Garner v. G. D. Searle & Co., et al

Filing 303

MEMORANDUM OPINION. Signed by Honorable Judge Charles S. Coody on 2/14/13. (djy, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
KATHY GARNER and
LOULEE W. KARN,
Plaintiffs,
v.
G. D. SEARLE
PHARMACEUTICALS & CO.,
Defendants.

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CIVIL ACTION NO. 2:90cv688-MHT
(WO)

MEMORANDUM OPINION
I. Introduction
On January 4, 2002, the court found in its liability opinion (doc. # 177) that the
plaintiff Kathy Garner (“Garner”) was sexually harassed and that because of her sex and in
retaliation for filing an EEOC complaint, she was subjected to disparate treatment with
regard to promotions, discipline, and discharge in violation of Title VII. (Doc. No. 177, p.
2.) The court also found that plaintiff Loulee W. Karn (“Karn”) was sexually harassed and
constructively discharged in violation of Title VII. (Id.) In addition, the court determined
that both Garner and Karn were paid less than male employees for equal work in violation
of the Equal Pay Act.1 (Id.) The court ordered that judgment be entered in favor of Garner
and Karn (“Karn”) and against defendant G.D. Searle Pharmaceuticals & Co (“Searle”).
1

The court also held that, “[s]ubject to the court’s additional finding, based on after-acquired
evidence, that Garner would have been discharged even in the absence of Searle’s discrimination, . . . Garner
and Karn are entitled to appropriate relief.” (Doc. No. 177, p. 2.)

(Doc. No. 179.)

In addition, the court determined that, in the event the parties could not

reach an agreement on the issue of damages, the court itself would determine, after an
additional hearing, how much the plaintiffs should receive in damages. (Doc. No. 177, p.
128.)
Thereafter, the parties filed a joint notice of consent to exercise jurisdiction to
determine remedies by the United States Magistrate Judge assigned to this case and motion
for limited reference. (doc. # 230) The District Judge then referred all outstanding issues,
other than liability, including the issues of the appropriate relief to be afforded the plaintiffs
and costs and attorneys’ fees, to the undersigned to conduct all proceedings and order the
entry of final judgment in accordance with 28 U.S.C. § 636 and FED.R.CIV.P. 73.2 (Doc. No.
232, p. 1.)
On September 23, 2010, after completion of discovery and conclusion of an aborted
attempt to appeal by Searle, this court conducted an evidentiary hearing to determine
remedies. (Doc. No. 291.) The parties thereafter filed post-hearing briefs in support of their
positions. (Doc. Nos. 298, 299 & 302.) Upon consideration of the evidence presented and
the parties’ briefs and argument, the court concludes that the plaintiffs are entitled to an
award of both back pay and liquidated damages with respect to the Equal Pay Act claims, as
well as an award for back pay and other appropriate relief, including interest, with respect

2

The court specified in its order of reference that the Magistrate Judge does not have jurisdiction
to hear or decide liability issues or to alter, amend, or otherwise change the District Court’s findings,
judgment, or memorandum opinion and order set forth in document nos. 177-179. (Doc. No. 232, pp. 1-2.)

2

to the Title VII claims.
II. Discussion
To be blunt, the court approaches the question of appropriate damages in this case
with some trepidation because at best this is an endeavor fraught with uncertainty. But any
problems related to that uncertainty are Searle’s to bear.
We have recognized that “[t]rial courts and the parties themselves invariably
lack perfect hindsight to forecast what would have happened had there been
no unlawful acts.” Rodriguez v. Taylor, 569 F.2d 1231, 1238 (3d Cir.1977),
cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978);
International Broth. of Teamsters v. United States, 431 U.S. 324, 372, 97 S.Ct.
1843, 1873, 52 L.Ed.2d 396 (1977) (“process of recreating the past will
necessarily involve a degree of approximation and imprecision”). We have
concluded, however, that this “risk of lack of certainty with respect to
projections of lost income must be borne by the wrongdoer, not the victim.”
Goss v. Exxon Office Systems Co., 747 F.2d 885, 889 (3d Cir.1984) (citing
Story Parchment Co. v. Paterson Paper Co., 282 U.S. 555, 51 S.Ct. 248, 75
L.Ed. 544 (1931)); Mason v. Association for Independent Growth, 817 F.Supp.
550, 555 (E.D.Pa.1993) (same).
Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1100-1101 (3d Cir. 1995).
A. Equal Pay Act
In its liability opinion the court found that Searle “showed reckless disregard for the
matter of whether its conduct was prohibited by the Equal Pay Act” and concluded that “a
three-year statute of limitations applies to the equal pay claims in this case.”3 (Doc. No. 177,
3

A finding that a defendant acted willfully for statute of limitations purposes precludes a finding that
the defendant acted in good faith for liquidated damages purposes. See Glenn v. Gen. Motors Corp., 841
F.2d 1567, 1573 n. 14 (11th Cir. 1988). Cf. Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d
1150, 1164 (11th Cir. 2008)(determining that a jury’s finding that defendants in FLSA case acted willfully
for purposes of the limitations period precluded judge from finding that defendants acted in good faith for
purposes of liquidated damages).

3

pp. 116-117.) In addition, the court was
convinced that Searle violated the provisions of the Equal Pay
Act and paid Garner and Karn less than male sales
representatives for equal work. As affected employees under
the Equal Pay Act, Garner and Karn are entitled to recover the
additional amount (subject to the court’s after-acquired evidence
finding as to Garner) they should have received had they been
paid equally. In addition, because the court is also convinced
that Searle did not act in good faith, they are also entitled to
liquidated damages in an amount equal to their compensation for
underpayment. . . .
(Id., at 127-28.)
Although the court determined that the plaintiffs are entitled to liquidated damages,
the plaintiffs argue that they should receive prejudgment interest without liquidated damages
with respect to their Equal Pay Act claims. Specifically, Garner asserts that she is entitled
to $45,273.84 in back pay during her employment between June 27, 1987, to January 31,
1990, based on the pay differential compared to James Gruber, plus interest through
September 23, 2010. (Doc. No. 298, p. 1.) Karn asserts that she is entitled to $47,632.05 in
back pay during her employment between December 22, 1987, and June 15, 1989, based on
the pay differential compared to Joe Gagliano, plus interest through September 23, 2010.
(Id., p. 2.) It is no surprise that the defendants, however, argue that prejudgment interest is
not permitted in Equal Pay Act cases.
The Equal Pay Act of 1963 amended § 206 of the Fair Labor Standards Act (“FLSA”)
to prevent pay discrimination based on sex, and the FLSA’s statute of limitations and
liquidated damages provisions apply to Equal Pay Act claims. Perez v. Sanford-Orlando
4

Kennel Club, Inc., 515 F.3d 1150, 1164 (11th Cir. 2008) (citing 29 U.S.C. §§ 206(d)(3),
216(b), 260). When an employer has violated the Equal Pay Act, the employer “shall be
liable to the employee or employees affected in the amount of their unpaid minimum wages,
or their unpaid overtime compensation, as the case may be, and in an additional equal amount
as liquidated damages.” 29 U.S.C. § 216(b). There is, however, a good faith defense, which
permits the court to reduce or deny an award of liquidated damages “if the employer shows
to the satisfaction of the court that the act or omission giving rise to such action was in good
faith and that he had reasonable grounds for believing that his act or omission was not a
violation” of the Equal Pay Act. See 29 U.S.C. § 260. The employer bears the burden of
establishing both the subjective and objective components of the good faith defense against
liquidated damages. See Perez, 515 F.3d at 1163.
In this case, the court has determined the plaintiffs are entitled to recover the
additional amount they would have received had they been paid equally, as well as liquidated
damages in an amount equal to their underpayment. Because the court determined that Searle
failed to establish good faith, the plaintiffs are entitled to liquidated damages under 29 U.S.C.
§ 216(b). The plaintiffs, however, seek prejudgment interest without liquidated damages.
Most courts will not award both liquidated damages and prejudgment interest. See
Brooklyn Bank v. O’Neil, 324 U.S. 697, 715 (1945). In this Circuit, a plaintiff may not
recover prejudgment interest in a private FLSA action. See Lindsey v. American Cast Iron

