Fresquez v. BNSF Railway Co.
Filing
193
ORDER Granting in Part and Denying in Part, and Taking under Advisement in Part, Plaintiff's 166 Motion for Back Pay and Front Pay, and Ordering Further Briefing. Simultaneous supplemental briefs and supporting additional evidence on the dollar amount owed to Plaintiff are due no later than November 25, 2019. Plaintiff is also ordered to supplement his Motion for Fees and Costs (ECF No. 165 ) by December 2, 2019. Defendant may file a response to this supplement no later than December 9, 2019. No reply will be allowed. ORDERED by Judge William J. Martinez on 11/4/2019.(angar, ) Modified on 11/4/2019 to add text (angar, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-0844-WJM-SKC
BRANDON FRESQUEZ,
Plaintiff,
v.
BNSF RAILWAY CO.,
Defendant.
ORDER GRANTING IN PART AND DENYING IN PART, AND TAKING UNDER
ADVISEMENT IN PART, PLAINTIFF’S MOTION FOR BACK PAY AND
FRONT PAY, AND ORDERING FURTHER BRIEFING
Plaintiff Brandon Fresquez (“Fresquez”) sued his former employer, BNSF
Railway Co. (“BNSF”), for retaliating against him for engaging in protected activity by
terminating his employment, all in violation of the Federal Railroad Safety Act, 49
U.S.C. § 20109 (“FRSA”). On February 11, 2019, the case proceeded to a 6-day trial
before Senior U.S District Court Judge Wiley Y. Daniel. On February 19, 2019, the jury
returned a verdict in favor of Fresquez, finding that BNSF retaliated against Fresquez in
violation of the FRSA. (ECF No. 152.) The jury awarded $800,000 to Fresquez as
compensatory damages for emotional distress, pain, suffering, inconvenience, and
mental anguish, and an additional $250,000 in punitive damages. (Id. at 3–4.) The
issue of back pay and front pay did not go to the jury because Judge Daniel decided,
and the parties did not dispute, that back pay and front pay are equitable remedies to
be decided by a judge. (ECF No. 159 at 131–32.)
After the jury returned a verdict for Fresquez, Judge Daniel instructed the parties
to attempt to reach an agreement on back pay and front pay, or request a hearing.
(ECF No. 163 at 198.) The parties did not reach an agreement, and Fresquez filed the
instant Motion for Back and Front Pay (the “Motion”) seeking damages. (ECF Nos. 155
& 166.) Judge Daniel set a hearing on the matter. Unfortunately, prior to the hearing
Judge Daniel passed away. On May 16, 2019, the matter was drawn to the
undersigned. (ECF No. 171.) Thereafter, BNSF moved for a hearing on the issues of
back pay and front pay, as well as attorneys’ fees, which the Court granted in part only
as to the back pay and front pay issues. (ECF Nos. 180 & 183.)
For the reasons discussed below, the Court grants in part and denies in part
Fresquez’s motion, and reserves ruling on the final amounts of back pay and front pay.
The Court orders the parties to submit additional briefing and evidence from which the
Court can determine the amount of back pay and front pay owed to Fresquez. The
Court also orders Fresquez to supplement his fee motion (ECF No. 165) to account for
the hours expended on litigating post-verdict issues.
I. BACKGROUND
A.
Factual History
This summary is drawn from the Order Denying BNSF’s Motion for Summary
Judgment.
Fresquez began working for BNSF in 2005 in the Maintenance of Way
Department. (ECF No. 83 at 1.) He worked mostly as a track inspector responsible for
determining if railroad tracks complied with the Federal Railroad Administration (“FRA”)
2
regulations and BNSF track safety standards. (Id. at 1–2.) Track inspectors are
responsible for locating track defects that deviate from FRA or BNSF safety standards,
remediating such defects by repairing or protecting them, and reporting any defects.
(Id. at 2.) A track inspector protects a defect by making a report, reducing the track
speed limit, or removing the track from service. (Id.) Defects are normally reported by
updating an electronic track inspection database called TIMS. Track inspectors report
to track supervisors called roadmasters, and are required to comply with instructions
from roadmasters. Roadmasters are authorized to instruct tract inspectors to measure
a track for defects. (Id. at 2.)
BNSF’s employment policy, Policy for Employee Performance Accountability
(“PEPA”), applies to all employees and has three categories of employee discipline.
The most severe is “stand alone dismissible violations,” which includes insubordination.
Insubordination is also prohibited by BNSF’s Maintenance of Way Operating Rule 1.6.
Failure to follow a supervisor’s instruction is not a stand-alone dismissible violation.
The difference between failure-to-follow-instructions and insubordination is often
subjective, but an employee can be charged with the former when he is asked to do
something and does not do it, and an employee can be charged with the latter for
refusing a direct order. A collective bargaining agreement (“CBA”) allows an employee
to participate in an investigation to determine whether a violation occurred. BNSF’s
2016 Code of Conduct prohibits retaliation for reporting hazardous conditions, and
BNSF maintains an anonymous hotline that allows employees to report behavior that
conflicts with the Code of Conduct.
Fresquez became aware that Michael Paz (one of his roadmasters) and Mark
3
Carpenter (another supervisor) were inappropriately reporting repairs to tract defects
when no repair had actually been made. (Id. at 4.) Fresquez claimed he confronted
Paz about the false reports and that Paz admitted it. (Id.)
Subsequently, on May 5, 2016, Fresquez claims that he spoke with Paz about
another track defect requiring removing a track from service, that Paz told him to falsify
the report, and that Fresquez refused. (Id. at 5.) Plaintiff called an FRA field agent to
ask whether the defect should be changed. (Id.) Later that afternoon, Paz and
Fresquez met to discuss another alleged defect. They disagreed whether there was a
defect, and whether Paz ordered Fresquez to measure the alignment of the track with a
string-line. (Id. at 5–6.) Fresquez drove his truck away without measuring the possible
defect, but later returned to find Paz and another employee measuring the track with a
string-line. (Id. at 6.)
That same day, Paz reported to Carpenter that Fresquez had, at a minimum,
refused an instruction, and perhaps stated that Fresquez was insubordinate. (Id. at 7.)
Carpenter removed Fresquez from service pending an investigation, and later charged
Fresquez with violating BNSF’s policy prohibiting insubordination. At an investigatory
hearing, Plaintiff testified that he believed he was taken out of service in retaliation for
confronting Paz about the defect reports. (Id. at 7.) After the investigation, Fresquez
was terminated on May 27, 2016. (Id. at 9.)
The case proceeded to trial, and the jury found that BNSF retaliated against
Fresquez in violation of the FRSA. (ECF No. 152.)
4
B.
