimate that benefits United, and that this approach
to calculating Lee’s replacing earnings is generally accepted in his field. (Id. 36:20-
37:1.)
Dr. Kaempfer’s opinion regarding the amount of front pay for Lee is the only one
that is supported by the record. United did not present a rebuttal witness on this issue,
and I find that it did not show that Dr. Kaempfer’s calculation using Lee’s highest net
income is unreasonable or not credible. Dr. Kaempfer testified that “the relevant
number is the reportable income”, i.e., net profits, per federal tax law. (Aug. 14 Hr’g Tr.
92:8-18.) The gross revenues of a business are irrelevant in the context of mitigation
according to Dr. Kaempfer; it is the net income of the owner that is relevant (id. 94:25-
95:10). See also Smith v. Great Am. Rests., 969 F.2d 430, 439 (7th Cir. 1992) (using
the net profit as the amount to be attributed to earnings) (citing Carden, 850 F.2d at
1005-06.) This is because, as Dr. Kaempfer testified, the expenses of the business
may be going up, along with the revenue, as the business may be hiring staff and have
more equipment to maintain. Thus, the profit margin can go down. (Id. 95:11-16.) This
appears to be the case with Lee’s business, as he testified that he has subcontractors
-31-
who work for him and who he has to pay. (Trial Tr., Lee Testimony 342:13-18, 397:13-
17; Aug. 14 Hr’g Tr., 182:1-6.) He testified that his cost for labor last year alone was
$117,000. (Aug. 14 Hr’g Tr. 183:2-6.) United did not present any evidence to counter
or rebut this.
Although United notes that Lee’s business has grown every year in terms of
revenue, there is no evidence to assume this will continue happening, particularly as
Lee’s net income has actually gone down since 2015. (See Aug. 14 Hr’g Tr. 88:21-
89:4; 93:4-12.) Thus, Dr. Kaempfer was asked why if Lee’s painting business is on an
“upward and onward trajectory”, and “every year he is making a little more money”
Dr. Kaempfer did not “simply extrapolate into the future [that] his business is going to
continue to do well.” (Id. 33:16-19.) Dr. Kaempfer responded “[b]ecause the actual
maximum earnings were at the beginning of the period” (in 2015), and the “[t]he
maximum earnings, which I have used, did not increase according to his tax returns for
the years that I examined.” (Id,. 33:20-23, 34:23-36:9; see also Aug. 14 Hr’g Ex. 17.)
He testified that the higher number was used “[t]o show a potential level of income that
had been demonstrated by this business”, and because it is speculative whether or not
Lee will make more money in the future with his business. (Aug. 14 Hr’g Tr. 36:6-
19.) I find this credible, particularly given Lee’s testimony that he is already working six
days a week and using Sundays to get bids. (Trial Tr., 397:18-398:4.) It is uncertain,
than, as to how much Lee can continue growing the business.
I also reject United’s argument that Lee is making more than he would have if he
were at United. United asserts on that issue that Lee testified at the hearing on August
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14, 2018, that he paid himself $3,000 the week before the hearing (Aug. 14 Hr’g Tr.,
187:1-4) and that, on average this year, he pays himself about $3,000 every two weeks.
(Id. 188:12-189:1.) From this, United extrapolates that Lee is making about $76,000 a
year, more than he would make at United and much more than what Dr. Kaempfer
credited him. I find that United’s argument does not accurately reflect Lee’s testimony.
Thus, when Lee testified that he paid himself $3,000 last week, he said that this
was a “guesstimate” and was based on “an extremely large house we did.” (Aug. 14
Hr’g Tr., 187:1-5.) He also made clear that he could not state how much he paid
himself as it varied depending on the week and the number and type of jobs that his
business did. (Id. 188:12-21.) When United asked whether that meant he could be
earning $20,000 every week, Lee stated “[l]et’s say $3,000 every two weeks.” (Id.
188:22-189:1.) United’s counsel then asked why Lee would say that if he has no idea
how much he earns, to which he responded “[b]ecause $20,000 was not even feasible.”
(Id. 189:2-4.) Lee again made clear that he could not state what his earnings were for
this year because they “vacillate[]” depending on the week and the jobs. (Id. 186:23-
188:13; 189:5-18.) Thus, Lee did not have a tally as to what he has actually earned in
2018. (Id. 189:14-18.) He also could not state what his gross sales have been this
year. (Id. 185:3-19.) I find from the foregoing that United has not shown that Lee is
