LEVIN H. CAMPBELL, Circuit Judge.
Frank L. Loeb brought this action in January 1976, alleging that the defendants (Textron, Textron's Speidel division, and several of its officers) had discharged him in 1975 because of his age, in violation of the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. §§ 621-634. In May 1978 a jury returned a verdict for Loeb. Defendants appeal the judgment of liability, and both parties appeal the court's handling of the remedy.
Loeb was hired by Textron's Speidel division as International Sales Manager on August 23, 1971, when he was 50 years old. This was classified as a "level 7" position and carried an annual salary of $24,000 plus bonuses. As International Sales Manager, Loeb supervised sales in areas that in 1974 accounted for 14.55% of Speidel's total international sales. From 1971 through 1974, Loeb's immediate supervisor, Vanover, Vice-President of International Operations, wrote favorable reports on his performance and recommended that he receive raises; in 1972, 1973 and 1974 he received bonuses of $3,570, $3,443 and $2,279, respectively.
At annual management meetings held in 1973 and 1974, Textron adopted "People Development" as a top priority. This program was designed "to ensure that the corporation would have personnel at all levels of its organization `to manage our companies in the future.'" Thus one Textron division "began anticipating its people requirements" by breaking down various job categories "by age and length of service to anticipate retirements or obsolescence." Company executives were encouraged to develop "coded and rated organization chart[s]" for "each of the key positions, age (and so, time to retirement), length of service, time on the present assignment and promotability," and to set timetables for "how you plan to prepare for and fill each organizational need—and when." At the 1974 meeting, the Executive Vice-President—Operations reviewed an "Aging" chart of corporate and divisional officers and commented that the Company had "a greater proportion of our combined senior management over 55 than we do under 40. That's a warning."
The events leading to Loeb's discharge began in late 1974. Vanover was transferred to the Engineering Department in response to problems that had developed there; at the same time, Textron reorganized Speidel's International Department. It abolished Vanover's position, placed international manufacturing under a Vice-President for Operations, and placed the international sales staff under a Vice-President for Sales and Marketing, who was to be assisted by a Director of International Sales and Marketing. Defendant Frank Grzelecki, then 37 years old, became Vice-President for Sales and Marketing, and Robert Ford, then 32 years old, became Director and—as a result—Loeb's immediate supervisor. Textron did not consider
Ford soon began studying Loeb's performance and taking over some of his responsibilities. He claimed that there were problems with Loeb's work in Puerto Rico, Switzerland and Germany, and moved to discharge Loeb in February 1975. This action was stopped by Speidel's President, who noted that there was a lack of documentation to support Loeb's termination and suggested that Loeb be given specific written assignments, against which his performance could be measured. This was done on March 19, 1975; Loeb's title and duties were taken away, he was made "Area Manager-Latin America" instead, and he was given an assignment listing marketing goals for Latin America. In May, Loeb responded to Ford in a report that Textron asserts indicated that there either was insufficient business to be done in Latin America or that Loeb could not develop such business. In June, Ford fired Loeb on the ground that he could not generate enough business in Latin America to justify his salary, noted "involuntary termination—poor job performance" on his personnel record and told him that there were no other openings in the International Department. Loeb was 54 at that time.
On November 1, 1975, a 34-year-old man named Stein Owre joined Speidel's International Department as "Senior Product Manager-International." Owre had written to Ford in January 1975, shortly before Ford first recommended Loeb's termination, and Ford had interviewed him in Europe in March and April. Between those two interviews Speidel had advertised for a "Senior Product Manager, International" with qualifications that closely paralleled Owre's; Ford had offered Owre the position formally on August 28.
Textron has not used Loeb's former title, "International Sales Manager," for any employee since it was taken from him in March 1975. Loeb's title as "Area Manager-Latin America" remained unused until January 1978, when it was given to one Joseph Torres, who was then 46 years old and had been functioning as Area Manager-Latin America since Loeb's dismissal. In the two-and-a-half years after Loeb received his March 1975 assignment, Speidel never sold more than $24,000 of goods per year—i. e., goods equivalent in value to Loeb's salary—in the Latin American countries covered by that assignment.
After the close of trial, the court delivered an instruction to the jury that attempted in large measure to track the analysis presented by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a major decision in the area of private, nonclass actions under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2000e-17. It told the jury that Loeb had to prove a "prima facie case" by showing by a preponderance of the evidence:
It instructed that, if Loeb proved these elements, the defendant had "the burden to prove by a fair preponderance of the evidence a legitimate non-discriminatory reason" for its actions; if the jury found that the defendant "was motivated by reasonable factors other than age or [by] good cause," then it was to "further find whether or not the reasonable factors or good cause ... were in fact a pretext arranged in order to accomplish discrimination against plaintiff because of his age." Finally, the jury was told that the plaintiff had the burden of proving by a preponderance that the defendant's reasons were in fact a pretext.
