GERUNDO v. AT&T, INC. et al
MEMORANDUM OPINION. SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 12/20/16. 12/22/16 ENTERED AND COPIES E-MAILED.(er, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
AT&T SERVICES, INC.
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 plaintiff for prejudgment judgment interest on the back pay award. For
the reasons that follow, the motion is granted.
Defendant does not dispute that plaintiff is entitled to prejudgment interest on the
back pay award. (ECF 108 at p. 2.) However, the parties do not agree on the method to
be used to calculate prejudgment interest. Plaintiff argues that the Court should award
prejudgment interest at Pennsylvania’s legal interest rate of 6% as set forth in 41 P.S. §
202. Defendant counters that the Court should award prejudgment interest at the rate
contained in the federal post-judgment interest rate statute, 28 U.S.C. § 1961(a), which
equals the Federal Reserve “weekly average 1-year constant maturity Treasury yield.” 28
U.S.C. § 1961(a). The difference is significant because under plaintiff’s method, plaintiff
would be entitled to $17,280 in pre-judgment interest, while under defendant’s method
plaintiff would be entitled to $854.49.
The decision to award prejudgment interest is in the sound discretion of the trial
court. Booker v. Taylor Milk Co., 64 F. 3d 860, 868 (3d Cir. 1995). Awarding
prejudgment interest “serves to compensate a plaintiff for the loss of the use of money
that the plaintiff would otherwise have earned had he not been unjustly discharged.” Id.
There is a “strong presumption in favor of awarding prejudgment interest, except where
the award would result in unusual inequities.” Id
Our Court of Appeals has stated that in awarding prejudgment interest a district
court “may be guided by the rate set out in 28 U.S.C. § 1961.” Sun Ship, Inc. v. Matson
Navigation, Co., 785 F. 2d 59, 63 (3d Cir. 1986). Indeed, this Court has repeatedly used
the post-judgment interest statute to calculate an award of prejudgment interest on back
pay in ADEA cases. See, e.g., O’Neill v. Sears Roebuck and Co., 108 F. Supp. 2d 443,
446 (E.D. Pa. 2000); Becker v. ARCO Chem. Co., 15 F. Supp. 2d 621 (E.D. Pa. 1998);
Young v. Lukens Steel Co., 881 F. Supp. 962, 977 (E.D. Pa. 1994); Argue v. David Davis
Enterprises, Inc., No. 02-951, 2009 WL 750197 (E.D. Pa. Mar. 20, 2009); Tomasso v.
Boeing Co., No. 03-4220, 2007 WL 2753171 (E.D. Pa. Sept. 21, 2007); Devore v. City of
Phila., No. 00-3598, 2004 WL 834924 (E.D. Pa. Mar. 30, 2004); Anderson v.
Consolidated Rail Corp., No. 98-6043, 2000 WL 1622863 (E.D. Pa. Oct. 25, 2000).
Plaintiff directs the Court’s attention to a recent decision wherein this Court
applied Pennsylvania’s six percent interest rate to calculate prejudgment interest on an
ADEA damages award. See Grieb v. JNP Foods, Inc., (E.D. Pa. Dec. 23, 2015). In
applying the six percent rate, the Court in Grieb stated that “[w]hile T-Bill interest rate
might account for lost investment, it certainly does not account for the plaintiffs’ inability
to access these funds in daily life. This is particularly true here where the plaintiffs would
most likely have used their less than $20,000 annual salaries for subsistence.”
Contrary to the situation in Grieb, plaintiff has not produced any evidence that he
needed to use most of his annual salary of $106,500 for basic living expenses. Rather, the
Court finds that plaintiff is only entitled to recoup an amount which would compensate
him for lost investment. The Court finds that the T-Bill interest rate adequately
compensates plaintiff for any lost investment.
Section 1961(a) of Title 28 provides for post-judgment interest as follows: “Such
interest shall be calculated from the date of entry of judgment, at a rate equal to the
coupon issue yield equivalent (as determined by the Secretary of Treasury) of the average
accepted auction price for the last auction of the fifty-two week United States Treasury
bills settled immediately prior to the date of judgment.” 28 U.S.C. § 1961(a).
According to defendant’s calculations, “[u]sing the Treasury Bill rate available
for the period ending just prior to each applicable year, and based on the jury’s back pay
award of $288,000,” results in plaintiff receiving a total prejudgment award on his back
pay totaling $854.49. (ECF 108 at p. 5.) Plaintiff has not objected to this calculation.
Accordingly, the Court awards plaintiff prejudgment interest on his back pay award in the
total amount of $854.49.
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