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Pipe Co., 810 F.2d 1094, 1101 (11th Cir. 1987)4; Townley v. Floyd & Beasley Transfer Co.,
Inc., No. 88-AR-0907-S, 1989 WL 205341, *3 (N.D. Ala. 1989) (“The law in this circuit is
clear that a successful FLSA plaintiff is not entitled to an award of pre-judgment interest.”).
Thus, the court concludes that the plaintiffs are not entitled to an award of prejudgment
interest under the Equal Pay Act. See Perez, supra. Consequently, this court must only
determine the additional amount the plaintiffs would have received had they been paid
equally.
The court has wide discretion in fashioning a remedy. Jepsen v. Florida Bd of
Regents, 754 F.2d 924, 927 (11th Cir. 1985) (citing Albemarle Paper Co. v. Moody, 422 U.S.
405 (1975)). When determining whether the starting salaries of the plaintiffs were
comparable to their comparators, the court in its liability opinion found that the “best way .
. . is to compare the placement of Garner and Karn within the pay grade 3 salary range upon
their dates of hire.” (Doc. No. 177, p. 99-100.) With respect to the plaintiffs’ and their
comparators’ starting salaries, the court specifically determined that
Garner received a starting salary of $28,500. This placed her
$500 below the midpoint of the 1987 salary range for pay grade
3. In contrast, Gruber and Swalley received starting salaries of
$33,000. This placed them only $100 below the midpoint of the
4

The court, citing World Airlines v. Thurston, 469 U.S. 111 (1985), noted that liquidated damages
under the ADEA are different from those available under the FLSA. See Lindsey v. American Cast Iron Pipe
Co., 810 F.2d at 1102 (“ADEA liquidated damages awards punish and deter violators, while FLSA liquidated
damages merely compensate for damages that would be difficult to calculate. Therefore, awarding both
prejudgment interest and liquidated damages in an ADEA case does not constitute double compensation.”).
See also Snapp v. Unlimited Concepts, Inc., 208 F.3d 928, 938-39 (11th Cir. 2000) (noting that, under the
FLSA, awards of damages are not punitive).

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1990 salary range for pay grade 3. Thus, when comparing their
relative placements within the applicable salary ranges, Garner
was paid $400 less than Gruber and Swalley. Similarly, when
Karn was hired in 1987, she received a starting salary of
$32,000. This placed her $100 above the 3/4 mark in the salary
range for pay grade 3 for that year. Therefore, when comparing
their rank within the applicable salary range, Karn was paid
$200 less than Gagliano
(Doc. No. 177, p. 100.) Thus, Garner’s starting salary was $400 less than Gruber’s starting
salary and Karn’s starting salary was $200 less than Gagliano’s starting salary.
The evidentiary materials indicate that both the plaintiffs and their comparators for
purposes of the Equal Pay Act received merit raises. On March 1, 1988, Garner’s salary was
increased to $30,000, which continued until the date of her discharge on January 31, 1990.
This placed her $300 below the midpoint of the 1988 salary range for pay grade 3. (Trial
Record, Defendant’s Ex. 48.) On December 1, 1990, Gruber’s salary was increased to
$34,700. This placed him $1600 above the midpoint of the 1990 salary range for pay grade
3. (Id.) Thus, when comparing their relative placements within the applicable salary ranges,
Garner was paid $1700 less than Gruber.
In December 1988, Karn received a promotion, increasing her salary to $36,000. This
placed her $650 below the midpoint of the 1990 salary range for pay grade 4. (Id.) On
September 1, 1990, Gagliano received a promotion, increasing his salary to $36,800. This
placed him $400 above the midpoint of the 1990 salary range. (Id.) Therefore, when
comparing their relative placements within the applicable salary ranges, Karn was paid $1050
less than Gagliano.
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Based on the foregoing, the court concludes that the plaintiffs are entitled to an award
of damages in the amount they would have received had they been paid equally, as well as
liquidated damages in an amount equal to their compensation for underpayment. Garner is
entitled to an award of $2100, as this is the amount she would have received had she been
paid equally, as well as an additional amount of $2100 in liquidated damages. Therefore, the
court shall award Garner a total of $4200 in damages with respect to Garner’s Equal Pay Act
claim. Karn is entitled to an award of $1250, as this is the amount she would have received
had she been paid equally, as well as an additional amount of $1250 in liquidated damages.
Thus, the court shall award Karn a total of $2500 with respect to Karn’s Equal Pay Act claim.
B. Title VII Liability
The court determined in its liability opinion that both Garner and Karn are entitled to
back pay and other benefits they would have received absent the unlawful discrimination.5
(Doc. No. 177, p. 126-27.)

Title VII requires that a plaintiff be made whole for

discrimination suffered as the result of a defendant’s actions. See Miranda v. B&B Cash
Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citing Albemarle Paper Co. v.
Moody, 422 U.S. 405 (1975)). Under Title VII, Congress characterized back pay as a form
of equitable relief. See 42 U.S.C. § 2000e-5(g)(1) (The court may “order such affirmative
action as may be appropriate, which may include, but is not limited to, reinstatement or hiring
of employees, with or without back pay . . . , or any other equitable relief as the court deems
5

The court did not award Garner any backpay or frontpay after the date Searle discovered evidence
indicating that she falsified a physician call report form.

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appropriate.”); Teamsters v. Terry, 494 U.S. 558, 572 (1990); Miranda, supra (citing
Franks v. Bowman Transportation Co., 424 U.S. 747, 763 (1976)). Thus, this court may
award back pay and other appropriate equitable relief in this case.
(1) An Award of Interest
Searle argues that the plaintiffs are not entitled to interest because the court rejected
their demand for such relief. Specifically, Searle contends that the court’s order that “Garner
and Karn are entitled to back pay and other back benefits they would have received absent
such discrimination”6 is an implicit denial of the plaintiffs’ demand for interest in this case.
In addition, the defendant argues that the plaintiffs failed to challenge the court’s rejection
of their demand for interest by failing to file a motion for attorney’s fees and expenses or
address the denial of an award of interest in their November 18, 2005, motion to amend. The
plaintiffs, however, argue that the terms “back pay” and “other appropriate relief” as stated
in the court’s opinion include interest by definition.
In its liability opinion, the court specifically found that, “[a]s victims of sex
discrimination and retaliation, Garner and Karn are entitled to appropriate relief.” (Doc. No.
177, p. 126.) The court also determined that, “subject to the court’s after-acquired evidence
finding with regard to Garner, Garner and Karn are entitled to back pay and other back
benefits they would have received absent such discrimination.” (Id., pp. 126-27.)
In Loeffler v. Frank, the United States Supreme Court discussed the effect of

6

(Doc. No. 177, pp. 126-27.)

