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ZERILLI v. NEW YORK CITY TRANSIT AUTH.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK


May 30, 1997

TERESA ZERILLI, Plaintiff,
v.
NEW YORK CITY TRANSIT AUTHORITY, Defendant.

The opinion of the court was delivered by: GERSHON

MEMORANDUM AND ORDER

 GERSHON, United States District Judge:

 This employment discrimination action against the New York City Transit Authority ("the TA") asserts claims under Title VII of the Civil Rights Act of 1964, §§ 701 et seq., 42 U.S.C. §§ 2000e et seq., and New York Executive Law, §§ 290 et seq. The jury returned a unanimous verdict in favor of the plaintiff, Teresa Zerilli, on two of her four claims of failure to promote because of her sex and on all four of her claims of retaliation for having engaged in the protected activity of raising claims of employment discrimination; and it awarded her $ 95,000.00 in damages for pain and suffering.

 Ms. Zerilli opted not to seek damages for backpay under her state law claims. She now seeks equitable relief, including an award of backpay, under Title VII. *fn1" Under Title VII, the Court is afforded broad discretion "to fashion the most complete relief possible for victims of discrimination." Gibson v. American Broadcasting Co., 892 F.2d 1128, 1133 (2d Cir. 1989). Accordingly, at my direction, the parties submitted extensive papers on issues of equitable relief and, on March 24, 1997 and April 1, 1997, hearings were conducted. Having fully considered the record, the following equitable relief is awarded.

 I. Backpay.

 There is a strong presumption in favor of awarding backpay to a successful Title VII plaintiff. Indeed, an award of backpay may 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); see also Los Angeles Dept. of Water & Power v. Manhart, 435 U.S. 702, 719, 55 L. Ed. 2d 657, 98 S. Ct. 1370 (1978) ("the Albemarle presumption in favor of retroactive liability can seldom be overcome").

 "Unrealistic exactitude is not required in determining backpay." Grant v. Bethlehem Steel Corp., 622 F.2d 43, 47 (2d Cir. 1980). Discretion with respect to awarding backpay should be "exercised in accordance with the 'make whole' purpose of Title VII;" "an award ordinarily ought to be based on the amount which, but for the discrimination, would have been earned, and should cover the period from when the discrimination against the individual began until when it ended." 5 L. Larson, Employment Discrimination, § 92.06 at 92-39 (2d ed. 1996). Guided by these principles, I have determined that Ms. Zerilli should be awarded backpay as described below.

 A. Salary.

 The jury found that Ms. Zerilli was impermissibly removed from the position of Acting Manager of Budget and Personnel in January 1992. This position, however, carried no higher salary than the position to which she returned, Associate Staff Analyst. Therefore, no backpay will be awarded with respect to this removal.

 Backpay will be awarded for two positions that the jury found had been impermissibly denied to Ms. Zerilli: Director of Administrative Support and Analytic Services, which was awarded to another TA employee in August 1992, and Manager of Surface Transit Business Planning, which was awarded to other TA employees in March 1993.

 With respect to the position of Director of Administrative Support and Analytic Services, Ms. Zerilli is entitled to an award for the period of August 1992 through December 1992 in an amount based upon an annual salary of $ 50,200.00, and for the period of January 1993 through February 1993 in an amount based upon an annual salary of $ 52,200.00, all to be reduced by the salary Ms. Zerilli did receive from the TA during these periods.

 With respect to the position of Manager of Surface Transit Business Planning, Ms. Zerilli is entitled to an award of backpay for the period of March 1993 through December 1993 in an amount based upon an annual salary of $ 53,800.00, and for the period of January 1994 through December 1995 in an amount based upon an annual salary of $ 55,950.00. For the period from January 1996 through the date of judgment, backpay will be awarded in an amount based upon an annual salary of $ 58,100.00. Again, subtracted from the award will be the amount of salary Ms. Zerilli received from the TA during these three time periods.

 Finally, the jury also found that Ms. Zerilli was impermissibly denied the position of Superintendent of Transportation, Administration in May 1994. However, since the salary for this position was less than that for Manager, Surface Transit Business Planning, no backpay will be awarded for this position.