Relevant Trial History
At trial, Judge Daniel and the parties discussed the compensatory damages
instruction, Instruction No. 21, multiple times. (See ECF No. 150 at 22–23.) Judge
Daniel raised the issue on the first day of trial, suggesting that back pay—the “amount
of lost wages and back pay”—is an equitable remedy. (ECF No. 157 at 25–27.) W hile
Judge Daniel did not locate any cases analyzing whether back pay is an equitable
remedy under the FRSA, he found that the Sarbanes-Oxley Act had the same burdenshifting framework as the FRSA, and the back pay remedy under Sarbanes-Oxley was
an equitable remedy. (Id.) Judge Daniel also noted that in Title VII cases, back pay
and front pay are both considered equitable remedies. He thus asked the parties to
consider the existing law, and bring any reasons to reconsider his decision to his
attention. (Id. at 27.)
The following day, Judge Daniel again raised the issue of back and front pay.
(ECF No. 159 at 130–36.) The parties agreed that back pay was an equitable remedy
to be decided by a judge. (Id. at 131–32.) Judge Daniel also proposed providing the
jury with a limiting instruction that back pay or lost wages would be determined by the
Court. (Id. at 133–34.) He also determined that, in the event of a plaintiff’s verdict, he
would hold an evidentiary hearing on the issue of mitigation and damages. (Id. at
135–36.)
Later, during the charging conference, the parties did not raise any objection to
the inclusion of the following language in the compensatory damages instruction: “In
calculating compensatory damages, you should not consider any back pay or front pay
5
that the Plaintiff lost.” (ECF No. 163 at 35–38.) During Fresquez’s closing argument,
counsel started to raise the issue of wage loss, and BNSF objected. (Id. at 147–48.)
Judge Daniel sustained the objection and instructed the jury “to disregard the amount
because any consideration of back pay or front pay damages will be decided by the
Court because of some legal requirements.” (Id.) The jury ultimately awarded
Fresquez $800,000 in compensatory damages. (ECF No. 152 at 3.) The jury also
awarded Fresquez $250,000 in punitive damages. (Id.)
C.
Hearing on Back and Front Pay
On September 6, 2019, the undersigned held a hearing on the issue of back and
front pay. Fresquez testified himself, and called expert Jeffrey Opp to testify on how
back pay and front pay should be calculated. BNSF called its vocational expert Cynthia
Bartmann to testify on Fresquez’s employability, estimated wages, and how long it
should have taken Fresquez to find work.
II. ANALYSIS
Under the FRSA, a prevailing plaintiff is “entitled to all relief necessary to make
the employee whole,” including:
(A) reinstatement with the same seniority status that the
employee would have had, but for the discrimination;
(B) any backpay, with interest; and
(C) compensatory damages, including compensation for any
special damages sustained as a result of the discrimination,
including litigation costs, expert witness fees, and
reasonable attorney fees.
42 U.S.C. § 20109(e)(1) & (2). In addition, a prevailing plaintiff may receive up to
$250,000 in punitive damages. Id. § 20109(e)(3).
6
Fresquez seeks a damages award of back pay of $183,821 and front pay of
$1,338,706, for a total award of $1,522,527, plus prejudgment and postjudgment
interest. (ECF No. 166 at 10.) BNSF asks that Fresquez’s front pay be limited to, at
most, four or five years of “wage differential based on the amount he could have made
with reasonable efforts,” and that various aspects of Fresquez’s damages calculations
for back pay and front pay should be rejected. (ECF No. 169 at 15.)
A.
Front Pay in Lieu of Reinstatement
In an adverse employment action, front pay is a form of equitable relief awarded
by the court to make the plaintiff whole. Whittington v. Nordam Group Inc., 429 F.3d
985, 1000 (10th Cir. 2005); Hall v. Claussen, 6 F. App’x 655, 679–80 (10th Cir. 2001).
“Although reinstatement is the preferred remedy . . ., front pay may be awarded instead
when appropriate.” Davoll v. Webb, 194 F.3d 1116, 1143 n.19 (10th Cir. 1999); see
Wooten v. BNSF Ry. Co., 387 F. Supp. 3d 1078, 1100 (D. Mont. 2019) (FRSA contex t).
The parties agree that reinstatement is not a viable option. (See ECF No. 166 at
6; ECF No. 169 at 5.) Based on the parties’ agreement and the Court’s own review of
the record, the Court agrees that reinstatement is not feasible. See Cooper v.
Asplundh Tree Expert Co., 836 F.2d 1544, 1553 (10th Cir. 1988) (“[T]he trial court must
state why front pay is more appropriate than reinstatement.”). Thus, the Court may
consider an award of front pay in lieu of reinstatement. See Goico v. Boeing Co., 347
F. Supp. 2d 986, 992 (D. Kan. 2004) (an award of front pay or future damages in lieu of
reinstatement furthers the remedial purpose of anti-discrimination statutes by assuring
that the aggrieved party is “returned as nearly as possible to the economic situation he
7
would have enjoyed but for the defendant’s illegal conduct”).
“‘[D]etermining a front pay award requires the district court to predict future
events and consider many complicated and interlocking factors.’” Davoll, 194 F.3d at
1143 (quoting Mason v. Okla. Tpk. Auth., 115 F.3d 1442, 1458 (10th Cir. 1997)). T he
Tenth Circuit has recognized that an “award of front pay is based on speculation.”
Greene v. Safeway Stores, Inc., 210 F.3d 1237, 1246 (10th Cir. 2000). However, even
though front pay awards are, by nature, somewhat speculative, “a defendant may not
take advantage of the fact that its unlawful conduct was the cause of such uncertainty.”
Barnett v. Bd. of Cnty. Comm’rs of Cnty. of Montrose, 2015 WL 5074471, at *3 (D.
Colo. Aug. 28, 2015). Ultimately, “the district court must attempt to make the plaintiff
whole, yet the court must avoid granting the plaintiff a windfall.” Abuan v. Level 3
Commc’ns, Inc., 353 F.3d 1158, 1176 (10th Cir. 2003).
To determine an appropriate award of front pay, the district court looks at the
individualized circumstances of the plaintiff, including
work life expectancy, salary and benefits at the time of
termination, any potential increase in salary through regular
promotions and cost of living adjustment, the reasonable
availability of other work opportunities, the period within
which a plaintiff may become re-employed with reasonable
efforts, and methods to discount any award to net present
value.
Davoll, 194 F.3d at 1144; see e.g., McInerney v. United Air Lines, Inc., 463 F. App’x
709, 725–26 (10th Cir. 2011) (district court did not abuse its discretion to deny front pay
where the record contained “no reference to any attempt on [the plaintiff’s] part to
address life expectancy, continued term of employment with United, or a viable discount
8
rate that would have supported a calculable front pay amount”). “A court may also
consider a plaintiff’s future in the position from which he was terminated.” Davoll, 194
F.3d at 1144.
The district court must also specify an end date for front pay and show that the
end date is “based on more than ‘mere guesswork.’” Id. at 1144–45. The appropriate
cutoff is “the point at which the plaintiff finds employment comparable or superior to her
old job.” Hayes v. SkyWest Airlines, Inc., 2018 WL 4561266, at *8 (D. Colo. Sept. 24,
2018). “The burden is on the plaintiff to produce evidence to support [his] damages
claim.” Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc. 39 F.3d 1482, 1493–94
(10th Cir. 1994).
