Equal Employment Opportunity Commission v. Beverage Distributors Company, LLC

Filing 116

ORDER granting in part and denying in part 104 Motion Pursuant to Fed. R. Civ. P. 50(b) for Judgment as a Matter of Law on Defendant's Failure-to-Mitigate Defense, and granting in part and denying in part 105 Motion for Injunctive Relief, by Judge Christine M. Arguello on 12/9/13. The jury's damages award is vacated.(dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 11-cv-02557-CMA-CBS
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Plaintiff,
v.
BEVERAGE DISTRIBUTORS COMPANY, LLC,
Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FOR JUDGMENT AS A MATTER OF
LAW AND MOTION FOR INJUNCTIVE RELIEF

This matter is before the Court on Plaintiff Equal Employment Opportunity
Commission’s (“EEOC”) Motion for Judgment as a Matter of Law on Defendant’s
Failure-to-Mitigate Defense (Doc. # 104) and Motion for Injunctive Relief (Doc. # 105).
Both motions are ripe for the Court’s review.
I. BACKGROUND
EEOC brought this enforcement action against Defendant Beverage Distributors
Company, LLC (“Beverage Distributors”) on behalf of Mike Sungaila. EEOC alleged
that Beverage Distributors discriminated against Mr. Sungaila in violation of the
Americans with Disabilities Act (“ADA”) when it withdrew its conditional offer of
employment as a Night Warehouse Loader upon being informed that he is legally blind.
This case was tried to a jury in April of 2013. On April 12, 2013, the jury returned
its verdict by completing a special verdict form. The jury determined that EEOC proved

by a preponderance of the evidence that Beverage Distributors withdrew its conditional
offer of employment and/or denied employment to Mr. Sungaila because of his disability
and awarded back pay in the amount of $132,347.00. However, the jury reduced that
award by $102,803.75 because it determined that Beverage Distributors proved by
a preponderance that Mr. Sungaila failed to make reasonable efforts to reduce his
damages for loss of back pay. (Doc. # 96.) The Court entered judgment on the verdict
on April 15, 2013, awarding $29,543.25 in damages. (Doc. # 98.)
EEOC now moves for judgment as a matter of law alleging that there was
insufficient evidence for the jury to consider Beverage Distributor’s failure-to-mitigate
defense and, therefore, the damage award should be reinstated to award the total back
pay amount. In the alternative, EEOC asks this Court to consider the jury’s award of
back pay as an advisory opinion and award back pay in its discretion. (Doc. # 104.)
EEOC also moves for various forms of injunctive relief. (Doc. # 105.)
II. THE ADA
At trial, the jury determined that EEOC proved that Beverage Distributors violated
the ADA by withdrawing its offer of employment because of Mr. Sungaila’s disability.
Remedies for such a violation are those remedies available under Title VII of the Civil
Rights Act of 1964. See 42 U.S.C. § 12117(a) (incorporating 42 U.S.C. §§ 2000e–4,
2000e–5, 2000e–6, 2000e–8, and 2000e–9); Olds v. Alamo Group (KS), Inc., 889
F. Supp. 447, 449 (D. Kan. 1995). Available remedies include, but are “not limited to,
reinstatement . . . , with or without back pay . . . , or any other equitable relief as the
court deems appropriate.” 42 U.S.C. § 2000e–5(g) (“Interim earnings or amounts

2

earnable with reasonable diligence by the person or persons discriminated against shall
operate to reduce the back pay otherwise allowable.”); E.E.O.C. v. Sandia Corp., 639
F.2d 600, 627 (10th Cir. 1980).
III. FAILURE-TO-MITIGATE DEFENSE
A.

STANDARD OF REVIEW
A party may make a renewed motion for judgment as a matter of law within

twenty-eight days of the entry of judgment. See Fed. R. Civ. P. 50(b). A movant is
entitled to judgment as a matter of law only if the evidence would not permit a
reasonable jury to find in the non-movant’s favor. See Deters v. Equifax Credit Info.
Servs., Inc., 202 F.3d 1262, 1268 (10th Cir. 2000); see also Baty v. Willamette Indus.,
Inc., 172 F.3d 1232, 1241 (10th Cir. 1999) (judgment as a matter of law “is warranted
only if the evidence points but one way and is susceptible to no reasonable inferences
supporting the party opposing the motion”) (internal quotations omitted). Although the
court must view the evidence in a light favorable to the non-movant, the court should not
re-weigh the evidence, judge witness credibility, or challenge the factual conclusions
of the jury. Mason v. Oklahoma Turnpike Auth., 115 F.3d 1442, 1450 (10th Cir.
1997), overruled on other grounds by TW Telecom Holdings Inc., v. Carolina Internet
Ltd., 661 F.3d 495 (10th Cir. 2011).
B.

