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EEOC v. COLGATE-PALMOLIVE CO.

June 26, 1985

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, against COLGATE-PALMOLIVE COMPANY, Defendant


The opinion of the court was delivered by: SWEET

SWEET, D. J.

After a fourteen day trial on allegations of age discrimination in promotions in violation of 29 U.S.C. ยง 621 et seq. ("ADEA"), on March 26, 1985 a jury returned a Special Verdict Form, annexed hereto as an Appendix (the "Verdict"), for the plaintiff Equal Employment Opportunity Commission ("EEOC"), with respect to certain allegations of two claimants and in favor of defendant Colgate-Palmolive Company ("Colgate") with respect to certain allegations of four others. As to certain allegations of two claimants, the jury was unable to reach a verdict. Left for resolution by the court were the calculation of damages with respect to the claims on which EEOC prevailed, appropriate injunctive relief on that claim, if any, the determination of EEOC's claim of discriminatory hiring practices by Colgate and any resultant injunctive relief, and Colgate's motion to set aside the Verdict and to dismiss the unresolved claims.

The EEOC complaint alleging discriminatory hiring practices will be dismissed. An injunction will be issued to prohibit future age discrimination in promotions in the Northeastern Region of Colgate's Personal Care Products Division, the Colgate motion for a directed verdict is denied with respect to Short's claim and is granted with respect to Branscomb's claim, and damages for the claims of Burke and Gallup will be awarded as set forth below. The facts and conclusions upon which these determinations have been reached follow.

 According to the Verdict, Colgate violated the ADEA (a) by not making William Burke ("Burke") the District Manager of the Philadelphia District in January 1979, and (b) by not promoting Raymond Gallup ("Gallup") to three Key Account Manager positions, to wit: (i) in the Philadelphia District in January 1979 - the position into which Colgate laterally transferred Randy Ward, (ii) in the Philadelphia District in January 1981 - the promotion Sandy Russell received, and (iii) in the New York District in January 1981 - the position Peter Marchioni received. Damages for these violations are calculated by measuring the difference between the amounts of salary and bonus Burke and Gallup would have earned in these positions and the amounts of salary and bonus they actually earned as Area Manager and Unit Manager, respectively. Montoya v. Anderson, 511 F. Supp. 523 (D.Colo. 1981); Berke v. Ohio Department of Public Welfare, 30 FEP Cases 387 (S.D. Ohio 1978), aff'd, 628 F.2d 980 (8th Cir. 1980).

 Since Burke and Gallup would have been paid pursuant to Colgate's Salary and Bonus Programs had they received the jobs the jury found they did not receive because of their ages, the appropriate differences in salary and bonus compensation are based on these Programs. Koyen v. Consolidated Edison Co., 560 F. Supp. 1161 (S.D.N.Y. 1983). Thus, the relevant consideration is the amount the discriminates would have received in the positions, not the amounts others received in those positions.

 In determining the specific merit salary increase for an individual employee, the following factors are considered, according to the unrebutted affidavit of Robert Burg sworn to April 23, 1985 (the "Burg affidavit"): (i) The company's merit increase budget, which is the maximum aggregate percentage merit increase allowed for Colgate's total employee complement for a given year, (ii) the employee's current position in the range of salaries for his salary grade, and (iii) the employee's performance evaluation for the preceding year. These factors determine the percentage increase a particular employee gets and the time of that increase.

 In addition, Colgate gives a percentage salary increase to employees who receive promotions based on such factors as the date of the employee's last merit increase, the current and probable future performance, the new base salary in relation to peers, subordinates and superiors, and the position in the salary range for the new job after promotion. In addition to its Salary Program, Colgate has a Bonus Compensation Plan, which is designed to reward sales personnel for attaining quota. Colgate computes each employee's bonus quarterly, based on the Region's performance. Thus, the bonus is identical for all employees in the Region in each salary grade.

 Had Burke became Philadelphia District Manager on January 1, 1979, rather than Area Manager, he would have earned an additional $11,488 in base salary and an additional $24,172 in bonus compensation, for a total of $35,660, through the end of calendar year 1984, assuming a "satisfactory" performance rating.

