Amicus Curiae Brief — McKennon v. Nashville Banner Publishing Co.

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

CHRISTINE MCKENNON,

- Petitioner,

NASHVILLE BANNER PUBLISHING Co.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

BRIEF OF THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

MARSHA S, BERZON

Scott A. KRONLAND

177 Post Street, Suite 300

San Francisco, CA 94108

(415) 421-7151

LAURENCE GOLD

(Counsel of Record)

815 16th Street, N.W.

Washington, D.C. 20006

(202) 637-5390

WILSON - Eras Printine Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

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TABLE OF CONTENTS

SITE sepivinicvicrenisss neratalnsitiintannasnitaiiaiiiiiias ta inilatuaitiatainiiae

Il.

AN EMPLOYER WHO COMMITS VIOLA-

TIONS OF THE ADEA IS NOT IMMUNIZED

FROM LIABILITY BY REASON OF THE

PLAINTIFF’S BREACH OF AN EMPLOY-

MENT RULE THAT WAS NOT KNOWN TO

THE EMPLOYER AT THE TIME OF THE

ONLY IN NARROW CIRCUMSTANCES

SHOULD THE FACT THAT AN _ EM-

PLOYMENT DISCRIMINATION PLAINTIFF

BREACHED AN EMPLOYMENT RULE

THAT WAS NOT THE BASIS FOR HER

UNLAWFUL DISCHARGE LIMIT THE RE-

LIEF AVAILABLE FOR THE STATUTORY

VIOLATION .............. pripinleasanisenhinnidiaesacinumbgptinnsnidl

in. TI i tetas

2. Proof of Economic Damages .............................

ETE EA RTS, a SV

CSUR ‘eh hiershvniisntinsinsssctcninicinamticinntinnitiniineduciaienionialts

TABLE OF AUTHORITIES

FEDERAL CASES Page

ABF Freight System Inc. v. NLRB, 114 8S. Ct. 835

EE SERB OS I ee OS 8

A.C. Frost & Co. v. Couer D’Alene Mines Corp.,

I i eesienateondoge 12

Albemarle Paper Co. v. Moody, 422 U.S. 405

ESL ESS A a ee ee aR passim

Anderson v. Liberty Lobby, 477 U.S. 242 (1986)... 27

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680

EE SET Lee a 26

Bigelow v. RKO Radio Pictures, 327 U.S. 251

EES SE OC aC ce 26

Community for Creative Non-Vivlence v. Reid, 490

EE A a 6

Eastman Kodak Co. v. Southern Photo Material

LS. ane 17

Eastman Kodak v. Image Technical Services, Inc.,

TA EE 2

Elyria-Lorain Broadcasting Co. v. Lorain Journal

Co., 298 F.2d 356 (6th Cir. 1961) 26

Evanston Bank v. Brink’s Inc., 853 F.2d 512 (7th

a stbuismesevenias 26

Francis v. AT&T, 55 F.R.D. 202 (D.D.C. 1972)... 21

Griggs v. Duke Power Co., 401 U.S. 424 (1971)... 10

Hazen Paper Co. v. Biggins, 118 S. Ct. 1701

EE OEE SAC Aer a 16

Lorillard v. Pons, 434 U.S. 575 (1978) —.................. 4,5

McDonald v. Santa Fe Trail Transportation Co.,

a er asesgectdnmeniaioanons passim

McDonnell Douglas Corp. v. Green, 411 U.S. 792

ERE passim

Mitchell Bros. Film Group v. Cinema Adult The-

ater, 604 F.2d 852 (9th Cir. 1979), cert. denied,

Ten ee 12

Mt. Healthy City School Dist. v. Doyle, 429 U.S.

SAL 13, 15

NLRB v. Transportation Management, 462 U.S.

AT ae a 8

Nationwide Mutual Ins. Co. v. Darden, 112 S. Ct.

ETERS SE SCARY 0 Se 6

iii

TABLE OF AUTHORITIES—Continued

Page

Northeastern Florida Contractors v. Jacksonville,

RP Wis PG CE CID ceiecinctcsceciinnscsnsccrecéeccsdssonencdace 13

Owens Illinois, 290 NLRB 1193 (1988), enforced

without opinion, 872 F.2d 413 (3rd Cir. 1989) .. 29

Palmer v. Connecticut Ry. & Lighting Co., 311 U.S.

RT Ue pve Rance SiR eR Ges Oe 25

Perma-Life Mufflers, Inc. v. International Parts

Corp., 308 U.S: 134 (1968) ....:....-......<.<.-.-.-:........ 12

Price Waterhouse v. Hopkins, 490 U.S. 228

ERE Seen OLE Se EME ONES Pe ie ae passim

Proulx v. Citibank, N.A., 681 F. Supp. 199 (S.D.

N.Y.), aff'd mem., 862 F. 2d 301 (2d Cir. 1988).. 25

Regents of the University of California v. Balke,

I 13, 15

Revés v. Ernst & Young, 113 S. Ct. 1163 (1993) __ 4

Roberts v. Sears, Roebuck & Co., 531 F. Supp. 784

I 27

Sartor v. Arkansas Natural Gas Co., 321 US . 620

IRE a ee a ED, ee eee 27

Summers v. State Farm Mutual Ins. Co., 864 F.2d

- S % > eee ryt snnar meen menaes: 29

Story Parchment Co. v. Patterson Parchment

Paper Co., 282 U.S. 555 (19381) ............ 17, 24, 25

Teachers v. Hudson, 475 U.S. 292 (1986) 0.0... 29

Trans World Airlines v. Thurston, 469 U.S. 111

(1985)........... ELE ON SO Oe ee EER 5

United Paperworkers Int'l Union v. Misco, Inc.,

I a 29

United States v. Alvarez-Sanchez, 114 8. Ct. 1599

TRESS SE ae See ee Nee NES ee See 4

Virginia Elec. & P. Co. v. Labor Board, 319 U.S.