DISCUSSION
EEOC first contends that the Court erred in allowing the jury to consider

Beverage Distributor’s failure-to-mitigate defense because there was insufficient
evidence to show that (1) there were jobs available, and (2) there were substantially

3

comparable jobs.1 Because the Court agrees, it does not reach EEOC’s alternative
argument.
“The purpose of a back pay award is to make the employee whole—i.e., restore
the economic status quo that would have obtained but for the wrongdoing on the part of
the employer . . . .” Aguinaga v. United Food & Commercial Workers Int’l Union, 993
F.2d 1463, 1473 (10th Cir. 1993) (citing Bowen v. United States Postal Serv., 459 U.S.
212, 222–23 (1983); NLRB v. J.H. Rutter–Rex Mfg. Co., 396 U.S. 258, 263 (1969)).
“The remedy of back pay does not constitute a windfall to plaintiff, nor does it award
damages based on some amorphous inherent value of her constitutional right to equal
protection.” Cunico v. Pueblo Sch. Dist. No. 60, 917 F.2d 431, 443-44 (10th Cir. 1990)
(internal citations omitted). Although no award can fully compensate a plaintiff for his
personal right to equal protection once denied, the award of back pay corresponds most
accurately to the injury suffered. Id. (internal citation omitted).

1

Beverage Distributors argues that EEOC did not preserve its Rule 50 motion with regard
to whether there was sufficient evidence that the alternative jobs were substantially similar.
“As a general rule, a defendant’s motion for directed verdict made at the close of the plaintiff’s
evidence is deemed waived if not renewed at the close of all the evidence; failure to renew that
motion bars consideration of a later motion for judgment n.o.v.” Karns v. Emerson Elec. Co.,
817 F.2d 1452, 1455 (10th Cir. 1987) (citing cases); see also 9B Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 2536 (3d ed. 2013) (“It is thoroughly established that
the sufficiency of the evidence is not reviewable on appeal unless a motion for judgment as a
matter of law was made in the trial court. Indeed a motion at the close of plaintiff’s case will not
do unless it is renewed at the close of all the evidence.”). At the close of evidence, EEOC
moved for judgment as a matter of law, arguing that “there has been absolutely nothing to show
there was a single job available that Mr. Sungaila was qualified for and could have applied for.”
In ruling on this motion, the Court addressed both the availability of the positions and whether
they were comparable. Therefore, EEOC preserved this issue for review. See Davoll v. Webb,
194 F.3d 1116, 1136 (10th Cir. 1999) (looking at counsel’s argument and district court’s ruling
to determine if the court can infer a party adequately objected to and therefore preserved the
issue).

4

Employees claiming entitlement to back pay and benefits are required to make
reasonable efforts to mitigate damages. Sandia Corp., 639 F.2d at 627. Once back
pay and benefits have been awarded, the burden is on the employer to show that the
claimant did not exercise reasonable diligence in mitigating his or her damages. Id.
To satisfy this burden, the employer must establish that: (1) there were suitable
positions available which the claimant could have discovered and for which he or she
was qualified, and (2) the claimant failed to use reasonable diligence in seeking such
positions. Spulak v. K Mart Corp., 894 F.2d 1150, 1158 (10th Cir. 1990); Sandia Corp.,
639 F.2d at 627 (citing United States v. Lee Way Motor Freight, Inc., 625 F.2d 918, 937
(10th Cir. 1979)); see also Whatley v. Skaggs Companies, Inc., 707 F.2d 1129, 1138
(10th Cir. 1983), cert. denied, 464 U.S. 938, 104 S.Ct. 349, 78 L.Ed.2d 314 (1983);
Eslinger v. U.S. Cent. Credit Union, 866 F. Supp. 491, 499 (D. Kan. 1994). Plaintiff
must make only reasonable, good faith efforts to mitigate damages and is not held
to the highest standards of diligence. Lee Way Motor Freight, 625 F.2d at 937.
Mr. Sungaila began working as a landscaper approximately one week after
having his offer rescinded by Beverage Distributors. Beverage Distributors argued at
trial that Mr. Sungaila failed to mitigate his damages by not pursuing another position
with similar pay to the Night Warehouse Loader position with its company. EEOC
contends, however, that Beverage Distributors did not present sufficient evidence to
permit the jury to reduce back pay by $102,803.75. (Doc. # 104, at 3.) In response,
Beverage Distributors points to evidence elicited from its expert, Dr. Robin Cook, and

5

in particular, her testimony regarding the Bureau of Labor Statistics (“BLS”) statistics
that there are 10,000 warehouse positions. (Doc. # 110, at 6.)
Dr. Cook’s expert testimony focused on her opinion that Mr. Sungaila could
not perform the essential job functions of the Night Warehouse Loader position.2
With regard to the mitigation of damages issue, Dr. Cook opined that:
Mr. Sungaila’s earning potential was not diminished;
in the Denver/Aurora area, people holding driver helper positions earned
a mean wage of $12.53 per hour, which was similar to the compensation
Mr. Sungaila earned as a Driver’s Helper3;
based on Mr. Sungaila’s job history and experience, it was reasonable to
conclude he could have earned the mean wage;
according to BLS, approximately 34 percent of unskilled workers would find
work within 5 weeks of job separation and 68 percent would be employed after
14 weeks;
the unemployment rate in the Denver/Parker area is lower than the national
average and the average for the State of Colorado;
according to BLS there were approximately 10,000 storage-laborer and driverhelper jobs4 but most of those positions require the worker to drive a forklift,
which Mr. Sungaila cannot do;
assuming he was capable of the work, Mr. Sungaila could have found another
warehouse position 9 months after his separation from Beverage Distributors;

2

The jury found that Mr. Sungaila could perform the essential functions of this position.

