United States District Court, S.D. New York
March 8, 2004.
MARTIN VARONE, Plaintiff, -against- CITY OF NEW YORK, NEW YORK CITY HUMAN RESOURCES ADMINISTRATION ("HRA"), DENNIS FECCI, and LYNN BRESLER, Defendants
The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge
OPINION AND ORDER
Martin Varone brought this case under the Americans with Disabilities
Act of 1990 and the New York City Human Rights Law. His disability was
Delayed Sleep Phase Syndrome. The complex factual and procedural
background was set forth in my Opinion and Order published at Varone
v. City of New York, 2003 WL 21787475 (S.D.N.Y. Aug. 4, 2003). I
then presided at a seven-day jury trial.
The summations were excellent. (Norma Cote for the defendants at Tr.
1011-37; Rebecca Northey for the plaintiff at Tr. 1039-60.) They ought to
be read by anyone who wants to understand this case in depth.
On December 11, 2003, the jury returned a special verdict answering 11
questions. (A copy of the verdict sheet is annexed to defendants' 1/2/04
memorandum.) Plaintiff was clearly the prevailing party, but the jury
decided some questions in favor of the defendants.
The jury's verdict made clear how to calculate the damages through
March 23, 2001, the date of Varone's resignation from HRA. The jury also
found that he was constructively discharged and that he would have worked
until July 2009.
Today's opinion addresses two issues: (a) what monetary damages should
be awarded for the period starting March 24, 2001, and (b) whether I
should issue an order of reinstatement. The possibility of the equitable
remedy of reinstatement was not mentioned to the jury.
On the verdict sheet, the first four questions were listed under "First
Claim: Failure to Provide a Reasonable Accommodation [to a Disability]."
The jury found as follows:
1. The defendants failed to prove that there was no accommodation that
would have enabled plaintiff to perform the essential functions of a job
that was vacant at HRA within the title of Computer Specialist
2. The plaintiff failed to prove that he proposed an effective
accommodation and that HRA refused it.
3. The plaintiff proved that, during the period from October 1999 to
March 2001, (a) he acted in good faith to attempt to identify
a reasonable accommodation and (b) HRA failed to engage in good
faith discussions with him to attempt to identify a reasonable
4. The defendants failed to prove that it would have imposed an undue
hardship to provide plaintiff with any of the accommodations that could
plausibly have enabled him to perform.
In Questions 5, 6 and 7, the jury found that plaintiff proved his claim
of retaliation, failed to prove his claim of hosfile work environment,
and proved his claim that he was constructively discharged by the time he
resigned in March 2001.
On the verdict sheet, I noted: "On the basis of your answers to
Questions 8 and 9, the judge will determine the amounts which will fairly
compensate plaintiff for the present value of salary and pension
benefits." The jury had Exhibit 59-A, a detailed letter by actuary
Jonathan Schwartz, who computed those present values to total $748,749 on
various assumptions, including the assumption that plaintiff would have
worked full time from October 18, 1999 through July 31, 2012 (his 65th
birthday) if the defendants had committed no misconduct. The jury
answered Questions 8 and 9 as follows:
8. Has plaintiff proven that, if the defendants had committed no
misconduct, he would have worked 35 hours per week during the entire
period from October 18, 1999 through March 23, 2001 (except for using
his annual leave days and sick leave days)? No. If your answer is No,
then state, as a percentage, the portion of $79,844 that will fairly
compensate plaintiff for salary and pension benefits that he lost
between October 18, 1999 and March 23, 2001 as a result of defendants'
9. (a) If plaintiff had not been constructively
discharged, and if he had continued to be an HRA employee, and if there
were no further misconduct by defendants, would he have retired on or
about July 31, 2002 (his 55th birthday)? No.
(b) If your answer is No, then state the age at which plaintiff would
retire if he were still an HRA employee. Age: 62.