REARS SER aac ae mE af OPN ee ee 12

STATE CASES

Nager v. Nager, 339 S.W.2d 492 (Mo. Ct. App.

ESE Sa aero eae cae Wy es TO ER 25

Noble v. Tweedy, 203 P.2d 778 (Cal. Ct. App.

at AS SARIS BES eel TO ae 25

FEDERAL STATUTES AND RULES

Be ee Oe ee iclesieniincntsessencninsnseinbnsscibbanianainesiantsenns 10

TABLE OF AUTHORITIES-—Continued

Page

Fair Labor Standards Act, 29 U.S.C. § 201 et seq... 5

Age Discrimination in Employment = Act

(“ADEA”)

29 U.S.C. § 621 ...... EEE DE AI a OT EO passim

I i echonmnes 5

29 U.S.C. § 626(b), (c), & (d) Pe |

SD TI, BED GE CE) nannies cccccsiicccnccnccecsenee 5, 6

42 U.S.C. § 1981a...... eae oe elected Aaindeetastientibdledsinttaipion 14

a csettininiioepilasion 5

42 U.S.C. § 2000e-2(m) and 2000e (5) (2) (2) (B).. 14

ae IID win adtscseccstenticiccdienisstss pO eS 5

on ccisccntustinseedbecdensieninbcumninitas &

Fed. R. Evid. 403 ........... seek bone sieeiticmaaemialaen oe 21

I a a innniniasebenennns 26

REE RTA ae a Aa Mae PE ee 26

Rev. Rul. 87-41, 1987-1 Cum. I TD aeitccctnnecoonnes 6

MISCELLANEOUS

Am. Jur. 2d, Damages § 489 (1988) . ie 24

Joseph H. Beale, The Proximate Consequences of

an Act, 33 Harv. L. Rev. 632 (1920) 9

Frank Elkouri & Edna Elkouri, How Arbitration

ne i csiciaines 23

Graham, Handbook of Federal Ev idence (1986) . 26

Joseph H. King, Jr., Causation, Valuation and

Chance in Personal Injury Torts Involving Pre-

existing Conditions and Future Consequences,

90 Yale L.J. 1353 (1981) _... | oes Se ea 9,18, 19

Charles T. McCormick, Handbook of the Law of

RE ae oener ae _...17, 24, 25, 26

Joseph M. McLaughlin, Federal Evidence Practice

I ee 26

Robert L. Peaslee, Multiple Causation and Dam-

age, 47 Harv. L. Rev. 1127 (1934) -................ 18

William L. Prosser, Handbook of the Law of Torts

On I ascends 9,18

Stone, The American Management Association

Handbook of Supervisory Management _.......... 23

Charles A. Wright & Victor J. Gold, Federal

Practice & Procedure Evidence (1988) ............... 26

In THE

Supreme Court of the Wuited States

OCTOBER TERM, 1994

No. 93-1543

CHRISTINE MCKENNON,

» Petitioner,

NASHVILLE BANNER PUBLISHING Co.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

BRIEF OF THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

The American Federation of Labor and Congress of

Industrial Organizations (“AFL-CIO”), a federation of

84 national and international unions with a total mem-

bership of approximately 13,500,000 working men and

women, files this brief amicus curiae with the consent of

the parties, as provided for in the Rules of this Court.

INTRODUCTION AND SUMMARY OF ARGUMENT

Ms. McKennon, the plaintiff in this case, has alleged

in her complaint that, due to her age, she was disadvan-

taged in pay, was harassed, and, ultimately, was dis-

charged. Since the employer was granted summary judg-

ment, and the plaintiff denied all relief, for the present

purposes the posture of the case is one in which it must

be taken as true that all of these wrongs, violative of the

Age Discrimination in Employment Act (“ADEA”), 29

U.S.C. § 621 et seq., occurred. Eastman Kodak v. Image

Technical Services, Inc., 112 §. Ct. 2072, 2077 (1992).

Before she was fired (but after some of the wage dis-

crimination and harassment occurred), Ms. McKennon

took home copies of certain confidential documents, a vio-

lation of her employment responsibilities that came to

light only as a result of the discovery in this case. The

employer maintains, based solely on declarations by em-

ployer officials, that had the confidentiality breach been

discovered when it occurred, Ms. McKennon would have

been discharged at that time rather than at the later time

she was, in fact, discharged.’ On that basis alone, the

employer was absolved of all responsibility for all its

alleged unlawful actions.

I. It is, we submit, all but self-evident that the Court

of Appeals erred in absolving completely an employer

who has committed several different acts in direct viola-

tion of Congress’ proscription against visiting disadvan-

tages upon employees because of their age. On any con-

struction of the facts, it is apparent both that the em-

ployer violated the norms established by the statute and

that the violation was the cause, as a matter of actual

fact, of Ms. McKennon’s discharge. Whatever the valid-

ity of the conclusion that Ms. McKennon would have

been discharged earlier had her employer known of her

confidentiality breach, the actuality is that her employer

did not know, and that she was harassed, was disadvan-

1 While the employer purported to “fire” Ms. McKennon a second

time, after the evidence of her infraction came to light, that second,

post hoe firing was not the basis for Court of Appeals ruling. Had

it been, the Court of Appeals then would have simply limited relief

to the period before the second firing, which is not what it did.

We note that while the record reflects that Ms. McKennon

recognized that her actions were ones for which she could have

been discharged, she did not concede that she in fact would have

been discharged, quite a different issue. See p. 15, infra.