3

Mr. Sungaila held a Driver’s Helper position before Beverage Distributors requested that he
apply for the Night Warehouse Loader position. The Driver’s Helper position was eliminated.
4

Although the parties dispute whether these positions were located in the Denver/Aurora
Metropolitan Area or throughout the state of Colorado, Dr. Cook’s testimony never defined
the location of these positions.

6

assuming that Mr. Sungaila found replacement employment making compensation comparable to what he would have earned as a Night Warehouse Loader,
his lost wages would have been approximately $10,000;
that she did not consider Mr. Sungaila’s vision loss in her analysis of his wage
loss;
that she had not identified a single open position that Mr. Sungaila was qualified
for.
The Court rejects Beverage Distributors’ assertion that Dr. Cook’s testimony
provided sufficient evidence that Mr. Sungaila did not mitigate his damages because all
that was required was evidence that there were positions in “existence.” (Doc. # 110
at 6.) First, the only Tenth Circuit case that Beverage Distributors cites for this
proposition is a non-binding order and judgment. Goodman v. Fort Howard Corp., 1994
U.S. App. LEXIS 17507 (10th Cir. July 18, 1994) (order and judgment). Yet, in that
same case, and indeed in all other cases this Court has found on the issue, the Tenth
Circuit routinely requires that employers prove not a position’s existence, but its
availability.5 To give vitality to the principle of making an employee whole through

5

See id. (defendant not entitled to instruction stating that plaintiff’s failure to seek full-time
employment could constitute unreasonable diligence because it failed to produce any evidence
indicating that suitable positions were available which plaintiff could have discovered and for
which he was qualified); see also McClure v. Indep. Sch. Dist. No. 16, 228 F.3d 1205, 1214
(10th Cir. 2000) (employer must show positions are available); Garcia v. Wal-Mart Stores,
Inc., 209 F.3d 1170, 1175 (10th Cir. 2000) (court did not err in refusing to instruct the jury
on mitigation where defendant offered no evidence that appropriate jobs were available to
someone in plaintiff’s condition with her educational and skill level, but instead merely presented
the evidence she could return to sedentary light-duty or self-paced jobs); Wilson v. Union
Pac. R. Co., 56 F.3d 1226, 1232 (10th Cir. 1995) (plaintiff’s general failure to seek employment
for eighteen months before trial does not alone suffice to justify a mitigation instruction; the
defendant must also show that appropriate jobs were available); Aguinaga, 993 F.2d at 1474
(district court did not abuse its discretion in refusing to allow defendant to interview class
members regarding their attempts to mitigate damages where defendant asserted no evidence
that suitable positions were available); Spulak, 894 F.2d at 1158 (employer must show positions

7

back pay, yet requiring that employee to take responsibility for ameliorating his
damages, an employer should present some evidence that positions were available and
could have been obtained by the employee. Indeed, the Tenth Circuit and district courts
within this circuit have likewise concluded that availability of a position requires some
evidence that a plaintiff could obtain that position.6 Dr. Cook specifically testified that
she had not identified a single open position that Mr. Sungaila was qualified for.
Therefore, there is no evidence showing that these positions were available—i.e., no
evidence that Mr. Sungaila could have obtained such a position so he could mitigate his
damages. Dr. Cook testified only that the BLS states that warehouse and driver-helper
positions existed, but offered no testimony regarding how many of those positions were
currently occupied by other workers and, therefore, unavailable to Mr. Sungaila.
Beverage Distributors points to no evidence that any of the positions Dr. Cook
testified to were accepting applications and instead asks the Court to conclude that it
was “reasonable for the jury to infer that some of those jobs had openings between
March 2008 and September 2009.” (Doc. # 110, at 7.) This explanation points to
another flaw in the evidence presented: there was no testimony as to the timeframe
are available); Sandia Corp., 639 F.2d at 627 (employer did not submit any evidence indicating
that other comparable positions were available to claimants).
6

Compare McClure, 228 F.3d at 1214 (district court erred in determining that plaintiff failed to
mitigate damages because defendant did not establish that positions were available to plaintiff
where she applied for positions within driving distance but received no offers); Ross v. Unified
Sch. Dist. No. 231, Johnson Cnty., Kan., CIV. A. 91-2302-GTV, 1993 WL 62442 (D. Kan. Feb.
16, 1993) (defendant failed to show any likelihood that plaintiff could have obtained any of the
available positions and testimony that there were many applicants for those positions tended to
show plaintiff would not have been successful had he applied); with Huffman, 883 F. Supp. at
1477 (defendant proved positions were available by offering newspaper want ads for various
positions for which plaintiff was qualified).