actually making more this year than he would have made at United.
As to Lee’s testimony that if he were reinstated at United he would be making
about the same amount of money that he makes now at his painting business (Aug. 14
Hr’g Tr., 72:20-22), Lee did not state and United did not ask whether he was referring to
-33-
his painting business’s sales, gross receipts, or his net income. From Lee’s testimony
as to his uncertainty about income for 2018, it appears he was not referring to what he
will actually earn this year. Thus, United has not shown that he would make about the
same amount of money as if he were working at United, or even more than the number
that Dr. Kaempfer used for his replacement earnings.
United also cites the Carden case and the questions it notes therein as pertinent
to the inquiry of how to value income from self-employment, but has not shown that any
of the questions raised therein merit a different analysis as to Lee’s business.13 Thus,
United’s counsel questioned Lee about profits and deductions he made for personal
expenses (Trial Tr., Lee Testimony 398:24-399:13), but did not show that any of these
expenses was inappropriate. Dr. Kaempfer testified that he considered expenses that
Lee could deduct from his gross income based on his business, and that the type of
expenses that Lee deducted were proper business deductions. (Id., Dr. Kaempfer
Testimony 454:17-455:12.) Further, Lee credibly testified that he did not earn more
than $33,121, and that his 2014 income of $33,121 was “after all expenses”. (Aug. 14
Hr’g Tr., 183:23-184:7.) Lee notes on that issue that he had over $100,000 in expenses
that year (id. 184:8-10), and that his labor costs alone last year were $117,000. (Id.
13
Carden notes the following questions that may be relevant. Has the plaintiff “drawn a salary
which has reduced, if not eliminated, the year-end profit”? “Have personal expenses, normally paid by a
wage earner from a salary, been absorbed by the business, e.g., personal car expenses, insurance,
vacations and other personal expenses? Have dividends been paid? Have profits been earned? Have
particular expenses been appropriately offset against revenues? Have profits been reinvested in capital
assets and have reserves been established? If so, how should they be treated in a mitigation context.
Has the plaintiff benefitted by an increase in value of the business?” Id. at 1005-06.
-34-
183:2-6.) United presented no evidence to the contrary, or any evidence that Lee made
improper deductions.
Further, despite having the burden on the issue, United did not ask questions or
elicit evidence about other questions noted in Carden, such as whether profits were
reinvested in capital assets, whether reserves have been established, and whether Lee
has benefitted by an increase in his business. 850 F.2d at 1006. Carden stated that
“[t]hese questions necessarily must be resolved by the fact finder, against a backdrop of
the governing principles recited earlier: that the plaintiff should not receive double
benefits, and that the burden is upon the defendant to prove by how much” front pay
should be reduced or eliminated. Id. Here, United has not met its burden of showing
that Lee is receiving a windfall or double benefits, or that the front pay award that he
requests and which is supported by Dr. Kaempfer is unwarranted.
Accordingly, I find that Lee is entitled to an award of front pay of $206,862, as
requested and supported by his testimony and that of Dr. Kaempfer. In awarding this
amount, I find that Lee’s attempt to mitigate damages by pursuing and expanding his
painting business when no offers of employment were forthcoming was, as noted by
one court, “a laudable attempt and should not be used against” him to cut off or reduce
his front pay. See Taylor, 890 F. Supp. at 372.
In conclusion on the issue of front pay, I find that Dr. Kaempfer’s analysis of front
pay and Plaintiffs’ replacement earnings that should be awarded is supported by the
record and has not been rebutted by United. Lee and Stroup have met their burden
regarding the amount of front pay that they should receive, and I find that United has not
-35-
met its burden of showing that either of the Plaintiffs’ income should be valued
differently. Hansel v. Pub. Serv. Co., 778 F. Supp. 1126, 1136 (D. Colo. 1991)
(Plaintiffs “bear[] the initial burden of proof concerning the amount of front pay and
[Defendant] bears the burden of proof on any issue in the nature of mitigation”).
As the Tenth Circuit has noted, “[t]he purpose of the equitable remedies under