A OG ne

taged in pay, and was discharged because of her age.

The ADEA was therefore in terms violated.

Moreover, Ms. McKennon was injured as a result of

that violation—that is, the employer’s illegal actions

caused Ms. McKennon financial (and possibly other)

harm. And, this Court has made clear that even imper-

fect employees who commit serious employment-related

misdeeds are entitled to the protection of the employment

discrimination laws. Thus, both the larger public policy

goals of the ADEA and the statute’s compensatory, “make

whole” purpose are served by holding the employer liable

for its wrongs and by requiring the employer to provide

at least some recompense to Ms. McKennon for the

ADEA violations the employer did commit.

II. The more interesting, and difficult, questions raised

by cases such as this are two: First, what are the pre-

cise remedial consequences, if any, of the fact that the

plaintiff employee did something at any point, known or

unknown to the employer, that could have legitimately

justified the adverse employment action in fact taken by

the employer against the employee for a proscribed rea-

son? Second, assuming that in some such circumstances

relief is properly limited on such a ground, what stand-

ards of proof apply and what types of evidence suffice?

As to the first question, tort analogies, principles gov-

erning determination of damages, and considerations of

statutory policies all lead to the conclusion that the possi-

bility of a hypothetical discharge (or failure to hire or

other adverse employment action) distinct from the one

that actually occurred should be allowed to affect only

backpay relief under the ADEA, and only when there is

evidence sufficiently strong to make the likelihood of the

hypothetical employer action all but certain. In most

circumstances, that evidence would have to establish both

that the employee infraction would have come to light

absent the discriminatory action and the ensuing lawsuit

(and when), and that the employer would have dis-

charged the employee when the information came to light.

As to the second question, the testimony of an employer

witness as to what would have happened in hypothetical

circumstances that did not in fact occur is ordinarily in-

admissible under the Federal Rules of Evidence, as non-

expert opinion or speculation not within the witness’ per-

sonal knowledge and should not, for similar reasons, be

sufficient to meet the employer’s standard of proof even

if admitted.

Finally, the reinstatement remedy should be subject to

somewhat different considerations from the backpay rem-

edy. There may be very narrow circumstances in which

employees should not be reinstated even if the back pay

remedy is appropriate. Conversely, since reinstatement is

an equitable remedy, and since wrongdoers are not neces-

sarily entitled to the free exercise of the same prerogatives

as non-wrongdoers, there may be situations in which an

employer would in fact not have kept the individual on,

but in which the person should still be reinstated in the

interest of eliminating discrimination in the workplace.

ARGUMENT

I. AN EMPLOYER WHO COMMITS VIOLATIONS OF

THE ADEA IS NOT IMMUNIZED FROM LIABIL-

ITY BY REASON OF THE PLAINTIFF’S BREACH

OF AN EMPLOYMENT RULE THAT WAS NOT

KNOWN TO THE EMPLOYER AT THE TIME OF

THE ADEA VIOLATIONS.

1. As always, the starting place for determining how

a statute applies to the situation before the Court is the

statutory language itself. Reves v. Ernst & Young, 113

S.Ct. 1163, 1169 (1993); United States v. Alvarez-

Sanchez, 114 S.Ct. 1599, 1603 (1994) .*

* The substantive provisions of the Age Discrimination in Em-

ployment Act “were derived in haec verba from Title VII [of the

1964 Civil Rights Act].” Lorillard v. Pons, 484 U.S. 575, 584

(1978). Generally, judicial interpretations of the substantive pro-

visions of Title VII “appl[y] with equal force in the context of

The ADEA defines an “employee” as “an individual

employed by any employer. . . .”, and an “employer” as

“a person engaged in an industry affecting commerce who

has twenty or more employees for each working day in

euch of twenty or more calendar weeks in the current or

preceding calendar year.” 29 U.S.C. § 630 (b) and (f).

And the statute, as here pertinent, proscribes “an em-

ployer” from

“discharg[ing] any individual or otherwise discrim-

inat[ing] against any individual with respect to his

compensation, terms, conditions, or privileges of em-

ployment, because of such individual’s age.” [29

U.S.C. § 623 (a)(1).]

This language, in our view, compels the conclusion that

Ms. McKennon’s age discrimination lawsuits is not subject

to dismissal pursuant to summary judgment for the de-

fendant. The Nashville Banner has not contended that

age discrimination.” Trans World Airlines v. Thurston, 469 U.S.

111, 121 (1985).

The procedural provisions of the ADEA are, however, “some-

thing of a hybrid” (Lorillard, 434 U.S. at 578), drawing in part

upon the procedural scheme of the Fair Labor Standards Act, 29

U.S.C. § 201 et seq., but also emulating portions of the remedial

scheme of Title VII. See 29 U.S.C. § 626(b), (c), & (d); compare

42 U.S.C, § 2000e-5. In particular, with regard to the relief pro-

vided by the ADEA, “legal or equitable relief as may be appro-

priate to effectuate the purposes of this subchapter” is generally

available (29 U.S.C. § 626(b), (c)), while under Title VII, equitable

relief and, under the 1991 amendments, limited compensatory and

punitive damages, are available (compare 42 U.S.C. § 2000e-5(g),

42 U.S.C. 198la(b)). And, the availability of back pay relief under

the ADEA is a matter of right, while under Title VII back pay

is a matter of equitable discretion. Lorillard, 434 U.S. at 584,

citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 421 (1975).

