Equal Employment Opportunity Commission v. Northern Star Hospitality, Inc.

Filing 217

ORDER granting EEOC's request for back pay and injunctive relief; denying EEOC's request for front pay. Motion for relief from judgment 207 (construed as motion to overturn jury's award of damages to Dion Miller) denied. Defendants enjoined from discharging employees in retaliation for complaints about racially offensive postings in workplace; from failing to adopt policies that prohibit actions made unlawful under Title VII; from failing to adopt investigative process re discrimination claims; and from failing to provide annual training re Title VII. Dion Miller awarded back pay plus interest and $15,000 for emotional damages. Signed by District Judge Barbara B. Crabb on 1/27/14. (krj)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
OPINION AND ORDER
Plaintiff,
12-cv-214-bbc
v.
NORTHERN STAR HOSPITALITY d/b/a
SPARX RESTAURANT; NORTHERN
STAR PROPERTIES, LLC; AND
NORTH BROADWAY HOLDINGS, INC.,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This civil action is before the court on post trial briefing by the parties on plaintiff
Equal Employment Opportunity Commission’s requests for back pay, front pay and
injunctive relief on behalf of Dion Miller, who was the subject of a retaliatory discharge by
defendants Northern Star Hospitality, d/b/a Sparx Restaurant, Northern Star Properties,
LLC and North Broadway Holdings, Inc. Defendants oppose the grant of any injunctive
relief or front pay. In addition, they have moved under Fed. R. Civ. P. 60(b)(3) and (d)(3)
to be relieved of any liability for the jury’s award of $15,000 for damages incurred by Miller
on the ground that the award was based on perjured testimony by Miller.
Plaintiff’s request for injunctive relief will be granted because the request is closely
tailored to defendants’ illegal act of retaliatory termination and properly limited in scope and

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duration. Miller is not entitled to front pay because plaintiff has neither shown how long
he would have continued to work for defendants had he not been terminated nor produced
evidence of a proper discount rate to apply to any calculation of front pay.

Finally,

defendants’ motion for relief from liability for the jury’s award of damages will be denied
because defendants have not shown that Miller’s testimony about his child support
payments was false or that it went to the heart of the issue to be decided.

BACKGROUND
Plaintiff brought this action in 2012, alleging that a manager working for defendants
had subjected Dion Miller, a former employee, to racial harassment and that defendants
failed to take appropriate action in response. Plaintiff also contended that defendants
retaliated against Miller by firing him when he complained about the harassment. At
summary judgment, I dismissed the harassment claim but allowed the case to go forward on
the retaliation claim.
An evidentiary hearing was held before trial to determine (1) whether defendants were
engaged in interstate commerce at the time of the alleged harassment and (2) whether the
three defendants were properly considered a “single employer” for liability purposes. Both
issues were decided in plaintiff’s favor.
At the September 2013 jury trial, Dion Miller testified that in September 2010, he
held the position of assistant kitchen manager. He was earning $14 an hour and was
responsible for ordering products for the restaurant.

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When Miller reported to work on October 1, he saw that someone had posted a
picture of an African-American actor, Gary Coleman, below a notice to employees about
rotating food in the cooler. Over the notice was a defaced dollar bill on which someone had
drawn a noose around George Washington’s neck and a swastika on his forehead; also on
the bill were drawings of a man on horseback and a “hooded klansman” with KKK written
on his head. When the front-of-the-house manager arrived, Miller asked her to look at the
posting; she said she knew nothing about it. Miller asked his direct supervisor about the
posting as soon as the supervisor arrived at work. The supervisor removed the dollar bill and
substituted a picture of another television star (a white man) under the reminder to rotate
the food. In subsequent days, the kitchen supervisor criticized Miller’s work several times,
although he had never done so before Miller complained about the posting.