the ADEA is to make a plaintiff whole”. Sandlin v. Corporate Interiors, Inc., 972 F.2d
1212, 1215 (10th Cir. 1992). When appropriate, as I find it is here, front pay may be
awarded “for the estimated remaining tenure plaintiff would have enjoyed with his
company absent the discriminatory conduct.” Id. The front pay awards that I have
awarded as to Stroup and Lee are the amounts I find that are required to put them “as
nearly as possible, into the position he or she would have been in absent the
discriminatory conduct.” Id.
C. Tax Penalty Offset
The next issue I address is Plaintiffs’ request for monetary awards to
compensate them for the tax penalties they will allegedly suffer as a result of the
amounts awarded by the jury and other amounts requested by Plaintiffs. Stroup
requests $125,416 to offset the tax penalty and Lee requests $39,108.
Turning to my analysis, “[c]ourts ha[ve] wide discretion in prescribing remedies
for victims of discrimination.” EEOC v. Beverage Distributors Co., LLC, 780 F.3d 1018,
1023 (10th Cir. 2015). Thus, courts have discretion to award an amount to compensate
a prevailing employee for his or her increased tax burden as a result of a lump sum
award. Id. (citing EEOC v. N. Star Hospitality, Inc., 777 F.3d 898 (7th Cir.2015)
-36-
(upholding an award of a tax offset in an EEOC claim on behalf of a single plaintiff in
order to make the plaintiff ‘whole’”)).
The Seventh Circuit found that a tax penalty award was appropriate in a Title VII
case where the plaintiff’s receipt of back pay would bump him into a higher tax bracket.
N. Star Hospitality, 777 F.3d at 904. It stated on that issue:
The resulting tax increase, which would not have occurred had [the plaintiff]
received the pay on a regular, scheduled basis, will then decrease the sum
total he should have received had he not been unlawfully terminated by
Hospitality. Put simply, without the tax-component award, he will not be
made whole, a result that offends Title VII’s remedial scheme.
Id.; see also Eshelman v. Agere Systems, Inc., 554 F.3d 426, 442 (3rd Cir. 2009) (“an
award to compensate a prevailing employee for her increased tax burden. . . represents
a recognition that the harm to a prevailing employees’ pecuniary interest may be
broader in scope than just a loss of back pay. . . [this type] of equitable relief may be
necessary to achieve complete restoration of the prevailing employee’s economic status
quo and to assure ‘the most complete relief possible.’”) (quotation omitted).
Plaintiffs’ economist Dr. Kaempfer presented testimony on this issue at the
hearing on August 14, 2018. He also presented a report dated August 20, 2018,
providing updated information on this issue, which was filed as part of his updated
expert materials on that same date. (ECF No. 210.) Dr. Kaempfer’s report and
testimony shows that both Stroup and Lee will suffer significant tax penalties when they
receive their damages in a lump sum. If they were still employed by United, that income
would have been spread out over multiple years as annual income. I find from this that
-37-
a tax penalty is appropriate to make Plaintiffs whole, consistent with the remedial
scheme of the ADEA.
United argues, however, that Plaintiffs should be precluded from receiving any
amounts as a tax penalty because Dr. Kaempfer did not include these amounts or
discuss tax penalties in his expert reports. I reject this argument, finding that this issue
was not ripe until a jury verdict was entered. Plaintiffs would not know that there was
going to be a tax penalty until they received a verdict and learned what the amount of
the verdict was. Depending on the amount awarded, there may have been no tax
penalty. Plaintiffs also did not know until a verdict was entered if they were going to be
awarded liquidated damages based on a finding of willfulness. United’s counsel stated
that they received Dr. Kaempfer’s notice of the tax penalty and calculation thereof on
April 6, 2018 (Aug. 16 Tr. 74:2-4; see also Ex. 8, ECF No. 192), giving United plenty of
time to prepare for his testimony on this issue at the August hearing and/or hire an
economist of its own to refute Dr. Kaempfer’s testimony if it so chose. Accordingly, I
find that Plaintiffs are not precluded from seeking a tax penalty award because the issue
was not asserted in Dr. Kaempfer’s pretrial expert reports.
United also objects to tax penalty awards to Plaintiffs as too speculative. I reject
that argument as the amounts were testified to and supported by Dr. Kaempfer. He