(c) If plaintiff uses reasonable diligence to mitigate his damages,
state the total amount of money (before taxes) that he can reasonably be
expected to earn (from non-HRA employment) from March 24, 2001 until the
age you gave in answer to Question [9(a) or 9(b)]. (The burden of proof
on this amount is on the defendants.) $ 120.000.
In Question 10, the jury awarded no damages for emotional injury. In
Question 11, it assessed $20,000 in punitive damages against Dennis
Fecci, who was HRA's Deputy Commissioner in charge of Management
Information Systems from July 1997 until October 2002, when he retired
from City employment.
The jury's answers to Questions 8, 9(b) and 9(c) resulted in a
recalculation by actuary Schwartz, with an affidavit by him dated
December 18, 2003.
On January 2, 2004, the defendants served an opposing memorandum. On
January 12, plaintiff served a reply memorandum. In telephone conferences
on February 23, March 1, and March 3, I outlined my decision, including a
reinstatement order, and discussed my reasoning.
There is no dispute about the calculation of the present value of the
salary and pension benefits lost during the period from October 18, 1999
through March 23, 2001.
Mr. Varone is now nearing age 57. Since July 31, 2002 (his 55th
birthday) he has been receiving a City pension of $27,785 per year, with
no deductions for City or State income tax or Social Security. In 1986 or
1987 he purchased a new house and he has received income by renting out
part of it. (Tr. 476-77.) He has had no other income, although during
2003 he became very interested in photography and hopes to earn money
from this in the future. (Tr. 230-32.)
It is clear that Mr. Varone is entitled to some lump-sum payment for
the period from March 2001 to roughly June 2004. As to the period from
June 2004 to June 2009, he is entitled to reinstatement; if that is not
feasible or not available, then a
question arises as to what additional lump-sum payment he may
"Reinstatement is the favored form of relief in discrimination and
retaliation cases." Reiter v. Metropolitan Transp. Authority of New
York, 2003 WL 22271223, *13 (S.D.N.Y. Sept. 30, 2003) (Koeltl, J.).
From 1973 to 1995, Mr. Varone worked for HRA as a mainframe computer
programmer, primarily using the COBOL language. Nine years have passed,
but I think he is still capable of producing work that would be
beneficial to the City in that field. In 1999, the New York City Civil
Service Commission ordered HRA to reinstate him; Mr. Fecci proceeded to
assign him to non-programming work, an assignment that Mr. Varone feels
was unfair. (Tr. 144.) In my March 3, 2004 conference, Ms. Cote reported
that HRA still has a number of employees doing mainframe computer
programming using the COBOL language. She also reported that some other
City agencies have employees doing mainframe computer programming, but
not in the COBOL language. One very significant fact suggests that
reinstatement would be feasible Mr. Fecci left City employment
more than a year ago.
My February 23 proposal (a) gave Mr. Varone almost the same
accommodation which he testified he offered in 2000, and (b) provided
that either party could bring a violation directly to me in a motion for
sanctions. Nevertheless, on March 3, Ms. Northey vigorously argued that
it would be unfair to Mr. Varone to issue any order of reinstatement. She
noted that in 1999 HRA received an order of reinstatement, and violated
its specific direction that "[t]he parties are to determine a work
schedule for [Varone] that takes into account both the needs of the
agency and [Varone]'s right to a reasonable accommodation per the ADA."
She argued that HRA does not deserve a second bite at the apple. Instead,
she argued, Mr. Varone deserves a straight lump-sum payment, not only for
the period from March 2001 to June 2004, but also for June 2004 to July
On the other side, Ms. Cote argued that the accommodation allegedly
offered by Mr. Varone in 2000 was too flexible to give HRA productive and
reliable work. The jury may have agreed with her on this point, judging
from its answer to Question 2. Ms. Cote also pointed to the answer to
Question 8, and predicted that Mr. Varone would continue to work, at
best, only 66% of a full week if he were reinstated.
The trial evidence showed that both sides had failed to negotiate in
the cooperative manner envisioned by the federal and City laws requiring
reasonable accommodation. On the first day of reinstatement, Mr. Fecci
announced that the accommodation
would be the same one that had failed in the early 1990's. Mr.