8

in which the BLS stated that these positions existed. See Huffman v. Ace Elec. Co.,
Inc., 883 F. Supp. 1469, 1477 (D. Kan. 1995) (defendant did not prove plaintiff failed
to mitigate damages prior to January 1993 because evidence of want ads during that
timeframe consisted of positions unavailable to plaintiff). Moreover, given the lack of
testimony regarding the availability of these positions coupled with the lack of evidence
that Mr. Sungaila would qualify for such positions or that they were comparable to the
Night Warehouse Loader position, discussed infra, the Court finds that inferring that the
positions were open during the applicable timeframe is not reasonable. Instead,
Beverage Distributors’ reliance on Dr. Cook’s vague testimony impermissibly requires
the Court to employ cascading inferences in an attempt to support the jury verdict. See
Brown v. Reardon, 770 F.2d 896, 904 (10th Cir. 1985) (evidence cannot be “comprised
of mere inference upon inference, such as would dictate a jury verdict based on pure
speculation”). For these reasons, there was not sufficient evidence to allow the jury to
consider Beverage Distributors’ failure-to-mitigate defense.
Similarly, the Court finds inadequate Beverage Distributors’ evidence that these
warehouse jobs were suitable positions for which Mr. Sungaila was qualified. See
Spulak, 894 F.2d at 1158. Despite Beverage Distributor’s assertion to the contrary,
courts regularly consider the salary, benefits, promotional opportunities, and commuting
distance of available positions to determine whether they are suitable or substantially
comparable to the position the discriminatee lost.7

7

See, e.g., DerKevorkian v. Lionbridge Technologies, Inc., 316 F. App’x 727, 740 (10th
Cir. 2008) (district court’s decision to preclude jury from considering whether plaintiff failed to
mitigate by refusing a less desirable job was not error, except that plaintiff’s damage was the

9

The testimony at trial established that the Night Warehouse Loader position was
full-time, paid $13.68-22.568 per hour, included benefits such as insurance, paid leave,
and 401(k), and was within a reasonable commute from Mr. Sungaila’s home.
Dr. Cook testified that in 2011, the mean salary for a driver helper position was
$12.53 per hour in the Denver-Aurora Metropolitan area. While Beverage Distributors
contends that Dr. Cook testified that the 10,000 positions existed in the Denver/Aurora
Metropolitan Area, the only testimony regarding that area was concerning the mean
salary for warehouse positions, not the location of the 10,000 jobs. Beverage
Distributors never established the location of these positions at trial to show they were
in commuting distance from Mr. Sungaila.9 Defense counsel asked Dr. Cook to
assume that Mr. Sungaila’s replacement employment would have paid a salary
comparable to what he would have been paid by Beverage Distributors. However,
loss of her green card, which the alternative position would have enabled her to obtain);
W. Trading Co., Inc., 291 F.R.D. at 620 (“Although the hourly rate was higher in the temporary
position . . . the irregularity of hours, lack of benefits, and instability of the work makes the
overall compensation not comparable.”); Eichenwald v. Krigel’s, Inc., 908 F. Supp. 1531, 1568
(D. Kan. 1995) (defendants did not present any evidence that there were jobs with equivalent
duties and pay available); Ramirez v. Bravo’s Holding Co., LLC, CIV. A. 94-2396-GTV, 1995 WL
649952 (D. Kan. Oct. 5, 1995) (same); see also Sellers v. Delgado Comm. College, 839 F.2d
1132, 1138 (5th Cir.1988) (“Comparable employment . . . affords virtually identical promotional
opportunities, compensation, job responsibilities, working conditions, and status as the position
from which the claimant has been discriminatorily terminated.”).
8

Testimony at trial established that Mr. Sungaila would have to undergo a probationary period
for three months, during which he would make $12 per hour. Thereafter, his wages would
be determined by a collective bargaining agreement, which increases his wages as he gains
seniority. Therefore, had Mr. Sungaila remained in his position, at the time of trial, he would
be earning $22.56 per hour.
9

Dr. Cook’s Expert report states that these positions exist within the State of Colorado. (Doc.
# 60-2.) However, because the report was not admitted at trial, the Court cannot rely on this
fact to infer that these positions were located within Colorado rather than throughout the United
States.