used an online tax software to calculate tax liability, based on 2017 tax rates (Aug. 14
Hr’g Tr. 60:6-20; see also Hr’g Ex. 19), and testified that this is a program that is
normally used in his profession. (Aug. 14 Hr’g Tr. 94:7-10.) Dr. Kaempfer testified that
it is a standard in the industry to use this type or program. (Id. 94:11-15.) I thus reject
-38-
United’s argument that Dr. Kaempfer’s calculations are unreliable, and again note that
United did not present its own economist to rebut Dr. Kaempfer’s testimony or provide a
different analysis of the tax penalties. I also reject United’s argument that increasing the
damage award determined by the jury for a tax penalty is an unlawful additur in violation
of the Seventh Amendment, as unsupported by Tenth Circuit law.14
I now turn to the amount of the tax penalty offsets to be awarded. Dr. Kaempfer
opined as to Stroup that her back pay award ($214,479) and front pay award ($314,711
as revised per the court rulings), when paid in a lump sum, will result in a tax penalty of
$66,070 over her expected work-life. (ECF No. 210-1, 210-2.) Since I awarded Stroup
the full amount of front pay that she requested, I accept Dr. Kaempfer’s testimony
regarding the amount of the tax penalty that she will incur and award Stroup $66,070 to
offset this tax liability. Lee’s back pay award of $195,552 and his front pay award of
$206,862 (ECF No. 210, Exs. 1, 3, 4), when paid in a lump sum, will result in a tax
penalty of $30,417 over his expected work-life. Again, I accept Dr. Kaempfer’s
testimony regarding the amount of this tax penalty and award Lee $30,417 to offset this
liability.
D. Prejudgment and Post-judgment Interest
I first find that an award of prejudgment interest in this case is not proper. The
Tenth Circuit has held that prejudgment interest is not available under the ADEA if
plaintiffs receive liquidated damages. Blim v. Western Elec. Co., Inc., 731 F.2d 1473,
14
The Tenth Circuit declined to address this issue in Beverage Distributors Co., finding it had
been forfeited. 780 F.3d at 1023 n. 4. United has not cited any other Tenth Circuit authority on this issue.
-39-
1479 (10th Cir. 1984). Blim based its holding on the Supreme Court’s decision in
Brooklyn Bank v. O’Neil, 324 U.S. 697, 715 (1945), which held that prejudgment interest
was not available because liquidated damages “compensated plaintiffs for any delay.”
Id. In a later case, the Tenth Circuit followed “the law of the circuit” set out in Blim, and
did not award prejudgment interest in an ADEA case where liquidated damages were
awarded. Greene v. Safeway Stores, Inc., 210 F.3d 1237, 1247 (10th Cir. 2000). Since
liquidated damages are awarded in this case, I will not award pre-judgment interest.
I do, however, find that an award of post-judgment interest is appropriate at the
applicable rate under at the applicable rate under 28 U.S.C. § 1961.
III. CONCLUSION
In conclusion, it is
ORDERED that United’s request for offsets to the jury’s back pay awards to
Plaintiffs is DENIED. It is
FURTHER ORDERED that the back pay awards to Stroup of $214,479 and to
Lee of $195,552 are AFFIRMED. It is
FURTHER ORDERED that Plaintiffs are entitled to a liquidated damages award
equal to the amount of back pay awarded by the jury, since the jury found that United’s
conduct was willful. Stroup shall thus receive a liquidated damages award of $214,479,
and Lee shall receive a liquidated damages award of $195,552. It is
FURTHER ORDERED that reinstatement is not appropriate in this case, and
Plaintiffs are entitled to an award of front pay. It is
-40-
FURTHER ORDERED that the front pay award shall not include travel benefits or
FICA contributions. It is
FURTHER ORDERED that United’s requests that Plaintiffs’ pension payments be
offset from front pay and that front pay be reduced or eliminated based on Plaintiffs’
failure to mitigate is DENIED. It is
FURTHER ORDERED that Stroup is awarded front pay in the amount of
$314,711. Lee is awarded front pay in the amount of $206,862. It is
FURTHER ORDERED that Plaintiffs’ request for a tax penalty offset is
GRANTED. Stroup is awarded a tax penalty offset of $66,070. Lee is awarded a tax
penalty offset of $30,417. It is
FURTHER ORDERED that Plaintiffs’ request for pre-judgment interest is
DENIED, given the award of liquidated damages. Finally, it is
ORDERED that Plaintiffs’ request for post-judgment interest is GRANTED. Post-
judgment interest shall be awarded at the applicable rate under 28 U.S.C. § 1961.
Dated: October 17, 2018
BY THE COURT:
s/ Wiley Y. Daniel
Wiley Y. Daniel
Senior United States District Judge
-41-