Varone would have to work 7 hours each weekday between 7 a.m. and 7 p.m.
HRA would allow Mr. Varone to have a 2-hour flex in the exact timing of
the 7 hours, whereas HRA allowed only a 1-hour flex to other employees.
On that first day, October 18, 1999, Mr. Varone replied, in substance:
"If that is the only accommodation, you might as well start
right now with the disciplinary proceedings to fire me again." (See Tr.
For the next six months and more, he stubbornly insisted that he ought
to be given the completely flexible schedule that he enjoyed from 1973 to
1990 (an era when HRA did not have one computer for every programmer and
was glad that some programmers were "night owls"). At trial, he and a
witness from his union testified that they had offered compromises, but
this testimony was not corroborated by the tape recording of an important
meeting with Mr. Fecci on May 8, 2000. The only "documentation" of a
compromise offer by Mr. Varone was a conversation with his supervisor
Lynn Bresler on September 5, 2000, which he secretly tape-recorded:
Varone: . . . I made several proposals, uh,
through the union attorneys, uh, that 50% of my
work week [be] between the hours of 10 and
4, . . . .
Bresler: The only ones I'm aware of are that you
should be allowed to work whenever suits your
sleeping time. * * * I don't remember a proposal
of half and half.
Varone: Uh, well, it's out there, and any time
Dennis [Fecci] wants to talk about it, . . . .
(Exh. T pp. 3-4.)
At trial, Mr. Varone elaborated that "every day would include a portion
of that time." (Tr. 196.) In other words, he was offering to work 35
hours a week, of which 17 1/2 hours would be between 10 a.m., and 4 p.m.,
and he would work some portion of those 17 1/2 hours somewhere between 10
and 4 each weekday.
I interpret the jury's answers to Questions 2 and 3 to mean as follows.
The "half and half" proposal was insufficient to meet HRA's legitimate
business needs, especially if Mr. Varone was going to be doing
non-programming work. On the other hand, his "half and half" proposal was
a good-faith offer and HRA failed to make a good-faith counter-offer.
Mr. Varone did not make his "half and half" proposal in writing, and he
made it very belatedly. Nevertheless, I think that a good-faith
counter-offer from HRA should have agreed to experiment with the "half
and half" proposal and to test whether it would prove to be workable. I
think it could have been workable if HRA had merely negotiated a few
protections. Since HRA failed to negotiate in good faith, I hereby step
in to state what I find to be reasonable.
I would require the City to reinstate Mr. Varone by July 1, 2004 for a
period running to (a) July 31, 2009 (when he will turn 62), or (b) such
earlier date on which he may choose to retire. I would require Mr. Varone
to work 35 hours a week in the office, of which at least 17 1/2 hours
each week shall be worked in the office between the hours of 9:00 a.m.
and 5:00 p.m. on Monday through Friday. Moreover, at least 3 hours of
each weekday shall be worked between the hours of 9:00 a.m. and 5:00 p.m.
He shall have complete flexibility with respect to the timing of the
other 17 1/2 hours per week, but the City has the right to insist on
reasonable means to assure that he is working productively 35 hours a
week. Also, prior to each working day, Mr. Varone shall give at least 24
hours' notice to the City (by e-mail) whether his required 3-hour period
will begin before or after 12:00 noon. Finally, I would require that his
duties shall be mainframe computer programming. I find that this portion
of the equitable remedy is justified by (a) the undisputed evidence that
mainframe computer programming is Mr. Varone's area of expertise, (b)
Mr. Fecci's refusal to reinstate him to a programming job, and (c) the
jury's finding of retaliation. Moreover, a programming job would maximize
the probability that Mr. Varone would do productive work for the City,
and that the City would not need to have him in the office for more than
3 hours between 9:00 a.m. and 5:00 p.m.