For present purposes, the upshot is that substantive Title VII

cases are generally pertinent in interpreting the ADEA (and are

freely cited for that purpose in this Brief). Title VII cases con-

cerning the availability of injunctive forms of equitable relief are

generally applicable as well. This free interchange does not extend

to the ADEA provisions concerning the availability of monetary

relief, including back pay, which differ from those of Title VII.

it is not an “employer” under the ADEA. Ms. McKennon

has contended that she was at the relevant time an “em-

ployee” of the Banner within the ordinary meaning of the

term, in the sense that she performed economically-useful

work for the newspaper and was paid for so doing.* In

any event, the pertinent statutory provision does not pro-

tect only “employees” but “individuals” from discharge

and other adverse employment actions based upon age.*

Moreover, here, in contrast to the situation in Price

Waterhouse v. Hopkins, 490 U.S. 228 (1989), there is

no doubt that, on the facts as alleged and, for present

purposes, not disputed, the substantive prohibition of

% See, e.g., Webster’s New Ninth Collegiate Dictionary (1991) at

408 (defining “employ” as “to provide with a job that pays wages

or salary” and “employee” as “one employed by another usually

for wages or salary and in a position below the executive level’).

Plainly, it is a functional definition of this sort, not a normative

one, that is generally used in federal statutes. Absent some indi-

cation to the contrary, the term “employee” in those statutes ordi-

narily is interpreted as incorporating the common law standard,

emphasizing “ ‘the hiring party’s right to control the manner and

means by which the product is accomplished.’” Nationwide Mutual

Ins. Co. v. Darden, 112 S. Ct. 1344, 1348 (4992), quoting Com-

munity for Creative Non-Violence v. Reid, 490 U.S. 730, 751

(1989). The IRS, for example, in determining whether or not an

employer is required to pay Social Security taxes on an employee,

considers a series of factors concerning that person’s actual rela-

tionship to the employer. See Rev. Rul. 87-41, 1987-1 Cum. Bull.

296, 298-99. It does not consider whether or not the employer had

some basis, known or unknown, for altering that relationship which

was not in fact exercised before the time period within which paid .

work was performed and taxes therefore are due. In short, the

question whether or not a person is an employee is not for legal

purposes generally confused with the question whether that person

is properly an employee.

‘Similarly, the statute’s remedial provisions permit “lajny

person aggrieved” to bring a civil action, and provide for payment

as unpaid wages of “|a]mounts owing to a person as result of a

violation of this chapter.” 29 U.S.C. §626(b) and (c)(1) (em-

phases supplied). The retaliatory discharge provision, 29 U.S.C.

§ 623(d), however, does limit its protections to “employees or

applicants ‘for employment.”

EE gee =

the statute applies in terms. The pertinent question in

Price Waterhouse was whether or not an adverse employ-

ment decision can be said to occur “because of” the in-

dividual’s gender, where the employer’s adverse employ-

ment decision took into account both permissible and

impermissible factors and might have been the same ab- |

sent the impermissible factor. The plurality, concurring,

and dissenting opinions answered that question through

varying theoretical constructs. But all these opinions

ultimately concluded that a given employer action does

not occur “because of” a proscribed motive where the

same action would have occurred at the same time be-

cause of other, actually-existing motives. /d. at 258

(plurality opinion); 261 (White, J., concurring); 279

(O’Connor, J., concurring); 295 (Kennedy, J., dissent-

ing).°

Here, however, there is no question that the actions

complained of, according to the complaint, occurred “be-

cause of” Ms. McKennon’s age, both in the sense that

age “was a factor in the employment decision at the

moment it was made” (id. at 240 (plurality opinion) ),

and in the “but-for causation” sense (id., at 262 (O’Con-

nor, J., concurring in the judgment) ) that Ms. McKennon’s

age in fact did “make a difference to the outcome” so

that “[t]he event would [not] have occurred just the same

without it.”. (id. at 282 (Kennedy, J. dissenting) (em-

phasis supplied) ). See also id. at 279 (emphasis supplied )

(question is whether “the outcome would have been the

same if respondent’s professional merit had been [the em-

ployer’s] only concern.” )

At a minimum, absent the employer’s age discrimina-

tion, Ms. McKennon would not have suffered the wage

discrimination and harassment she alleges she endured

while employed, and would have been discharged, if at

5 The principal difference between the majority and dissenting

opinions in Price Waterhouse was not on that question, but on

whether or not the burden of p°oof as to what would have hap-

pened absent the impermissible consideration is properly on the

plaintiff or on the defendant.

all, not when she was but some time later, when her in-

fraction was discovered, losing less pay and benefits than

she in fact lost. Thus, while Ms. McKennon might even-

tually have been terminated at some point had she not

been discriminated against on the basis of her age, over-

all “the outcome would [not] have been the same.” Id.

at 279 (Kennedy, J., dissenting) (emphasis supplied).

Indeed, where the employer only acquires information

concerning an alleged employee infraction after the em-

ployer takes an unlawful, adverse action against that

employee—so that the employer could not have taken

that action based upon that information at that time—the

infraction could not have been a contributing factor

(“motivating’, “substantial”, “but for” or otherwise)

with regard to the actual employer action.* To take an

analogous example, in a wrongful death action brought

against the allegedly negligent driver of the automobile

that hit and instantaneously killed the plaintiff, evidence

that the autopsy determined that the plaintiff had been

terminally ill (although not in any way affecting her abil-

ity to survive the impact) at the time of the accident,

and therefore would have died a short while later, is not

* There is in the ADEA no provision parallel to the subsection

of Title VII forbidding reinstatement and backpay where “such

individual was . . . discharged for any reason other than discrimi-

nation on account of race [fetc.] ...” Title VII §$ 706(g), 42

U.S.C. § 2000e-5(g¢). Even under Title VII, the provision just

quoted would plainly have no application here, since plaintiff was

not discharged for a “reason other than discrimination on account

of [age]"’; she was (or we must assume that she was) discharged

precisely for age. See also Price Waterhouse, 490 U.S. at 244

n.10 (§ 706(g), modelled upon §10(c) of the National Labor

Relations Act, 29 U.S.C. §-160(c), concerns relief, not liability,

and applies not to individual discrimination cases but to pattern-

and-practice and class action cases); NLRB v. Transportation

Management, 462 U.S: 393, 401 n.6 (1983) (construing § 10(c)

of the NLRA so as not to apply where there was in fact a dis-

criminatory motive); ABF Freight System Inc. v. NLRB, 114

S. Ct. 835, 839 (1994) (the NLRA’s specific, limited prohibition

upon reinstatement and backpay in certain circumstances indicates

that there is no such prohibition in other circumstances).