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prejudgment interest in Title VII cases as follows:
The back pay award authorized by § 706(g) of Title VII, as
amended, 42 U.S.C. § 2000e-5(g), is a manifestation of
Congress’ intent to make “persons whole for injuries suffered
through past discrimination.” Albermarle Paper Co. v. Moody,
422 U.S. 405, 421, 95 S.Ct. 2362m 2373, 45 L.Ed.2d 280
(1975). Prejudgment interest, of course, is “an element of
complete compensation.” West Virginia v. United States, 497
U.S. 305, 310, 107 S.Ct. 702, 706, 93 L. Ed. 2d 639 (1987).
Thus, since Title VII authorizes interest awards as a normal
incident of suits against private parties . . . . , it follows that
respondent may be subjected to an interest award in this case.
486 U.S. 549, 557 (1988).
Consequently, prejudgment interest is not an added remedy. Rather, it is simply part
of providing full compensation to the injured party. Prejudgment interest, as a legal matter,
is intended to compensate injured parties both for the time value of the lost money as well
as for the effects of inflation. United States v. City of Warren, Mich., 138 F.3d 1083 (6th Cir.
1998). “Money today is not a full substitute for the same sum that should have been paid
years ago.” Matter of Oil Spill by the Amoco Cadiz, 954 F.2d 1279, 1331 (7th Cir. 1992).
“Prejudgment interest, like all monetary interest, is simply compensation for the use or
forbearance of money owed.” Transmatic, Inc. v. Gulton Industries, Inc., 180 F.3d 1343,
1347 (Fed. Cir. 1999). “Prejudgment interest is not awarded as a penalty; it is merely an
element of just compensation.” City of Milwaukee v. Cement Division, National Gypsum,
Co., 515 U.S. 189, 197 (1995).
An award of prejudgment interest is within the discretion of the court. See Loeffler,

10

supra. After careful consideration, the court concludes that an award of prejudgment interest
is appropriate in this case to adjust the back pay award for inflation and reflect the present
day value of income that should have been paid to Garner and Karn in the past.7 See Stone
v. Geico Ins. Co., No. 8:05cv636-T-30TBM, 2009 WL 3720954, *2 (M.D. Fla. 2009). In
other words, prejudgment interest is simply a part of providing full compensation to the
plaintiffs. See Saulpaugh v. Monroe Cmty Hosp. 4 F.3d 134, 145 (2d Cir. 1993) (Title VII
authorizes district court to grant prejudgment interest on back pay award; its purpose is to
prevent employer from attempting to enjoy interest-free loan for as long as it can delay
paying out back wages); Robinson v. Instructional Sys., Inc., 80 F. Supp. 2d 203, 207
(S.D.N.Y. 2000) (employee was entitled to prejudgment interest on back pay award in Title
VII retaliation action against employer; interest would help insure that employee was made
whole, that employer would not profit from any delay in paying wages, and that remedial
purposes of Title VII would be served); Davis v. Rutgers Casualty Ins. Co., 964 F. Supp.
560, 575 (D.N.J. 1997) (“Prejudgment interest in a Title VII case is an equitable remedy
meant to compensate for the plaintiff’s loss of the value of money over time, and to avoid a
windfall to defendant in paying lost wages in current dollars while having enjoyed the use
7

The defendant argues that the reference to the undersigned Magistrate Judge “denied jurisdiction
[to determine] . . . the equitable relief of interest.” Given the court’s findings concerning the violations of
law committed by the defendant with the concomitant necessity of providing appropriate complete relief, the
defendant’s attempt to cabin the court’s ability to provide that relief is specious. The defendant also argues
that the plaintiffs’ consent to the reference to the undersigned is an abandonment of any claim to interest.
This contention is equally specious. The joint motion for the reference gave consent for the Magistrate Judge
to determine among other things “the appropriate relief to be awarded the plaintiffs, and costs and attorney
fees.” The order of reference says the same thing. The argument of the defendant improperly conflates the
issues of liability with the issue of damages.

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of the capital over the years.”); Ford v. Rigidply Rafters, Inc., 984 F. Supp. 386, 391 (D. Md.
1997) (“An award of [prejudgment] interest [on back pay] ensures that inflation does not
consume the value of a back pay award, and ensures that a discriminating employer does not
reap an unfair benefit from ‘the inherent delays of litigation.’”); Iannone v. Frederic R.
Harris, Inc., 941 F.Supp. 403, 413 (S.D.N.Y. 1996) (determining “it is generally an abuse
of discretion not to award interest, since that would reward the employer who has violated
Title VII by effectively providing it with an interest-free loan”)). Thus, this court will
compute prejudgment interest pursuant to 28 U.S.C. § 1961 and consistent with the policy
and practice of the National Labor Relations Board (NLRB) at the applicable IRS prime rate.
See, e.g., Weaver v. Gallardo, Inc., 922 F.2d 1515, 1528 (11th Cir. 1991); McKelvy v. Metal
Container Corp., 854 F.2d 448, 453 (11th Cir. 1988) (citing 28 U.S.C. § 1961); EEOC v.
Guardian Pools, Inc., 828 F.2d 1507, 1512 (11th Cir. 1987) (determining that, consistent with
the policy and practice of the National Labor Relations Board, IRS prime rates are to be used
in calculating the amount of prejudgment interest on back pay awards in Title VII cases);
Baldwin v. City of Prichard, No. CA 07-0789-C, 2009 WL 1211385, * 6 (S.D. Ala. May 4,
2009).
This court notes that in a typical damages case interest accrues until the date of the
court’s final judgment. The plaintiffs, however, request that interest accrue until the date of
this court’s evidentiary hearing on September 23, 2010. Given the protracted nature of this
case, the court concludes that the plaintiffs’ request to cease the accrual of interest to the date

12

of the evidentiary hearing in this case is an appropriate compromise. Consequently, the court
will discontinue the accrual of prejudgment interest on September 23, 2010.
(2)

Promotion Liability8

Garner asserts that she is entitled to $14,399.69 as compensation for Searle’s failure
to promote her between September 1, 1988 to January 31, 1990, based on the pay differential
compared to James Gruber, plus interest through September 23, 2010. (Doc. No. 298, p. 1.)
The defendant argues that Garner is not entitled to damages resulting from Searle’s failure
to promote her because she did not allege in her EEOC charge or her amended complaint that
she was denied a promotion based on gender in violation of Title VII.9 (Doc. 299, p. 12-13.)
8

Karn did not raise a failure-to-promote or disparate treatment claim in this case.

9

In its pre-trial order, the court identifies the plaintiffs’ claims as follows:
. . . The plaintiffs contend that they were discriminated against by the
defendant, G.D. Searle and its agent, Joe Flanders, because of their sex in
discharge, constructive discharge, evaluations, job assignments, raises,
compensation, training, discipline, supervision, assistance, work
environment and promotions. The plaintiffs also contend that they were
retaliated against for opposition to defendants’ unlawful behavior and/or
participation in EEOC proceedings. . . .
The plaintiffs contend that they were required to work in a sexually
hostile environment which subjected them to severe emotional stress,
harassment and abuse. . . .
The plaintiffs were paid less than similarly situated males for
performing substantially the same duties and responsibilities. The
defendant hires women sales representatives at lower salaries than men and
at . . . lower job classifications. The defendant further has a discriminatory
policy and practice regarding evaluations and pay raises. The defendant’s
policy of paying women less for their initial wages causes women to
receive lower raises. In addition, the defendant intentionally pays women
less for promotions and merit increases than men. The defendant has
discriminated against women in promoting men to higher job classifications
when similarly situated women are not promoted in a like fashion. . . .

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In addition, Searle contends that the plaintiff failed to demonstrate a prima facie case of a
failure-to-promote claim because the court did not enter a finding that a male employee
received a promotion that she sought in September 1988. (Id., p. 13.) Specifically, Searle
argues that, “[f]rom a proof standpoint, the proper comparator would be the unidentified
sales representative in Florence” because Garner testified in her 2009 deposition that this
individual was the person who received the promotion she had sought. (Doc. No. 299, pp.
13-14.)
As previously discussed, the undersigned does not have jurisdiction to hear or decide
liability issues or to alter, amend, or otherwise change the court’s liability findings in this
case. In its January 4, 2002, opinion, the court specifically found that Garner asserted a claim
that “with regard to promotions, discipline, and discharge, Searle discriminated against her
because of her sex and in retaliation for filing a complaint with the Equal Employment
Opportunity Commission. . . .” (Doc. No. 177, p. 1.) The court also found as follows:
Promotions: Garner was denied a promotion in
...
...
Garner was paid less than similarly situated men for performing
work of equal skill, responsibility and effort. Garner did not receive
promotions when similarly situated men received promotions.
Furthermore, Garner’s evaluations were lower than men whose
performance was equal to or worse than hers. Garner’s initial job
assignment and wages was lower than men who had equal or less
qualifications as a sales representative.
(Doc. No. 124, pp. 2-3.) The record does not indicate that the defendant objected to the court’s identification
of the plaintiffs’ claims in it pre-trial order. Consequently, the aforementioned claims, including the
differential treatment and failure-to-promote claims, were presented and argued during the non-jury trial in
March and April of 1993.