In the midst of this part of the instruction the court interjected an issue not addressed by McDonnell Douglas: the possibility that Textron had "mixed motives" for Loeb's discharge, one of which was age. It said:
The jury returned a verdict of $90,700 for Loeb. In response to a special interrogatory, it found that the defendants' violation of the ADEA had been willful, thus raising the possibility of awarding Loeb liquidated damages under Section 7 of the Act, 29 U.S.C. § 626(b). The district court denied defendants' motions for a directed verdict and for a new trial and entered judgment on the jury award. It assessed an additional $90,700 as liquidated damages and $42,500 as attorneys' fees, and awarded Loeb $90,000 and a pension commencing at age 70 in lieu of reinstatement.
A multitude of issues are raised by the parties on appeal. Defendants challenge the verdict largely on the ground that the court instructed the jury erroneously. They argue, first, that the principles of McDonnell Douglas do not apply to age
Even assuming the validity of the verdict, defendants argue that the court's award of liquidated damages was not authorized by the statute and that the court abused its discretion by awarding Loeb payments until age 70 and a pension thereafter. Loeb counters, however, by arguing that he was entitled to reinstatement and that the award of liquidated damages was too low. We reverse and remand for a new trial in accordance with the principles set forth herein.
This appeal raises questions of first impression in this circuit concerning the correct way to try an age discrimination case brought under 29 U.S.C. §§ 621-634 (ADEA). Our problem would be difficult enough were we simply faced with the question of implementation of the new ADEA statute. It is compounded, however, by the fact that the district court based much of its jury charge on an attempted application of principles in McDonnell Douglas. This requires us to determine whether and how McDonnell Douglas, a Title VII case involving allegations of racial discrimination in hiring, applies to a case arising under a different statute and involving allegations of discriminatory firing on the basis of age. And, as McDonnell Douglas arose from non-jury proceedings, we are faced with the entirely separate but equally troublesome problem of adapting its principles to a jury trial, where responsibilities must be divided between judge and jury.
Because the path is tortuous and, in places, unlit, we map out our journey and some of our destinations in advance:
We begin by analyzing the district court's jury charge. Leaving aside our later conclusion that the full McDonnell Douglas formulation should not be recited to the jury, see Part I(B)(5), infra, we hold that the district court in any event misstated that formulation, both as to the burden on the defendant and as to the elements making up the prima facie case.
We next discuss the more general question of the applicability of McDonnell Douglas to age discrimination cases and to jury trials. We conclude that the operative principles behind McDonnell Douglas are applicable in age cases as in Title VII cases,
After disposing of the McDonnell Douglas issue, we address the question whether age must simply be "a factor" or a determinative factor in the employment decision to warrant a finding of discrimination. We conclude that, at least where defendant denies that age was a consideration,
Finally, we consider the district court's handling of damages.
I. THE McDONNELL DOUGLAS ISSUES
A. The Jury Instructions On Their Face Did Not Correctly Reflect McDonnell Douglas Principles.
McDonnell Douglas involved the Title VII claim of a black civil rights activist who sought re-employment as a mechanic in response to the defendant's job opportunity notice. Complainant was rejected even though he was a mechanic whose qualifications were not disputed and even though the prospective employer continued to seek other mechanics. In that case, the Court said that a Title VII complainant "must carry the initial burden ... of establishing a prima facie case of racial discrimination," 411 U.S. at 802, 93 S.Ct. at 1824, and that this "may" be done by showing that he "belongs to a racial minority," that "he applied and was qualified for a job for which the employer was seeking applicants," that "despite his qualifications, he was rejected," and that, "after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications," Id.
In McDonnell Douglas, the Supreme Court held that the complainant had proven the elements of a prima facie case as described. "The burden then must shift to the employer," the Court went on, "to articulate some legitimate, nondiscriminatory reason for the employee's rejection... [T]his suffices to discharge petitioner's burden of proof at this stage and to meet respondent's prima facie case of discrimination." Id. at 802-03, 93 S.Ct. at 1824, (emphasis added). Complainant, however, must then "be afforded a fair opportunity to show that petitioner's stated reason for respondent's rejection was in fact pretext." Id. at 804, 93 S.Ct. at 1825.