The parties dispute the appropriate duration of a front pay award. This
disagreement stems from their differing ideas about the purpose of front pay. Fresquez
contends that union railroad jobs are well-paid, secure positions available without a
college degree with good health insurance and retirement benefits, and that no
comparable employment exists outside the railroad industry. (ECF No. 166 at 7.) He
therefore requests a front pay award for the difference between his position at BNSF
and his “best available alternative employment,” including salary, health benefits, and
retirement benefits, from the date of the verdict until August 17, 2045, when he will turn
60 years old and would have been eligible for full retirement at BNSF. (ECF No. 166 at
7; ECF No. 166-1 at 5.) Opp calculates the net present v alue of Fresquez’s lost wages,
lost benefits, and employee annuity pensions as $1,338,706. 1 (ECF No. 166 at 8.)
1
The Motion has a typo: it lists Opp’s calculation of Fresquez’s Tier 1 regular employee
annuity pension at $247,305, whereas Opp’s report lists $247,355. (Compare ECF No. 166 at
9
BNSF does not directly address the argument that Fresquez cannot obtain
comparable employment outside the railroad industry. Instead, BNSF argues that front
pay until 2045 is inappropriate for several reasons: (1) Fresquez did not ask for an
award of front pay; (2) Fresquez has failed to present sufficient expert testimony to
support lost future earnings, and (3) an equitable award of front pay should be limited to
two to four years. (ECF No. 169 at 5–10; Transcript of Sept. 6, 2019 Hearing (“Tr.”)2.)
BNSF argues that front pay as a limited-term stopgap payment for Fresquez until he is
able to secure a good job, not a long-term award for the remainder of Fresquez’s career
(as is common in personal injury cases, where the plaintiff’s capacity to work is
diminished as a result of a defendant’s wrongful conduct). (ECF No. 169 at 6–7.)
BNSF also argues that any award of front pay or back pay should be reduced because
of Fresquez’s failure to mitigate his damages.
1.
Fresquez Asked For An Award of Front Pay
BNSF briefly suggests that Fresquez “did not ask the jury for such an award.”
(ECF No. 169 at 7.) Fresquez’s complaint asked for lost income and benefits, and any
relief deemed just and equitable by the Court. (ECF No. 1 ¶¶ 45.) The jury instructions
did not include lost future wages as part of compensatory damages because, as
discussed above, the Court determined that back pay and front pay were equitable
remedies to be decided by the Court. (ECF No. 159 at 130–36; ECF No. 163 at
8 with ECF No. 166-1 at 1.) The Court will use the amount listed in Opp’s report.
2
An official transcript of the evidentiary hearing is not yet available. The Court will
therefore cite the unofficial, rough transcript generated by the court reporter and made available
for internal Court purposes.
10
147–48.) Indeed, when Fresquez began to discuss wage loss in his closing argument,
the Court sustained BNSF’s objection because “any consideration of back pay or front
pay damages” would be decided by the Court. (ECF No. 163 at 147.) The Court
therefore finds that while Fresquez arguably did not “ask the jury” for an equitable
award of front pay at trial, the issue of front pay was properly raised before the
appropriate finder of fact.
2.
Opp’s Testimony on Front Pay or Lost Future Earnings
BNSF distinguishes between an equitable award of front pay and lost future
earnings. (ECF No. 169 at 6.) BNSF argues that the former provides a plaintiff who
has suffered a short-term negative impact to get back on his feet and acquire
comparable or superior employment, whereas the latter is often calculated for the
duration of a plaintiff’s career. (Id.) The Seventh Circuit makes a similar distinction
between front pay and lost future earnings, recognizing that the latter compensates the
plaintiff “for a lifetime of diminished earnings resulting from the reputational harms she
suffered as a result of [the defendant’s] discrimination.” Williams v. Pharmacia, Inc.,
137 F.3d 944, 953 (7th Cir. 1998); see Hall, 6 F. App’x at 679 (favorably citing
Williams). However, the Tenth Circuit has not always been so clear; in James v. Sears,
Roebuck & Co., the Tenth Circuit stated that “[f]ront pay refers to the award of money
as compensation for the future loss of earnings.” 21 F.3d 989, 997 (10th Cir. 1994).
Based on a distinction between future wage loss and front pay, BNSF argues
that Fresquez has failed to present sufficient expert testimony to justify compensating
Fresquez for lost future earnings because he “lacks the kind of expert testimony and
other proof needed to support” such an award. (ECF No. 169 at 7.) Specifically, BNSF
11
contends that Fresquez has not presented an expert in labor-market dynamics to
establish that its discharge of Fresquez will have a lasting negative effect on his future
earnings or earnings capacity. It thus contends that Opp’s opinions on f uture earning
capacity should be disregarded because Opp fails to take into account actual market
dynamics.
The Tenth Circuit has not distinguished between front pay and future wage loss
in the way that BNSF proposes, and the Court declines to do so here. Aw ards of front
pay or lost future wages and benefits are necessarily speculative by nature, and the
courts have accounted for future uncertainty by determining a cutoff date for awards of
front pay, and discounting to net present value. E.E.O.C. v. Prudential Fed. Sav. &
Loan Ass'n, 763 F.2d 1166, 1173 (10th Cir. 1985). T he Court finds that Opp’s
testimony is sufficient to establish lost wages or front pay, and that a cut-off date with
an appropriate discount rate is sufficient to account for future uncertainty.
3.
Duration of Front Pay
It is manifest that in order to determine the amount of front pay the Court must
first determine the appropriate front pay period. Fresquez asks for a front pay end date
based on an anticipated retirement date in August 2045. BNSF argues that four or five
years (maximum) is appropriate.
Many of the cases in which the court awards front pay until retirement involve
older plaintiffs. As the Sixth Circuit observed,
the award of front pay to a discriminatorily discharged 41
year old employee until such time as he qualifies for a
pension might be unwarranted. On the other hand, the
failure to make such an award for an employee age 63,
likewise discriminatorily discharged, might be an abuse of
12
discretion.
Davis v. Combustion Eng’g, Inc., 742 F.2d 916, 923 (6th Cir. 1984). The D.C. Circuit
found that “[t]o award [the plaintiff] front pay based on the assumption that she will
continue in an allegedly low-paying job (compared to a journeyman proofreader at
GPO) for a full career, when she is only 34 years old and not incapacitated, is to give
her a tremendous windfall rather than to make her whole.” Peyton v. DiMario, 287 F.3d
1121, 1130 (D.C. Cir. 2002). Consistent with this view, the D.C. Circuit held that the
district court had abused its discretion by basing its decision to award equitable relief
until retirement “solely on the basis of [the plaintiff’s] one month of experience at a
private employer that may, or may not, be representative of the private sector, doing
work that may, or may not, be comparable to the work of a journeyman proofreader at
GPO.” Id.