Another

manager met with Miller and told him that his work was not up to his usual standards and
that his attitude was poor. Three weeks after the incident, Miller was fired. Although
defendants had a progressive discipline policy in place, they did not follow it when
terminating Miller.
At trial, Miller testified about the emotional effects of his termination. He said he
“felt terrible” about having to tell his girlfriend and his daughter about the loss of his job; he
and his girlfriend had to put off their plans to have a child; he and the mother of his
daughter experienced a strain in their relationship because he was unable to pay child
support to her, trial tr., dkt. #198, at 3-45; and he felt “less than a man” because he was no
longer the primary bread winner. Id. He found it difficult to look for work day after day

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without success and he went through “a little bit of a depression,” put on weight and did not
go out much. Id. at 3-46.
In her closing argument, plaintiff’s counsel argued that Miller had suffered depression,
that his termination had affected his family and his family planning, that it caused him to
cry, to feel bad about his life and it “turned his whole world upside down.” Id. at 3-96-97.
She did not say anything about the strain placed on his relationship with the mother of his
daughter.
The jury found that when Dion Miller complained about the allegedly racial posting
at his workplace, he was acting on a reasonable, good faith belief that the posting was racially
offensive. It found also that defendants would not have terminated him from his cook’s job
had he not complained about the posting. A day later, the jury awarded him $15,000 in
compensatory damages, but refused to award any punitive damages, despite its finding that
defendants had acted with reckless disregard for Miller’s federal protected rights.

OPINION
The jury’s verdict makes it necessary to decide (1) the amount of back pay to which
Miller is entitled; (2) whether Miller is entitled to any front pay and if so, how much; (3)
whether plaintiff’s motion for injunctive relief should be granted; and (4) whether
defendants are entitled to relief from the damages award.

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A. Relief from Judgment for Damages under Fed. R. Civ. P. 60(b)(3) and (d)(3)
Defendants do not take issue with the jury verdict as it relates to liability, but they
do object to the $15,000 compensatory damages award. They have filed a motion for relief
from judgment under Fed. R. Civ. P. 60(b)(3) and (d)(3), both of which relate to fraud.
(Subsection (b)(3) refers to fraud by an opposing party; subsection (d)(3) refers to “fraud
on the court.”) Although no judgment has been entered in this case, I will take up the
matter as it relates to the legitimacy of the damages award.
Since the trial, defendants have found evidence that in their opinion shows that
Miller was the subject of seven different orders to show cause relating to his non-payment
of support for his daughter. They argue that this is proof he was lying when he testified he
had a good relationship with his daughter’s mother before his termination. Plaintiff does not
agree. First, it points out that the court records on which defendants rely relate to Miller’s
younger daughter, who is the child of a different woman and not the child about whom he
testified at trial. Second, the court records are not reliable evidence because they include
little information and what they do provide is devoid of context. Third, Miller’s testimony
related to his subjective thoughts and feelings about his relationship with the mother of his
older daughter. Plaintiff adds that defendants had an opportunity to examine Miller about
his claims for emotional distress when they deposed him, but never took advantage of it.
Defendants’ showing falls far short of proof that Miller committed perjury requiring
relief from the jury’s award. To make such a showing, defendants would have to show not
only that Miller’s testimony was intentionally false but that his testimony went to the heart

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of the issue before the court. His relationship with the mother of his daughter was only one
of several matters that he testified had caused him distress and plaintiff’s counsel never even
mentioned it in her closing argument. It was not so critical to the jury’s decision as to
support a damages award by itself. Certainly, it did not go to the “the heart of the matter,”
which is what is required to merit reopening of a judgment under Rule 60(b)(3). Metlyn
Realty Corp. v. Esmark, 763 F.2d 826, 832 (7th Cir. 1985) (“an adverse party's fraud or
subornation of perjury permits relatively free reopening of the judgment when the perjury
goes to the heart of the issue” (citing Peacock Records, Inc. v. Checker Records, Inc., 365
F.2d 145, 147 (7th Cir. 1966), and Harre v. A.H. Robins Co., 750 F.2d 1501, 1503 (11th
Cir. 1985)). The motion for relief from the jury’s award of damages under Rule 60(b)(3)
and 60(d)(3) will be denied.