The mechanics of the burden shifting in McDonnell Douglas and the meaning of the requirement that the defendant "articulate a legitimate nondiscriminatory reason" for the plaintiff's discharge have caused no little difficulty among courts. Here the district court interpreted McDonnell Douglas to require defendants to prove by a preponderance that their actions "were motivated by reasonable factors other than age or were for good cause." (Emphasis added.) Just four months earlier, we ourselves stated (incorrectly) that defendants must "prove absence of discriminatory motive." Sweeney v. Board of Trustees of Keene State College, 569 F.2d 169, 177 (1st Cir.), vacated and remanded, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978) (emphasis added). Our decision was remanded by the Supreme Court on the ground that "there is a significant distinction between merely `articulat[ing] some legitimate, nondiscriminatory reason' and `prov[ing] absence of discriminatory motive.'" 439 U.S. at 25, 99 S.Ct. at 295. The majority and the dissent there agreed that, "the employer's burden is satisfied if he simply `explains what he has done' or `produc[es] evidence of legitimate nondiscriminatory reasons,'" 439 U.S. at 25 n.2, 99 S.Ct. at 296 (emphasis added); compare 439 U.S. at 25, 99 S.Ct. 295 (Stevens, J., dissenting).
In light of the Supreme Court's remand of our decision in Sweeney, we conclude that the district court erred by placing too great a burden on defendants. We think it now clear that McDonnell Douglas leaves the burden of persuasion at all times with the plaintiff, and that the employer's burden to "articulate" a legitimate, nondiscriminatory reason is not a burden to persuade the trier that he was in fact motivated by that reason and not by a discriminatory one. Rather it is a burden of production—i.e., a burden to articulate or state a valid reason,
Confusion as to the defendant's burden under McDonnell Douglas was created in part by the Supreme Court itself, in Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978). There the Court at one point said, "the burden which shifts to the employer is merely that of proving that he based his employment decision on a legitimate consideration ...." Id. at 577, 98 S.Ct. at 2950 (emphasis added).
Sweeney, 439 U.S. at 26, 99 S.Ct. at 297 (Stevens, J., dissenting). This conclusion not only seems required by Sweeney, it is also most consistent with the fact that the plaintiff must prove that the defendant's reason was a pretext for discrimination, McDonnell Douglas, 411 U.S. at 804, 93 S.Ct. 1817, i. e., that the defendant's action was not based on the reason given.
While the district court's misstatement of the burden of proof was a serious enough error to require a new trial, it was not the only error. The court was also incorrect in instructing that, as part of his prima facie case, Loeb had to prove that
438 U.S. at 577, 98 S.Ct. at 2949-2950.
To apply the above concept in the present case, which involves firing, not hiring, the critical elements (beyond being within the protected class, i. e., age 40-65, and fired) must be modified to produce an analogous inference. Complainant would be required to show that he was "qualified" in the sense that he was doing his job well enough to rule out the possibility that he was fired for inadequate job performance, absolute or relative. See Teamsters, 431 U.S. at 358 n.44, 97 S.Ct. 1843.
B. Use of McDonnell Douglas in ADEA Cases.
We now turn to defendants' more fundamental objection, that the McDonnell Douglas formula has no relevance to age discrimination cases and should not have been used in this case at all.
1. The Purpose and Limitations of McDonnell Douglas and its Relevance to Age Discrimination Cases.
Defendants' objection to use of McDonnell Douglas in ADEA cases assumes that McDonnell Douglas establishes a form of "strict analysis" unwarranted when a complainant alleges that he has been treated unfavorably because of his age, rather than because of "more invidious" factors, such as race or sex. We cannot accept this premise.
The Supreme Court has said that, "The method suggested in McDonnell Douglas ... is merely a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination." Furnco, 438 U.S. at 577, 98 S.Ct. at 2949. As such, it addresses two problems that exist in most employment discrimination cases: (1) direct evidence of discrimination is likely to be unavailable, and (2) the employer has the best access to the reasons that prompted him to fire, reject, discipline or refuse to promote the complainant. To offset, to some degree, these difficulties, McDonnell Douglas affirms the right of a complainant to make a prima facie showing of discrimination by establishing that his rejection did not result from "the two most common legitimate reasons"—lack of qualifications or absence of a job opening. Teamsters, 431 U.S. at 358, n.44, 97 S.Ct. at 1866; see Sweeney, 569 F.2d at 176-77. Proof of the McDonnell Douglas-type prima facie case assures the plaintiff his day in court despite the unavailability of direct evidence, and entitles him to an explanation from the defendant-employer for whatever action was taken.