10

Beverage Distributors never submitted evidence of what the salary was for a
replacement position other than the mean salary, which was well below that paid by
Beverage Distributors. Nor did it present evidence that any of these positions offered
benefits or were for full-time rather than part-time work. See Todaro v. Siegel Fenchel
& Peddy, P.C., 2009 WL 3150408, *4 (E.D.N.Y. Sept. 25, 2009) (failure to accept parttime work in place of full-time did not cut off eligibility for back pay); Apple Supermarkets
v. Local 338, 1999 WL 596273, *4 (S.D.N.Y. Aug. 9, 1999) (part-time work is not
comparable to full-time even if the hourly rate of pay is the same). Accordingly,
Beverage Distributors offered no evidence that a suitable position was available.
See E.E.O.C. v. W. Trading Co., Inc., 291 F.R.D. 615, 620 (D. Colo. 2013) (granting
a Rule 50 motion because defendant failed to prove that a comparable position existed);
see also Baty, 172 F.3d at 1241 (non-movant entitled only to reasonable inferences).
Similarly, Defense counsel asked Dr. Cook to assume that Mr. Sungaila was
capable of performing the Night Warehouse Loader position but offered no evidence
of job duties and qualifications for those positions, other than that the majority of the
positions required a worker to drive a fork lift, which Mr. Sungaila could not do due to his
sight limitations. Therefore, Beverage Distributors did not establish that Mr. Sungaila
was qualified for those positions. See Garcia v. Wal-Mart Stores, Inc., 209 F.3d 1170,
1175 (10th Cir. 2000) (defendant offered no evidence that appropriate jobs were
available for someone in plaintiff’s condition or with her educational and skill level, but
instead merely presented the evidence she could return to sedentary light-duty or selfpaced jobs); Volkman v. United Transp. Union, 826 F. Supp. 1253, 1258 (D. Kan. 1993)

11

(a worker is not required to take anything other than substantially equivalent
employment determined by a worker’s skill, qualifications, age, and personal
limitations); cf. Huffman, 883 F. Supp. at 1477 (defendant proved positions were
available by offering newspaper want ads of various positions plaintiff was qualified, but
limited the time frame in which plaintiff could not recover to after January 1993 because
prior positions required skills plaintiff did not possess).
Accordingly, the Court concludes as a matter of law that Defendant failed to
present evidence to support the jury’s reduction of the back pay damages award.
Because the jury determined the amount of back pay available to Plaintiff in the
absence of mitigation to be $132,347.00, the Court finds that there is no need for a new
trial on back pay damages. See Fed. R. Civ. P. 50(c) (if Court grants a renewed motion
for judgment as a matter of law under Rule 50(b), it must then determine whether a new
trial is necessary); (Doc. # 96 at 2).
IV.

INJUNCTIVE RELIEF

EEOC also asks that this Court award (1) prejudgment interest on the back
pay damages award, (2) reinstatement and/or front pay, (3) a tax penalty offset, and
(4) injunctive relief. (Doc. # 105.)
A.

PRE-JUDGMENT INTEREST ON BACK PAY AWARD
The award of pre-judgment interest “rests firmly within the sound discretion of

the trial court.” Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1287 (10th Cir.
2002); see also Zuchel v. City and County of Denver, 997 F.2d 730, 746 (10th Cir.
1993). “A two-step analysis governs the determination of such an award.”

12

Caldwell, 287 F.3d at 1286. In exercising its discretion, “[t]he district court must first
determine whether the award of pre-judgment interest will serve to compensate the
injured party. Second, even if the award of pre-judgment interest is compensatory in
nature, the district court must still determine whether the equities would preclude the
award of pre-judgment interest.” Id.
The Court finds that awarding pre-judgment interest is compensatory rather than
punitive. “The rule in this circuit is that pre-judgment interest is generally available to
compensate the wronged party for being deprived of the monetary value of his loss from
the time of the loss to the payment of the judgment.” Id. (internal quotation omitted).
An award of pre-judgment interest places Mr. Sungaila in the position he would have
been in and compensates him for the time that he has been denied the income he
would have earned but for his wrongful termination. See Reed v. Mineta, 438 F.3d
1063, 1066 (10th Cir. 2006) (“prejudgment interest helps to make victims of
discrimination whole and compensates them for the true cost of money damages
they incurred”).
The Court rejects Beverage Distributors’ assertion that pre-judgment interest
would be a “windfall” to Mr. Sungaila because he received social security disability
insurance (“SSDI”) benefits after his separation from Beverage Distributors. “The
collateral source rule allows a plaintiff to seek full recovery from a tortfeasor even
though an independent source has compensated the plaintiff in full or in part for the
loss.” Green v. Denver & Rio Grande Western RR Co., 59 F.3d 1029, 1032 (10th Cir.
1995). Thus, the Court disagrees that it should deny pre-judgment interest on this

13

basis. That result would constitute a windfall to a defendant, who would benefit from the
availability of a plaintiff’s income from a collateral source.10
The Tenth Circuit “has adopted a preference, if not a presumption, for prejudgment interest.” United Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219,
1236 (10th Cir. 2000); FDIC v. UMIC, Inc., 136 F.3d 1375, 1388 (10th Cir.),
(“prejudgment interest should normally be awarded on successful federal claims”), cert.
denied, 525 U.S. 962, 119 S. Ct. 404, 142 L. Ed. 2d 328 (1998). Following this
presumption, the Court finds that an award of pre-judgment interest is compensatory
and would not be inequitable.
Further, pursuant to the Tenth Circuit in Caldwell, the calculation of prejudgment
interest is within the court’s discretion. 287 F.3d at 1287–88; see also Guides, Ltd. v.
Yarmouth Group Prop. Mgmt., Inc., 295 F.3d 1065, 1078 (10th Cir. 2002); Kleier
Advertising, Inc. v. Premier Pontiac, Inc., 921 F.2d 1036, 1042 n. 4 (10th Cir. 1991)
(“Because there is no federal statutory interest rate on pre-judgment interest, the rate
imposed will be left to the trial court’s discretion.”) Colorado law also provides for an
10

