Sam T. Coston v. Plitt Theatres, Inc.

MANION, Circuit Judge,

concurring in part.

I join in the majority’s thorough and well-reasoned opinion. I write separately only to discuss our holding that the “knew or should have known” standard for willfulness enunciated in Syvock v. Milwaukee Boiler Manufacturing Co., 665 F.2d 149 (7th Cir.1981), is consistent with the Su *1338 preme Court’s decision in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 , 105 S.Ct. 613 , 83 L.Ed.2d 523 (1985). This conclusion is mandated because two recent decisions of this circuit, Graefenhain v. Pabst Brewing Co., 827 F.2d 13 (7th Cir. 1987) and Rengers v. WCLR Radio Station, 825 F.2d 160 (7th Cir.1987) have held that Syvock’s “knew or should have known” standard was acceptable under Thurston 1 Although those precedents control our decision, I question their application of Thurston .

Since Thurston , every other circuit addressing willfulness in ADEA disparate treatment cases has adopted the “knew or showed reckless disregard” standard found to be acceptable in Thurston , see Wilhelm v. Blue Bell, Inc., 773 F.2d 1429, 1435 (4th Cir.1985, cert. denied, 475 U.S. 1016 , 106 S.Ct. 1199 , 89 L.Ed.2d 313 (1986); Powell v. Rockwell Int’l Corp., 788 F.2d 279, 285-86 (5th Cir.1986); Williams v. Caterpillar Tractor Co., 770 F.2d 47, 50-51 (6th Cir. 1985); Nolting v. Yellow Freight System, Inc., 799 F.2d 1192, 1197-98 (8th Cir.1986); Gilchrist v. Jim Slemons Imports, Inc., 803 F.2d 1488, 1495-96 (9th Cir.1986); Smith v. Consolidated Mutual Water Co., 787 F.2d 1441, 1443 (10th Cir.1986); Lindsey v. American Cast Iron Pipe Co., 810 F.2d 1094, 1099-1100 (11th Cir.1987), except for the Third Circuit, which has adopted a higher “outrageousness” standard for liquidated damage awards in individual disparate treatment cases. Dreyer v. Arco Chemical, 801 F.2d 651, 657-58 (3d Cir.1986), cert. denied, — U.S.-, 107 S.Ct. 1348 , 94 L.Ed.2d 519 (1987). In Powell v. Rockwell Int’l Corp., 788 F.2d 279, 285-86 (5th Cir.1986) the Fifth Circuit specifically rejected a “knew or should have known” instruction as being inconsistent with Thurston . Although there is some conflict over the effect of the failure to apply the willfulness standard, compare Wilhelm v. Blue Bell, Inc., 773 F.2d 1429, 1435 (4th Cir.1985) (reverses and remands district court’s failure to give proper willfulness instruction) with Powell v. Rockwell Int’l Corp., 788 F.2d 279, 285-86 (5th Cir.1986) (holds error to be harmless), the Seventh Circuit appears to stand alone in applying a less stringent standard than the “knew or showed reckless disregard” standard found to be acceptable by the Supreme Court in Thurston .

Syvock’s “should have known” standard and Thurston’s “reckless disregard” standard cannot peacefully coexist. Syvock only requires negligence as a threshold for finding willfulness; Thurston requires recklessness. The law has always made a large distinction between negligent and reckless conduct particularly regarding the award of punitive damages. Given that Thurston states that the award of liquidated damages is punitive in nature, see 469 U.S. at 125 , 105 S.Ct. at 624 , Syvock’s “should have known” standard does not square with either the language or the rationale of Thurston .

This circuit’s persistence in retaining the Syvock standard will cause confusion. Plaintiffs will request a Syvock instruction, defendants will request a Thurston instruction. The loser will appeal if his instruction is rejected (or if both instructions are given!); at that point we will face this dilemma once again. We cannot reverse a Thurston instruction when the Supreme Court has found it acceptable. On the other hand, Graefenhain and Rengers tell us we must uphold a Syvock instruction. Absent the adoption of a novel theory that recklessness and negligence are indistin *1339 guishable, we cannot justify the conflict. While the Third Circuit may have taken an extra step in Dreyer v. Arco Chemical, 801 F.2d at 657 -58 by requiring outrageous conduct to be shown before liquidated damages may be awarded, this circuit refuses to take the step necessary to be in line with Thurston and with the other circuits that have addressed this issue.

In addition to the Thurston conflict, any future review of the willfulness issue should clearly explain that the “knew” part of either a “knew or showed reckless disregard” standard (Thurston) or a “knew or should have known” standard (Syvock) means that the employer knew he was violating the ADEA. The Supreme Court has emphasized that willfulness is not established merely by showing that the ADEA was violated and that the employer knew of the ADEA. Thurston, 469 U.S. at 127-28 , 105 S.Ct. at 625 . Stating the Syvock or Thurston standard without further clarification concerning what is meant by “knew” leaves an unacceptably high risk that the jury will impose liquidated damages simply because the employer knew the ADEA existed.

In sum, our decision in this matter is controlled by this circuit’s precedent in Graefenhain and Rengers . Those precedents, however, need our reexamination in light of the discrepancy between the standards presented in Thurston and Syvock. If we do not reconcile that discrepancy we will create unnecessary confusion throughout the circuit on the proper definition of a willful violation of the ADEA.

. It should be noted that this circuit has treated ADEA "retaliation” cases differently from other types of disparate treatment violations. In Rose v. Hearst Magazines, 814 F.2d 491 , 493 (7th Cir.1987), the court held that it was inherently inconsistent for a jury to find that an employer discriminated against an employee because the employee filed a discrimination claim and that the employer had not acted willfully. In other words, the court treated the issue of liability and willfulness as the same question. As a practical matter, single-tiered liability is imposed. For willfulness purposes, however, a "retaliation" case would seem to be no different from any other disparate treatment case. In either case the jury simply finds that a prohibited factor (age or the filing of a claim) motivated the employer’s conduct.