Once an explanation is given, plaintiff then must show that it was not the real reason for his rejection or discharge, but rather a pretext for discrimination. McDonnell Douglas, 411 U.S. at 804, 93 S.Ct. 1817. This is true even where, as here, the proffered "legitimate reason," poor job performance, disputes one of the elements of the prima facie case (i.e., that plaintiff was performing well)—the ultimate question is not whether defendants' decision to fire or discipline plaintiff reflected an objective factfinder's judgment of plaintiff's abilities, but whether it was unlawfully motivated. See Teamsters, 431 U.S. at 335 n.15, 97 S.Ct. 1843. Here again, however, plaintiff may proceed with indirect evidence, as by demonstrating that the reason advanced applied to other employees who did not have plaintiff's "protected" characteristics, but that they were not rejected or fired. See id. 411 U.S. at 804-05, 93 S.Ct. 1817.
McDonnell Douglas, in short, helps an alleged victim of discrimination identify
Given this understanding of McDonnell Douglas, we see no inherent reason why it is any less a "sensible, orderly way to evaluate the evidence" in an age discrimination case than in any other. McDonnell Douglas meets a problem of proof that may be present in any case where motivation is in issue, but does not alter the traditional burdens of proof in civil litigation, and is not intended to deflect the factfinder from the central issue of whether the employer was motivated by discriminatory factors.
2. The Statutory History of the ADEA Does Not Preclude Use of McDonnell Douglas.
Defendants argue that Congress evidenced an intent to avoid the "strict, formal approach" of McDonnell Douglas when it chose to deal with age discrimination in a separate statute, rather than in an amendment to Title VII, and to provide explicitly that it shall not be unlawful, "to discharge or otherwise discipline an individual for good cause," 29 U.S.C. § 623(f)(3), and that differential treatment of older persons is not prohibited "where the differentiation is based on reasonable factors other than age," 29 U.S.C. § 623(f)(1).
We are not convinced. As the Supreme Court has noted, "the prohibitions of the ADEA were derived in haec verba from Title VII." Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978); e. g., compare 42 U.S.C. § 2000e-2(a)(2) with 29 U.S.C. § 623(a)(2). "There are important similarities between the two statutes ... both in their aims—the elimination of discrimination from the workplace—and in their substantive provisions." Lorillard, 434 U.S. at 584, 98 S.Ct. at 872. Thus one naturally might expect to use the same methods and burdens of proof under the ADEA as under Title VII. Nothing in either the ADEA or its legislative history indicates a different conclusion.
The mere fact that Congress chose to pass a separate statute rather than to amend Title VII does not imply that age discrimination was intended to be subject to different standards and methods of proof than race or sex discrimination. Nor is defendants' position supported by the provisions in the ADEA that find no parallel in Title VII. The first of these, 29 U.S.C. § 623(f)(3), protecting an employer's right to act for good cause, expresses a principle equally applicable in Title VII cases—a fact evidenced by the McDonnell Douglas case itself.
3. McDonnell Douglas is Adaptable to a Jury Trial.
Defendants argue that the McDonnell Douglas rules for the "order and allocation of proof" should not be used in ADEA cases because they cannot be adapted to trials before juries. They contend that a McDonnell Douglas charge will confuse the jurors and that use of the shifting burdens will make it difficult to dispose of motions for directed verdicts.
While of some moment, these points take an unnecessarily literal view of what use of McDonnell Douglas in a jury setting entails. We cannot quarrel with the fact that the subtleties of McDonnell Douglas are confusing—as discussed in Part I(A) of this opinion, the "prima facie case," "burden of persuasion," and the shifting "burden of production" have caused considerable difficulty for judges of all levels. McDonnell Douglas was not written as a prospective jury charge; to read its technical aspects to a jury, as was done here, will add little to the juror's understanding of the case and, even worse, may lead jurors to abandon their own judgment and to seize upon poorly understood legalisms to decide the ultimate question of discrimination. Since the advantages of trial by jury lie in utilization of the jurors' common sense, we would have serious reservations about using McDonnell Douglas if doing so meant engulfing a lay jury in the legal niceties discussed in this opinion.
But we do not equate use of McDonnell Douglas with a requirement that the full formulation be read in haec verba to the jury. McDonnell Douglas is to a large extent an analytical framework enunciated post hoc, in light of a given set of facts, to give judges a method of organizing evidence and assigning the burdens of production and persuasion in a discrimination case. In light of this and the fact that the defendants' burden is one of production rather than of persuasion, only the factual determinations necessary to the underlying rationale of McDonnell Douglas need be made by the jury—the burden-shifting can and should be monitored by the judge.