 B. Merit Increases and Fringe Benefits.

 As a successful Title VII plaintiff, Ms. Zerilli may receive not only an award of straight salary, but also those benefits that would have accrued to her in the course her employment by the TA if she had not been the victim of discrimination. See, e.g., Armstrong v. Trans World Airlines, Inc., 1991 U.S. Dist. LEXIS 12970, 1991 WL 102511 at *3 (S.D.N.Y. May 30, 1991). The TA does award merit increases to its employees, but only when an employee has been in a particular position for at least a year, and only in those years when a determination has been made by the TA that it will award merit increases. The TA did not award merit increases for the years 1992 and 1995, and I will accordingly award Ms. Zerilli no merit increases for these years of her employment. The TA did award merit increases in 1993. However, as outlined above, since Ms. Zerilli will be treated as having been promoted to the position of Manager of Surface Transit Business Planning during that year, and thus would have been in the position for less than a year by the end of 1993, she will receive no merit increase for 1993.

 In 1994 and 1996, the TA awarded merit increases, in amounts calculated at up to six percent of base salary based upon the quality of the employees' performance. Employees who received a poor or marginal performance rating received no merit increase. There is no basis in the record for concluding that Ms. Zerilli would have been placed in this category. On the other hand, only top employees received the full six percent increase. In light of the jury's determination that Ms. Zerilli was qualified to hold managerial positions, she should not be completely deprived of merit pay simply because it is not possible to precisely determine what the quality of Ms. Zerilli's work performance would have been, had she not been the victim of discrimination. Other than by those who discriminated against her, Ms. Zerilli was viewed at the TA as well-qualified. On the other hand, it would be speculative to find that she would have been among the employees awarded the very highest increase. Under these circumstances, Ms. Zerilli will be awarded a four percent merit increase on her $ 55,950.00 salary for 1994 and a four percent merit increase on her $ 58,100.00 salary for 1996, and to the date of judgment.

 Ms. Zerilli has not offered any basis for rejecting the TA's position that there should be no separate award for fringe benefits. She has offered no evidence that her medical benefits would have been higher had she received the promotions she sought. Nor has she proffered any basis for calling into question the TA's assertion that she suffered no loss of pension benefits because the TA calculates an employee's pension based upon the salary received by the employee at retirement. Finally, the only additional benefit received by TA employees in managerial positions is eligibility for tuition reimbursement for courses taken for the purpose of professional development. Since Ms. Zerilli has provided no basis for concluding that she would have furthered her education beyond the Masters degree she received in May 1992, a date that is before the date at which she could have received her earliest promotion to a managerial position, no award is made.

 C. Mitigation.

 The law of this Circuit regarding the duty of a successful Title VII plaintiff to mitigate her damages is well settled:

 

A victim of employment discrimination has the same duty to mitigate his damages as any victim of a tort or breach of contract. This duty requires the plaintiff to utilize reasonable diligence in finding other suitable employment. . . . The employer bears the burden of proving that suitable work existed, and that the employee did not make reasonable efforts to obtain it.

 Clarke v. Frank, 960 F.2d 1146, 1152 (2d Cir. 1992) (citations and quotations omitted).

 The TA has not met its burden of showing that Ms. Zerilli failed in her duty to mitigate. It merely asserts that, prior to her employment with the TA, Ms. Zerilli worked in the securities industry, and it asks that I take judicial notice that "this industry has been growing very quickly within the last year and therefore is one of the fastest growing sectors of the economy." Letter of Joyce Rachel Ellman, Esq., dated March 27, 1997 at 3. I decline to take judicial notice as requested; and even proof that the "industry" is doing well would be insufficient to meet the TA's burden of showing that Ms. Zerilli herself could have found suitable employment within the industry. Most importantly, as I stated during the hearings held on equitable relief, Ms. Zerilli has satisfactorily met her duty to mitigate by repeatedly seeking promotions with the TA itself. Transcript of April 1, 1997 Hearing at 25-27. I reiterate here that her efforts to gain a promotion within the TA were an entirely appropriate and adequate effort to mitigate the damages she suffered from earlier denials of promotion. See, e.g., Badeen v. Burns Int. Sec. Services, 765 F. Supp. 341, 348 (E.D. Tex. 1991) (plaintiff's duty of mitigation in case involving discrimination in promotion is to remain on job).