In determining a front pay period, courts also consider the plaintiff’s tenure with
the organization. For example, in Huebner v. City of Roswell, the U.S. District Court
Judge William P. Johnson of the District of New Mexico awarded over seven years of
front pay to a former police officer who had been with the department for sixteen years,
calculated from the date of judgment until his projected retirement date. 2002 WL
35649508, at *4 (D.N.M. Dec. 10, 2002). However, in Payton-Huebner v. City of
Roswell, Judge Johnson awarded only two years of back pay and declined to award
front pay because the plaintiff had only been employed by the defendant for two years.
2002 WL 35649526, at *3 (D.N.M. Dec. 10, 2002). He f ound that assuming that the
plaintiff would have worked for the defendant an additional 17 years until her retirement
13
was too speculative. Id.
Fresquez has presented credible evidence that he cannot reasonably expect to
obtain employment comparable, in terms of his wages, fringe benefits, retirement
income, and union job protection, to that which he enjoyed with BNSF. He testified that
he was rejected from a position at Union Pacific immediately after he submitted his
application. (Tr.) Moreover, it is his understanding that other railroads would not hire
him because he would have to report to them his being fired by BNSF. (ECF No. 166 at
4.) BNSF did not present any evidence to dispute Fresquez’s understanding, and
indeed seems to agree that Fresquez’s best alternative employment is in the building
and construction inspection industry, rather than railroad inspection.
In support of his argument that front pay should last until his retirement,
Fresquez cites Hayes v. SkyWest Airlines, in which the court found an award of front
pay for thirteen years (until the plaintiff reached retirement age) was appropriate after
the plaintiff “testified credibly that he has little prospect of finding comparable
employment.” 2018 WL 4561266, at *8. Here, the evidence present at the hearing
supports Fresquez’s claim that it is highly unlikely that he can ever find comparable
employment. At the hearing, Fresquez testified that he intended to remain at BNSF
until he retired. (Tr.) However, Fresquez admitted that he had been disciplined on
several occasions, and BNSF argued that these personnel issues undercut Opp’s
assumption that Fresquez would remain with the company until 2045. (Id.)
BNSF argues that “front pay is generally not awarded for a lifetime” and is
instead intended to provide a “financial cushion for a reasonable period during which a
diligent claimant could secure reemployment.” (ECF No. 169 at 7 (citing Wilkerson v.
14
Martin Marietta Corp., 171 F.R.D. 273, 287 (D. Colo. 1997)).) It argues that courts
within the Tenth Circuit “regularly award front pay for periods of two to three years.” (Id.
at 8 (citing cases).) It also attempts to factually distinguish Hayes on the grounds that
the plaintiff in that case was 52 years old, suffered kidney disease, and had work
restrictions that limited his ability to find alternate positions. (Id.) However, the
Hayes court did not consider those factors in its decision to award front pay until
retirement. See 2018 WL 4561266, at *5–6. Rather, the court relied on the plaintif f’s
testimony about his diligent efforts to obtain alternate employment. Id.3
BNSF’s argument and evidence also has shortcomings. Ultimately, BNSF’s
argument focuses on the amount Fresquez would need as a cushion until he finds
alternate employment. BNSF fails to address Fresquez’s argument that comparable
positions are simply not available because union railroad jobs are among “the bestpaying jobs available to individuals with limited education,” and that such jobs are now
effectively unavailable to him. See Wooten, 387 F. Supp. 3d at 1102. Instead, BNSF’s
expert Bartmann contends that there is room for job and wage growth in the
construction and building inspection industry, and that Fresquez can make a good
salary with benefits in that industry. Bartmann’s report states that “individuals in the 10 th
percentile for construction and building inspection have a wage of $44,730 . . . . The
Bureau of Labor Statistics reports a median wage of $66,410 . . . and in the 90 th
3
Senior U.S. District Court Judge Robert E. Blackburn’s order in Hayes suggests that
the equitable award of front pay was also influenced by the egregiousness of the defendant’s
discriminatory conduct and offensive litigating positions. See 2018 WL 4561266, at *6 (“To
insinuate, as [the defendant] does, that [the plaintiff] seeks to ‘sit idly by and be compensated
for doing nothing,’ is not only insulting, but plainly contrary to all the evidence presented both at
the trial and the front pay hearing.” (citations omitted)).
15
percentile [it] report[s] a wage of $95,870.” (ECF No. 182-1 at 6.) However, from the
salary ranges presented in Bartmann’s report and testimony the hearing, the Court
notes that the top wages in the building inspection industry are lower than Fresquez’s
wages at BNSF. In addition, BNSF’s other benefits (such as a rare defined benefit
plan) are not prevalent in positions in the building inspection industry. (Tr.)
Ultimately, the Court must determine some future stop date for front pay and
justify its decision. While front pay always has an element of speculation, the Court
finds that it is far too speculative to find that Fresquez would have stayed with BNSF
until August 2045, a front pay period of about 26 years. “[I]t would be a highly unusual
case that would support a thirty-year award of front pay.” McBride v. Halliburton Energy
Servs., 2004 WL 7338157, at *2 (D.N.M. Mar. 15, 2004); see also United States v.
Wyo. Military Dep’t, 2018 WL 3969555, at *16 (D. W yo. Mar. 21, 2018) (finding that it
was too speculative to assume that a wrongfully terminated employee who was
approximately 30 years old at the time of termination would remain with her employer
for the next 25 years); Peyton, 287 F.3d at 1130; Payton-Huebner, 2002 WL 35649526,
at *3.
Moreover, granting front pay until 2045 would surely result in a windfall to
Fresquez. He is young, healthy, has shown aptitude for learning, and seems to have
established a good career in the building inspection industry in the three years since his
termination. On the other hand, the Court concludes that g ranting front pay for only two
or three years would result in an unwarranted and unmerited windfall to BNSF.
Fresquez had been with BNSF for ten years at the time of his termination. Given his
intent to stay with the company for the long term, but also factoring in his youth, his
16
opportunities for a significant, if not comparable, wage and benefits package as a
building inspector, as well as his disciplinary history, the Court finds it reasonable on
this record to conclude that Fresquez would likely have remained at BNSF for an
additional ten years.
For these reasons the Court finds that Fresquez is entitled to ten years of front
pay from the date of the jury verdict. This period of front pay will not result in a windfall
to either Fresquez or BNSF, and is not, on these facts, unreasonably speculative. The
Court further finds that this period of front pay takes into account the strengths and
weaknesses of the arguments and evidence on both sides. Finally, it is instructive that
appellate courts review decisions on the duration of front pay under a abuse of
discretion standard, and the Court has endeavored mightily to exercise its discretion on
this issue prudently and fairly. See Davoll, 194 F.3d at 1143.
4.
Failure to Mitigate
BNSF also argues that Fresquez did not make reasonable efforts to mitigate his
damages, and therefore an award of back pay and front pay should be reduced. (ECF
No. 169 at 2–5.) “Unquestionably, wrongfully discharged claimants have an obligation
to use reasonable efforts to mitigate their damages.” EEOC v. Sandia Corp., 639 F.2d
600, 627 (10th Cir. 1980). BNSF bears the af firmative burden to prove a failure to
mitigate on the part of Fresquez. Hayes, 2018 WL 4561266, at *5. To satisfy that
burden, BNSF must establish (1) that Fresquez could have avoided the damage
suffered, i.e., “that there were suitable positions available which plaintiff could have
discovered and for which he was qualified,” and (2) that Fresquez “failed to use
reasonable care and diligence in seeking such a position.” Sandia, 639 F.2d at 627.
