Allows Front Pay Damages

In a case of first impression, the Ninth Circuit held that front pay in excess of Title VII’s cap can be awarded since it is an equitable remedy rather than merely compensatory damages. Gotthardt v. National Railroad Passenger Corporation, 191 F. 3d 1148 (9th Cir. 1999). In so holding, the Ninth Circuit joined the Eight, Tenth and District of Columbia Circuits, all of which had reached the same conclusion; the Sixth Circuit has reached the opposite conclusion.

In Gotthardt, the plaintiff began her employment with Amtrak working as a fireman, or assistant engineer, on Amtrak’s trains in 1988. In September, 1993, she sued Amtrak, alleging violations of Title VII including employment discrimination based on sex, hostile work environment, retaliation and false imprisonment. On July 5, 1995, after Gotthardt stopped working at Amtrak, she filed a second action alleging similar violations of Title VII and the Fair Employment & Housing Act (“FEHA”). The court consolidated the action and case went to trial.

The case was decided by a jury, and that jury found against Gotthardt on her retaliation and sex discrimination claims, but for her on her hostile work environment sexual harassment claim, and awarded her compensatory damages of $350,000.

The district court adopted the jury’s verdict, but reduced the jury award of compensatory damages to $300,000, as required by 42 U.S.C. @ 1981a(b)(3), which caps compensatory damages for Title VII claims. After an evidentiary hearing it calculated equitable relief. It found that Gotthardt’s post traumatic stress disorder (“PTSD”) had rendered her unable to return to Amtrak, and that, given her age and background, she would be unable to enter another career. It also found that, if Gotthardt had not developed PTSD, she would have qualified for the Capitol Run, and assumed that she would have remained in that position until she retired. The court therefore awarded her $124,010.46 in back pay (representing the pay should have received if she had qualified for the Capitol Run and remained in that position until the time the district court issued its findings, minus the disability benefits she already had received, plus prejudgment interest), and $603,928.37 in front pay (representing the pay and benefits she would have received if she had worked as a locomotive engineer on the Capitol Run from the date of the court’s decision until she reached Amtrak’s mandatory retirement age of 70, discounted to present cash value). Gotthardt was 59 years old at the time of the award.
The district court concluded that section 1981a(b)(3), which caps compensatory damages in Title VII cases, does not apply to front pay awards.

On appeal, one of the main issues before the Ninth Circuit was how to characterize front pay. Amtrak argued that front pay awards are “compensatory damages awarded under [section 1981a] for future pecuniary losses,” and as such the district court should have capped the total amount of compensatory damages and front pay at $300,000. Gotthardt, on the other hand, claimed, that front pay is a form of equitable relief “authorized under section 706(g)” and that Congress did not intend to limit it when it passed section 1981a because front pay does not fall within section 1981’s definition of “compensatory damages,” thus, the district court correctly refused to cap Gotthardt’s front pay award.

In reaching its decision, the Ninth Circuit examined the legislative history of section 1981a and concluded that Congress did not intend section 1981a(b)(3) to restrict front pay awards. The Court stated that when Congress was considering section 1981a, Senator Kennedy, one of the bill’s sponsors, explained that, “compensatory damages did not include backpay, interest on backpay, or other type of relief authorized under section 706(g) of the Civil Rights Act of 964, including front pay.” The Court further noted that the chairman of the House subcommittee that drafted the bill, Representative Edwards, stated that “damages awarded under [section 1981a] cannot include remedies already available under Title VII including backpay, the interest thereon, front pay, or any other relief authorized under Title VII.”
Based upon this legislative history, the Ninth Circuit held that because section 1981a(b)(3) does not apply to front pay awards, the district court correctly refused to limit Gotthardt’s front pay award on that basis.

As a split remains in the Circuits of Appeal, it is almost certain that this is an issue that will we will hear from again. However, as the legislative history reveals, it will be a hard fight for employers.