Nor does use of McDonnell Douglas, as we understand it, pose any real, as opposed to theoretical, difficulty for disposing of motions for directed verdicts in jury trials. Normally the plaintiff will know ahead of trial what reason the defendant is relying on, and the usual order of trial, with plaintiff putting all of his evidence in first, will suffice. If defendant then moves for a directed verdict, the judge will be able to determine whether enough evidence has been introduced to allow the jury to find each disputed element of the prima facie case and that defendants' reason is a pretext. As the defendants' burden is not one of persuasion, McDonnell Douglas creates no impediment to ruling on this motion before the defendant has put on his defense.
4. McDonnell Douglas is Not an Inflexible Formula.
While we conclude that McDonnell Douglas provides an appropriate and
5. Utilization of McDonnell Douglas in the Jury Instruction.
We cannot formulate a charge that should be given in every ADEA case, nor would it be appropriate, in advance of the new trial, to indicate what charge should be given in the present case. We can state, however, some flexible guidelines and give some general directions for use by the district court.
The central issue, which the court must put directly to the jury, is whether or not plaintiff was discharged "because of his age," 29 U.S.C. § 623. We emphasize this obvious point lest technicalities of the kind addressed in this opinion become unduly intrusive, and discourage juries from relying on their common sense.
Whether the jury is also instructed that the plaintiff must establish the four elements of the McDonnell Douglas-type prima facie case (properly tailored to the circumstances) and that the employer's reason is a pretext, will depend on whether the plaintiff's age discrimination
While the above instructions would fit a "classic" or "pure" McDonnell Douglas paradigm, it is obvious that most cases will not come neatly packaged in that form. At least two other types of cases seem likely. One is a case which simply does not fit the mold of the McDonnell Douglas formula, as where plaintiff's evidence of discrimination is significantly different (for example, where plaintiff relies chiefly upon direct evidence of discriminatory motive in a letter or on an admission from defendant). The court should not force a case into a McDonnell Douglas format if to do so will merely divert the jury from the real issues; rather it should use its best judgment as to the proper organization of the evidence and the charge. In cases of this type, the best charge may simply be one that emphasizes that plaintiff must prove, by a preponderance of the evidence, that he was discharged because of his age—with adequate explanation of the meaning of the age statute, the determinative role age must have played, etc., see infra and Part II, infra.
Another case would be one in which proof of the McDonnell Douglas elements is a significant part of plaintiff's total evidence, but where there is also other evidence, direct or circumstantial, that might support an inference of discrimination. In the present case, for example, there were company documents that might be interpreted as indicating a preference for younger employees, although there apparently was no direct evidence that Loeb in particular was fired because of age.
Whatever the role of McDonnell Douglas in the particular case, we strongly encourage the court to go beyond the bare outlines of the issues mentioned here, and to provide the jury with a helpful and meaningful explanation of the relevance of the evidence introduced and of the interests of the parties. It would be useful to discuss the policies of the Age Discrimination Act and the plaintiff's rights thereunder, as the court did here to some extent. The court should also, especially when a management level job is involved, explain that an employer is entitled to make its own subjective business judgments, however misguided they may appear to the jury, and to fire an employee for any reason that is not discriminatory.
II. THE MIXED MOTIVE INSTRUCTION
We now turn to that portion of the charge in which the court said that Loeb did not have to prove that age was the "sole factor" in the decision to discharge him, and that he could recover simply by proving that age was one factor that "contributed to or affected the decision." This touches on a situation not addressed by McDonnell Douglas: the possibility that defendants were motivated by both legal and discriminatory motives.
Plaintiff's brief apparently concedes that he was required to prove that age was the determining factor, but argues that this was conveyed by instructing that age had to have "made a difference." We agree with defendants, however, that the court's statement was inadequate to convey to the jury the legal standard it should follow. To find that age was a factor that affected the decision is not equivalent to finding that age was a determinative factor, yet proof that it was a determinative factor is, as both parties recognize, essential to recovery under the ADEA.