See Sandia Corp., 639 F.2d at 625 (finding it “unfair” to give the employer the benefit of
another collateral source, unemployment compensation); see also Thurman v. Yellow Freight
Systems, Inc., 90 F.3d 1160 (6th Cir. 1996) (unemployment benefits were collateral source
benefits, and thus should not have been deducted from the jury’s award of back pay for
discrimination); Jackson v. City of Cookeville, 31 F.3d 1354, 1359 (6th Cir. 1994) (“Because the
victim rather than the perpetrator of discrimination should profit, courts that have considered this
question have held that pension payments from a collateral source are not to be deducted from
an Age Discrimination in Employment Act award.”); Doyne v. Union Elec. Co., 953 F.2d 447,
451-52 (8th Cir. 1992) (collateral source payments should not have been deducted from jury
verdict in discrimination case); EEOC v. O’Grady, 857 F.2d 383, 389 (7th Cir. 1988) (affirming
the district court’s refusal to offset pension benefits from an age discrimination award);
Structural Metals, Inc. v. S & C Elec. Co., SA-09-CV-984-XR, 2013 WL 870084 (W.D. Tex.
Mar. 7, 2013) (declining to take into account collateral source payments when calculating
prejudgment interest).

14

award of prejudgment interest to the prevailing party. Where the action does not involve
personal injury, the interest calculation is governed by Colo. Rev. Stat. § 5–12–
102(1)(b), pursuant to which the interest rate is set at eight percent per annum
compounded annually “after [the moneys] are wrongfully withheld or after they become
due to the date of payment or to the date judgment is entered, whichever first occurs.”
In its discretion, the Court will award interest consistent with Colorado’s prejudgment interest rate of 8%. See Allison v. Bank One-Denver, 289 F.3d 1223, 1244
(10th Cir. 2002) (affirming an 8% rate for pre-judgment interest); Caldwell, 287 F.3d at
1287-88 (same); Pavicich v. Aetna Life Ins. Co., No. 09-CV-00818-CMA-KMT, 2010 WL
3854733 (D. Colo. Sept. 27, 2010). While Beverage Distributors points out that interest
rates have been at historic lows during this timeframe, had Mr. Sungaila not been
released from his position, he could have invested and garnered a rate of return much
higher than the 0.49% rate Beverage Distributors advocates for. Accordingly, the Court
will set a pre-judgment interest rate of 8% per annum, compounded annually, to apply to
the back pay award of $132,347. See Reed, 438 F.3d at 1067; (Doc. # 105-3).11

11

The Court rejects Beverage Distributors’ argument that pre-judgment interest should not
accrue for more than six months prior to the lawsuit filing date because the EEOC took an
“unreasonable length of time . . . to complete its investigation . . . .” (Doc. # 111 at 3.) “As a
general rule, district courts should calculate interest on back pay and past damages based on
the date of the adverse employment action.” Reed, 438 F.3d at 1066 (citing Thomas v. Texas
Dep’t of Crim. Justice, 297 F.3d 361, 372 (5th Cir. 2002)). Beverage Distributors cites to no
authority stating that this Court should reduce an award where an agency’s investigation takes
longer than the time specified in its regulations. Moreover, while 20 C.F.R. § 1614.108(e) states
that EEOC should complete investigations within 180 days, that timeframe can be voluntarily
extended. Limiting pre-judgment interest based on an assessment of the reasonableness of the
timeliness of an agency investigation would inappropriately punish a claimant and undermine
the purpose of pre-judgment interest as a means of making a claimant whole. See Reed, 438
F.3d at 1066.

15

B.

REINSTATEMENT AND/OR FRONT PAY
The central purpose of the ADA is to make the plaintiff whole—to restore the

