GERUNDO v. AT&T, INC. et al

Filing 129

MEMORANDUM OPINION SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 12/20/16. 12/22/16 ENTERED AND COPIES E-MAILED.(er, ) Modified on 12/22/2016 (er, ). (Main Document 129 replaced on 12/22/2016) (er, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JOHN GERUNDO,
Plaintiff,
v.

CIVIL ACTION
NO. 14-5171

AT&T SERVICES, INC.
Defendant,

MEMORANDUM OPINION
SCHMEHL, J. /s/ JLS

DECEMBER 20, 2016

Plaintiff brought this action, claiming he was placed on surplus status by his
former employer, defendant AT&T Services, Inc., because of his age in violation of the
Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621-629 and the
Pennsylvania Human Relations Act (“PHRA”), 43 Pa. Cons. Stat. Ann. § 951. After the
Court denied the defendant’s motion for summary judgment, the case was tried to the
Court sitting with a jury. After a five-day trial, the jury found, as indicated on the verdict
form, that plaintiff had proven by a preponderance of the evidence that his age was the
determining factor in the decision to surplus his employment in connection with a
reduction in force. (ECF 91.) The jury awarded plaintiff $288,000.00 in back pay and
$188,000.00 in front pay. (Id.).The jury further found that defendant had proven by a
preponderance of the evidence that plaintiff did not exercise reasonable diligence in his
efforts to secure substantially equivalent employment and, as a result, deducted
$53,000.00 from the award of front pay, leaving a total front pay award of $135,000.00.
(Id.) Finally, the jury found that plaintiff had failed to prove that defendant either knew or

showed reckless disregard for whether its conduct was prohibited by the age
discrimination law. (Id.) The Court then entered a judgment in favor of plaintiff and
against defendant in the amount of $370,000.00. (ECF 87.) Presently before the Court is
the motion of the defendant to alter or amend judgment pursuant to Rule 59(e) of the
Federal Rules of Civil Procedure. For the reasons that follow, the motion is denied.
A motion to alter or amend a judgment pursuant to Federal Rule of Civil
Procedure 59(e) “must rely on one of three major grounds: (1) an intervening change in
controlling law; (2) the availability of new evidence not available previously; or (3) the
need to correct clear error of law or prevent manifest injustice.” N. River Ins. Co. v.
CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995) (alterations, citations, and
quotations omitted).
Defendant argues that the fact that the jury made a specific finding that plaintiff
did not mitigate his damages, automatically precludes plaintiff from recovering any front
pay and, as a result, any deduction for failing to mitigate should come off of plaintiff’s
back pay award. Therefore, argues defendant, an award of any front pay was a clear error
of law.
In support of this argument, defendant relies exclusively on the following
language in an unpublished opinion from the Court of Appeals for the Third Circuit.
“When an employer successfully proves a failure to mitigate, any back pay award to an
aggrieved employee will be cut off or reduced beginning at the time of the employee’s
failure to mitigate and any front-pay award will be foreclosed.” Caufield v. Ctr. Area Sch.
Dist., 133 Fed. Appx. 4, 11 (3d Cir. 2005). For support of this position, the Court of