We do not quarrel with the court's statement that age did not have to be the sole factor motivating defendants to act; we do think, however, that the court should have instructed the jury that for plaintiff to prevail he had to prove by a preponderance of the evidence that his age was the "determining factor" in his discharge in the sense that, "but for" his employer's motive to discriminate against him because of age, he would not have been discharged. See McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 282 n.10, 96 S.Ct. 2574, 49 L.Ed.2d 493; Fisher v. Flynn, 598 F.2d 663 (1st Cir. 1979) (Title VII plaintiff must prove "but for" causation); cf. Givhan v. Western Line Consolidated School District, 439 U.S. 410, 99 S.Ct. 693, 58 L.Ed. 2d 619 (1979); Mt. Healthy City Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977); Rosaly v. Ignacio, 593 F.2d 145 (1st Cir. 1979) (employers who considered protected expression in employment decisions can prevail by showing
Although this case must be remanded for a new trial, the trial court's damages award raises several legal issues that we address, in the event they will recur.
A. Liquidated Damages
The ADEA provides that, "liquidated damages shall be payable only in cases of willful violations of this chapter." 29 U.S.C. § 626(b). The trial court here awarded liquidated damages on the strength of the jury's specific finding that Textron's violation had been willful.
The ADEA also incorporates the enforcement provisions of the Fair Labor Standards Act, 29 U.S.C. §§ 216, 217, 29 U.S.C. § 626(b). These two sections of the FLSA have been amended by Section 11 of the Portal-to-Portal Pay Act, 29 U.S.C. § 260. Defendants argue that Section 11 therefore also is incorporated by reference into the ADEA.
Defendants go on to argue that liquidated damages were awarded improperly here, as there was no specific finding that they had not acted in "good faith."
Leaving aside the obvious, that a finding of "willfulness" would seem to preclude a finding of "good faith,"
434 U.S. at 581-82 n.8, 98 S.Ct. at 870. This selectivity is strong evidence that Congress did not intend to graft Section 11 onto the ADEA. See id. at 582, 98 S.Ct. 866. The reason is clear: under 29 U.S.C. § 216(b), standing alone, liquidated damages must be awarded once a violation is shown. Section 11 mitigates this result in FLSA cases. Id. at 581 n.8, 98 S.Ct. 866. In ADEA cases, the "willfulness" test serves the same function and renders Section 11 superfluous.
B. Pension Benefits and Damages in Lieu of Reinstatement
The trial court here decided that reinstatement would be inappropriate. In lieu thereof, and in addition to the clearly authorized awards of back pay and liquidated damages, it ordered Textron to make gradually decreasing yearly payments totalling $90,000
An award of pension benefits is plainly authorized under the ADEA. Congress intended that the calculation of "amounts owing" to a prevailing plaintiff include "items of pecuniary or economic loss such as wages, fringe, and other job-related benefits." H.Conf.Rep.No.95-950, 95th Cong., 2d Sess. 13, reprinted in  U.S. Code Cong. & Admin. News pp. 528, 535. Pension benefits are part of an individual's compensation and, like an award of back pay, should be awarded under 29 U.S.C. § 626(b). If a prevailing plaintiff is returned to the defendant's employment, this award will consist of payments to the pension fund on plaintiff's behalf, bringing plaintiff's pension interest to the level it would have reached absent discrimination.
When reinstatement is not ordered, any pension benefits due a prevailing plaintiff normally should be liquidated as of the date damages are settled, see Monroe v. Penn-Dixie Cement Corp., 335 F.Supp. 231, 235 (N.D.Ga.1971), and should approximate the present discounted value of plaintiff's interest. Just as with back pay, the award should be computed as if plaintiff had been employed until the date damages are settled. Where the time from plaintiff's initial employment until that date does not meet the employer's vesting requirements, some pension award may still be appropriate—an employer need not be allowed to stand on requirements that plaintiff cannot meet because of the employer's own wrongful acts. In such cases, the district court will have to exercise its discretion carefully. At the least, a plaintiff will be entitled to whatever would have been paid into the pension fund on his behalf. At most, he will be entitled to be treated as a vested employee and to receive a pension award based on employment from when he was first hired until damages are settled or on the minimum vesting period. This is a matter of some technicality, however, and one that we leave largely to the trial court's discretion.
A more difficult question is raised by the award of payments in lieu of reinstatement. Defendants argue that the court abused its
The ADEA damages section provides that,
29 U.S.C. § 626(b). While this language is expansive, we have noted previously that it is limited for the most part by the remedies available under the FLSA, Vazquez, supra, 579 F.2d at 109; see 29 U.S.C. § 626(b); Lorillard v. Pons, supra, 434 U.S. at 582, 98 S.Ct. 866; 113 Cong.Rec. 31254 (1967),
Given these principles, three questions are raised by the present case: First, what standards must govern the district court in deciding whether to grant or deny reinstatement to a prevailing plaintiff? See generally Albemarle Paper Co. v. Moody, 422 U.S. 405, 415-22, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). Second, assuming that reinstatement is properly denied, are damages in lieu thereof authorized or prohibited under the FLSA; does the legislative history of the ADEA counsel any different result? Finally, if such damages are available, what standards should govern the district court in deciding what amount, if any, to award?
