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BONURA v. CHASE MANHATTAN BANK

February 19, 1986

FRANK C. BONURA, JOSEPH J. GUARASCIO, BERNARD LEFKOWITZ and MARY E. MOUSSEAU as Executrix of the Estate of JOSEPH E. MOUSSEAU, Plaintiffs, against THE CHASE MANHATTAN BANK, N.A., Defendant


The opinion of the court was delivered by: WARD

WARD, District Judge.

This is an action brought pursuant to the Age Discrimination in Employment Act of 1967 (the "ADEA" or the "Act") as amended, 29 U.S.C. § 621 et seq. At the conclusion of the trial on liability, the jury found that defendant, Chase Manhattan Bank N.A. ("Chase"), had willfully discriminated against each of the four plaintiffs on the basis of age, in violation of the Act. In a subsequent decision dated August 16, 1984, the Court ruled that plaintiff Lefkowitz had not presented sufficient evidence to warrant an equitable tolling of the 300-day time limit for filing a charge of age discrimination with the Equal Employment Opportunity Commission ("EEOC"). Accordingly, the Court dismissed Lefkowitz's claim for failure to file a timely age discrimination charge with the EEOC as required under 29 U.S.C. § 626(d)(2). With respect to the remaining three plaintiffs, the Court denied Chase's motion for judgment notwithstanding the verdict and directed the parties to complete discovery and submit a joint pretrial order on the issue of damages.

Following submission of the joint pretrial order on December 5, 1984 and a supplemental pretrial order dated January 7, 1985, the Court held a bench trial on the question of damages. At the conclusion of the trial, the Court apprised the parties of its tentative conclusions regarding certain of the issues raised in the proceeding. Based on these tentative conclusions, the parties conferred on the damage calculations that would follow, and made a final joint submission to the Court setting forth damage calculations for each remaining plaintiff. At the same time, plaintiffs made a separate submission setting forth alternative damage calculations based on certain of plaintiffs' proposed conclusions that had not tentatively been accepted by the Court.

 The following constitute the Court's findings of fact and conclusions of law pursuant to Rule 52(a), Fed. R. Civ. P., on the issue of damages:

 The Court adopts the stipulated facts set forth in the parties' joint pretrial order, as amended and augmented by the supplemental pretrial order dated January 7, 1985. As will be elaborated below, the Court further adopts the proposed findings and calculations found in the parties' joint submission on damages, except with respect to the proposed finding on prejudgment interest. Plaintiffs' separate submission on damages is rejected.

 I. Back Pay

 Having prevailed at trial on their claims that Chase terminated them on the basis of age in violation of the Act, plaintiffs can be awarded reinstatement . . ., with or without back pay . . ., or any other equitable relief as the Court deems appropriate." 42 U.S.C. § 2000e-5(g). In calculating back pay, the Court may take into account any salary increases that plaintiffs could reasonably have expected to receive had they not been terminated for discriminatory reasons. See Koyen v. Consolidated Edison Co., 560 F. Supp. 1161, 1164 (S.D.N.Y. 1983). In addition to straight wages or salary, back pay awarded under the Act may include those benefits that would have accrued to plaintiffs in the course of their employment by defendant if they had not been discriminatorily discharged. Such benefits include, but are not limited to, profit sharing, vacation pay, medical benefits and pension benefits. See Meyers v. I.T.T. Diversified Credit Corp., 527 F. Supp. 1064, 1070 (E.D. Mo. 1981). At the same time, any back-pay award must be reduced by plaintiffs' interim earnings "or amounts earnable with reasonable diligence." 42 U.S.C. § 2000e-5(g).

 A. Length of Back-Pay Period

 The Court rejects Chase's argument that its liability to plaintiffs ended or was otherwise diminished when Chase sold its factoring department, the Credit Services Division ("CSD"), to the Commercial Credit Company ("CCC") effective June 30, 1983. It is true that prevailing plaintiffs under the Act may not recover damages for the period beyond which they would have been terminated for a nondiscriminatory reason. Gibson v. Mohawk Rubber Co. 695 F.2d 1093, 1097 (8th Cir. 1982). An award of lost wages may be limited, for example, to exclude the period after which the division in which the prevailing plaintiff worked was entirely eliminated. E.g., Hill v. Spiegel, Inc., 708 F.2d 233, 238 (6th Cir. 1983). The same result would not obtain, however, if the evidence showed that the plaintiff would have continued to hold a position within the defendant's enterprise, even if it is likely that he or she would have been transferred to another department or division of that organization. E.g., Gibson, supra, 695 F.2d at 1097-98. In this case, the evidence strongly suggests that plaintiffs would have retained their positions in the CSD even after it had been acquired by CCC, or else that Chase would have made reasonable efforts to relocate them in another of its own divisions.

 At the trial on damages, David Goldberg, plaintiffs' former supervisor in the CSD, testified that he would not have recommended to CCC that it retain plaintiffs in the CSD after it acquired the division. It is undisputed, however, that Goldberg recommended to CCC that it continue to employ one hundred twenty-five of the one hundred eighty employees in Chase's CSD, including plaintiffs' successors, and that all were continued. Furthermore, Chase had sent a memorandum to all CSD employees advising them of the contemplated sale of the division. In the memorandum, which was admitted into evidence at trial, Chase assured its employees that if they did not remain with the CSD through the change in ownership, Chase would attempt to relocate them internally.

 In view of the foregoing, the Court rejects Goldberg's testimony and concludes that, but for the discriminatory animus of Chase supervisory personnel, which the jury found at the liability stage of this case to have been the true cause of plaintiffs' discharge, plaintiffs would have remained in the CSD or would have been relocated within the Chase organization after sale of the factoring division to CCC. Defendant has failed to demonstrate that plaintiffs would have been terminated solely as a consequence of the CSD sale, and therefore its liability to plaintiffs for their discriminatory discharge in 1981 does not end with the sale of the factoring division in June of 1983.

