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REILLY v. CISNEROS

August 10, 1993

WILLIAM REILLY, Plaintiff,
v.
HENRY G. CISNEROS, Secretary, United States Department of Housing and Urban Development, Defendant. 1



The opinion of the court was delivered by: JOHN T. ELFVIN

 Plaintiff Reilly brought this action pursuant to the Rehabilitation Act of 1973 ("the Rehab Act"), 29 U.S.C. § 791, alleging that the United States Department of Housing and Urban Development ("HUD") had unlawfully discharged him from his position as Area Counsel without proper accommodation of his handicap -- namely, alcoholism. After a non-jury trial before this Court, liability of HUD was found to exist. See Memorandum and Order dated August 29, 1991. Post-trial briefs were submitted by the parties on the issue of damages and oral argument was heard thereupon June 5, 1992. By Memorandum and Order dated August 4, 1992, this Court found that an evidentiary hearing would be necessary in order to resolve such issue. The hearing was conducted December 2, 1992 and at nine sessions thereafter. The parties submitted proposed findings of fact and conclusions of law and oral argument was heard May 14, 1993.

 Reilly was discharged from HUD January 20, 1989. He started his search for other employment in the Spring or Summer of 1989 by making informal inquiries as to job opportunities and letting it be known that he was available for work. During such period Reilly was still recovering from his alcoholism and assisting the woman with whom he was living in her recovery from back surgery.

 In mid-1989 Reilly learned of an opening for the General Counsel position at the New York State Housing Finance Agency, applied for it, was interviewed in New York City but was not hired. In early 1990 he was advised of an opening at the United States Small Business Administration ("the SBA"). He wrote to the SBA February 12th, had two interviews for a position and was hired March 12th as an Attorney Advisor for the SBA's disaster relief operation. He was sent to the Caribbean to work in the Hurricane Hugo relief effort. The SBA position was a temporary one and, after his tenure had been extended numerous times, he was terminated March 21, 1992. During this temporary employment Reilly had applied unsuccessfully for, a permanent position with the SBA. In October of 1991 and subsequently, Reilly had sent out to local firms a number of resumes seeking employment.

 In March of 1992, just prior to and immediately after his discharge from the SBA, Reilly sent out resumes to a number of local law firms and development companies seeking employment. He also wrote to a number of schools seeking a teaching position. None of such inquiries resulted in a job offer. Reilly remained unemployed until November, when he again took a temporary position with the SBA as part of the latter's relief efforts following Hurricane Andrew.

 On November 10, 1992 HUD offered Reilly the position of Senior Public Housing Specialist ("Housing Specialist"). Such position had been created for Reilly and embodied the same salary and benefits as he had had as Area Counsel. Reilly interviewed for this position and obtained some material descriptive of its parameters. After a period of time and at the outset of the evidentiary hearing, he rejected such offer.

 In the present case two mitigation issues must be addressed as facets of determining damages. Firstly, it must be decided whether Reilly adequately mitigated his damages by diligently seeking substantially similar employment. Secondly, this Court must decide whether Reilly's rejection of HUD's offer to hire him as Housing Specialist was unreasonable and, therefore, a bar to his recovery of subsequent damages.

 The remedies set forth in section 706(g) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(g), apply to claims under the Rehab Act and, therefore, the case law applying and interpreting section 706(g) is pertinent here. See 29 U.S.C. § 794a(a)(1). Section 706(g) provides that "back pay" may be awarded. The United States Supreme Court has limited a district court's discretion in making such award by holding that "backpay should be denied only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy and making persons whole for injuries suffered through past discrimination." Albemarle Paper Co. v. Moody, 422 U.S. 405, 421, 45 L. Ed. 2d 280, 95 S. Ct. 2362 (1975). "Front pay" may also be awarded under section 706(g) as appropriate equitable relief where reinstatement is undesirable because of the resultant "bumping" of the present incumbent from the plaintiff's former position or because hostility between the parties would preclude an efficient work environment. See Whittlesey v. Union Carbide Corp., 742 F.2d 724, 727-728 (2d Cir. 1984) (front pay in ADEA case); Dunlap-McCuller v. Riese Organization, 980 F.2d 153, 159 (2d Cir. 1992) (Title VII). Section 706(g) also provides that "interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable." Thus this plaintiff had a duty to mitigate his damages by exercising reasonable diligence in seeking substitute employment that is substantially similar to his former employment or else risk having the amount of damages reduced by the amount that could have been earned. See Johnson v. Chapel Hill Independent School Dist., 853 F.2d 375, 383 (5th Cir. 1988). Such duty applies to both back pay and front pay awards. See Cassino v. Reichhold Chemicals, Inc., 817 F.2d 1338, 1347 (9th Cir. 1987), cert. denied, 484 U.S. 1047, 98 L. Ed. 2d 870, 108 S. Ct. 785 (1988).

