Know Your Rights: Front-Pay As Remedy In Job Divorces

Know Your Rights
Front-Pay As Remedy In Job Divorces


As I have emphasized in this column, lawsuits fundamentally involve two elements: liability and damages. Once a defendant is deemed liable because it violated the law, the question then becomes what remedy is available and what monetary damages can be recovered.

James A. Brown is an attorney based in Manhattan. He can be reached at (212) 366-4600 and at jabrownlaw@aol.com.

In employment discrimination litigation, monetary damages include recovery for back-pay and emotional distress. While punitive damages are also generally available, they may not be recovered from public employers such as the City of New York.

Another lesser-known (and rarely awarded) remedy is "front-pay." A recent Federal court decision, Picinich v. United Parcel Service, helps explain the concept of front-pay and also underscores a plaintiff's duty to mitigate damages, a topic previously addressed in "It's Your Duty to Mitigate," Nov. 14, 2003.

Irreparable Damage

While back-pay measures monetary damages from the wrongful termination to when the court issues its judgment, front-pay represents wages (and other benefits) a plaintiff would earn if he or she continued working for the defendant after judgment was rendered. Front-pay is awarded only when a court declines to order reinstatement because the employment relationship is "irreparably damaged." Bitter litigation, often lasting many years, has been deemed a basis for finding such irreparable damage. In such situations, front-pay can substitute for reinstatement as a way to appropriately compensate a plaintiff for his or her future harm.

If a court determines that restoring the employment relationship between the parties is impossible (or at least impractical), front-pay will be awarded, but only if plaintiff has "no reasonable prospect of obtaining comparable alternative employment" in the future.

This is where the concept of "mitigation of damages" comes into play. Front-pay requires a finding that plaintiff made diligent efforts to find other employment after his or her employment with defendant terminated. In making this judgment, courts consider factors not limited to the job market; they also consider the plaintiff's skill level and how his or her age might affect any job search.

No Windfalls

Clearly, lump-sum awards of front-pay can create a potential windfall for a plaintiff who subsequently finds other employment. Accordingly, courts rarely require an employer to award front-pay. Such awards are also usually capped at the age at which the plaintiff is qualified to receive full retirement benefits.

In Picinich, the plaintiff commenced his action claiming that he was denied a reasonable accommodation and was later wrongfully discharged in violation of the Americans with Disabilities Act and the New York State Human Rights Law.

At trial, the plaintiff won his claims and was awarded partial back-pay and compensatory damages for emotional distress. However, the plaintiff was not reinstated by the trial judge and was not awarded front-pay. The trial court denied reinstatement based on a finding that "trust" could not be re-established between plaintiff and his former coworkers.

Remand Ordered

On appeal, the Second Circuit Court of Appeals upheld the favorable aspects of the lower court's ruling and reversed the lower court's denial of full back-pay and front-pay. Ultimately, the Second Circuit remanded to the trial court to further consider whether the plaintiff sufficiently mitigated his damages to be eligible to collect full back-pay as well as front-pay.

On remand, the trial court awarded the plaintiff over one million dollars in front-pay. The court acknowledged that defendants had the burden of proof with regard to mitigation of damages. In other words, defendants had to prove that plaintiff failed to diligently look for other employment (while plaintiff had no duty to volunteer what efforts he made). Thus, it was incumbent upon defendants to demonstrate that other suitable employment existed and that plaintiff failed to take advantage of such opportunities. The court concluded that defendants failed to ask plaintiff about his job search after he quit a job he took after being fired by defendants.

Having previously found that reinstatement was inappropriate, the trial court fashioned its front-pay award based on the compensation plaintiff received before he was wrongfully terminated. For plaintiff, this meant a front-pay award including wages, holiday bonuses, incentive plan payments and health insurance. The court's sizable front-pay award should remind all plaintiffs who allege employment discrimination not to overlook this valuable remedy.