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September 1988 from medical sales representative I, pay grade
3, to medical sales representative II, pay grade 4. While her
sales numbers were low, at least two male sales representatives,
who were in comparable positions, were granted promotions.
Graham Crosby was promoted in September 1989 from a pay
grade 3 to a pay grade 4 even though he was not meeting his
sales budget. According to Searle, it was a “motivational
promotion” and the personnel document granting the promotion
points to a positive trend in his territory. However, the sales
figures on which the promotion was based do not reflect that
there was a significant increase between when Crosby took over
his territory and when he received his first promotion. Most
importantly, if the same criteria used to give Crosby a promotion
were applied to Garner, she too should have received a
promotion. The evidence at trial was that when Garner took
over her territory, sales were very low, and she appeared to have
turned the territory around to some extent by September 1988,
when she was denied a promotion.
Crosby then received a second promotion in February
1991 to a pay grade 5. It was based on Crosby’s 1990
performance appraisal in which he was rated “below sales” for
the second consecutive year. Yet, despite this record he was
promoted a second time. Frye admitted at trial that it was quite
unusual to promote a representative who was not meeting
budget for two years in a row. Even more importantly, Crosby’s
December 1990 sales figures, which appear in his 1990
performance appraisal, are quite similar to Garner’s December
1989 sales figures. However, Garner was terminated on the
basis of her December 1989 figures, while Cosby was promoted.
James Gruber received a promotion from pay grade 3 to
pay grade 4 in November 1990, seven months after [he] was
hired. Again, the basis for the promotion was that he had
“reversed a long standing trend” in his territory and was
“beginning to produce results.” It was also stated that he had
“the potential to meet budget.” All of the same things, however,
could have been said of Garner when she was denied her
promotion.

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That Garner’s job performance did not warrant a
promotion is pretextual.
(Doc. No. 177, pp. 69-70.) Thus, the court found that both Crosby and Gruber were proper
comparators with respect to Garner’s disparate treatment claim, which includes a failure-topromote claim.
Although Garner’s 2009 deposition indicates that an unidentified male employee
received a promotion, this does not establish that Garner has failed to prove her damages
with respect to her failure-to-promote or disparate treatment claim. Searle relies on Brown
v. Alabama Dep’t of Transportation, 597 F.3d 1160 (11th Cir. 2010), when arguing that
Garner is not entitled to damages because she failed to prove that a male employee received
a promotion that she sought in 1988. In Brown, the court held that a plaintiff in a failure-topromote case must demonstrate that other employees of similar qualifications who were not
members of a protected group were promoted at the time the plaintiff’s request for a
promotion was denied. 597 F.3d at 1179. Brown, however, involved the promotion of
employees to new or open positions within the Alabama Department of Transportation. The
liability findings of the court, however, indicate that promotions at Searle were not vacancy
driven but were a natural progression through pay grades and ranges based on performance.10
10

The Court determined:

Sales performance is also the most important factor in determining merit pay raises
and promotions. Merit pay raises, which affect a sales representative’s salary within a
particular grade, are based on a representative’s annual evaluation and overall performance
rating, which . . . is tied primarily to a representative’s sales performance. Similarly,
promotional raises, which affect a sales representative’s pay grade, are based principally on
sales performance.

16

Thus, it was unnecessary for the plaintiff to name the employee who received a promotion
in 1988. See Walker v. Mortham, 158 F.3d 1177, 1186 & n. 15 (11th Cir. 1998) (discussing
the test for a prima facie case as set forth in McDonnell Douglas Corp. v. Green, 411 U.S.
792, 802 (1973), and noting that “this original formulation allows a plaintiff to establish her
prima facie case without even showing that another person was hired for the job, let alone
anything about the successful applicant”).
Garner asserts that Gruber is the proper comparator with respect to her disparate
treatment claim.11 Garner compares the differences between her pay and Gruber’s quarterly
pay when calculating damages. The defendant argues that, if Gruber is used as a comparator
to determine relief, the salary increase Gruber received when he was promoted, rather than
comparative total salaries, would be the proper number to use. The court specifically found
that Garner was subjected to disparate treatment, including the failure to promote.
Specifically, the Court determined that Garner was “subject to disparate treatment with
regard to promotions, discipline, and discharge in violation of Title VII.” (Doc. No. 177, p.
2.) Given the Court’s determination that Gruber’s promotion to Pay Grade 4 is the proper

Searle pays its medical sales representatives according to five pay grades. The
lowest pay grade for sales representatives is 3, and the highest pay grade is 7. Within each
pay grade there is a salary range. Merit raises increase a representative’s salary within a
particular pay grade, which promotional raises move a representative from one pay grade
to the next. A different title accompanies each pay grade.
(Doc. No. 177, pp. 6-7.)
11

In their pleadings concerning damages (Doc. Nos. 298, 299, & 302), neither the plaintiffs nor the
defendant consider Crosby as a comparator. Therefore, for purposes of this opinion, this court will compare
Garner’s and Gruber’s salaries when calculating back pay.

17

benchmark for Garner’s disparate treatment claim, this court will calculate the amount of
back pay by determining the difference in earnings between Garner and Gruber on a quarterly
basis. See Kendrick v. Jefferson County Bd. of Educ., 13 F.3d 1510, 1513 (11th Cir. 1994)
(holding that, in general, Title VII damages are calculated on a quarterly basis).
Accordingly, the court finds the difference in earnings between Garner and Gruber
on a quarterly basis as follows:

Gruber

Garner

Total

09/01/88 to 09/30/88

$2747.90

$2373.14

$374.76

10/01/88 to 12/31/88

$8250.06

$7124.91

$1125.15

01/01/89 to 03/31/89

$8250.06

$8250.06

-0-

04/01/89 to 06/30/89

$8250.06

$8250.06

-0-

07/01/89 to 09/30/89

$8250.06

$8250.06

-0-

10/01/89 to 12/31/89

$8250.06

$8250.06

-0-

01/01/90 to 03/31/90

$2747.90

$1239.90

$1508.00

Consequently, when calculating actual earnings, Garner is entitled to a total of
$3007.91 in back pay, as well as prejudgment interest, with respect to her Title VII failure-topromote claim.
(3)

Discharge Liability

Garner asserts that, after subtracting interim earnings and other mitigation, she is

18

entitled to $305,871.39 of back pay. Garner bases her calculation on the difference in pay
between herself and Gruber through the date of her discharge on January 31, 1990, until the
date of trial on March 22, 1993, as well as interest through the date of the September 23,
2010 evidentiary hearing before this court.12 Karn also asserts that, after subtracting interim
earnings and other mitigation, she is entitled to $816,887.00 of back pay. Karn’s calculation
is based on the difference in pay between herself and Joe Gagliano through the date of her
constructive discharge on June 15, 1989 until her decision to stop seeking employment in
pharmaceutical sales on December 31, 1998, as well as interest through the date of the
September 23, 2010 evidentiary hearing.
In Kendrick v. Jefferson County Bd. of Educ., 13 F.3d 1510 (11th Cir. 1994), the Court
discussed the appropriate damages formula to apply in wrongful termination cases.
The situation presented arises in a wrongful termination
or refusal to hire case when the prevailing plaintiff had, during
some but not all of the relevant damages period, income from a
new job that exceeded that which she would have earned at the
terminated or denied job. The question is how the new
employment income is to be offset against lost wages from the
old job. The Supreme Court addressed this question forty years
ago in NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 73 S.Ct.
287, 97 L. Ed. 377 (1953). The Seven-Up Court reversed the
court of appeals, which had adopted an aggregate pay approach,
and instead upheld the National Labor Relations Board rule that
offsetting should be done on a quarterly basis. The Court
approved the following formula:
Loss of pay shall be determined by deducting
12

The District Court ordered that Garner should not be awarded any back pay or front pay after the
date Searle discovered her misrepresentation on a physician call report. (Doc. No. 177, p. 76.)