B. Back Pay Award
Defendants have several objections to the back pay award, one of which is that Miller
is not entitled to back pay for the period in which the Sparx Restaurant was closed for
conversion to a Denny’s franchise. According to the trial record, however, defendants kept
certain employees on their payroll during the conversion period, using them for help with
demolition and clean up. It was defendants’ burden to show that Miller would not have
been kept on for this purpose and they did not offer any evidence to show that he would not
have been, so I must assume he would have been retained.
Defendants criticized the efforts that Miller put into finding a replacement job, noting

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that he looked for jobs only one to two days a week and that he never submitted a résumé
or letter of recommendation from former employers. Miller started looking for work the
week he was terminated and applied for two or more jobs every week thereafter. He drove
up to 60 miles from home to apply for jobs and he testified that he could not afford to do
more job hunting. Although he limited his search to restaurant jobs for a long time, that
limitation does him bar him from obtaining back pay. Victims of retaliatory discharges are
not required to look for jobs in other positions or in other lines of work. Ford Motor Co.
v. EEOC, 458 U.S. 219, 231 (1982). Defendants have not shown that Miller failed to
exercise reasonable diligence in his efforts to find work.
Defendants object to plaintiff’s failure to make allowance in its proposed back pay
award for holidays or days of sick leave that Miller would have taken. Defendants did not
put in any evidence about the number of sick days and holidays Miller had taken in the past
or even the average number of days that other kitchen crew members took. In the absence
of such evidence, it would be improper to speculate about whether Miller would have taken
any days off and, if so, how many he would have taken.
Defendants have shown no reason why Miller should not be awarded the damages
plaintiff is requesting: $39,775.59 in back pay through August 31, 2013, plus $19.20 per
week (the difference between what he earned at Sparx and what he is able to earn now)
through the date of judgment. The interest due on the award will be added to that amount,
with the interest calculated in the same manner and at the same rate used by the Internal
Revenue Service for calculating interest on unpaid taxes. 26 U.S.C. § 6621. Defendants

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have not objected to the use of this interest rate.
The award will not be taxed because Miller will be taxed on the award when he
receives it. However, I will grant plaintiff’s request for a 15% increase in the back pay
award, to account for the fact that Miller will have to pay taxes on a lump sum award that
he would not have had to pay had he received the money spread out over the more than
three years since he was terminated improperly.

C. Front Pay Award
Defendants object to any award of front pay on the ground that plaintiff failed to give
the court “‘the essential data necessary to calculate a reasonably certain front pay award,’”
dfts’ br., dkt. #200, at 23 (quoting McKnight v. General Motors Corp., 973 F.2d 1366,
1372 (7th Cir. 1992)).

(Defendants do not argue that Miller should have sought

reinstatement.) This “‘includes the amount of the proposed award, the length of time the
plaintiff expects to work for the defendant and the applicable discount rate.’” Id.
Plaintiff has set forth the amount of the proposed award, but has said nothing about
how long Miller would have expected to work for defendants or about the applicable
discount rate. Without any evidence on these factors, plaintiff has failed to sustain its
request for a front pay award to Miller. Bruso v. United Airlines, Inc., 239 F.3d 848, 862
(7th Cir. 2001).

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D. Injunctive Relief
As injunctive relief, plaintiff asks the court to (1) to bar defendants from discharging
employees in retaliation for complaints about racially offensive postings in defendants’
workplace; (2) require defendants to adopt policies that explicitly prohibit actions made
unlawful under Title VII; (3) require defendants to adopt an investigative process with
regard to discrimination claims; and (4) require them to provide annual training to Chris
Brekken and other managers regarding Title VII. Defendants object to this request, arguing
that the proposed injunctions are nothing more than telling defendants to “obey the law”
and that such injunctions are not favored by the law. In addition, defendants say that
plaintiff does not come before the court with clean hands: it did not serve the Notice of
Claim on defendants within ten days of Miller’s charge of discrimination, it made a
determination of reasonable cause without interviewing key witnesses, it failed to make a
Determination on Reasonable Cause within 120 days from the filing of the Charge of
Discrimination, it did not file this civil action within 180 days of the filing of the Charge of
Discrimination, it failed to work to eliminate the alleged wrongful conduct by engaging in
good faith conciliation and it based its damage request on Miller’s misleading and perjured
testimony.
It is too late for defendants to raise a claim of “unclean hands”; the time for doing so
was at the outset of the litigation. At this junction, plaintiff’s alleged procedural failings are
irrelevant to the question on injunctive relief. The question for defendants is whether
injunctive relief is unnecessary. Defendants did not show that it is, so I will consider the

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nature, scope and length of plaintiff’s proposal to determine whether the requested
injunctive relief is proper.
Defendants are correct when they say that the courts do not favor injunctions that
merely require the subject to obey the law, but plaintiff’s claim for relief does not fall into
that category. Its first request is directed to barring the three defendants from discharging
a person in retaliation for complaints about racially offensive postings in defendants’
workplace. It is limited in time to three years. Defendants characterize this proposal as an
overly broad injunction not to discharge employees for unlawful reasons, but the
characterization is unjust. The injunction is narrowly framed and tied to the particular
unlawful conduct in this case. Moreover, it would last for only three years, so it escapes the
criticism that rightfully attaches to injunctions of unlimited length.

