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