19

from a sum equal to that which [the employee]
would normally have earned for each such quarter
or portion thereof, [her] net earnings, if any, in
other employment during that period. Earnings in
one particular quarter shall have no effect upon
the back-pay liability for any other quarter.
Id. at 345, 73 S.Ct. at 288 (citation omitted). . . .
Thirty years after Seven-Up, this Court adopted for Title
VII cases the quarterly earnings formula from the NLRA case
law. In Darnell v. City of Jasper, 730 F.2d 653 (11th Cir. 1984),
. . . [the Court] explained:
Although we have discovered no cases applying
the “quarterly earnings formula” in the context of
a Title VII action, we conclude that such a
formula more faithfully serves the remedial
objectives of Title VII and, in any case, promotes
the consistent application of back pay awards
rendered under both Title VII and the NLRA.
Id. at 657.
Kendrick, 13 F.3d at 1513.
(a) Mitigation of Damages. A majority of the post-hearing briefs are
devoted to the issue of mitigation; consequently, so is a large part of this opinion. Therefore,
before determining the sum that Garner or Karn would normally have earned for each pay
period, this court must determine whether the plaintiffs mitigated their damages. Title VII
provides that “[i]nterim earnings or amounts earnable with reasonable diligence by the person
or persons discriminated against shall operate to reduce the back pay otherwise allowable.”
42 U.S.C.A. § 2000e-5. Therefore, once a plaintiff makes a showing that she is entitled to

20

damages resulting from the discriminatory acts of an employer, the burden shifts to the
employer to prove that the claimant is not entitled to the full amount of back pay sought.
Brown v. Alabama Dept. Of Transp., 597 F.3d 1160, 1183 (11th Cir. 2010); Nord v. U.S.
Steel, 758 F.2d 1462, 1470 (11th Cir. 1985). The defendant’s burden can be met by the
production of evidence establishing the amount of interim earnings received by the claimant,
or through evidence showing that the claimant failed to exercise diligence in searching for
or retaining interim employment. Nord, 758 F.2d at 1470.
Searle contends that Garner is entitled to no more than three weeks of back pay
because she accepted a comparable sales position at Delta Foremost, and she was largely
satisfied with the position.13 Searle also argues that Garner failed to mitigate her damages
by using reasonable diligence to find substantially equivalent employment.
. . . “Substantially equivalent employment” is
employment that affords virtually identical promotional
opportunities, compensation, job responsibilities, working
conditions, and status to those available to employees holding
the position from which the Title VII claimant has been
discriminatorily terminated. If the former employee cannot find
substantially equivalent employment, he may “lower his sights”
and accept noncomparable employment. Title VII, however
“does not require that a person remain employed despite
dissatisfaction.”
Weaver v. Casa Gallardo, Inc., 922 F.2d 1515, 1527 (11th Cir. 1991).
Searle has the burden of showing that Garner did not make reasonable efforts to obtain

13

Searle does not challenge Garner’s mitigation efforts during the three week period before
beginning her new job at Delta Foremost. (Doc. No. 299, p. 22.)

21

comparable work. When discussing the duties of sales representatives at Searle, the District
Court found the following:
The primary responsibility of all of Searle’s sales
representatives is to call on doctors, hospitals, retail pharmacies,
and drug wholesalers in order to promote the prescription and
use of Searle products within their territory. Each sales
representative is expected to be fully versed in Searle’s products
and capable of comparing and contrasting the pharmacologic
characteristics of Searle’s products with competing products in
the market. A sales representative’s duties include arranging for
physicians to attend special instructional seminars that promote
Searle’s products. . . .
(Doc. No. 177, pp. 3-4.)
The evidentiary materials indicate that Garner’s duties at Delta Foremost included
selling industrial cleaning products to local car dealerships, manufacturing companies,
nursing homes, and hospitals. (Def’s Ex. 14, Garner’s October 1990, Dep., p. 26.) Searle
argues that Garner’s isolated statement during her deposition that her position at Searle and
her job at Delta Foremost were “comparable” establishes that she is not entitled to back pay.
Specifically, Searle contends that “Garner’s acceptance of comparable, satisfactory
employment for 161 of the 164 weeks spanning the discharge date and the end of [her] back
pay period disproves entitlement to make-whole relief for those 161 weeks.”
Although both positions are “comparable” to the extent they involved the sale of a
product, the court finds that there are more differences than similarities between Garner’s
pharmaceutical sales position at Searle and her industrial-product sales position at Delta
Foremost. First, selling heavy industrial cleaning products to car dealerships is substantially
22

different from the sale of pharmaceutical products to physicians in a medical environment.
Secondly, Garner’s position at Delta Foremost included some manual labor, including
carrying heavy commercial cleaning products from one dealership to another. Plainly,
Garner’s job as a sales representative at Delta Foremost did not hold the same status as her
position as a pharmaceutical representative at Searle. More importantly, the compensation
at Delta Foremost was substantially less than the salary Garner could have received at Searle
during the same time period. Garner’s acceptance of employment as a sales representative
in an entirely different industry when no full-time pharmaceutical jobs were available is a
significant factor demonstrating that Garner used reasonable efforts to mitigate her damages
in this case. This court therefore concludes that Garner mitigated her damages by lowering
her sights and accepting a sales position in the industrial cleaning product industry.
Moreover, Searle has failed to overcome its burden of demonstrating that Garner
failed to exercise diligence is searching for or retaining interim employment. There is no
evidence indicating that other comparable sales positions were available in the
pharmaceutical industry at the time Garner sought employment. See Weaver, 922 F.2d at
1527. Furthermore, Garner testified that she sent her résumé to numerous businesses and
sought other employment while working at Delta Foremost.14 (Def’s Ex. #7, p. 7; Def’s Ex.
14

The court recognizes the possibility that “[a]t best, Garner applied for only eight jobs in the five
year period from 1991 through 1996, or slightly less than two job applications per year.” (Doc. No. 299,
Def’s Brief, p. 25.) Nonetheless, because Garner accepted a sales job at Delta Foremost and the defendant
has failed to point to evidence indicating that any comparable pharmaceutical sales positions were available
in the area during the relevant time period, the court finds that the defendant failed to overcome its burden
of proving that Garner did not make reasonable efforts to obtain employment or otherwise mitigate her
damages.

23

#10, p. 84; Def’s Ex. # 12, p. 20; Def’s Ex. # 14, pp. 23-25.) This court therefore concludes
that Garner reasonably mitigated her damages during the period between her constructive
discharge on June 15, 1989 until the date of trial on March 22, 1993.15
Next, the court must decide whether Karn mitigated her damages in this case. Karn
asserts that she is entitled to back pay between the date of her constructive discharge on June
15, 1989, and the date she decided to discontinue her efforts to find a pharmaceutical sales
position on December 31, 1998. Searle contends that Karn is not entitled to back pay
because she failed to mitigate her damages. Specifically, Searle argues that Karn’s
acceptance of a part-time sales position followed by her decision to stop working after having
a child demonstrates that Karn is not entitled to back pay. Karn, however, maintains that she
obtained a new job within a week after her constructive discharge and that she remained
employed during 221 of the 234 weeks of the relevant time period. She also contends that,
although she sought full-time employment, she was unable to secure an available full-time
job during the economic recession. In addition, Karn contends that Searle has failed to
present any affirmative evidence demonstrating that other better-paying jobs were available
and that she would have been hired for those jobs.
The record indicates that Karn applied for several positions, both part-time and full-

15

The District Court ordered that Garner may not recover any back or front pay occurring after the
date Searle discovered Garner’s misrepresentation. (Doc. No. 177, pp. 76-77.) This court, however, is
unable to determine the specific date Searle discovered the misrepresentation. Because the discovery was
made during the course of litigation and shortly before or during the time of trial, the court will assume for
purposes of this opinion that the defendant discovered the misrepresentation on the day of trial on March 22,
1993.