E.g., EEOC v.

AutoZone, Inc., 707 F.3d 824, 844 (7th Cir. 2013) (reversing lower court’s imposition of
permanent injunction requiring defendant to make accommodations for persons covered by
Americans with Disabilities Act).
Plaintiff’s second request is for an injunction requiring the adoption of a workplace
policy explicitly barring retaliation for opposing matters made unlawful under Title VII.
Such an injunction would cover discharges for many more things than objecting to the
posting of a racially discriminatory posting, but it is not so broad as to be objectionable.
Again, defendants have not shown that this injunction is unnecessary. Although defendants
no longer employ many of the people involved in the racial posting incident, Christopher
Brekken remains the dominant person in each of the defendant organizations and his

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testimony that he did not think the posting of the dollar bill violated any workplace policy
indicates that he has an incomplete understanding of the concept of racial discrimination.
Plaintiff’s third request is for an injunction requiring defendants to adopt a complaint
and investigative procedure for internal complaints of retaliation. Defendants do not deny
the merits of the request, but contend that no injunction is needed because the topic is
covered by the materials now in use by Denny’s, the franchisee. However, a review of
Denny’s Employee Handbook, trial exh. #12, shows gaps in procedures for both complaints
and investigations. The section on employee complaints of harassment says only that such
complaints should be made to “someone in management” or by contacting “anyone at
Denny’s company offices.” Id. at 8 (Sparx 963).
Finally, plaintiff asks for annual training on rights and responsibilities under Title VII,
including the provisions on retaliation, for Christopher Brekken and for all managers,
including supervisors, working for defendants. Although defendants say that the injunction
is unnecessary because it duplicates training already provided by Denny’s, they do not say
that Christopher Brekken has received the training.
I conclude that the limited injunctive relief sought by plaintiff is appropriate to the
violation of law in this case. It is not simply an “obey the law” injunction, but tailored to
the deficiencies identified in defendants’ operations and it is limited in duration.

ORDER
IT IS ORDERED that plaintiff Equal Employment Opportunity Commission’s

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request for back pay and injunctive relief is GRANTED and its request for front pay is
DENIED; the motion filed by defendants Northern Star Hospitality, d/b/a Sparx Restaurant,
Northern Star Properties, LLC and North Broadway Holdings, Inc. under Fed. R. Civ. P.
60(b)(3) and (d)(3) for relief from judgment (construed as a motion to overturn the jury’s
award of damages to Dion Miller), dkt. #207, is DENIED.
FURTHER, IT IS ORDERED that
1. defendants are enjoined
a. from discharging employees in retaliation for complaints
about racially offensive postings in defendants’ workplace;
b. from failing to adopt policies that explicitly prohibit actions
made unlawful under Title VII;
c. from failing to adopt an investigative process with regard to
discrimination claims; and
d. from failing to provide annual training to Chris Brekken and
other managers, including supervisors, regarding Title VII; and
2. Dion Miller is awarded $15,000 for emotional damages;
3. Dion Miller is awarded back pay in the amount of $39,775.59 for the period
through August 31, 2013 and $422.40 for the period from September 1, 2013-January 31,
2014, plus interest of $2,2565.29 for the period through August 31, 2013 and additional
interest for the period from September 1, 2013-January 31, 2014, which plaintiff is to
calculate using the Internal Revenue Service interest rate and submit to the court for approval

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no later than February 3, 2014; defendants may have until February 13, 2014 in which to
raise any objections they have to the interest calculation; and
4. Plaintiff is awarded an additional amount of back pay equal to 15% of the back pay
award, including interest, to reimburse him for the extra taxes he will owe on the lump sum
payment he is to receive, to be determined by the court once the interest calculation has been
approved.
Entered this 27th day of January, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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