relevant to the issue of whether the driver has caused

the death or committed a tort. Drivers do not have a

privilege to negligently run down terminally ill pedes-

trians any more than drivers have a right to negligently

run down apparently healthy pedestrians. The illness per-

tinence, at the most, is in measuring the monetary dam-

ages payable on account of the plaintiff's death. See

William L. Prosser, Handbook of the Law of Torts § 52

at p. 321 (4th ed. 1971).’

2. Despite the plain applicability of the state’s prohibi-

tory language, as construed by this Court, and the ab-

sence of any pertinent exceptions to that operative statu-

tory language, the employer maintains that there is some

implicit basis, not apparent upon the face of the statute,

upon which Ms. McKennon’s suit should be dismissed

and all relief for the ADEA wrongs committed denied

out of hand.

(a) The first suggestion as to why this result obtains is

best characterized as the contention that, because at the

time of the adverse employment actions against her (or

at least some of them) Ms. McKennon had committed

an employment infraction that might have justified her

discharge, Ms. McKennon has forfeited any and _ all

ADEA rights she might otherwise have as an “employee”

7It is important to distinguish between the concepts of causa-

tion and valuation. See Joseph H. King, Jr., Causation, Valuation

and Chance in Personal Injury Torts Involving Preexisting Condi-

tions and Future Consequences, 90 Yale L.J. 1353, 1353-58 (1981)

(hereinafter “Causation, Valuation and Chance’) (explaining the

difference). In determining the cause of an injury, events that

might have.occurred but did not are irrelevant, even if they would

have caused the same injury and even though, in placing a mone-

tary value on the injury, consideration of such events may be

proper. “[I]n determining causation, the question is not what

would have happened but what did happen. A murdered man

would have died in time if the blow had not been given; yet the

murderer’s blow is a cause of his death.” Joseph H. Beale, The

Proximate Consequences of an Act, 33 Harv. L. Rev. 632, 638

(1920) ; see also Prosser, Handbook of the Law of Torts, at p. 237

(“Causation is a fact. It is a measure of what in fact happened.’’).

or “individual.” The protections of the employment dis-

crimination laws, however, are not limited to employees

who have never violated the employer’s or society’s rules.

It is perhaps sufficient that the ADEA’s language pro-

vides no such limitation.” The employment discrimina-

tion statutes are directed at eradicating reliance on cer-

tain proscribed criteria in the employer’s decisionmaking

process concerning employees, thereby creating “equality

of employment opportunity.” Griggs v. Duke Power Co.,

401 U.S. 424, 429 (1971) (emphasis supplied). As

“prophylactic” statutes (Albemarle Paper Co., 422 U.S.

at 417 (1975)) whose purpose is to “drive employers to

focus on qualifications rather than on [age or other pro-

scribed factors]” (Price Waterhouse, 490 U.S. at 243

(plurality opinion) ), employment discrimination statutes

do not permit employers to continue to act upon the pro-

scribed criteria with regard to less-than-perfect employees

whom the employer might have a basis for discharging for

“cause.”

The Court has made that much clear in two seminal

decisions growing out of employment discrimination

claims brought by employees who engaged in extremely

serious employment-related misconduct, McDonnell Doug-

las Corp. v. Green, 411 U.S. 792 (1973), and McDonald

v. Santa Fe Trail Transportation Co., 427 U.S. 273

(1976).

* The National Labor Relations Act, for example, does in limited

circumstances regard otherwise-covered employees as outside the

statute’s protections because of actions deemed to be fundamentally

inconsistent with the statutory scheme. See 29 U.S.C. § 158(d)

(“Any employee who engages in a strike within any notice period

specified in this subsection . . . shall lose his status as an employee

of the employer engaged in the particular labor dispute, for the

purposes of sections 158, 159, and 160 of this title, but such loss of

status for such employee shall terminate if and when he is reem-

ployed by such employer.”) The ADEA contains no similar exclu-

sion of an employee from the Act’s protections based on the actions

of those employees. See also n.6, supra.

McDonnell Douglas involved an applicant for em-

ployment who, along with others, “illegally stalled their

cars on the main roads leading to petitioner’s plant for

the purpose of blocking access to it at the time of the

morning shift change,” and was arrested and fined as a

result. 411 U.S. at 794-95. The Court recognized that

“[njothing in Title VII compels an employer to absolve

and rehire one who had engaged in such deliberate, un-

lawful activity against it.” Jd. at 803. Nonetheless, the

plaintiff was not disqualified from pursuing his case fur-

ther because he had committed a serious, indeed crim-

inal, wrong, directly affecting the defendant employer.

Rather, recognizing that the role of Title VII is broadly

to eradicate race and other forms of prohibited employ-

ment discrimination, the Court held that an employer

“may justifiably refuse to rehire one who was engaged

in unlawful, disruptive acts against it, but only if this

criterion is applied alike to members of all races.” Id.

at 804 (emphasis supplied).