 EEOC had challenged Colgate's calculations, not as to accuracy, but as to method. While Colgate's calculation used average figures, EEOC proposed an earnings figure roughly midway between the average and the amounts actually received by Stephen Frenda ("Frenda") who in fact was promoted to become Philadelphia District Manager. Aside from citing the general proposition that uncertainties in this area be resolved against the discriminating employer, Cohen v. West Haven Bd. of Police Commissioners, 638 F.2d 496, 502 (2d Cir. 1980), EEOC v. Enterprise Association Steamfitters, 542 F.2d 579, 587 (2d Cir. 1976), EEOC offers no reasoned basis for using its above-average figure. Obviously no empirical evidence was offered which could be said to demonstrate that Burke's performance would have equalled Frenda's. Consequently, the average figures used by Colgate will be adopted.

 Since there will be no injunction requiring Colgate to promote Burke at the expense of an existing District Manager, Patterson v. American Tobacco Co., 535 F.2d 257, 268-69 (4th Cir.). cert. denied, 429 U.S. 920, 50 L. Ed. 2d 286, 97 S. Ct. 314, 97 S. Ct. 315 (1976), it is appropriate to consider what EEOC refers to as "front pay," that is, the continuation of pay at a determined level in the event the reinstatement is not possible. See, Whittlesey v. Union Carbide Corp., 742 F.2d 724, 727 (2d Cir. 1984). In Whitlesey, in lieu of reinstatement resulting from an unlawful compulsory retirement, the discriminatee was entitled to continued receipt of his pay as if reinstatement had occurred. Similarly, in order to be compensated fully for the discrimination, Burke is entitled not only to damages up to the entry of judgment, but also to front pay until found qualified for promotion as district manager or equivalent position, or disqualified for reasons other than age. Front pay will equal the differential between the actual salary earned and the salary that would have been earned with the promotion.

 The same considerations apply to the calculations applicable to the failure of Colgate to promote Gallup to Key Account Manager in the Philadelphia District on January 1, 1979. The Colgate calculations will be accepted, and front pay as defined above required until Gallup is promoted or disqualified for age-neutral reasons.

 In Gallup's case, an additional issue was raised by a post-trial submission which by affidavit presented evidence that Gallup in the summer of 1981 refused to move out of his assigned geographical district because of personal and family reasons. When asked upon direct examination in EEOC's rebuttal case if he ever made a statement refusing to relocate in the summer of 1981, his unequivocal, monosyllable answer was, "no". There was no attack on his testimony. The conflict between the affidavit of Paul Minning and the trial testimony of Gallup must be resolved in the latter's favor. There is consequently no 1981 cut-off. Gallup is entitled to a $34,641.00 recovery representing $15,846 in base pay and $18,795.00 in bonus compensation through December 31, 1984, as well as "front pay.".

 The Verdict found Colgate's action to be wilful and the back pay awards are thus doubled. The front pay awards, however, are not subject to doubling, since the current inability to promote Burke and Gallup is not a consequence of established wilful discrimination but is a result of there being no vacancies in the relevant job levels.

 In addition, EEOC seeks prejudgment interest, noting candidly that there is strong authority against its position. Even assuming that there is discretion to award prejudgment interest, contrary to those authorities which hold that prejudgment interest cannot be awarded in the absence of statutory authority, see Hill v. J. C. Penney Co., Inc., 688 F.2d 370 (5th Cir. 1982); Barcellona v. Tiffany English Pub, Inc., 597 F.2d 464, 469 (5th Cir. 1979), it will not be awarded where Congress has made the discriminatee whole through the award of liquidated damages. See O'Donnell v. Georgia Osteopathic Hospital, Inc., 748 F.2d 1543, 1552 (11th Cir. 1984); Rose v. National Cash Register Corp., 703 F.2d 225, 230 (6th Cir.), cert. denied, 464 U.S. 939, 104 S.Ct 352, 78 L. Ed. 2d 317 (1983); Kolb v. Goldring, Inc., 694 F.2d 869, 875 (1st Cir. 1982); ...


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