As mentioned earlier, Ms. Cote predicts that, if Mr. Varone were
reinstated, he would shirk and complain and (at best) work productively
for only 66% of a full 35-hour week. She says this view is supported by
the jury's answer to Question 8, which I will analyze below. Her
prediction has support in some of the evidence, but I find that it may
be unduly pessimistic. The legislative intent behind the disability
statutes eschews pessimistic predictions; it prefers to experiment with
accommodations and to test feasibility in the crucible of actual
experience. Reinstatement would provide that test. There is no reason why
Mr. Varone cannot work a full 35-hour week. If he fails to do so, the
City retains its right to dock his paychecks. Moreover, it may make a
motion to me for sanctions, which could include (a) revocation of my
order of reinstatement, and (b)
forfeiture of some $58,000 which I have decided to withhold from
plaintiff until July 31, 2006. See below at pages 9-10.
In calculating monetary damages after March 23, 2001, the parties have
only two disputes. The most important one is whether I should take the
jury's answer to Question 8 and extrapolate it beyond March 2001. That
answer awarded plaintiff only 47% of the amount that was docked from his
paychecks. The parties agree that "this is equivalent to assuming that he
would have worked 66% of the time between October 18, 1999 and March 23,
2001." (12/18/03 Schwartz aff., Exh. 3 p. 3, with arithmetic following;
accord: 1/2/04 Def. Mem. p. 2.) The jury's answer to Question 8 may have
been based on various factors. Ms. Northey suggests that it may have been
based on plaintiff's medical problems during that period (psychotherapy
for depression; extensive dental work). I draw the following
interpretation in light of the jury's answers to Questions 2 and 8
plaintiff was partially at fault because he did not make his
"half and half" proposal until almost 11 months after his reinstatement;
therefore, the jury awarded him only 47% compensation for the hours he
failed to work during the 17 months from October 1999 to March 2001
(yielding a total of 66% of his salary, since he did work some hours).
If my interpretation is correct, then it might be unfair to extrapolate
the 66% beyond March 23, 2001. On the other hand, the jury might not have
extended Mr. Varone's working life beyond March 2001, or beyond July
2002, if it could have foreseen that in 2004 he would object to
The other dispute, which involves less money, concerns the fact that
actuary Schwartz treated the pension benefits that Mr. Varone is
receiving ($27,785 per year) as though they were actual earnings. The
. . . This is indefensible, because pension
benefits receive favored tax treatment. Mr. Varone
does not have to pay state or city income taxes on
his pension benefits, . . . . [nor] Social
Security or Medicare taxes . . . Thus, a dollar of
pension benefits is [worth more than] a dollar of
(1/2/04 Def. Mem. p. 5.) But plaintiff replies:
Here, no matter how the benefit is treated
either Varone or the City will receive a
"windfall." Varone will receive compensation in
excess of lost
income, or the City will not have to make a full
payment of back pay. The courts have made it clear
that fairness dictates that the "windfall" be
awarded to the victim of discrimination rather
than the perpretrator. . . . Dailey v. Societe
Generals, 889 F. Supp. 108, 113 (SONY 1995) aff'd
in pertinent part 108 F.3d 451, 461 (2d Cir.
1997) [dealing with unemployment benefits].
(1/12/04 Reply Mem. p. 4.) Here, however, we are not merely talking
about back pay, but the more uncertain waters of front pay. If Mr. Varone
is not willing to work under my 2004 order of reinstatement, then he
certainly does not deserve the windfall from 2004 to 2009, and he
probably does not deserve it from 2001 to 2004.
Plaintiff does concede that fairness might dictate a minor
recalculation "to reflect that Varone does not pay City income tax on his
pension, which otherwise would be paid to the City." (Ibid.)
Actuary Schwartz notes that this increases the value of Mr. Varone's
pension by $859 per year for the seven years from July 2002 to July 2009.
(Reply Mem., App. 2 p. 2.) I find that these amounts are too small to
bother about reducing to present value. If we subtract $6,013 ($859 x 7),
then Mr. Schwartz's best calculation for plaintiff (for the period from
October 18, 1999 through July 31, 2009) would be lost earnings of
$315,019 and lost pension of $177,198.
