that § 104(a)(2) excludes damages received "through prosecution of a legal suit or action based upon tort or tort-type rights, or through a settlement agreement entered in lieu of such prosecution." 29 C.F.R. § 1.104-1(c) (1993).
The United States Supreme Court recently interpreted § 104(a)(2) in the context of a Title VII settlement. United States v. Burke, 119 L. Ed. 2d 34, 112 S. Ct. 1867 (1992). The Burke Court found that a back pay award received in settlement of a Title VII claim is not subject to § 104(a)(2) as "damages received on account of personal injuries." 112 S. Ct. at. 1874.
The Burke Court first focused its analysis on "the nature of the claim underlying the damages award." Id at 1872. Only compensation for "tort-type" injuries are subject to exclusion under § 104(a)(2). "A 'tort' has been defined broadly as a 'civil wrong, other than breach of contract, for which the court will provide a remedy in the form of an action for damages.'" Id. at 1870. Typically, tort plaintiffs are allowed to recover for "lost wages, medical expenses, and diminished future earning capacity on account of injury [as well as] for emotional distress and pain and suffering." Id. at 1871.
Next, the Burke Court considered whether Title VIII's remedial scheme allowed for compensation for the "tort-type" injuries. The Court found that Title VII compensates only for "backpay, injunctions, and other equitable relief." 112 S. Ct. at 1873.
Title VII "focuses on 'legal injuries of an economic character'". Id. at 1873. "Thus, we cannot say that a statute such as Title VII, whose sole remedial focus is the award of backwages, redresses a tort-like personal injury within the meaning of § 104(a)(2) and the applicable regulations." Id. at 1874.
Applying the two-pronged Burke test to the ADEA, we find that the Act does not address tort-type injuries. The ADEA is part of the Fair Labor Standards Act, 29 U.S.C. § 100, et seq. and specifically incorporates the remedial provisions of the FLSA. 29 U.S.C. § 626(b). The only remedies available under the ADEA, then, are equitable relief, lost wages and benefits and, under limited circumstances, liquidated damages.
The Seventh Circuit recently considered the nature and extent of damages permitted under the ADEA, albeit not in conjunction with § 104(a)(2). Moskowitz v. Trustees of Purdue University, 5 F.3d 279, 283 (7th Cir. 1993). In Moskowitz, a professor brought a ADEA claim alleging that his employer's discriminatory actions deprived him a certain post-retirement income Professor Moskowitz could have earned, if his employer had not discriminated against him before he retired. The Court found that the ADEA's remedial provisions did not include the consequential damages sought by the plaintiff. 5 F.3d at 283.
The ADEA's damages provision must be narrowly construed and does not provide for general tort-type remedies:
If Congress wanted to grant age discrimination plaintiffs full rights to common law damages, why did it use as its remedial template the Fair Labor Standards Act? . . . If we were to break out of the FLSA framework . . . we could not reasonably stop at postretirement income. Like other forms of tortious conduct, age discrimination can cause psychological distress but the cases hold . . . that the courts are not authorized to grant such 'legal relief' to age discrimination plaintiffs. [citations omitted].