 In determining whether a plaintiff has met his duty to mitigate, a court must look at whether he used reasonable diligence in his search for comparable employment and, where he has rejected an offer of employment, whether such rejection was reasonable. See E.E.O.C. v. Exxon Shipping Co., 745 F.2d 967, 978 (5th Cir. 1984). The burden is on the defendant to show that the plaintiff did not exercise reasonable diligence in seeking to mitigate damages. See Gaddy v. Abex Corp., 884 F.2d 312, 318 (7th Cir. 1989). In carrying such burden herein the defendant must show more than that there were steps towards finding comparable employment other than those Reilly took; it must "show that the course of conduct plaintiff actually followed was so deficient as to constitute an unreasonable failure to seek employment." See E.E.O. 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). In general, a plaintiff fails to mitigate adequately and therefore is entitled to neither back pay nor front pay "to the extent he fails to remain in the labor market, fails to accept substantially similar employment, fails diligently to search for alternative work, or voluntarily quits alternative employment without good reason." See N.L.R.B. v. Madison Courier, Inc., 153 U.S. App. D.C. 232, 472 F.2d 1307, 1317 (D.C. Cir. 1972) (quoting from N.L.R.B. v. Mastro Plastics Corporation, 354 F.2d 170, 174 fn.3 (2d Cir. 1965), cert. denied, 384 U.S. 972, 16 L. Ed. 2d 682, 86 S. Ct. 1862 (1966)).

 If a plaintiff rejects an offer of substantially similar employment, he loses his right to pay from and after the time of such rejection -- see Ford Motor Co. v. EEOC, 458 U.S. 219, 231-232, 73 L. Ed. 2d 721, 102 S. Ct. 3057 (1982). See Dominic v. Consolidated Edison Co. of New York, Inc., 822 F.2d 1249, 1258 (2d Cir. 1987). In order to be substantially similar to a plaintiff's former position, the new position must afford him or her virtually identical promotional opportunities, compensation, job responsibilities, working conditions and status as the former position. See Rasimas v. Michigan Dept. of Mental Health, 714 F.2d 614, 624 (6th Cir. 1983), cert. denied, 466 U.S. 950, 80 L. Ed. 2d 537, 104 S. Ct. 2151 (1984); Floca v. Homcare Health Services, Inc., 845 F.2d 108, 111 (5th Cir. 1988); Weaver v. Casa Gallardo, Inc., 922 F.2d 1515, 1527 (11th Cir. 1991). A plaintiff is not obligated, however, to accept a position that "is not consonant with his particular skills, background and experience" -- N.L.R.B. v. Madison Courier, Inc., 472 F.2d at 1320, 1321 --, "go into another line of work, accept a demotion or take a demeaning position * * *." Ford Motor Co. v. EEOC, 458 U.S. at 231.

 HUD claims that Reilly failed to mitigate adequately during certain periods of the time in which he claims entitlement to back pay. It argues that from January 20, 1989 until March 11, 1990 Reilly was unemployed and, besides word-of-mouth inquiries, did nothing to look for work. He had only two interviews during such period, one for the Housing Finance Agency position and one for the SBA position. Reilly claims that immediately after his discharge from HUD he was somewhat stymied in his search for work because of his own continuing battle with alcoholism and because of his paramour's back problems -- the latter not considered to be a handicap to Reilly for the instant purposes. He also claims that he was discouraged from looking because of his feeling that the animosity between himself and Lynch, his erstwhile immediate superior at HUD, would be known to employers and dissuade them from hiring him. Lastly he cites the HUD policy that he could not represent clients on matters before HUD for one year after his termination.

 While the burden of mitigation is not onerous and does not require success, it does require that a plaintiff show an honest, good faith effort to obtain comparable employment. See Brooks v. Woodline Motor Freight, Inc., 852 F.2d 1061, 1065 (8th Cir. 1988). A plaintiff, for example, cannot merely look through want ads -- see E.E.O.C. v. Service News Co., 898 F.2d 958, 963 (4th Cir. 1990) -- or spend an insufficient amount of time and effort looking for work -- see Payne v. Security Sav. & Loan Ass'n, F.A., 924 F.2d 109, 111 (7th Cir. 1991). A plaintiff must demonstrate that he made and is making an effort that is reasonably calculated to find comparable work. The reasonableness of a plaintiff's search for comparable employment must be assessed in light of the circumstances of the individual case. See Rasimas v. Michigan Dept. of Mental Health, 714 F.2d at 624. Reasonable diligence does not require success or depend on the plentitude of applications made. A plaintiff must show only a good faith effort.

 During 1989 Reilly claims that he relied on a word-of-mouth campaign and therefore did not send out resumes or applications for employment. Reilly claims that relying on word of mouth to search for employment is sufficient diligence to warrant back pay. He cites Marshall v. Arlene Knitwear, Inc., 454 F. Supp. 715, 731 (E.D.N.Y. 1978), aff'd in part, rev'd in part, 608 F.2d 1369 (2d Cir. 1979), wherein it was found in an age discrimination suit that a 62-year old clothing designer had adequately mitigated her damages by relying on word-of-mouth contact with her "excellent contacts" obtained as vice-president of a small trade association and by registering with a specialized employment agency. He also cites E.E.O. v. Kallir, Phillips, Ross, Inc., 420 F. Supp. at 925, wherein reasonable diligence was found in a word-of-mouth search where it had been adequately shown that such was the way employees were obtained for vacancies in pharmaceutical advertising positions. Reilly claims that likewise he "let it be known that [he] was available."

 HUD's main argument is that Reilly did not engage in a job search that was reasonably calculated to secure employment. It argues that he made only two job applications during the first year of his unemployment, made minimal efforts during his temporary employment with the SBA and that his efforts in the Fall of 1991 and Spring of 1992 were orchestrated by his counsel and, in any event, do not demonstrate good faith on Reilly's part. HUD argues that a plaintiff may not simply abandon his job search and continue to recover back pay. See Hansard v. Pepsi-Cola ...


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