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Appeals in Caufield cites a decision from the United States Supreme Court in Ford Motor
Co. v. Equal Employment Opportunity Commission, 458 U.S. 219, 233-34 (1982).
However, a careful reading of the Ford Motor decision reveals that nowhere in the
decision does the Supreme Court address the duty to mitigate in the context of front pay.
In addition, in a case decided well before Caufield, but after the Supreme Court’s
Decision in Ford Motor, the Third Circuit stated that “an award for future lost earnings is
no more speculative than awards for lost earning capacity routinely made in personal
injury and other types of cases. The plaintiff’s duty to mitigate damages should serve as
an effective control on unjustified damage awards.” Maxfield v. Sinclair Int’l, 766 F. 2d
788, 796 (3d Cir. 1985), cert. denied, 474 U.S. 1057 (1986) (emphasis added.)
In citing the Ford Motor Co. decision, it appears the Third Circuit relied on
language from the Court of Appeals for the Second Circuit in Dominic v. Consol. Edison
Co., 822 F. 2d 1249, 1258 (2d Cir. 1987). In Dominic, the Second Circuit stated, “Had
[defendant] proved that [plaintiff] failed to mitigate damages . . .[plaintiff’s] back pay
award would have been cut off or reduced at the time of his failure to mitigate and any
front-pay award would have been foreclosed.” 822 F. 2d at 1258. In support of this
proposition, the Second Circuit cited the Supreme Court’s decision in Ford Motor.
However, as noted above, that decision does not address the duty to mitigate in the
context of front pay. Indeed, in a case decided before Dominic, but after the Supreme
Court’s decision in Ford Motor, the Second Circuit even stated “that the duty to mitigate
damages by seeking employment elsewhere significantly limits the amount of front pay
available.” Whittlesey v. Union Carbide, Corp., 742 F. 2d 724, 728 (2d Cir. 1984).
(emphasis added.)

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Although, as defendant points out, the Third Circuit also cited the Dominic
decision in Feldman v. Philadelphia Hous. Auth., 43 F.3d 823, 840 (3d Cir. 1994) (“Had
[defendant] proved that [plaintiff] failed to mitigate damages…[,][plaintiff’s] back pay
award would have been cut off or reduced at the tjme of his failure to mitigate and any
front pay award would have been foreclosed”), this citation was not in the majority
opinion, but rather in the dissenting and concurring opinion of Judge Garth. In any event,
even Judge Garth wrote after citing Dominic that “[i]t follows that a plaintiff may only
receive front pay for that period of time reasonably necessary to mitigate his losses.” Id.
(emphasis added.)
In view of the fact that our Court of Appeals cited only the Supreme Court’s
decision in Ford Motor for the proposition that the failure to mitigate forecloses a
plaintiff’s right to front pay (which the decision does not), and since the Third Circuit
cautions that “[n]on-Precedential Opinions are only binding on the parties involved, and
should not be cited or relied upon for the legal principles stated within,” the Court will
not follow the Third Circuit’s decision in Caufield nor the Second Circuit’s decision in
Dominic.
Indeed, most of the other Court of Appeals which have considered the issue after
the Supreme Court’s decision in Ford Motor, have concluded that the failure to mitigate
reduces but does not bar an award of front pay. See Castle v. Sangamo Weston, Inc.,
837 F. 2d 1550, 1562 (11th Cir. 1988); Cassino v. Reichhold Chems., Inc., 817 F.2d 1338,
1347 (9th Cir.), cert. denied, 484 U.S. 1047 (1988); McNeil v. Economics Laboratory,
Inc., 800 F. 2d 111, 118 (7th Cir. 1986); EEOC v. Prudential Fed. Sav. & Loan Ass’n,
763 F. 2d 1166, 1173 (10th Cir.), cert. denied, 474 U.S. 946 (1985). In addition, the Sixth

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Circuit Court of Appeals has stated that a plaintiff’s duty to mitigate damages is only one
of a number of factors relevant to a front pay award. Suggs v. ServiceMaster Education
Food Management, 72 F. 3d 1228, 1234 (6th Cir. 1996).
The Court elects to follow these decisions as well as the decision of our Court of
Appeals in Maxfield. As such, the jury’s verdict should not be disturbed because the
issues of back pay, mitigation and front pay were all within their province. The jury was
properly instructed on the law, they deliberated and rendered a verdict. That verdict will
not be disturbed by this Court. Additionally, since neither party challenges the jury’s
finding that plaintiff failed to mitigate his damages, the Court will affirm the jury’s
decision to deduct $53,000 from the award of front pay for failure to mitigate, leaving
plaintiff with a total of $135,000 in front pay.

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