plaintiff to the economic position the employee would have occupied but for the wrongful
discrimination of the employer. Davoll v. Webb, 194 F.3d 1116, 1143 (10th Cir. 1999);
see also Farley v. Nationwide Mut. Ins. Co., 197 F.3d 1322, 1338 (11th Cir. 1999).
Reinstatement is the preferred remedy under the ADA, but front pay in lieu of
reinstatement may be appropriate where discord and antagonism between the parties
would render reinstatement ineffective as a make-whole remedy. Davoll, 194 F.3d at
1143 n.19. The district court may consider all evidence presented at trial in formulating
the proper award. See id. at 1144 (citing EEOC v. General Lines, Inc., 865 F.2d 1555,
1562 (10th Cir. 1989)).
Beverage Distributors opposes reinstatement because it believes that
Mr. Sungaila’s current position places him “in as good a financial position as he would
be in a Night Warehouse Loader position” and allows him “better work hours than he
would have working the night shift.” (Doc. # 111, at 6.) EEOC refutes these statements
by arguing that Mr. Sungaila’s income is not equivalent to the Night Warehouse Loader
position and that working during the day further requires him to pay for daycare. (Doc.
# 113, at 6) (also noting that Beverage Distributors’ argument takes into account
collateral source income). Beverage Distributors offered no evidence at trial that
Mr. Sungaila’s current position is financially comparable to the Night Warehouse
position and in fact, as discussed supra, trial testimony demonstrated the opposite.
The Court is also leery of accepting counsel’s arguments in lieu of evidence. More to

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the point, Beverage Distributors does not argue that its relationship with Mr. Sungaila
would make reinstatement untenable. Cf. E.E.O.C. v. Prudential Fed. Sav. & Loan
Ass’n, 763 F.2d 1166, 1172 (10th Cir. 1985) (“Reinstatement may not be appropriate,
however, when the employer has exhibited such extreme hostility that, as a practical
matter, a productive and amicable working relationship would be impossible.”) Indeed,
at trial Beverage Distributors representatives routinely testified that they held
Mr. Sungaila in high regard. Thus, reinstatement is appropriate in this case and
Beverage Distributors must reinstate Mr. Sungaila to the Night Warehouse Loader
position with retroactive seniority. This disposition best facilitates the remedial purposes
of the ADA and is in accord with the jury’s finding that Mr. Sungaila was able to perform
the essential functions of the position with or without reasonable accommodations.
Because the Court orders reinstatement, it denies EEOC’s request for front pay at this
time. See Fitzgerald v. Sirloin Stockade, Inc., 624 F.2d 945, 957 (10th Cir 1980) (trial
court has discretion to reinstate employee rather than award front pay); see further
Dilley, 296 F.3d at 968 (court need not analyze whether a claimant mitigated his
damages when it orders reinstatement).
C.

TAX PENALTY OFFSET
EEOC requests a tax penalty offset, arguing that the damages awarded will be

paid during one tax year, subjecting Mr. Sungaila to a higher tax rate and, thus, a higher
tax penalty. Beverage Distributors argues that such an offset is inappropriate because
this is a typical single plaintiff discrimination case.

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District courts “ha[ve] wide discretion in fashioning remedies to make victims of
discrimination whole.” Sears v. Atchison, Topeka & Santa Fe Ry., Co., 749 F.2d 1451,
1456 (10th Cir. 1984). In Sears, the Tenth Circuit stated that although “[a] tax
component may not be appropriate in a typical Title VII case,” Sears presented special
circumstances, including the case’s protracted nature and the tax regulations at the
time. Id. Taken together, these circumstances would result in the class members
being taxed at the highest rate. Id. Conversely, in Blim v. Western Electric Co., Inc.,
the Tenth Circuit held that awarding a tax offset was inappropriate because at the time,
tax laws contained five-year averaging provisions that would eliminate almost the entire
tax penalty that would result from a lump sum payment. 731 F.2d 1473, 1480 (10th Cir
1984).
The Court is not persuaded by Beverage Distributors’ argument that tax offsets
are inappropriate in single plaintiff cases. But see E.E.O.C. v. RadioShack Corp.,
No. 10-CV-02365-LTB-BNB, 2012 WL 6090283 (D. Colo. Dec. 6, 2012) (awarding a
tax offset in a single plaintiff case). Instead, Sears and Blim emphasize the plaintiff’s
ability to reduce the tax penalty through income averaging provisions. Since those
decisions, income averaging was eliminated from the tax code as of the Tax Reform Act
of 1986, 26 U.S.C. § 1305 (repealed 1986). Therefore, Mr. Sungaila would be unable to
allot his damages award over a multiple-year period for tax purposes. The result is that
Mr. Sungaila will be placed into a higher tax bracket. A tax offset would simply restore
Mr. Sungaila to the position he would have been but for his wrongful separation from

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Beverage Distributors. To determine the tax consequences, however, a hearing is
necessary.
D.

