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JIRUS v. CITY OF BERWYN

April 26, 1989

ROBERT JIRUS, Plaintiff,
v.
CITY OF BERWYN, Defendant


James B. Moran, United States District Judge.


The opinion of the court was delivered by: MORAN

JAMES B. MORAN, UNITED STATES DISTRICT JUDGE.

 This case is before the court on motions in limine submitted by defendant and intervenor. Defendant having conceded liability, the only issues remaining before this court concern damages and reinstatement.

 FACTS

 Plaintiff Robert Jirus was employed by the fire department of defendant, City of Berwyn (City). Pursuant to its ordinance mandating compulsory retirement, on July 3, 1986 (one day prior to his 60th birthday), the City involuntarily terminated plaintiff.

 Plaintiff filed suit charging a violation under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634 (1982), and the City conceded liability. The case was originally assigned to Judge Getzendanner who, on March 31, 1987, entered a judgment order purportedly agreed to by all parties. Plaintiff was reinstated pursuant to that order.

 There was disagreement, however, over whether Jirus had assented to certain other terms of the settlement agreement, namely whether the pension benefits he received while involuntarily retired should be subtracted from his backpay award. Judge Getzendanner submitted the dispute to be heard before a magistrate.

 On February 9, 1988, this court vacated the order of March 31, 1987, pursuant to the recommendation of Magistrate Bucklo, and held that plaintiff lacked sufficient knowledge of the terms of the settlement agreement prior to accepting it. Also, the motion to intervene of the Board of Trustees of Firemen's Pension Fund of Berwyn, Illinois (pension fund), was granted.

 This court requested both the City and the pension fund to file motions in limine on the question of damages. Plaintiff is entitled to backpay and, because the discrimination was willful, plaintiff is entitled to liquidated damages pursuant to 29 U.S.C. § 626(b) (1982). See Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 83 L. Ed. 2d 523, 105 S. Ct. 613 (1985). The issues which remain are whether the pension benefits received by plaintiff should be recouped by the pension fund or be subject to offset from the backpay award, and whether plaintiff is entitled to prejudgment interest. Also before this court is the City's motion for a declaration of rights pursuant to 28 U.S.C. § 2201 (1982), requesting an order allowing it to discharge plaintiff.

 DISCUSSION

 I. Pension Benefits

 The parties have stipulated that plaintiff received $ 18,000 from the pension fund during the period of his involuntary retirement, and the fund argues for recoupment of those benefits. The City, however, contends that the benefits are subject to setoff from the backpay award.

 The primary goal in assessing compensatory damages in an ADEA action is to restore the plaintiff to the economic state he would have been in but for the discrimination. Kossman v. Calumet County, 800 F.2d 697, 703 (7th Cir. 1986), cert. denied, 479 U.S. 1088, 94 L. Ed. 2d 151, 107 S. Ct. 1294 (1987), overruled on other grounds, Coston v. Plitt Theatres, 860 F.2d 834 (7th Cir. 1988). A slight departure from this objective occurs where cases involve collateral source benefits. Collateral benefits are paid from a source independent of the employer. This payment does not discharge the employer's obligation but, rather, serves independent social policies such as financial assistance during retirement or while seeking new employment. See National Labor Relations Board v. Gullett Gin, 340 U.S. 361, 364, 95 L. Ed. 337, 71 S. Ct. 337 (1951) (unemployment benefits are a collateral source benefit).

 It is widely held that collateral benefits received by a victim of discrimination, such as employment insurance, need not be deducted from a successful plaintiff's backpay award. Hunter v. Allis-Chalmers Corp., 797 F.2d 1417, 1429 (7th Cir. 1986). The policy behind this doctrine is that it is better for the victim to receive a windfall than the perpetrator of discrimination. Equal Employment Opportunity Commission v. O'Grady, 857 F.2d 383, 389 (7th Cir. 1988). In essence, the plaintiff enjoys "the rewards . . . both of working and not working." Id.

 The City of Berwyn Pension Fund is a state agency established pursuant to Ill.Rev.Stat. ch. 108 1/2, para. 4-117 (1987). As such, the Fund is independent from the City of Berwyn and the collateral benefits doctrine would seem to prohibit offset. In similar cases, pension benefits have been treated as collateral source benefits. O'Grady, 857 F.2d at 391. However, the decision whether to offset or allow recoupment is left to the sound discretion of the district court. Orzel v. City of Wauwatosa Fire Dept., 697 F.2d 743, 756 (7th Cir. 1983), cert. denied, 464 U.S. 992, 78 L. Ed. 2d 680, 104 S. Ct. 484 (1983).

 In a typical collateral benefits case, a windfall is conferred on the plaintiff because there is a missing claimant. In fact, those cases disallowing offset often make reference to the absence of the party entitled to the benefits. See, e.g., O'Grady, 857 F.2d at 391 ("claimants should be required to return to the Retirement Board the pension benefits they received"); see also Hunter, 797 F.2d at 1430 ("Hunter should be required upon collection of the judgment, to reimburse the welfare program").

 This court need not confer such a windfall because the missing claimant, the pension fund, has intervened to recoup the benefits paid. The pension fund is rightfully entitled to those funds. Were it to have stayed out of the instant case and instituted an action against plaintiff, it most certainly would have prevailed in recovering these benefits. There should be no penalty for ...


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