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E.E.O.C. v. UNITED AIR LINES

December 14, 1983

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, PLAINTIFF,
v.
UNITED AIR LINES, INC., DEFENDANT.



The opinion of the court was delivered by: Bua, District Judge.

Memorandum Order

Plaintiff brought the instant case claiming that the parties it represented, Karlo McArthur and Zolton Sotonyi, had been discriminated against on the basis of age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. On February 4, 1983, the Court entered summary judgment against defendant on the issue of whether defendant's mandatory retirement policy violated the ADEA. On August 24, 1983, trial was commenced before a jury to determine whether defendant's policies were a wilful violation of the ADEA and to assess the amount of damages incurred by the individual defendants. The jury found that defendant had wilfully violated the ADEA and assessed total damages in favor of McArthur in the amount of $67,523.42 and in favor of Sotonyi in the amount of $288,694.38. On August 25, 1983, judgment was entered on the jury's verdict.

On September 2, 1983, defendant filed a Motion to Alter the Judgment seeking reduction of the awards by the amounts received by the individual claimants in the form of pension and unemployment benefits. In addition, on October 28, 1983, plaintiff made a Motion for the Entry of Judgment on Equitable Issues requesting that United be required to establish a new retirement date for Mr. Sotonyi of August 25, 1983. The Court will address these issues individually.

I. The Motion to Alter the Judgment.

Plaintiff does not contest the reduction of the awards by the amount of pension benefits received. What it does dispute, however, is the proposed reduction of the awards by the unemployment compensation received as well as defendant's proposed method of calculating the liquidated damages.

Under the ADEA, the trial court is given broad discretion on the question of the granting of legal or equitable relief necessary to effectuate the purposes of the Act. 29 U.S.C. § 626(b). Consistent therewith, the decision of whether to offset unemployment compensation from an award of back pay is a matter within the court's discretion. Orzel v. Wauwatosa Fire Department, 697 F.2d 743 (7th Cir. 1983); Syvack v. Milwaukee Boiler Mfg. Co., 665 F.2d 149 (7th Cir. 1981); Naton v. Bank of California, 649 F.2d 691 (9th Cir. 1981); EEOC v. Sandia Corp., 639 F.2d 600 (10th Cir. 1980).

The make-whole standard of relief is the touchstone for district courts in fashioning both legal and equitable relief under the ADEA. As under other anti-discrimination statutes, victims of age discrimination are entitled to be restored to the economic position they would have occupied but for the intervening unlawful action of the employer. Rodriguez v. Taylor, 569 F.2d 1231 (3rd Cir. 1977).

In the case at bar, both Sotonyi and McArthur were employed by defendant in California at the time of their retirement. In California, individuals who receive over-payments of unemployment compensation benefits are liable to repay the amount overpaid unless all of the following conditions exist:

    (1) The overpayment was not due to fraud,
  misrepresentation, or wilful nondisclosure by the
  person.
    (2) The overpayment was received without fault
  by the person.
    (3) The recovery of the overpayment would be
  against equity and good conscience.

In the case at bar, if the claimants were not required to repay, they would be the beneficiaries of a slight windfall which would result in their being made a bit more than whole. However, it is very likely that the claimants will be required to repay the unemployment benefits which have been received as fewer than all of the conditions obviating repayment appear to be met. (While conditions (1) and (2) are met, it appears that requirement (3) is not, as recovery of the overpayments most likely would not be against equity and good conscience, especially in light of the instant proceedings.) Allowing claimants to recover as part of their back-pay award the amounts received in unemployment compensation would merely result in their being made whole. The Court therefore holds that the amount awarded claimants in back pay should be reduced by the amount each has received in pension benefits only, and not by the amount of unemployment compensation they have received. See, Kauffman v. Sidereal Corp., 695 F.2d 343, 346 (9th Cir. 1982).

The Court also holds that the amount of liquidated damages should be calculated before the amount of the back pay award is reduced by the amount of the pension benefits received. In the present case, both Mr. McArthur and Mr. Sotonyi were awarded full backpay in the amounts they would have earned had they not retired. In addition, each was awarded the amount of money he had expended in insurance premiums since ...


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