INJUNCTIVE RELIEF
Finally, EEOC asks for injunctive relief in the form of an order permanently

enjoining Beverage Distributors from further discrimination, and requiring training for
employees, revisions to its policies, updates to its job postings, notice posting, and
reporting and compliance review.
As a threshold matter, the Court disagrees with Beverage Distributors’ assertion
that EEOC waived its request for injunctive relief by failing to include it in the Final
Pretrial Order. In the order, EEOC stated that it “seeks reinstatement and front pay and
other equitable relief due to Defendant’s discriminatory conduct.” (Doc. # 49 at 4)
(emphasis added). Section 2000e-5 of Title VII, which has been incorporated into the
ADA, discusses the equitable relief available to victims of discrimination, including an
injunction. 42 U.S.C. § 2000e-5(g). Therefore, EEOC has not waived its right to
request the injunctive relief at issue here.
“[T]he purpose of injunctive relief is to prevent future violations.” E.E.O.C. v.
General Lines, Inc., 865 F.2d 1555, 1565 (10th Cir. 1989) (citing United States v. W.T.
Grant Co., 345 U.S. 629 (1953)). “The likelihood of future violations is inferred from
the totality of the circumstances, including the commission of past illegal conduct.” Id.
To obtain such relief, “the moving party must demonstrate that there exists some
cognizable danger of recurrent violations, something more than a mere possibility,
which serves to keep the case alive.” Id. (citing W.T. Grant Co., 345 U.S. 629).

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“A court has considerable discretion in fashioning an appropriate equitable remedy
based upon the particular facts of a case, may rely on all the evidence adduced at trial
and draw all reasonable inferences from that evidence.” E.E.O.C. v. Wal-Mart Stores,
Inc., 11 F. Supp. 2d 1313, 1330 (D.N.M.) aff’d, 202 F.3d 281 (10th Cir. 1999) (internal
citations and quotations omitted); see also Roe v. Cheyenne Mountain Conference
Resort, Inc., 124 F.3d 1221, 1231 (10th Cir. 1997).
At trial, the testimony of Beverage Distributors managers and human resources
professionals demonstrated a lack of sufficient knowledge about the ADA, its interactive
process, and the requirement that reasonable accommodations be provided to
employees. Moreover, Beverage Distributors’ Employee Handbook contains an
inaccurate statement of the law: it states that Beverage Distributors will provide
reasonable accommodations, “unless doing so would result in an undue hardship . . . or
create the risk of harm to the health or safety of the applicant, associate, or others.”
(Doc. # 105-1, at 4); Albertson’s, Inc. v. Kirkingburg, 527 U.S. 555, 569 (1999) (“direct
threat” is defined as “a significant risk to the health or safety of others that cannot be
eliminated by reasonable accommodation”) (citing 42 U.S.C. § 12111(3) (emphasis
added)). The handbook is also unclear on Beverage Distributor’s policies regarding
how an employee should request accommodations under the ADA.
Beverage Distributors fails to address EEOC’s specific arguments regarding
whether injunctive relief is appropriate and instead objects to the relief requested
because EEOC offers no evidence of similar treatment of other employees. However,
injunctive relief is not limited to cases in which there is a pattern or practice of

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discrimination. See, e.g., EEOC v. Wal-Mart Stores, Inc., 202 F.3d 281 (10th Cir. 1999)
(affirming district court’s grant of injunctive relief in a single plaintiff case). Instead, the
apt inquiry is not whether EEOC proved that other employees have been discriminated
against; it is whether the evidence presented at trial demonstrates a danger of recurrent
violations. See id. Therefore, Beverage Distributors’ legal arguments do not satisfy the
Court’s concern that without specific training on the ADA, a similar incident will be
repeated.
The jury verdict and testimony exposing a lack of adequate ADA training
establishes that Beverage Distributors intended to do the act which had the
discriminatory effect and there is a cognizable danger of a recurrent violation. See
Walmart, 11 F. Supp. 2d at 1330-31 (lack of adequate training creates a legitimate
concern that a similar incident will happen again). Accordingly, the Court grants
EEOC’s request for injunctive relief.12
V.

CONCLUSION

Based on the foregoing, it is ORDERED that:
(1)

Plaintiff EEOC’s Motion Pursuant to Fed. R. Civ. P. 50(b) for Judgment as a
Matter of Law on Defendant’s Failure-to-Mitigate Defense (Doc. # 104) is
GRANTED IN PART and DENIED IN PART;

(2)

Plaintiff EEOC’s Motion for Injunctive Relief (Doc. # 105) is GRANTED IN PART
and DENIED IN PART;

(3)
12

The jury’s damages award of $29,543.25 for back pay is VACATED;
However, the Court does not see it necessary to permanently enjoin Beverage Distributors.

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(4)

The Clerk shall enter judgment in favor of Plaintiffs in the amount of $132,347.00
for back pay, plus pre-judgment interest accruing at a rate of 8 percent per
annum compounded annually from March 31, 2008, the date of Mr. Sungalia’s
separation from Beverage Distributors;

(5)

Mr. Sungaila shall be reinstated to the position of Night Warehouse Loader with
the same seniority he would have had if he had not been terminated;

(6)

The parties shall contact chambers to schedule a hearing on the determination
of an appropriate tax penalty offset;

(7)

Beverage Distributors shall engage an outside consultant to provide employee
training and assistance in revisions to its policies, updates to its job postings,
notice posting, and reporting and compliance review. Beverage Distributors shall
report its compliance with this order to the Court within six months of this order.
DATED: December

09

, 2013
BY THE COURT:

________________________________
CHRISTINE M. ARGUELLO
United States District Judge

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