24

time employment, during the relevant time period. Within one week after her discharge,
Karn sought full-time employment with Whitehall Pharmaceuticals. (Def’s Ex. 13, Karn’s
October 1990 Dep., p. 204.) A full-time position, however, was unavailable. Whitehall
Pharmaceuticals offered Karn a part-time position, which she accepted. In June 1989, Karn
began working part-time at Whitehall Pharmaceuticals with a salary of $18,000. (Pl’s Ex.
138; Def’s Ex. 13, p. 204.) During her employment with Whitehall, she received a car
allowance, automobile insurance and a retirement plan. (Def’s Ex. 13, p. 207.) Toward the
end of August 1990, Whitehall Pharmaceuticals laid-off all of its part-time employees.
(Def’s Ex. 13., p. 208.) Thus, Karn worked at White-Hall Pharmaceuticals for a total of
fifteen (15) months. (Pl’s Ex. 121, 138; Def’s Ex. 9, Karn’s October 8, 2009 Dep., p. 31.)
Between August and November of 1990, Karn sent résumés to several pharmaceutical
companies and other businesses seeking full-time employment. (Attach. to Def’s Ex. 8;
Def’s Ex. 13, p. 211.) Although a full-time position was unavailable, Karn accepted a parttime position in retail at Warner Lambert, beginning work on November 5, 1990. (Def’s Ex.
13, p. 209.) Warner Lambert paid Karn $10 per hour and provided a car allowance, disability
insurance, and retirement benefits. (Def’s Ex. 13, p. 210.) Karn worked twenty (20) hours
per week for four or five months. (Def’s Ex. 13, pp. 43, 48.) She stopped working at Warner
Lambert in January 1991. (Def’s Ex. 13, p. 50.)
Shortly thereafter, Karn applied for pharmaceutical sales positions at Dow B.
Hickman Pharmaceuticals, TAP Pharmaceuticals, Pfizer Corporation, General Medical

25

Corporation, as well as other sales positions with Gerber Products, Innisbrook Wraps,
General Food USA, and Validata Computer and Research Corporation. (Pl’s Ex. 75; Def’s
Ex. 1, Post-Trial Doc. 124; Pl’s Exhs. 13-19.) In February 1991, Karn began working full
time as a marketing director for Central Alabama Nursing Services with a salary of $28,000.
(Def’s Exh. 9, p. 50; Def’s Ex. 11, p. 23.) Although she did not receive fringe benefits, such
as a car, health benefits, or a retirement benefits, the company reimbursed her for gas and
mileage. (Def’s Exh. 9, p. 47.) Karn left her position at Central Alabama Nursing Services
for a better job at Boehringer Mannheim (“Boehringer”), a medical supply company, in July
1991. (Def’s Ex. 9, p. 50, 53-54; Def’s Ex. 11, p. 24-25.)
At Boehringer, Karn received “the whole package deal,” including a car, gas, health
insurance, and retirement benefits, as well as a starting salary of approximately $35,000.
(Def’s Ex. 9, p. 56; Def’s Ex. 11, pp. 33-34.) In 1992, Karn received a bonus, earning a total
of $52,330. (Def’s Ex. 9, p. 59.) On or around June 1993, Boehringer moved its territory
from Alabama to Florida. (Def’s Ex. 9, pp. 59-60.) Because Karn did not wish to relocate
to Florida, she stopped working at Boehringer in June 1993. (Def’s Ex. 9, p. 61.) Due to the
relocation, Boehringer provided Karn with a severance package through May 31, 1993.16
16

In most cases, the period of time for which back pay is calculated begins on the date the plaintiff
is discharged and ends on the day when she finds full-time equivalent employment elsewhere. See, e.g.,
Stallworth v. Shuler, 777 F.2d 1431 (11th Cir. 1985) (affirming court’s judgment that defendant who was not
considered for position of school superintendent should be awarded back pay from a date 2 years prior to
filing of his complaint with the EEOC to the date 7 years later when he accepted the post of principal of a
school); Edwards v. J. C. Penney Co., No. C-80-1024-A, 1981 WL 309, *6 (N.D. Ga. 1981). In this case,
the court finds that it would be inequitable to stop the back pay award on the date Karn began work at
Boehringer. Karn was laid off from Boehringer through no fault of her own for economic reasons,
specifically the reorganization of Boehringer’s territory. Accordingly, it is not appropriate to stop Searle’s

26

(Attach. to Def’s Ex. 1.)
In October 1993, Karn sent her résumé to Syncom Pharmaceuticals in response to an
advertisement in the newspaper for an available flex-time position. (Pl’s Ex. 60; Def’s Ex.
9, Pl’s Dep., pp. 71, 73.) She also sent her résumé to Kimberly Quality Care, a nursing
company. (Attach to Def’s Ex. 1; Def’s Ex. 9, pp. 74-75.) Between October 1993 and
December 1993, Karn worked full time as a nurse for a group of doctors. (Def’s Ex. 9, p.
62.) She stopped working in December 1993 when her third child was born. (Def’s Ex. 9,
p. 68.) During her deposition, Karn stated that she chose not to work for six weeks to take
care of her newborn baby, but that she “did not quit forever.” (Def’s Ex. 9, p. 68.)
In January 1994, Karn answered several want-ads from the Montgomery Advertiser
newspaper by applying for positions as a project director at Family Services Center, a health
care liaison for EDS, an account executive for Southeast Health Plan, a sales associate at
Solvay Animal Health, an admissions officer at a local college, a beauty advisor at Gayfers,
a sales representative at AMRE, and a pharmaceutical sales representative at Boehringer
Ingelheim. (Pl’s Ex. 76; Attach. to Def’s Ex. 1, p. 125.) In February 1994, Karn applied for
an advertised part-time sales position at Kimberly Clark Corporation. (Attach. to Def’s Ex.
1, p. 126.)

back pay liability on the date Karn received a comparable job at Boehringer. See EEOC v. Fotios, 671
F.Supp. 454, 460 (W.D. Tex. 1987) (court held it would be inequitable to end plaintiff’s back pay eligibility
on the day she first obtained new job where plaintiff was laid off from the position through no fault of her
own, but deducted interim earnings she made during the extended period from the back pay awarded).