McDonald, in its turn, concerned two employees dis-

charged for “theft of property entrusted to [their] em-

ployer for carriage.” 427 U.S. at 284.° Their contention

was that an equally culpable employee was not discharged

and “that the reason for the discrepancy in discipline was

that the favored employee is Negro while petitioners are

white.” Jd. at 282-83. This Court emphatically rejected

the employer’s argument that, because the employees had

committed “a serious criminal offense” against their em-

ployer, “Title VII affords petitioners no protection in

this case” (id. at 281):

We cannot accept respondents’ argument that the

principles of McDonnell Douglas are inapplicable

where the discharge was based, as petitioners’ com-

plaint admitted, on participation in serious miscon-

duct or crime directed against the employer. The

Act prohibits a// racial discrimination in employ-

®The Court in McDonald assumed that the misappropriation

“would amount to a felony under Texas law.” 427 U.S. at 283 n.12.

- 12

ment, without exception for any group of particular

employees, and while crime or other misconduct may

be a legitimate basis for discharge, it hardly is one

for racial discrimination. [/d. at 283.]

In this instance Ms. McKennon is not contending that

there was age discrimination in the application of the em-

ployer’s rules against disclosure of confidential informa-

tion, but that there was age discrimination before any

question of the application of those rules arose. With

regard to the question whether Title VII and the ADEA

protect sinners as well as saints from proscribed discrimi-

nation, however, the distinction is one that makes no

difference: Since “the Act prohibits al] [age] discrimina-

tion in employment, without exception for any group of

particular employees”, McDonald, 427 U.S. at 283, Ms.

McKennon’s later-discovered confidentiality infraction does

not strip her of her ADEA rights.”®

(b) The second suggestion proffered for nonsuiting

the plaintiff in this case despite the adverse employment

actions taken against her based on age is that Ms.

McKennon suffered no injury due to the employer’s

illegal actions, and therefore is entitled to no relief. See

1 Some have suggested the equitable “clean hands” doctrine as

a basis for denying relief to plaintiffs in the position of Ms. Mc-

Kennon. That suggestion is doubly flawed. First, the “clean

hands” doctrine, like other common law and equitable defenses, is

not imported into statutory schemes where to do so would frustrate

the purposes of the statute. See, e.g., Perma-Life Mufflers, Inc. v.

International Parts Corp., 392 U.S. 134, 188 (1968): Virginia

Elec. & P. Co. v. Labor Board, 319 U.S. 533 (1948); A.C. Frost &

Co. v. Couer D'Alene Mines Corp., 312 U.S. 38, 40 & 43-44 n.2

(1941); Mitchell Bros. Film Group v. Cinema Adult Theater, 604

F.2d 852 (9th Cir. 1979), cert. denied, 445 U.S. 917 (1980).

McDonnell Douglas and McDonald necessarily reject any “clean

hands” approach, and make clear that to deprive a plaintiff of

statutory rights under employment discrimination statutes because

of their own workplace misconduct would fundamentally undermine

the statutory scheme. Second, since backpay under the ADEA

is not an equitable remedy (see n.2, supra), the “clean hands” doc-

trine would not in any event apply here on the backpay issue.

Pet. App. 5a. The notion is that if Ms. McKennon would

have been fired for legitimate reasons, had the employer

known of those reasons, before she was actually fired for

age-related reasons, she suffered no injury due to the

latter. See Mt. Healthy City School Dist. v. Doyle, 429

U.S. 274, 285-86 (1977) (“an employee [should not be]

place[d] in a better position as a result of [age] than he

would have occupied [otherwise]”); Price Waterhouse,

490 U.S. at 249 (plurality opinion). That theory does

not fit the present circumstances, for two reasons.

ees

First, as this Court has recently held, there is an “in-

jury in fact” simply from being subjected to a discrimi-

natory policy, even if the plaintiff cannot prove that he

or she would have faired better under a nondiscriminatory

policy. Northeastern Florida Contractors v. Jacksonville,

113 S.Ct. 2297 (1993) (contractors suffer a cognizable

injury and therefore have standing to challenge minority

preference program for city contracts without alleging or

proving that absent the program, the plaintiff contractors

would have been awarded any contracts); Regents of the

University of California v. Bakke, 438 U.S. 265, 281

n.l4 (1978) (applicant challenging minority admissions

preference suffered an injury in being unable “to com-

pete for all 100 places in the class, simply because of his

race” and “[t}he question of [the applicant’s] admission

. . is simply one of relief.)"' See also Price Waterhouse,

1! Justice Powell’s controlling Bakke opinion went on to specifi-

cally reject the notion that the Mt. Healthy concern with avoiding

windfalls to plaintiffs applies where it is clear that the discrimi-

natory motive was in fact the sole cause of a plaintiff’s injury:

There is no occasion for remanding the case to permit peti-

titioner to reconstruct what might have happened if it had

been operating the type of program described as legitimate. . .