 Relying on Ford Motor Co. v. EEOC, 458 U.S. 219, 231-32, 73 L. Ed. 2d 721, 102 S. Ct. 3057 (1982), the TA also argues that the backpay award should end at June 1996 because, as of that date, Ms. Zerilli had the "opportunity" to be appointed to a managerial position as a Training Superintendent in the Department of Buses. The Ford Motor Co. case, however, has no application here. In Ford Motor Co., the Court held that a Title VII plaintiff loses her right to backpay if she refuses promotion to a job that is the substantial equivalent of the one she was denied. Here, Ms. Zerilli did not refuse a promotion and, indeed, was not even offered a promotion. Rather, the TA merely asserts that she was being considered for a position, but that it was denied to her because she engaged in conduct that precluded her from being further considered. Ms. Zerilli vigorously denies any misconduct, and it would clearly be improper to now conduct a trial on whether the TA, which has been found to have improperly and repeatedly denied her a promotion, would have offered her a different promotion but for her fault. Put another way, Ford Motor Co. does not mandate that, after a finding of liability, another trial be conducted to determine what, if any, promotional opportunities the plaintiff might have obtained from the TA but for her own alleged misconduct.

 D. Interest.

 "Title VII authorizes a district court to grant pre-judgment interest on a backpay award." Saulpaugh v. Monroe Community Hosp., 4 F.3d 134, 145 (2d Cir. 1993), cert. denied, 510 U.S. 1164, 127 L. Ed. 2d 539, 114 S. Ct. 1189 (1994). Indeed, "it is ordinarily an abuse of discretion not to include pre-judgment interest in a backpay award. Id. (emphasis in original; quotation omitted).

 Ms. Zerilli argues that any backpay award should be subject to a prejudgment interest rate of 9%, as set forth in Section 5004 of the New York Civil Practice Law and Rules. This position is rejected. The backpay award in this case is made, at plaintiff's request, on her federal claim. Prejudgment interest will therefore be based upon 28 U.S.C. § 1961, under which interest is determined upon the United States 52-week treasury bill rate. See Luciano v. Olsten Corp., 912 F. Supp. 663, 677 (E.D.N.Y. 1996) (collecting cases), aff'd., 110 F.3d 210 (2d Cir. 1997).

 "Where prejudgment interest is given, it should be assessed upon damages only as they become due." Chandler v. Bombardier Capital, Inc., 44 F.3d 80, 84 (2d Cir. 1994). With this rule in mind, prejudgment interest "must be compounded and applied to portions of the earnings . . . in a manner that will best reflect the progression, over time, of the damages sustained." O'Quinn v. New York Univ. Med. Center, 933 F. Supp. 341, 346 (S.D.N.Y. 1996). In this case, Ms. Zerilli's backpay award is quantifiable on a month-by-month basis, and there is therefore no need for a pro rata allocation of the total award, as in, for example, O'Quinn. Id. Rather, the interest is to be calculated based upon the actual month-by-month award.

 In contrast to backpay awards, prejudgment interest is ordinarily not applied to awards of damages for pain and suffering. See, e.g., McIntosh v. Irving Trust Co., 873 F. Supp. 872, 881-82 (S.D.N.Y. 1995). But see O'Quinn v. N.Y. Univ. Med. Center, 933 F. Supp. at 344-45 (recognizing general principle, but awarding prejudgment interest on award of damages for pain and suffering where jury was instructed to award such damages for "a very specific period of time"). There is no reason to depart from the general principle here and, accordingly, no prejudgment interest will be applied to the jury's award of $ 95,000.00 for pain and suffering.

 II. Promotion.

 It remains for me to consider an award of prospective relief in the form of either promotion or front pay. A central and salutary purpose of an award of promotion or reinstatement is to give the plaintiff a chance to prove herself on the job free from the presence of impermissible discrimination. See Carrero v. N.Y.C. Housing Auth., 890 F.2d 569, 579 (2d Cir. 1989). Further, as opposed to the necessarily speculative nature of an award of front pay, promotion or reinstatement "involves the least amount of uncertainty. . .and at the same time assure[s] the plaintiff of employment free of discrimination." Whittlesey v. Union Carbide Corp., 742 F.2d 724, 727 (2d Cir. 1984). Indeed, the preference for awarding reinstatement or promotion is such that an award of front pay "presupposes. . .that reinstatement [or promotion] is either impossible or impracticable." Stratton v. Dept. for Aging for the City of N.Y., 922 F. Supp. 857, 866 (S.D.N.Y. 1996) (quotation omitted).