If we take the 34% reduction implicit in the jury's answer to Question
8, and extrapolate it beyond March 2001, then the figures (again, for the
period from October 18, 1999 through July 31, 2009) would be lost
earnings of $127,632 and lost pension of $147,252. (Reply Mem., App. 2 p.
If, in addition, we make the adjustment to deprive plaintiff of the
windfall with respect to State income tax, Social Security and Medicare,
then the lost earnings would be $100,083 and the lost pension would
remain at $147,252. (Id. at p. 1.)
Before there was any discussion of reinstatement, city appeared to be
resigned to paying the amounts in the previous paragraph, or something
very close to them. (See Def. Mem. p. 9.) I find that plaintiff is
certainly entitled to those amounts. But he argues that he deserves the
lost earnings of $315,019 and lost pension of $177,198. He says the
lesser amounts are unfair because he was always prepared to work 35 hours
a week and to give the City truly valuable work. If he accepts
reinstatement (a fact the jury could not have known), and
if he performs, then I will be convinced that (1) the jury's 34%
reduction should not be extrapolated beyond March 2001, and (2) it is not
unfair for him to pocket the tax advantages of the early pension that was
forced upon him.
On both of those disputed issues, I find that the best evidence will be
something the jury could not know how Mr. Varone and the City
will react to my proposal for reinstatement. If Mr. Varone rejects it,
then he will buttress the City's arguments that he values his freedom
more than money and that he was always planning to retire on a reduced
pension as soon as he turned 55 in July 2002. On the other hand, if he
accepts reinstatement but the City rejects it, then the City will confirm
the jury's prediction that he would have worked until age 62 with a
If he rejects reinstatement, then I will require the City to pay the
damages at the highest calculation ($100,083 plus $147,252).
If he accepts reinstatement, but the City rejects it, then I will
require the City to pay the damages at the highest calculation ($315,019
If both sides accept reinstatement, then I will require the City to
give him pension credits as if he had worked 66% of full time from
October 18, 1999 through March 23, 2001 and 100% of full time from March
24, 2001 through June 30, 2004. (Or, at the City's option, the City may
make a lump-sum payment for this.) As for the lost earnings from October
18, 1999 through June 30, 2004, I will require the City to pay at the
highest calculation, which I find to be $172,432. See Reply Mem., App. 1
p. 2, which I revise as follows:
Calendar Present Value of Reduction for Revised Present
Year Lost Earnings City Tax not Value (using simple
paid by Varone subtraction for
1999 $ 1,833 - - $ 1,833
2000 32,574 - - 32,574
2001 51,908 - - 51,908
2002 44,954 - 358 44,596
2003 28,450 - 859 27,591
2004 (1st 14,359 - 429 13,930
There is a danger that Mr. Varone may be tempted to accept
reinstatement even though his heart is no longer in it, and then
retire after a year or so, with a higher pension. To guard against this,
I will require the City to pay only 66% of the $172,432 (i.e., $113,805)
in May 2004 and to pay the remaining $58,627 (plus 0.5% per month
uncompounded interest) by July 31, 2006, provided that, on motion by the
City, I may at any time excuse all or part of this $58,627 payment if I
find that Mr. Varone has not acted in good faith to provide the City with
With this Opinion, I am faxing my Judgment. It contains deadlines of
March 22 for Mr. Varone's decision and April 12 for the City's decision.
These deadlines were discussed in my telephone conferences, although I
have changed the start date for reinstatement from June 1 to July 1,
2004. In the March 1st conference, I informed the attorneys that I think
it would be counter-productive to stay my order of reinstatement pending
appeal. I am open to any stipulations or timely motions to amend the
Judgment. I am not inclined to hear any counter-offer from the City about
the terms of the reinstatement, but in any event any such counter-offer
would have to be made well in advance of March 22.
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