Front Pay Damages
Many anti-discrimination and anti-retaliation statutes authorize reinstatement as an element of damages. If restatement is not feasible, a court may award front pay in lieu of reinstatement. There is no precise formula to determine the amount of front pay, A front pay award is intended to provide compensation for a period of time sufficient to allow the wronged employee an opportunity to obtain similar employment. As front pay is an equitable remedy, the judge usually determines front pay.
A prevailing plaintiff can also recover lost future earnings, which compensates the plaintiff for the effects of an unlawful termination. Lost future earnings “encompass reputational harms, loss of experience, and other forward-looking aspects of the injury caused by the discriminatory conduct.” Teutscher v. Woodson, 835 F.3d 936, 959 (9th Cir. 2016). Because lost future earnings is a component of compensatory damages, such damages should be decided by the jury.
How is Front Pay Determined?
Some of the factors courts consider to craft front pay awards include:
(1) the plaintiff’s age, (2) the length of time the plaintiff was employed by the defendant employer, (3) the likelihood the employment would have continued absent the discrimination, (4) the length of time it will take the plaintiff, using reasonable effort, to secure comparable employment, (5) the plaintiff’s work and life expectancy, (6) the plaintiff’s status as an at-will-employee, (7) the length of time other employees typically held the position lost, (8) the plaintiff’s ability to work, (9) the plaintiff’s ability to work for the defendant-employer, (10) the employee’s efforts to mitigate damages, and (11) the amount of any liquidated or punitive damage award made to the plaintiff.
Ogden v. Wax Works, Inc., 29 F. Supp. 2d 1003, 1015 (N.D. Iowa 1998) (internal citations omitted) (collecting cases from the First, Second, Third, Fourth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, and D.C. Circuits).
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SOX Whistleblower Obtains $2.7M in Front Pay
Prevailing SOX whistleblowers are entitled to reinstatement. But where reinstatement is not feasible, a court can order the employer to pay front pay in lieu of reinstatement. The court found that it was not feasible for Dr. Perez to return to work because there was “manifest hostility” between Dr. Perez and his former employer Progenics. Indeed, at trial, Progenics’ CEO was “condescending, contemptuous, and patronizing” to Dr. Perez.
Dr. Perez asserted that his front pay should consist of earnings from his age at the time of the verdict, 58 years and 2 months, until a reasonable retirement age of 66 years and 6 months. Progenics, however, contended that Dr. Perez’s calculation of front pay was speculative.
The court credited Dr. Perez’s testimony that he made a good-faith effort to find comparable work for over seven years and that “his prospects for future employment are unpromising in part due to Defendant’s violations of his rights.” Accordingly, the court adopted Dr. Perez’s calculation of front pay in the amount of $2,706,585.00. Judge Preska cited the Second Circuit’s decision in Whittlesey v. Union Carbide Corp., 742 F.2d 724, 729 (2d Cir.1984), an age discrimination case holding that when calculating front pay, the Court should “assume, absent evidence to the contrary, that the illegally discharged employee would have continued working for the employer until he or she reached normal retirement age.”
Judge Preska’s decision to award front pay through retirement age soundly reflects the reality that corporate whistleblowers often encounter substantial challenges finding comparable work and suffer significant reputational harm.
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