17
The duty to mitigate extends to both back pay and front pay. Id.; Hughes v. Regents of
Univ. of Colo., 967 F. Supp. 431, 434 (D. Colo. 1996) (“A plaintif f claiming front pay has
the duty to take reasonable steps to mitigate such damages.”). However, failure to
mitigate does not preclude an award of back pay or front pay as a matter of law; rather,
it may reduce the amount to which a plaintiff is entitled. EEOC. v. RadioShack Corp.,
2012 WL 6090283, at *4 (D. Colo. Dec. 6, 2012).
After Fresquez was terminated from BSNF, he was employed as follows:
•
May 27, 2016 to August 25, 2016: unemployed
•
August 26, 2016 to January 9, 2017: employed in a seasonal position with
the Town of Castle Rock as a roof inspector (Tr.; BNSF Ex. J.);
•
January 10, 2017 to August 6, 2017: unemployed;
•
August 7, 2017 to October 2017: employed in a seasonal position with
SAFEbuilt at $30 per hour (BNSF Ex. K; Tr.);
•
October 2017 to November 2018: employed full-time at SAFEbuilt with
annual wage of $48,000, or approximately $23 per hour (Tr.); and
•
November 2018 to present: employed full-time by Charles Abbott at
approximately $25 per hour (id.).
(ECF No. 169 at 3.) To summarize, Fresquez found seasonal employment within
approximately three months. He was employed for a season, and then laid off. He was
unable to find employment until the start of the following season. Fresquez was able to
turn that seasonal employment into full-time work, albeit at a lower hourly wage.
Fresquez then found another job in the same industry that paid slightly more per hour.
The evidence is uncontroverted that during the 67 weeks he was unemployed or
18
employed part-time, he applied for 54 jobs, exclusively or almost exclusively by online
applications. (ECF No. 182-1 at 3, 17; Tr..) Bartmann opined that (a) Fresquez should
have been able to find full-time work in the field of building inspection within one or two
months of his termination, with a starting wage of approximately $62,400, and
(b) applying for online only postings and submitting less than one application per week
is not a “reasonable effort” to find full-time employment. (Id. at 6, 21.) Fresquez
suggests that Bartmann’s opinions are speculative and BNSF has not met its burden to
prove that he failed to mitigate his damages. (ECF No. 174 at 2.)
Bartmann testified that, at the time she did her market research in October 2017,
Charles Abbott indicated they had a variety of openings for ongoing projects in Denver,
and that not all positions required a license. (Tr.) Wages for those positions ranged
from $48,000 to $70,000 per year. (Id.) Additionally, environmental building inspectors
were hiring for positions that paid between $50,000 and $75,000 per year, and were
willing to train new employees. (Id.) Using data from the Bureau of Labor Statistics,
Bartmann determined that, as of October 2017, building inspectors with no experience
could expect to make approximately $44,730 per year. (Id.) The median wage in the
building inspection industry was $66,410, and the 90 th percentile wage was $95,870.
(Id.) Bartmann continued her market research in December 2017 and January 2018,
contacting the Cities of Longmont, Aurora, and Brighton about building inspector
positions and salaries. (Id.) She also reviewed job vacancies through the Railroad
Retirement Board, and noted that Union Pacif ic was hiring for several positions in
Denver. (Id.) She continued her market research through January 2019, and found
19
positions with various governmental entities and private companies in the construction
inspection industry. As of January 20, 2019, the Colorado Department of Labor
reported 24 job openings for building and construction inspectors in the Denver metro
area with a mean wage just over $62,000, and top wage of $73,819 per year. (Id.)
Based on her market research, Bartmann concludes that Fresquez did not make
a good faith effort to find full time work after he was terminated. She opined that if he
had applied for five jobs a day over a two-week period, he would have found
employment. (Id.) She also contends that, with reasonable effort, he should be making
$62,400 annually. (ECF No. 182-1 at 6.)
Bartmann’s expert testimony is of limited use. While Bartmann opines that
Fresquez should have applied to five jobs a day, there is nothing in her report that
indicates there were that many openings available during Fresquez’s periods of
unemployment. In addition, Bartmann’s market research was conducted after Fresquez
obtained full-time employment. She does not address the labor market prior to
Fresquez finding full-time employment. Finally, Bartmann states that the reason
Fresquez is, in her opinion, underemployed and earning less than $62,400 per year is
that he failed to conduct a reasonable and diligent job search.
The Court finds that BNSF has failed to establish that there were suitable
positions available to Fresquez prior to the time he obtained full-time employment.
Moreover, from his testimony the Court finds that Fresquez appears to have used
reasonable, good faith efforts to find new employment. Fresquez was not required to
use the highest standard of diligence, such as applying to five jobs a day, but rather
required to make a good faith effort. Fresquez found seasonal work after three months
20
of unemployment. When he was laid off, he did not regain employment until the next
season. He was then hired full-time, though at a lower wage. He recently switched
jobs to a higher-paying position. Under these circumstances, the Court finds that BNSF
has not carried its burden to show that Fresquez failed to mitigate his damages.
BNSF also argues that Fresquez has not shown that he has mitigated damages
by finding the “best available alternative employment” because he has not shown that
he applied to other railroads who would not hire him. Thus, BNSF suggests that there
“is not competent evidence that every railroad would exclude Plaintiff from
consideration due to his history with BNSF.” (ECF No. 169 at 4.) BNSF’s argument
inverts the burden of proof on mitigation, and improperly places it on Fresquez. At the
hearing, Fresquez testified that he applied for a position with Union Pacific after his
discharge from BNSF, but that he quickly received a rejection letter back from that
company after he submitted his application. (Tr.) Fresquez also argues that, as a
practical matter given the employment realities of the railroad industry, his dismissal
from BNSF will prevent him from ever again working for another railroad. BNSF has not
presented any credible evidence that another railroad will hire a candidate discharged
from a class 1 railroad for insubordination (even if wrongfully terminated), and therefore
has not shown that Fresquez could mitigate his damages by seeking employment in the
railroad industry.
B.
Court’s Jurisdiction to Award Pay
BNSF argues that the Court lacks jurisdiction to award a specific amount of back
pay or front pay (as opposed to setting a length of time) because the Railway Labor Act
(“RLA”) precludes all claims that involve rights vested in a CBA. (ECF No. 169 at
21
10–11.) Specifically, it argues that the process of calculating back pay and front pay
requires an assessment of the terms of the CBA, and that such an assessment for lost
wages would “normally occur between a union general chairman and a BNSF labor
relations official about the correct calculation of lost wages.” (Id. at 11.)