To answer these questions, should they need to be addressed after the new trial, the district court should examine, inter alia, the traditional equitable powers of the federal courts
The Fifth Circuit's suggestion of damages in lieu of reinstatement was based in part on a statement the Supreme Court quoted with approval in Robert De Mario Jewelry, supra:
361 U.S. at 291, 80 S.Ct. at 335, quoting Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946). Wirtz, 302 F.2d at 157 n.3. The Supreme Court's endorsement of broad equitable relief in that case must be taken with caution, however. The Court has never been confronted with the issue of damages in lieu of reinstatement and, undoubtedly because of the difficulty of ascertaining future damages, there does not appear to be significant authority for such awards by "equity courts," except perhaps in cases involving the breach of employment contracts of specified duration.
The judgment is vacated and the case remanded for a new trial.
BOWNES, Circuit Judge (concurring and dissenting).
Because of errors made by the district judge in instructing the jury, I agree that
My overriding concern is that the majority opinion may be read as an attempt to dilute the force of McDonnell Douglas in discrimination cases. That case has been the lodestar, continually looked to by the Supreme Court in this area. See, e. g., Franks v. Bowman, 424 U.S. 747, 772, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976); International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); United Air Lines v. McMann, 434 U.S. 192, 98 S.Ct. 444, 54 L.Ed.2d 402 (1977); Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978); Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978). McDonnell Douglas first established the requirements of a prima facie case, emphasizing that the format therein described was appropriate to accommodate both the strong policy reasons for allowing plaintiff to proceed on the basis of a prima facie case and the further logical reason that the employer was the person best able to explain legitimate reasons for failing to hire (or firing) an otherwise qualified person who was within the protected class. While I agree that the precise formulation spelled out McDonnell Douglas need not be transmitted verbatim to the jury, I surely see no error in so doing. Furthermore, if the majority opinion can be read to suggest that the jury need not be informed of the role played by the prima facie case in the McDonnell Douglas matrix, I must demur.
Inherent rational grounds underlie the McDonnell Douglas prima facie case rule. As noted by the Supreme Court in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 359 n.45, 97 S.Ct. 1843, 1867, 52 L.Ed.2d 396 (1977), "[p]resumptions shifting the burden of proof are often created to reflect judicial evaluations of probabilities and to conform with a party's superior access to the proof." The Supreme Court has utilized the prima facie case to meet the problems of proof in discrimination cases. The important role of the prima facie case should, therefore, be communicated to the jury. Failure to do so slights both the logic and the underlying policies giving rise to it. These reasons do not vanish once defendant has adduced sufficient rebuttal evidence to protect against a directed verdict. Some instruction to the jury on the prima facie case is necessary for a full appreciation of what is involved in discrimination cases. So long as a trial court does not fall into the mistake of placing upon defendant an improper burden, its commenting on shifting burdens imports no error. Certainly, it will not be difficult for a trial judge to explain to a jury what a prima facie case means and what is necessary to rebut it.
The difficulties involved in instructing a jury in a products liability case, where liability is alternately premised on the three theories of strict liability, negligence, and warranty are no less complex than the shifting burdens outlined in McDonnell Douglas. Nor would such an instruction be beyond the ability of the average juror to adequately comprehend and appreciate. This important aspect of discrimination cases should not be sidestepped or hidden from the jury on the unsupported theory that it might be too complex or confusing.
I also think it important to set out precisely what burden shifts to the defendant once the plaintiff has made out a prima facie case. Although it has been stated that once the plaintiff has made out a prima facie case, the "burden of proof" shifts to the defendant, an analysis of the Supreme Court cases compels the conclusion that this does not mean proof by a preponderance of the evidence. In Furnco Construction Corp. v. Waters, supra, 438 U.S. at 577, 98 S.Ct. at 2950, the Court discussed the McDonnell Douglas, test, explaining that once a prima facie case had been made out, "the burden which shifts to the employer is merely that of proving that he based
My next point of clarification is with that portion of the majority opinion, ante at 1011 and 1019-1020, where the burden which is placed on plaintiff is that of proving that he would not have been fired "but for" age. With the following gloss, I concur. The "but for" analysis has been used at least on one occasion by the Supreme Court in a Title VII case, McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976), where the Court discussed the burden on plaintiff in showing defendant's reasons to be pretextual.