In Mt. Healthy, there was considerable doubt whether pro-

tected First Amendment activity had been the “but for’ cause

of [the plaintiff’s] protested discharge. Here, in contrast,

there is no question as to the sole reason for respondent’s

rejection—purposeful racial discrimination in the form of the

special admissions program. Having injured respondent solely

490 U.S. at 265 (O'Connor, J., concurring) (“Congress

considered reliance on gender or race in making employ-

ment decisions an evil in itself... . Congress was not blind

to the stigmatic harm which comes from being evaluated

by reason of one’s race or sex.”)"*

Indeed, the “primary” purpose of employment discrimi-

nation statutes is to “cause[] employers and unions to

self-examine and self-evaluate their employment practices”

(Albemarle Paper Co., 422 U.S. at 418) so as to elimi-

nate discriminatory behavior. It is therefore particularly

plain that employers should not be absolved where the

action taken was “because of” a statutorily proscribed

criterion and the plaintiff suffered the precise sort of

stigmatic harm the statute was designed to eliminate.’

on the basis of an unlawful classification, petitioner cannot

now hypothesize that it might have employed lawful means

of achieving the same result ... In sum, a remand would

result in fictitious recasting of past conduct. [438 U.S. at

320 n. 54 (opinion of Powell, J.) (citations omitted). ;

1 Unlike Title VII, which et the time Price Waterhouse was

decided provided only for equitable relief, fhe ADEA provides for

“such legal or equitable relief as will effectuate the purpose of the

chapter.” But see Civil Rights Act of 1991 § 102, 42 U.S.C, § 1981a

(providing for limited compensatory and punitive damages for

Title VII disparate treatment cases); 42 U.S.C. $ 2000e-2(m) and

2000e(5) (7) (2) (B) (limiting relief available where (unlike here)

“the respondent would have taken the same action in the absence

of the impermissible aggravating factor’). It would therefore

appear, although this Court has not had the opportunity to address

the question, that damages for the “stigmatic harm” of being sub-

ject to age discrimination are available under the ADEA, regardless

whether there was economic injury as well. Since, as developed in

the text, there was economic injury in this case, there is no need

to decide this issue here.

13 There may be limited circumstances in which it is both true

that age discrimination was the dispositive cause in fact of an ad-

verse employment action and the plaintiff is not thereby placed in a

worse economic position than if the discrimination had not occurred.

In particular, in hiring situations, it is possible that an individual

could be excluded from the hiring pool solely on the basis of age, .

yet on the basis of his or her completed application and the em-

Second, even if one considers only the economic injury

to the plaintiff, it is indubitably not true that Ms. Mc-

Kennon, if denied all relief, would be “in no worse posi-

tion than if [she had not been discriminated against on

the basis of her age].” Mt. Healthy School Dist., 429

U.S. at 285-86. As a result of age discrimination, Ms.

McKennon, according to her complaint, lost wages, suf-

fered emotional distress due to harassment, and was, at

the very least, discharged before she would have been

discharged for “cause.” Indeed, it was only when she

filed suit to redress her age. discrimination injuries, that

the information on her confidentiality breach came to

light in the course of, and as a result of, the litigation

itself. For all that appears, that information might never

otherwise have been discovered, and it is only on the

basis of that information that Ms. McKennon was “fired”

for a second time and then nonsuited on her present

ADEA claims.“

ployer’s regular practices for screening applicants it is perfectly

clear that the individual would have been excluded in the next

“cut” anyway, for example, for lacking the requisite pilot’s license

or a universal-required college degree. Because in the hiring situ-

ation the person is not employed while the consideration process

goes on, there is no economic injury where the rejection would

have occurred before final decisions were made, even if the rejection

actually occurred earlier than it would have otherwise.

The situation just hypothesized is similar to the one addressed

in Bekke, and is different from the situation addressed in Price

Watehouse. In Price Waterhouse, the contention was that the same

actual decision would have been made, at the same time, without

regard to any discriminatory motive. Where that is the conten-

tion, the “cause” and “injury” issues collapse onto each other,

so that the conclusion that there was no economic injury also

demonstrates that illegitimate factors did not in fact cause the

discharge. In contrast, in the above hiring example, there is

no question that the cause of the events that actually occurred

was unlawful discrimination, and the question is whether there is

a cause of action without proof of a consequent economic injury.

144 Without in any way condoning Ms. McKennon’s actions in

taking home confidential documents, we believe it is highly relevant

that because she did not use the documents she took home to divulge

information injurious to the Banner, it is unlikely that her actions

Thus, the theory of the decision below undermines the

“prophylactic” values inhrent in ADEA, frustrates the

“make . . . whole for injuries suffered on account of un-

lawful employment discrimination,” (Albemarle Paper

Co., 422 U.S. at 418) value in the statute and com-

promises the very effort to vindicate those values through

the legal process. That theory is plainly not a fair and

proper interpretation and elaboration of the ADEA.

Il. ONLY IN NARROW CIRCUMSTANCES SHOULD

THE FACT THAT AN EMPLOYMENT DISCRIMI-

NATION PLAINTIFF BREACHED AN EMPLOY-

MENT RULE THAT WAS NOT THE BASIS FOR

HER UNLAWFUL DISCHARGE LIMIT THE RE-

LIEF AVAILABLE FOR THE STATUTORY VIO-

LATION.

The question, then, becomes what relief ADEA plain-

tiffs in situations like this one are entitled to receive on

proving that the defendant employer did commit the

ADEA violations alleged.”

would have been discovered absent the employer’s discriminatory

actions against her and the ensuing lawsuit. In contrast, employee

wrongdoing that does injure the employer, such as the theft in

McDonald is likely to come to light whether of not the employee

make a claim against the employer eventually.

15 With regard to damages for unequal pay because of age while

employed, and for harassment because of age while employed there

appears to be no basis for limiting the relief otherwise available

under the ADEA. The lower pay and harassment, if both occurred

as alleged, inflicted injuries while the plaintiff was still employed,

and would not have been affected by any later hypothetical dis-

charge based on legitimate, nondiscriminatory factors. Moreover,

the values underlying the prohibitions upon age-related discrimina-

tory pay and age-related harassment certainly would not permit the

discrimination in question even if the employer knew of Ms. Mc-

Kennon’s breach of confidentiality while she was employed. An

employer who discovered that breach would be entitled to discharge

or otherwise discipline an employee for that reason, but not to pay

her less because of her age and harass her because of her age.