27

During one month in 1994, Karn worked part-time in a temporary position for Dr.
Porter, earning $966.00. (Def’s Ex. 9, Pl’s Dep., p. 68; Def’s Ex. 9, Job Application List.)
On or around March 1994, Karn applied for a sales position in the Memphis District at
Boehringer Ingelheim, as well as a position as a contract negotiator for Health Star, Inc., and
an association coordinator for T.R. McDougal & Associates in Montgomery, Alabama. (Pl’s
Ex. 69-70; Def’s Ex. 1, Post-Trial Doc. Nos. 118-19, 127.) In April 1994, Karn applied for
a flex-time position with Syncom Pharmaceuticals, Inc. (Attach. to Def’s Ex. 1.) On August
19, 1994, Karn re-applied for a flex-time position with Syncom Pharmaceuticals. (Id.) On
November 8, 1994, Karn applied for a community relations position at Care One. (Pl’s Ex.
138; Attach. to Def’s Ex. 1; Def’s Ex. 9, Job Application List.)
Around this time, Karn decided that it did not make economic sense to work in a parttime position and pay for three children to attend daycare. (Def’s Ex. 9, Pl’s Dep., pp. 74,
77-78.) Karn, however, asserts that she “would have taken a full-time job ... with benefits
[and a] company car.” (Id., p. 78.) The court has no reason to doubt Karn’s intentions in
this regard, especially in light of substantial evidence indicating that she continued to
exercise diligence in searching for employment.
On March 15, 1995, and April 5, 1995, Karn re-applied for available sales positions
at Syncom Pharmaceuticals. (Attach. to Def’s Ex. 1.) In May 1995, Karn applied for a parttime position at Professional Detailing Incorporated, a marketing service. (Pl’s Ex. 138;
Attach. to Def’s Ex. 1; Def’s Ex. 9, Pl’s Dep., p. 82; Def’s Ex. 9, Job Application List). In

28

October 1995, Karn applied for pharmaceutical sales positions at Abana and Merck
Pharmaceuticals. (Pl’s Ex. 66; Def’s Ex. 1, Post-Trial Doc. 115.)
In September 1995, Karn applied for a full-time sales position at EDS, a business
product company, and a nursing position with Hill-Rom, a home care company. (Pl’s Ex. 62;
Def’s Ex. 9, Pl’s Dep., pp. 84-85.) In November 1995, Karn began working as a part-time
sales representative for Professional Detailing Incorporation hired Karn. (Pl’s Ex. 120;
Def’s Ex. 9, Job Application List.) Between November and December of 1995, Karn earned
$2382.00. (Id.) Between January and July of 1996, Karn earned $12,890.00. (Id.) The
corporation reorganized and Karn was placed on laid-off status on July 31, 1996. (Attach.
to Def’s Ex. 1.)
In January 1997, Karn applied for sales positions at Innovex and Ortho-McNeil
Pharmaceutical. (Pl’s Ex. 64; Def’s Ex. 1, Post-Trial Doc. 113.) In August 1997, Karn
applied for a pharmaceutical sales position with UBC Pharma in Birmingham, Alabama, as
well as ASTRA, USA. (Pl’s Ex. 122, 124; Def’s Ex. 9, Job Application List.) She also sent
her résumé to Innovex, Ortho-McNeil Pharmaceutical, and Hoechst. (Pl’s Ex. 123-24; Def’s
Ex. 9, Job Application List.) On or around September 1997, Karn interviewed for a position
at Hoechst Marion Roussel, Inc. (Attach. to Def’s Ex. 1.) On October 31, 1997, Karn faxed
her résumé to The American Red Cross, The Merchandising Team, Sales Consultants of
Boston, and Don Hulling, RSM. (Pl’s Ex. 138, 148-151; Def’s Ex. 9, Job Application List.)

29

From the foregoing recitation, it is obvious that substantial evidence in the record
demonstrates that Karn diligently sought to mitigate her damages in this case by searching
for and retaining employment. Searle’s argument that Karn is not entitled to back pay
because she sought part-time employment lacks merit. The evidence demonstrates that the
majority of the advertised pharmaceutical or other similar jobs available at the time were
part-time positions and that Karn diligently sought both part-time and full-time positions
during the relevant time period. Although Searle argues that there are gaps in Karn’s job
search and employment history, the defendant has failed to point to any evidence indicating
that interim employment was available during those times or that it otherwise met its burden
of proving that Karn failed to exercise diligence in searching for or retaining interim
employment. See Nord, 758 F.2d at 1470.
Karn, however, does concede that she did not intend to work during the six weeks
after the birth of her third child. Because Karn would have been covered under the Family
Medical Leave Act, 29 U.S.C.A. § 2601, et seq., and would have been eligible to take leave
without pay if she had remained at Searle, the court concludes that back pay during the sixweek period between January 1, 1994, and February 12, 1994, shall be deducted from this
court’s back pay calculation. This court therefore concludes that, with the exception of the
aforementioned six-week pay-period, Karn is entitled to the full amount of back pay, less any
interim earnings.

30

(b)

Salary Comparisons

Because the court found that Garner was subject to disparate treatment with regard
to promotions, discipline, and discharge in violation of Title VII, the court must now
determine what Garner “would have earned had she not been the victim of discrimination,
and must subtract from this figure the amount of actual interim earnings.” EEOC v. Joe’s
Stone Crab, Inc., 15 F. Supp. 2d 1364, 1378 (S.D. Fla. 1998). Thus, the court will compare
Garner’s actual interim earnings with Gruber’s salary at Searle when determining what she
would normally have earned for each quarter between the date of her termination on January
31, 1990 and the date of trial on March 22, 1993, and shall subtract any interim earnings
from this amount.
This court must also determine the salary Karn would have received at Searle had she
not been constructively discharged in violation of Title VII. Searle argues that Karn’s
proposed back pay chart is factually and legally incorrect. Specifically, Searle contends that
Karn is not permitted to use Gagliano’s pay rate as a comparison because she did not bring
a Title VII disparate pay claim against the defendant. The record indicates that, although
Karn raised a claim that the defendant violated the Equal Pay Act, she did not raise a Title
VII disparate treatment pay claim in her complaint or amended complaint. (Doc. Nos. 1 &
61.) In addition, the Court did not conclude at any point in its liability opinion that Karn was
subject to disparate treatment with regard to pay in violation of Title VII. (Doc. No. 177.)
But that doesn’t matter.

31

In Crabtree v. Baptist Hospital of Gadsden, Inc., 749 F.2d 1501 (11th Cir. 1985), the
plaintiff asserted violations of both the Equal Pay Act and Title VII. The plaintiff’s Title VII
claim complained only of unlawful discharge and not of salary violations. The Court held:
The sex discrimination provisions of Title VII must be read in
harmony with the Equal Pay Act. Orr v. Frank R. MacNeill &
Son, Inc., 511 F.2d 166, 170 (5th Cir.) cert. dismissed 423 U.S.
865, 96 S.Ct. 125, 46 L. Ed. 2d 94 (1975). Basing a back pay
award under Title VII on a salary found to violate the Equal Pay
Act would ignore both Title VII’s purpose of making victims
whole for economic losses suffered through past discrimination
and the requirement that Title VII and the Equal Pay Act be read
in harmony.
Crabtree, 749 F.2d at 1503. Thus, Karn argues that the Title VII back pay award should be
based on Gagliano’s higher salary which the Court determined she should have been paid
under the Equal Pay Act, and the court agrees. This court, therefore, will compare Karn’s
actual interim earnings with Gagliano’s salary at Searle when determining what she would
have normally earned for each quarter between the date of her discharge on June 15, 1989
to the date she chose to stop seeking employment in pharmaceutical sales on December 31,
1998, and shall subtract any interim earnings from this amount.
(c)

Fringe Benefits

The defendants initially argued that the plaintiffs were not entitled to damages for
fringe benefits because they failed to present sufficient proof regarding their value. During
the evidentiary hearing, however, the parties stipulated that the total monthly value of fringe
benefits at Searle is $755.00. (Transcript of September 23, 2010, evidentiary hearing, Doc.

32

No. 295 at 3-4) Thus, the court will calculate an award of damages by applying the amounts
as stipulated by the parties, less the amount of any actual interim benefits.
Because the object of the back pay provisions of Title VII is to make employees whole
for losses suffered due to unlawful discrimination, fringe benefits should be included when
calculating back pay. Walker v. Ford Motor Co., 684 F.2d 1355, 1364 (11th Cir.1982); 29
U.S.C. § 2617(a)(1)(A)(i)(I). In this case, there is no evidence that Garner received any
fringe benefits during her employment at Delta Foremost. Therefore, Garner is entitled to
an award of the value of fringe benefits between February 1, 1990 and March 22, 1993.
Karn concedes that she received equivalent benefits during her employment at
Boehringer. (Doc. No. 302, p. 30, n. 7.) The evidentiary materials indicate Karn was
employed and/or received severance pay with benefits at Boehringer between July 1, 1991
and March 31, 1993. Consequently, the equivalent value of fringe benefits during Karn’s
employment at Boehringer should be deducted when calculating the total amount of
damages. The court further concludes that Karn is entitled to receive the value of fringe
benefits between June 15, 1989 through June 30, 1991, and between June 1, 1993 through
December 31, 1998.
C.