Jeanne Stroup and Ruben Lee v. United Airlines: Order On Damages

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Case 1:15-cv-01389-WYD-STV Document 220 Filed 10/17/18 USDC Colorado Page 1 of 41

IN THE UNITED STATES DISTRICT COURT

Civil Action No. 15-cv-01389-WYD-CBS

JEANNE STROUP and

UNITED AIRLINES, INC.,

THIS MATTER came before the Court on an evidentiary hearing on August 14

Thus, Defendant United Airlines, Inc. [“United”] filed a response to Plaintiffs’

(ECF No. 213), and September 4, 2018 (ECF No. 216).

by $122,227 based on failure to mitigate, resulting in a back pay award of $195,552.

prejudgment and post-judgment interest.

Damages, in addition to interest, were as follows:

Liquidated damages: $214,479 $195,552

damages and other issues raised in the briefing.1

A. Liquidated Damages/Requests for Offsets to Back Pay

to be willful, an award of liquidated damages is mandatory. Greene v. Safeway Stores,

awards before the Court issues an order on liquidated damages.

Dr. Kaempfer Testimony 437:3-438:20.)

for such an offset is rejected.

LLC, No. 11-cv-02557-CMA-CBS, 2013 WL 6458735, at *5 n. 10 (D. Colo. Dec. 9,

Plaintiffs or whether it contributes to the plan in part. It is undisputed, however, that

Employee Benefits at United, ¶ 6, Ex. A to Def.’s Decl. Related to Pls.’ Pension

pension that United turned over to the PBGC. (Id. ¶ 5.)

plan’s payments to the PBGC.” (Id. ¶ 11.)

. . . [United] currently makes no payments towards the benefits that PBGC

were defrayed by PBGC’s recovery from the [United] bankruptcy.” (Id.)

with the remedial purposes of the ADEA.

awards” and finding that Sandia “strongly supports” this).5

an award of liquidated damages in that amount.

1. Whether to Require Reinstatement or to Award Front Pay

I next address whether Plaintiffs should be reinstated or whether an award of

remedies. . . .” Carter, 36 F.3d at 957.

extreme hostility that, as a practical matter, a productive and amiable working

damages in lieu of reinstatement furthers the remedial purpose of the ADEA by

150:16-151:14, 201:10-12, 268:20-270:25). Plaintiffs’ counsel represented that

Testimony 55:3-13, 76:16-77:4, 105:6:22, 117:12-18, 122:7-123:22, 226:25-227:4,

Testimony 52:1-7, 52:21-54:10, 195:2-21, 210:12-19, 238:4-16, 257:6-15; Kyle

Testimony 85:16-20; see also Kyle Testimony 567:7-14—progressive discipline applies

consideration of their exemplary records at United. (Id., Stroup Testimony 57:13-59:9,

63:16-64:12, 65:3-6; Lee Testimony 828:18-829:4; see also Dean Whittaker

[“Whittaker”] Testimony 851:22-852:3.) Kyle, Plaintiffs’ union representative, was

“surprised and disappointed” at United’s termination decision. (Id., Kyle Testimony

responded when Stroup requested a written explanation of the termination decision.

[“Bagwe”] review of Plaintiffs’ performance on the flight he observed was supposed to

throughout the process. (Id. 830:306.)

Testimony 162:24-163:20, 191:11-194:2, 358:4-365:9: Lee Testimony 361:22-363:2,

364:11-365:6, 745:22-748:13, 777:2-792:18, 831:3-10), questioned United witnesses

1030:4-1034:6), and discussed this in United’s closing argument. (Id. 1213:18-23,

173:25-174:19, 175:16-176:5, 179:1-180:6; Dodge Testimony 854:16-856:3; Whittaker

Testimony 966:15-22, 1016:16-21, 1019:11-1020:6; Closing Argument 1211:5-1212:5,

assert safety or untruthfulness as a basis of discipline (id., Stroup Testimony 81:5-10;

Lee Testimony 314:4-18, 325:14-25, 828:2-17; Dodge Testimony 849:8-10; Whittaker

828:2-5; Kyle Testimony: 547:17-25; 587:13-24.)7

extremely offensive to Plaintiffs. (Trial Tr., Stroup Testimony 103:15-104:2; Lee

Bagwe. (Id. 155:23-156:1.)

would be through the roof”. (Id. 191:19-23.) He further testified:

with an unsupervised workforce.” (Id. 49:13-16.)

irreparably damaged by animosity caused by the lawsuit”).