Id. at 282 n.10, 96 S.Ct. at 2580. As I think this makes clear, the burden on plaintiff once defendant denies discriminatory motive is that of showing that the legitimate motive advanced by defendant is pretextual. In other words, plaintiff need not— once having established a prima facie case—canvass the entire waterfront and eliminate every other possible motive for the discharge. He must simply meet defendant's alleged valid reason by showing it to be a pretext. To the extent that the majority opinion can be understood to place a heavier burden on plaintiff than this, I suggest that it places plaintiff under an impermissible handicap.
The majority addresses the question of the propriety of future damages in lieu of reinstatement in the Damages portion of
The Age Discrimination in Employment Act treats damages as follows:
29 U.S.C. § 626(b). The statute speaks clearly in terms of "unpaid ... wages" as the measure by which damages are to be determined.
Damages in age discrimination cases are not premised on the exact formulations permissible in an ordinary tort case. "Put more plainly, money damages in a case under the Age Discrimination Act must be liquidated as of the date of judgment." Monroe v. Penn-Dixie Cement Corp., 335 F.Supp. 231, 235 (D.Ga.1971). See also Bishop v. Jelleff Associates, 398 F.Supp. 579, 597 (D.D.C.1974); Schulz v. Hickok Mfg. Co., Inc., 358 F.Supp. 1208, 1217 (D.Ga. 1973). Cf. Brennan v. Ace Hardware Corp., 495 F.2d 368, 373 (8th Cir. 1974) (citing and following the language from Monroe, supra, 335 F.Supp. at 235). Nor is Mitchell v. De Mario Jewelry, 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960), to the contrary. That case involved a narrow point of statutory construction, namely, whether the 1949 amendment to the FLSA which added a proviso prohibiting the Secretary of Labor from seeking unpaid overtime wages on behalf of any employee, 29 U.S.C. § 217, Oct. 26, 1949, c. 736, § 15, 63 Stat. 919, also extended an interdict on the Secretary's bringing suit for lost wages for retaliatory discharge under 29 U.S.C. § 215(a)(3). The Court found that the Secretary could institute suit for lost wages. 361 U.S. at 294-95, 80 S.Ct. 332. Nothing in the case intimates that damages for speculative losses in the future can be awarded under the statute.
The law is clear, I believe, that damages must be liquidated as of the date of judgment.
"In this case, Plaintiff must prove what is called a `prima facie' case. To do this, he must prove:
"If Plaintiff does not prove a prima facie case by a fair preponderance of the evidence, then your verdict must be for Defendants.
"If you find Plaintiff has proved these four (4) elements of a prima facie case, by a fair preponderance of the evidence, then each Defendant has the burden to prove by a fair preponderance of the evidence a legitimate non-discriminatory reason for his or its actions. That is, that his or its actions were motivated by reasonable factors other than age or were for good cause. If you find that Plaintiff has proved a prima facie case and Defendant has not proved that his or its actions were motivated by reasonable factors other than age or were for good cause, then your verdict must be for Plaintiff.
"If, however, you find that Plaintiff has proved a prima facie case and you also find that Defendant has proved that his or its actions were motivated by reasonable factors other than age or were for good cause, your task is not ended. Although you may find that Defendant was motivated by reasonable factors other than age or for good cause, you must further find whether or not the reasonable factors or good cause which motivated Defendant were in fact, a pretext arranged in order to accomplish discrimination against Plaintiff because of his age. If you find that Defendant was motivated by reasonable factors other than age or good cause, the Plaintiff has the burden to prove by a fair preponderance of the evidence that the reasonable factors other than age or good cause were in fact a pretext arranged to accomplish discrimination against Plaintiff because of his age. If you find that Plaintiff has proved by a fair preponderance of the evidence that the reasonable factors other than age or good cause were in fact a pretext arranged to accomplish discrimination against Plaintiff because of his age, then your verdict must be for Plaintiff.
"To put it in outline form:
"Plaintiff prevails if:
"Defendant prevails if:
The court's repeated language at the end— "motivated by reasonable factors other than age or good cause" was obviously meant, as made clear at the onset, to be understood as "motivated by reasonable factors other than age or [motivated by] good cause."
The reasonableness of the employer's reasons may of course be probative of whether they are pretexts. The more idiosyncratic or questionable the employer's reason, the easier it will be to expose it as a pretext, if indeed it is one. The jury must understand that its focus is to be on the employer's motivation, however, and not on its business judgment. See NLRB v. Eastern Smelting & Refining Corp., 598 F.2d 666, 670 (1st Cir. 1979).