Tax Consequences

The plaintiffs request that this court include a tax component as part of the damages
award to compensate for their additional tax liability as a result of receiving twenty years of
back pay and/or interest in one lump sum. (Doc. No. 298, p. 25.)

33

Back pay awards are taxable under the Internal Revenue Code. United States v.
Burke, 504 U.S. 229 (1992). For income tax purposes, the IRS treats all back pay as wages
in the year paid. See IRS Publication 957, http://www.irs.gov/publications/p957/ar02.html.
Certainly, other courts have approved an award to offset the negative tax consequences of
a back pay award. See Eshelman v. Agere Sys., Inc., 554 F.3d 426, 441-43 (3rd Cir. 2009);
Sears v. Atchison Topeka & Santa Fe Ry., 749 F.2d 1451, 1456 (10th Cir. 1984). Searle
argues that there is no controlling law in this Circuit which would substantiate an upward
adjustment of the plaintiffs’ damages award due to tax consequences.17 (Doc. No. 299, p.
32.) Searle is correct that no decision of the Eleventh Circuit authorizes a judgment to
account for negative tax consequences that result from a lump sum award of back pay. But
no case prohibits either.
The difficulty here is not whether the law permits this type of award; rather, the
problem is the lack of an evidentiary foundation for the court to make the necessary
calculation. The plaintiffs suggest that the court apply a percentage increase of varying
amounts seemingly based on tax tables. But the plaintiffs offer no evidence to support the
legitimacy of this approach. Notwithstanding what the court said earlier about uncertainty,
rank speculation is not the same, an the court is not inclined to engage in a purely speculative
task of determining and then offsetting the plaintiffs’ future tax liability. Cf. O’Neill v.

17

Searle also argues that awarding a tax adjustment would exceed the jurisdiction conferred upon this
court because the court did not award this relief in its liability opinion. Given the court’s conclusion, this
argument will not be addressed.

34

Sears, Roebuck & Co., 108 F. Supp. 2d 443, 448 (E.D. Pa. 2000) (finding award for back pay
under ADEA appropriate where plaintiff supported her request with testimony from a
financial consultant). See EEOC v. Joe’s Stone Crab, 15 F. Supp. 2d 1364, 1380 (S.D. Fla.
1998) (determining plaintiff failed to provide sufficient competent foundation evidence to
permit the court to make the calculations). See also Hukkanen v. International Union of
Operating Engineers, Hoisting & Portable Local No. 101, 3 F.3d 281 (8th Cir. 1993)
(plaintiff failed to present a convenient way for the court to calculate the amount at the time
the court announced judgment). In the absence of an evidentiary basis supporting a
methodology for crafting an appropriate award, the court declines to award money damages
to offset whatever increased tax liability the plaintiffs will experience by receiving a lump
sum award.
C. Damages Calculations
The court bases its damage calculations with respect to Garner on the following:
1.
2.

3.
4.
5.

Garner is entitled to an award of $2100 as well as an additional amount of
$2100 in liquidated damages with respect to her Equal Pay Act claim.
With respect to her Title VII claims, Garner is not entitled to any back pay
after the date Searle discovered evidence indicating that she falsified a
physician call report form. For purposes of this opinion, the court presumes
the discovery occurred on the date of trial, March 22, 1993.
Garner is entitled to an award of back pay, including the value of fringe
benefits and pre-judgment interest with respect to her Title VII claims.
The amount of interim earnings and benefits shall be subtracted from the back
pay calculation.
Damages ceased to accrue on March 22, 1993. However, prejudgment interest
accrued until September 23, 2010.

35

1988

Promotion Liability

1989

1990
01/01/90
to
03/31/90

1,499.91

-0-

1990
04/01/90
to
12/31/90

1,508.00

1991

1992

n/a

n/a

1993
01/01/93
to
03/22/93

n/a

n/a

Comparator Salary

n/a

n/a

n/a

24,891.73

35,749.84

37,412.44

8,844.24

Fringe Benefits

n/a

n/a

1,590.00

6,795.00

9,060.00

9,060.00

2,090.77

(Interim Earnings)

n/a

n/a

(1,239.90) (11,167.65) (8,642.92)

(7,723.04) (1,251.24)

Title VII Damages

1,499.91

-0-

1,778.10

38,749.40 9,683.77

20,519.08

36,166.92

Using the NLRA methodology, Garner requests $432,090.85 in prejudgment interest.
The court has reviewed Garner’s calculation of interest and concludes that this amount is
appropriate and should be awarded based on her back pay award of $108,397.18.
This court concludes that Garner is entitled to the following award:
Title VII

$432,090.85
$540,488.03

EPA

$4200.00

Total

+

Interest
Subtotal

+

$108,397.18

$544,688.03.

The court bases its damages calculations with respect to Karn on the following:
1.
2.
3.

Karn is entitled to an award of $1250 as well as an additional amount of $1250
in liquidated damages with respect to her Equal Pay Act claim.
Karn is entitled to an award of back pay, including the value of fringe benefits,
and prejudgment interest with respect to her Title VII claims.
The amount of interim earnings and benefits shall be subtracted from the back
36

4.
5.

pay calculation.
Karn is not entitled to back pay between January 1, 1994 and February 12,
1994, the six-week period she chose not to work due to the birth of her child.
Damages ceased to accrue on December 31, 1998. However, prejudgment
interest continued to accrue until September 23, 2010.

1989
1990
06/15/89
to
12/31/89

1991

1992

1993

1994

1995

1996

1997

1998

Comparator
Salary

18,046.24 35,750.16 36,799.88 38,637.04 40,568.84 42,597.36 44,727.28 52,525.99 63,500.32 63,500.32

Fringe Benefits

4,878.46 9,060.00

(Interim
Earnings)

(7,925.40) (12,842) (34,116.16) (38,637.04) (38,228.84) (966.00) (2,382.00) (12,890.00) - 0 -

9,060.00

(Interim Benefits) - 0 -

-0-

(Leave without
Pay)

n/a

n/a

TITLE VII
Damages

14,999.30 31,968.00 11,743.72

9,060.00

2,265.00

(4,530.00) (9,060.00) (2,090.77)

n/a

n/a

-0-

n/a

2,514.23

9,060.00

-0-

(5,324.67)

45,366.69

9,060.00 9,060.00 9,060.00 9,060.00

-0-

-0-

-0-

-0-

-0-

n/a

n/a

n/a

n/a

51,405.28 48,695.99 72,560.32 72,560.32

Karn requests $1,040,843.90 in prejudgment interest. Because Karn is not entitled to
back pay with respect to the six-week period in which she was eligible for leave without pay
under the Family Medical Leave Act, the amount of her award of prejudgment interest shall
be reduced. According to Karn’s assessment of the NLRB interest rates calculated through
September 23, 2101, prejudgment interest on $5324.67 is $17,014.10. This court therefore
concludes that $1,023,829.80 in prejudgment interest is appropriate based on her Title VII
back pay award of $351,813.85.
The court concludes that Karn is entitled to the following award:
Title VII

$351,813.85
37

+

$1,023,829.80

Subtotal
+

Interest

$1,375,643.60

EPA

$2500.00
$1,378,143.60

The court will enter a separate final judgment for Garner and Karn and against Searle
for these damages.
Done this 14th day of February, 2013.

/s/Charles S. Coody
CHARLES S. COODY
UNITED STATES MAGISTRATE JUDGE

38