 Although originally Ms. Zerilli had requested that she be awarded one of the jobs that were the subject of the jury's verdict, at the hearing on equitable relief she took the position that she should be awarded front pay, because the TA was resistant to giving her a managerial position to which she was entitled and because of ongoing animosity between the parties. This position is rejected. Ms. Zerilli remains employed at the TA, and it will clearly be preferable for her to be employed in a managerial capacity rather than as an Associate Staff Analyst. The TA is a large organization with many managers, and offices in all five boroughs of New York City; as will be seen, there is ample possibility of employment without animosity. Further, Ms. Zerilli's reliance upon Padilla v. Metro-North Commuter R.R., 92 F.3d 117 (2d Cir. 1996) is misplaced. There, front pay was awarded because the plaintiff "had no reasonable prospect of obtaining comparable alternate employment." Id. at 126 (quotation omitted).

 Assuming that promotion is an appropriate remedy, the parties do not agree as to what position Ms. Zerilli should be awarded. Ms. Zerilli argues that there are only two appropriate positions: 1) Director of Administrative Support and Analytic Services or 2) Manager of Surface Transit Business Planning. I disagree.

 The Director position has been eliminated, and the Manager position is currently filled. Awarding Ms. Zerilli the latter position will require "bumping" its current occupant, a person who is innocent of any wrongdoing as regards Ms. Zerilli, an act which is highly disfavored. See, e.g., Hicks v. Dothan City Bd. of Ed., 814 F. Supp. 1044, 1050 (M.D. Ala. 1993); Daines v. City of Mankato, 754 F. Supp. 681, 703 (D. Minn. 1990).

 Fortunately, bumping need not be considered here because the TA has offered Ms. Zerilli promotion to a position, Manager, Analytical Support in the Department of Buses, which I find to be an appropriate position for her. This is a newly created position which, the TA has confirmed, has recently been fully funded. The position is suitable for Ms. Zerilli's skills, requiring three years of supervisory or managerial experience and an undergraduate degree or its equivalent. The job will entail the supervision of staff analysts, assistance with the TA's budget process and representation of the Department at certain meetings. There will be one such Manager in each borough, and Managers will report to the Assistant General Manager of Strategic Planning in the borough in which they work. There has been no showing that in this position Ms. Zerilli will be supervised by any of the individuals who directly subjected her to discrimination or retaliation. Transcript of April 1, 1997 Hearing at 35-38, 51-53. Based on these representations of the TA regarding the position, I find that Ms. Zerilli should be promoted to Manager, Analytical Support in the Department of Buses at the earliest practicable date. Until the date that the TA places Ms. Zerilli in this managerial position, it is ordered that she be awarded front pay in an amount equal to the difference between her current salary and the salary she will receive in her new position, see, e.g., King v. Staley, 849 F.2d 1143 (8th Cir. 1988), a salary that the TA has acknowledged will not be less than the salary for the position of Manager, Surface Transit Business Planning, which she is being awarded here as backpay.

 III. Injunctive Relief.

 It was established at trial that Ms. Zerilli was subjected not only to the retaliatory performance evaluation of April 1993, but also to negative written commentary by individuals who were found to have engaged in retaliatory and discriminatory conduct toward her. I therefore order that Ms. Zerilli's personnel file be purged of the April 1993 evaluation and of any evaluations, comments or notes made by George Governale, Fred Herman or Carmine Corebello, or references to same. This should preclude "further retaliatory conduct by preventing any reliance on discriminatory evaluations and records." McIntosh v. Irving Trust Co., 873 F. Supp. at 880.

 IV. Judgment.

 The parties are directed to settle a form of judgment within 15 days of the date of this Memorandum and Order. The judgment must incorporate both the jury's award of compensatory damages and the equitable relief awarded here. Ms. Zerilli is awarded her costs. The bill of costs should be directed to the Clerk of the Court within 30 days after the entry of the judgment. See Local Civil Rule 54.1.

 SO ORDERED.

 NINA GERSHON

 United States District Judge

 Dated: May 30, 1997

 Brooklyn, New York.


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