In response, Fresquez argues that BNSF fails to cite any authority that the RLA
precludes an FRSA claim for back pay or front pay. (ECF No. 174 at 6.) Fresquez
cites to the plain language of the FRSA, which entitles a prevailing employee to back
pay and all necessary relief to make the employee whole. It contends that this does not
require any interpretation of the CBA.
No Tenth Circuit case definitively resolves this matter. However, it does not
appear that any court has limited FRSA back pay and front pay awards in the manner
suggested by BNSF. The RLA mandates an arbitration scheme under which a railroad
employee may pursue a grievance under a CBA. Norfolk S. Ry. Co. v. Perez (“Perez”),
778 F.3d 507, 509 (6th Cir. 2015). As one case has ex plained, however, claims
independent of a CBA—including FRSA claims—are not subject to mandatory
arbitration under the RLA. Brisbois v. Soo Line R.R. Co., 124 F. Supp. 3d 891, 898 (D.
Minn. 2015) (“[T]he CBA is not the source (or at least not the only source) of [the
plaintiff’s] right not to . . . [be] accused of rule violations in retaliation for engaging in
conduct protected by the FRSA.”).
Significantly, the 2007 amendments to the FRSA “permitted employees to file
FRSA claims with the Secretary of Labor, rather than requiring them to proceed through
the RLA arbitration process.” Perez, 778 F.3d at 510; Norfolk S. Ry. Co. v. Solis, 915
F. Supp. 2d 32, 38 (D.D.C. 2013) (“The 2007 amendments to FRSA also specifically
22
eliminated the requirement that FRSA complaints proceed through the RLA arbitration
process, instead transferring authority to investigate and adjudicate such complaints to
the Secretary of Labor.”). Thus, it appears contrary to the purpose of the FRSA to
require that a remedy under that Act (namely, back pay or front pay) be exclusively
reserved to a Public Law Board under the RLA for adjudication.
Finally, other federal courts and administrative bodies outside the RLA process
have awarded back pay and front pay under the FRSA, instead of merely determining
the length of time for a back pay or front pay award. See, e.g., Wooten, 387 F. Supp.
3d at 1091, 1102 (awarding over $1.4 million in lost wages and benefits in the future
and $500,000 for mental and emotional humiliation, pain, or anguish on FRSA claim),
appeal docketed, No. 19-35431 (9th Cir. May 17, 2019); Barati v. Metro-N. R.R.
Commuter R.R. Co., 939 F. Supp. 2d 143, 145 (D. Conn. 2013) (ju ry awarded $1,428 in
lost wages on an FRSA claim); Koziara v. BNSF Ry. Co., 2016 WL 4435299, at *1
(W.D. Wis. Aug. 19, 2016) (jury award of $425,724.64 for lost wages, pain and
suffering, and punitive damages on FRSA claim), rev’d on other grounds, 840 F.3d 873
(7th Cir. 2016); Araujo v. New Jersey Transit Rail Operations, Inc., 708 F.3d 152, 156
(3d Cir. 2013) (noting that the Occupational Safety & Health Administration’s Office of
Whistleblower Protection awarded the plaintiff $569,587, including $40,271 in lost
wages on a FRSA claim); Port Auth. Trans-Hudson Corp. v. Sec’y, U.S. Dep’t of Labor,
776 F.3d 157, 160 (3d Cir. 2015) (ALJ awarded plaintiff over $1,000 in back pay for
FRSA violation).
For these reasons the Court rejects BNSF’s argument, and finds that it may
23
award a specific dollar amount for front pay, rather than simply determine the length of
the front pay period. Nonetheless, the Court finds that, on the record before it, it does
not have the necessary information to calculate the front and back pay owed to
Fresquez with any reasonable degree of accuracy. The Court will therefore order the
parties to submit simultaneous supplemental briefing, with such supporting additional
evidence as the parties believe appropriate, on the issue of the correct amount of back
pay and front pay to be awarded to Fresquez. This supplemental briefing shall be
based on the Court’s determination that it will award front pay to Plaintiff for a period of
ten years from the date of the verdict. These supplemental briefs and supporting
evidence must also be consistent with the Court’s decisions on mitigation and the
contested components of back pay and front pay discussed below in Part III.C.
C.
Disputed Elements of Back Pay and Front Pay
1.
Offset for Unemployment Benefits
Without any citation to cases to support its position, BNSF argues that Opp’s
calculation of the back pay owed to Fresquez should be reduced by $14,551.19 for
unemployment benefits he received. (ECF No. 169 at 11–12.) Fresquez does not
address the offset for unemployment benefits in his Reply, nor did he address the issue
at the hearing.
A review of Tenth Circuit case law explains BNSF’s lack of citations: courts within
the Tenth Circuit and the District of Colorado do not reduce back pay by the amount of
unemployment insurance benefits received. The Tenth Circuit has reasoned that
“unemployment compensation is purely a collateral source and is peculiarly the property
of the claimant. It would be unfair to give [the party that wrongfully terminated an
24
employee] the benefit of it in these circumstances.” Sandia Corp., 639 F.2d at 625. It
further explained that the “deduction or offsetting of employment benefits may well
result in a windfall to the employer.” Id. at 626.
Thus, “[t]his Court follows the rule that [a wrongfully terminated party’s]
unemployment benefits should not be deducted from any back pay award.” Cooper v.
Cobe Labs., Inc., 743 F. Supp. 1422, 1435 (D. Colo. 1990); see also Clawson v.
Mountain Coal Co., 2007 WL 201253, at *12 (D. Colo. Jan. 24, 2007) (“[T ]he more wellaccepted trend in this Circuit is to decline to offset a damage award with unemployment
benefits.”); Pickering v. USX Corp., 1995 WL 584372, at *44 (D. Utah May 8, 1995)
(“either as a matter of law or a matter of discretion, unemployment compensation
benefits are almost never offset against back pay awards”); Toledo v. Nobel-Sysco,
Inc., 892 F.2d 1481, 1493 (10th Cir. 1989) (“the am ount of unemployment
compensation [the plaintiff] received is not essential to ascertaining backpay because it
is within the district court’s discretion whether to discount a backpay award by the
amount of unemployment compensation”).
Accordingly, the Court rejects BNSF’s request to reduce Fresquez’s back pay by
the amount Fresquez received in unemployment benefits.
2.
Actual Earnings at BNSF and Lost Wages
BNSF argues that Opp’s calculation of Fresquez’s lost future wages used “a
complicated analysis of projected wages”, and that what he should have done is use
the amount Fresquez was actually making prior to his termination, and then factor in
annual increases for future inflation. (ECF No. 169 at 12.) BNSF argues that “a more
25
appropriate method for calculating Plaintiff’s projected wages post-termination would be
to take the last three years of full employment . . . or to look at the actual wages of the
six comparators.” (Id.)