 B. Mitigation of Damages

 The Court also rejects defendant's argument that its liability to plaintiff Bonura is diminished or eliminated entirely by Bonura's failure to mitigate his damages. An ADEA plaintiff has a duty to mitigate damages by using reasonable care and diligence in seeking suitable alternative employment. Jackson v. Shell Oil Co., 702 F.2d 197, 201 (9th Cir. 1983). The burden is on the defendant, however, to prove that plaintiff has failed in his duty to mitigate. Coleman v. City of Omaha, 714 F.2d 804, 808 (8th Cir. 1983). Defendant's burden under the law of this circuit is extremely high. As Judge Weinfeld explained in the context of an action brought under the Civil Rights Act of 1964,

 defendant's burden of proving a lack of diligence is not satisfied merely by a showing that there were further actions that plaintiff could have taken in pursuit of employment. Rather, defendant must show that the course of conduct plaintiff actually followed was so deficient as to constitute an unreasonable failure to seek employment.

 EEOC v. Kallir, Philips, Ross, Inc., 420 F. Supp. 919, 925 (S.D.N.Y. 1976), aff'd, 559 F.2d 1203 (2d Cir.), cert. denied, 434 U.S. 920, 54 L. Ed. 2d 277, 98 S. Ct. 395 (1977).

 Applying the above standard to plaintiff Bonura's conduct following his termination by Chase, the Court is satisfied that plaintiff met his obligation to make diligent efforts to obtain suitable alternative employment. Bonura testified at trial that, upon learning in late July 1981 that he was about to be discharged by Chase, he began contacting individuals in the factoring industry to obtain leads on positions comparable to the high-level position he had held in Chase's factoring division. Bonura stated that the initial job search involved numerous telephone calls, luncheon appointments and meetings for drinks.

 Having heard of no openings in factoring at a salary comparable to what he had been receiving at Chase, Bonura accepted a position at Gotham Bank, where he began working in October of 1981. Gotham Bank had no factoring division, however. Bonura's responsibilities at Gotham involved principally garnering new deposits and loans. In December of 1981, Bonura also formed ADM Consultants, Inc. ("ADM" or "ADM Consultants"). As the sole employee of that corporation, Bonura testified at trial, he performed on a commission basis essentially the same services he had rendered in the factoring division at Chase. Bonura later formed a second company, Business Capital Corporation ("BCC)", to manage or monitor accounts-receivable portfolios for companies and banks.

 Bonura remained at Gotham Bank only until the beginning of April 1982. He testified at trial that he left Gotham Bank pursuant to "a mutual understanding." (Tr. 72) Thereafter, Bonura again sought leads on positions available in the factoring industry. Bonura's efforts to obtain suitable employment following his departure from Gotham Bank are documented by numerous affidavits and letters admitted into evidence at trial. Again, however, he located no factoring positions comparable in responsibility and compensation to the post he had left at Chase. As of the date of trial on damages, Bonura had not found employment within the factoring industry. To the best of the Court's knowledge, however, he continues to provide consulting services through ADM and BCC, the two companies he formed after his departure from Chase.

 On the facts set forth above, there is ittle question in the Court's mind that plaintiff Bonura fulfilled his duty to exercise reasonable care and diligence in attempting to find suitable alternative employment. There are, undoubtedly, avenues leading to employment opportunities that Bonura did not pursue. Nevertheless, Bonura displayed persistence and resourcefulness in seeking comparable employment within the factoring industry, while at the same time expending personal energy and capital to develop his own consulting businesses. Chase has not demonstrated that Bonura's conduct "was so deficient as to constitute an unreasonable failure to seek employment," Kallir, supra, 420 F. Supp. at 925. Therefore, the damages Bonura may recover for Chase's wrongful conduct will not belimited on that account.

 C. Lost Salary

 Plaintiffs are entitled to awards of lost salary for the period beginning December 31, 1981 (the day all three plaintiffs were taken off Chase's payroll) and ending February 9, 1984 for plaintiff Mousseau (the date of his death) and December 31, 1984 for plaintiffs Bonura and Guarascio (the date stipulated to by the parties as the commencement date for the trial on damages). The Court concludes further that, but for Chase's discriminatory conduct, plaintiffs would have received salary increases during those periods consistent with the pattern of salary increases they had received during the last two years of their employment at Chase. The parties therefore have calculated lost wages based on the historic pattern of salary increases for each respective plaintiff beginning September 1, 1979, and have projected these increases through September 1, 1983. Based on these calculations, plaintiffs are entitled to lost salaries in the following amounts:

 Bonura 232,034.00

 Guarascio 205,207.00

 Mousseau 111,349.00

 D. Lost Profit Sharing

 In addition to lost salary, plaintiffs are entitled to lost profit sharing under Chase's Thrift Incentive Plan ("TIP") for the same relevant periods. TIP awards are calculated as a percentage of salary that Chase fixes after the close of each fiscal year. Based on the percentage Chase has used for the years 1981 through 1984, plaintiffs are entitled to lost TIP awards in the following amounts:

 Bonura 27,855.00

 Guarascio 24,630.00

 Mousseau 14,325.00

 E. Lost Pension Benefits

 Plaintiffs Bonura and Guarascio are also entitled to recover lost pension benefits assuming employment at Chase through December 31, 1984. *fn1" Having considered various forms of pension reimbursement, Bonura and Guarascio elect to receive lost pension benefits in the form of a lump sum equal to the cost of a joint and 100% survivor annuity ...


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