The Court finds that Fresquez’s expert used a logical method for determining
Fresquez’s lost future wages. Significantly, BNSF did not present an expert who
calculated Fresquez’s damages using BNSF’s suggested approach. At the hearing on
back and front pay, Opp explained that his approach took into account three “discrete
factors” that impact a “railroader’s ability to earn,” namely how much employees are
paid under the union contracts, how much work is available, and how much Fresquez
elected to work on a historical basis. (Tr.) Using those factors, Opp calculated how
much Fresquez would likely earn going forward. The Court finds that Opp’s method to
calculate Fresquez’s front pay has a reasonable factual basis and is legally sound, and
it will therefore not be disturbed.
3.
Health Insurance
Opp’s calculation of front pay (or lost future earnings) includes health insurance
benefit amounts based on the premiums BNSF paid or would have paid absent
unlawful discrimination. (ECF No. 169 at 13; ECF No. 174 at 6.) BNSF objects to this
approach, arguing that any health insurance benefit should be based on actual out-ofpocket expenses of the former employee. (ECF No. 169 at 13.) Fresquez disagrees,
arguing that the proper valuation is the amount the employer would have had to pay,
consistent with Opp’s calculations. (ECF No. 174 at 6.)
There is a circuit split on whether the value of lost health insurance should be
measured by the cost of insurance premiums the employer would have had to pay
26
absent unlawful discrimination. The Tenth Circuit has not addressed this issue. The
Fifth, Seventh, and Ninth Circuits measure recovery based on actual out-of-pocket
expenses. Kossman v. Calumet Cnty., 800 F.2d 697, 703 (7th Cir. 1986), overruled on
other grounds by Coston v. Plitt Theatres, Inc., 860 F.2d 834 (7th Cir. 1988); Galindo v.
Stoody Co., 793 F.2d 1502, 1517–18 (9th Cir. 1986); Pearce v. Carrier Corp., 966 F.2d
958, 959 (5th Cir. 1992) (per curium) (agreeing with the Seventh and Ninth Circuits).
The Fourth and Sixth Circuits measure recovery by the cost of premiums to the
employer. Fariss v. Lynchburg Foundry, 769 F.2d 958, 966 (4th Cir. 1985); Blackwell v.
Sun Elec. Corp., 696 F.2d 1176, 1185 (6th Cir. 1983).
District courts within the Tenth Circuit are also not consistent on their approach
to this issue. One decision from the Northern District of Oklahoma sided with the
Fourth and Sixth Circuits, and held that the value of lost health benefits should be
measured by the cost of premiums that the defendant would have paid for each
employee. Millsap v. McDonnell Douglas Corp., 2002 WL 31386076, at *8 (N.D. Okla.
Sept. 25, 2002), rev’d in part on other grounds, 368 F.3d 1246 (10th Cir. 2004).
However, decisions from the District of Kansas and the District of Utah have applied the
Fifth, Seventh, and Ninth Circuits’ approach and awarded only out-of-pocket expenses
incurred for other insurance or actual medical expenses. Aguinaga v. United Food &
Commercial Workers Int’l Union, AFL-CIO/CLC, 1990 WL 163306, at *3 (D. Kan. Oct. 9,
1990); Sanderson v. Leavitt Grp. Ins. Advisors, 2015 WL 5254492, at *10 (D. Utah
Sept. 9, 2015).
One decision from this district used the Fifth, Seventh, and Ninth Circuit
27
approach, awarding actual expenses for medical insurance as back pay. Thornton v.
Kaplan, 961 F. Supp. 1433, 1441 (D. Colo. 1996). However, in calculating the health
insurance benefit component of front pay, the court multiplied the estimated wage loss
(the difference between estimated wages with the former employer and estimated
wages in a new position) by 15% to calculate “fringe benefits lost.” Id.
Further complicating matters here is the fact that neither party directly addresses
whether the dispute is over including lost health benefits in back pay, front pay, or both.
The approach adopted by the Fifth, Seventh, and Ninth Circuits—namely, the proper
measure of lost medical benefits is actual out-of-pocket expenses—is more logically
applied only to back pay. Kossman, 800 F.2d at 703–04 (discussing how to calculate
the cost of insurance coverage in the context of a back pay award); Galindo, 793 F.2d
1517–18 (only back pay at issue). This makes intuitive sense, given the fact that the
estimated cost of future health insurance premiums to an employer would at best be
informed speculation. The Court will thus address how lost health insurance benefits
should be calculated for both periods of damages.
a.
Back pay health insurance
As it pertains to the period of back pay losses, the Court agrees with the
approach adopted by the Fifth, Seventh, and Ninth Circuits that the proper measure of
lost medical benefits is the out-of-pocket expenses incurred by the employee for
purchasing replacement coverage or paying medical expenses that would have been
covered by the employer’s policy. This is the actual measure of damages, and easily
calculable.
28
In this case, as discussed at the hearing, Fresquez has not put forth evidence of
his actual out-of-pocket expenses for health insurance. There is credible evidence
about amount Fresquez paid to insure himself and his son while at BNSF. After
Fresquez’s termination, he was covered by a BNSF health insurance policy for several
months. (Tr.) After that time, his son moved onto the son’s mother’s health insurance
plan. (Id.) Fresquez has not disclosed any evidence of out-of-pocket expenses for
health insurance incurred after his termination. (Id.)
The Court therefore finds that Fresquez has failed to prove the amount he
expended due to lack of health insurance, and thus he may not include any amount for
health insurance in his back pay calculation. The parties must take this ruling into
account when recalculating the amount of back pay owed to Fresquez.
b.
Front pay health insurance
Neither party directly explains or argues how health insurance benefits should be
calculated as a component of front pay. And as previously discussed, the approach
adopted by the Fifth, Seventh, and Ninth Circuits for calculating health care related
damages by looking to a plaintiff’s “out-of-pocket” insurance expenses is logically
inconsistent with an award of front pay, given that such expenses have not yet accrued.
The Court has located only a few examples of courts within the Tenth Circuit
calculating health insurance benefits as part of front pay. In Gomez v. Presbyterian
Healthcare Servs., Inc., health benefits were calculated as the difference in cost to the
employee between the old employer plan and new employer plan. 2006 WL 8443619,
at *28 (D.N.M. Oct. 27, 2006). In Townley v. Servicemaster Co., LLC, the court
29
subtracted the plaintiff’s yearly mitigation earnings from the plaintiff’s estimated annual
salary at the former employer (including the approximate value of benefits). 2017 WL
4843296, at *7 (D. Kan. Oct. 25, 2017). In Huebner v. City of Roswell, the court simply
estimated the employer-paid fringe benefits to be approximately 17.81% of the
employee’s salary, and included that amount as part of the employee’s base pay for
calculating back pay. 2002 WL 35649508 (Dec. 10, 2002 D.N.M.). Finally, in Thornton
v. Kaplan, the court multiplied the estimated future wage loss by 15% to calculate the
fringe benefit lost. 961 F. Supp. at 1441.
Considering the various approaches used by district courts within the Tenth
Circuit, the Court orders the parties to calculate the health benef it component of front
pay by adding a multiplier to the straight front pay wage losses, as the court did in
Huebner. This will entail looking at the value of the health insurance benefits Fresquez
received at BNSF, as compared to the value of such benefits at his alternate
employment, and reducing same to present value. This approach will address the
relative loss in value of health benefits (recognizing that “health insurance benefits” are
not fungible goods, but rather are of varying quality and benefit). The parties are
instructed to, in their supplemental briefing, justify the multiplier they each use in
determining the value of the future health insurance benefits.
4.
Interest
Fresquez seeks both pre- and postjudgment interest. (ECF No. 166 at 8–10.)
The parties do not dispute the availability of postjudgment interest, and the Court finds
that postjudgment interest at the federal statutory rate would be appropriate.
The FRSA provides for backpay with interest. 42 U.S.C. § 20109(e)(1) & (2).
30
The parties dispute what prejudgment interest rate should apply. Fresquez asks the
Court to calculate interest according to 26 U.S.C. § 6621. That section provides the
Internal Revenue Service underpayment interest rate, which is generally the Federal
short-term rate plus three percent. 26 U.S.C. § 6621. Fresquez also asks that interest
be compounded daily consistent with Department of Labor guidance. (ECF No. 166 at
9.) Fresquez does not cite any federal courts using § 6621 to calculate interest on back
pay or front pay, but rather relies on the Secretary of Labor’s guidance which states that
using that section to calculate interest is appropriate in FRSA adm inistrative actions.
(ECF No. 166 at 9.) See Procedures for the Handling of Retaliation Complaints under
the National Transit Systems Security Act and the Federal Railroad Safety Act. 80 Fed.
Reg. 69115 (Nov. 9, 2015).
BNSF argues that prejudgment interest should be calculated using the
postjudgment interest rate calculations set forth by 28 U.S.C. § 1961. Section 1961,
which sets forth the guidelines for calculating postjudgment interest, mandates an
interest rate “equal to the weekly average 1-year constant maturity Treasury yield” with
interest usually computed daily and compounded annually. BNSF cites several cases
from this District applying § 1961 to award prejudgment interest on federal claims.
(ECF No. 169 at 15.)
A district court has discretion to determine an appropriate prejudgment interest
rate. Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1287 (10th Cir. 2002). T he
Tenth Circuit has made it clear that the district courts may, but are by no means
required to, use the postjudgment interest rate under § 1961 to calculate prejudg ment
interest. See id. (“Many circuits have held that courts are not required to use section
31
1961 in calculating prejudgment interest and that the calculation rests firmly within the
sound discretion of the trial court. We now join them.”).
Courts within this district have used various prejudgment interest rates including
the Colorado statutory interest rate of 8%, the federal postjudgment interest rate of
§ 1961, and the IRS underpayment rate under § 6621. See Barnett v. Bd. of Cnty.
Comm’rs of Montrose, 2015 WL 5315183 (D. Colo. Sept. 11, 2015); EEOC v. W.
Trading Co., 291 F.R.D. 615, 621 (D. Colo. 2013). In both Western Trading and
Barnett, the court considered what prejudgment interest rate should apply to an award
of back pay for an employee for disability and gender/pregnancy discrimination,
respectively. In Western Trading, the court elected to apply the underpayment rate set
forth in § 6621, finding that the rate “best reflects the economic reality of the backpay
period . . . as interest rates were low but return on investment was high.” 291 F.R.D. at
621. The court in Barnett followed suit. 2015 WL 5315183, at *2.
The Court here finds the reasoning in Barnett and Western Trading persuasive.
The interest rate in § 6621 ensures that Fresquez is fully compensated for his damages
without receiving a windfall. The short-term federal interest rate in February 2019 for
amounts compounded monthly was 2.54%, and thus the applicable interest rate under
§ 6621 is 5.54%. Although the Internal Revenue Code allows for daily compounding of
interest, see 26 U.S.C. § 6622(a), the court finds that monthly compounding better
serves the purposes of the FRSA, more accurately reflects the plaintiff’s losses, and
balances the parties’ competing requests for daily compounding (Fresquez) and annual
compounding (BNSF). Leidel v. Ameripride Servs., Inc., 276 F. Supp. 2d 1138, 1147 n.
32
37 (D. Kan. 2003) (finding that annual compounding more accurately reflects the
plaintiff’s losses than daily compounding of the § 6621 rate); Wirtz v. Kan. Farm Bureau
Servs., Inc., 274 F. Supp. 2d 1215, 1223 (D. Kan. 2003) (a nnual compounding better
serves the purposes of the remedial statute).
In sum, the Court directs the parties to calculate prejudgment interest using a
fixed interest rate of 5.54%, with such interest compounded monthly. The parties are
further directed to use the formula approved by the Tenth Circuit in Reed v. Mineta, 438
F.3d 1063, 1067 n.4 (10th Cir. 2006) to calculate prejudg ment interest.
IV. CONCLUSION
For the reasons discussed above, the Court grants in part and denies in part
Plaintiff’s Motion for Back Pay and Front Pay, but the precise dollar amount of back pay
and front pay to be awarded remains under advisement. Because the rulings in today’s
Order on the period of front pay, as well as the disputed components of back pay and
front pay, will necessarily change the calculations already performed by the parties, the
Court will order the parties to submit supplemental, simultaneous briefs and additional
evidence that addresses the calculations for back pay and front pay in accordance with
the Court’s rulings above.
The Court emphasizes that the supplemental briefs are NOT an opportunity to
relitigate the Court’s rulings in this Order. Any argument which attempts to do so will be
stricken and ignored. Moreover, the Court will not consider, and will similarly strike and
ignore, any additional arguments that could have been raised in briefing on the instant
Motion.
33
The Court therefore ORDERS as follows:
1.
Plaintiff’s Motion for Back and Front Pay (ECF No. 166) is GRANTED IN PART,
DENIED IN PART, and REMAINS UNDER ADVISEMENT IN PART, subject to
the parties’ supplemental briefing, as discussed above;
2.
Plaintiff and Defendant are each ordered to submit simultaneous, supplemental
briefs, including such supporting additional evidence in the form of declaration(s)
and/or affidavit(s), as the parties believe appropriate, by no later than November
25, 2019 on the issue of the dollar amounts owed to Plaintiff as back pay and
front pay, calculated in a manner consistent with the Court’s rulings in this Order;
3.
Because the amount of prejudgment interest will depend on the precise day that
judgment is entered, the parties are instructed to calculate prejudg ment interest
as of the following three dates: December 17, December 18, and December
19, 2019;
4.
No extension of the supplemental brief deadline will be granted, and no
responses to the supplemental briefs will be allowed. These supplemental briefs
shall not exceed 7 pages in length, exclusive of attorney signature blocks,
certificate of service, and supporting declaration(s) and/or affidavits(s), if any;
and
5.
Plaintiff is also ordered to supplement his Motion for Fees and Costs (ECF No.
165) by December 2, 2019. Defendant may file a response to this supplement
no later than December 9, 2019. No reply will be allowed.
34
Dated this 4th day of November, 2019.
BY THE COURT:
_______________________
William J. Martínez
United States District Judge
35
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