As to liquidated damage under the ADEA, we would assume that

the standards of “willfulness” under §7(b) of the statute, 29 U.S.C.

§ 626(b), established by this Court would apply (see Hazen Paper

1. Economic Damages: It facilitates analysis to con-

sider how similar problems are treated as a matter of the

law of torts. See Price Waterhouse, 490 U.S. at 264

(characterizing Title VII as a “statutory employment

‘tort’”). The general tort rule is that, once the plaintiff

has satisfied her burden of proving that the defendant's

wrongful conduct was the cause of some damage, the

calculation of the amount, where uncertain, “may be left

to reasonable inference,” Charles T. McCormick, Hand-

book of the Law of Damages § 27, at p. 101 (1935), and

“[t]he wrongdoer is not entitled to complain.” Story

Parchment Co. v. Patterson Parchment Paper Co., 282

U.S. 555, 562 (1931); Eastman Kodak Co. v. Southern

Photo Material Co., 373 U.S. 359, 377-79 (1927); Bige-

low v. RKO Radio Pictures, 327 U.S. 251, 265 (1946).

Assuming an omniscient trier of fact and a determinis-

tic universe, deciding whether contingent events would

have happened in the absence of the defendant’s wrongful

conduct in determining the plaintiff's damages makes per-

fect sense. However, in the real world of affairs the law

has long had to cope with the fact that, regardless of what

theory is accepted with regard to determinism, omnisci-

ence is not possible, and the contingent possibilities that

might affect damages are infinite. In determining damages,

therefore, courts have consistently excluded consideration

of possible developments that are too remote, speculative,

Co. v. Biggins, 113 S. Ct. 1701, 1708 (1993)) as usual, and that

the amount of liquidated damages would be, as usual, an amount

equal to whatever backpay is awarded, as the statute unequivocally

directs.

Although punitive damages are not available under the ADEA,

as a general matter it would appear that since punitive damages

are designed to deter certain conduct rather than to compensate

the plaintiff, such damages should be available without regard to

whether the economic damages are limited by the possibility of a

late, hypothetical discharge.

Since there seem to be no difficult questions concerning the

availability of relief of these kinds, we do not address these mat-

ters further in the textual discussion that follows.

and uncertain, and have done so most forcefully when it

is the defendant, an adjudicated wrongdoer, who is seek-

ing to rely on such possibilities to limit monetary relief.

For example, there is considerable discussion by com-

mentators concerning hypotheticals in which a person 1s

shot while (1) standing in the path of an avalanche and

(2) about to embark on a steamship doomed later to

strike an iceberg and sink. Although the commentators

differ in their reasoning, they agree that the fact of the

avalanche, already in progress when the shooting occurred,

should be considered in determining damages for wrong-

ful death, while the planned embarkation on the steam-

ship should not. See, e.g. Prosser, Handbook of the Law

of Torts, supra, § 52, at pp. 321-323; King, Causation,

Valuation and Chance, supra, 90 Yale L.J. at 1358;

Robert L. Peaslee, Multiple Causation and Damage, 47

Harv. L. Rev. 1127, 1139-40 (1934). According to

Prosser, for contingent factors properly to be considered

in reducing the amount of damages, “they must be in

operation when the defendant causes harm, and so immi-

nent that reasonable men would take them into account.

Prosser, Handbook of the Law of Torts at p. 321. The

plaintiff with a steamship ticket might later decide not to

make the voyage, might somehow spot the iceberg in time

to avert an accident, or might miraculously be the sole

survivor of the wreck. All that being possible, at some

point the law must disregard contingent events in com-

puting damages, because “[t]he retrospective conjuring

up of events contingent at the time of injury would open

16 We recognize that Price Waterhouse did sanction the proof

of facts concerning what would have happened absent a discrim-

inatory motive as an affirmative employer defense, itself a some-

what speculative endeavor (albeit much less speculative than the

hypothesis ventured here, since the pertinent discharge itself and

the mixed motives therefore were real, not hypothetical). The plur-

ality opinion in Price Waterhouse, however, specifically recognized

that where the question is “the proper determination of relief rather

than [as in Price Waterhouse] the initial finding of liability,

different principles may govern.” 490 U.S. at 254.

the door to absurd results” and “allowing such factors

to affect valuation would create a rule that could nui be

administered.” King, Causation, Valuation and Chance.

90 Yale L.J. at 1358.

2. There may be some employment discrimination

cases that are similar to the “avalanche” hypothetical, in

that a later, valid termination is already “in progress” at

the time of the earlier, illegal termination, and should

properly be taken into account in valuing economic dam-

ages. For example, where there are discrete layers of

management with discharge and layoff authority, it is

possible to imagine a situation in which an individual is

illegally discharged on a Monday although, unbeknownst

to her or to the supervisor firing her, headquarters has

already determined to discharge her for a legitimate rea-

son recently discovered, and has placed the pink slip in

her envelope, awaiting delivery at the end of the week.

While, even in this circumstance, termination on Friday

is not certain—perhaps the employer will have a change

of heart or of need, due to the employer's landing a

major contract on Wednesday—the contingency is suffi-

ciently certain that economic damages for the illegal

discharge should be limited to backpay for the period

between Monday and Friday.’

In terms of certainty, the present case is at the other

end of the spectrum.

” As we discuss later, the propriety of relying on such a con-

tingent, although extremely likely, event to limit damages should

properly depend in part upon the clarity of the showing that

the contingent event was indeed in progress. In the hypothetical

in the text, that showing can normally be made through evidence

that a decision had been made to discharge the plaintiff and would

have been carried out other than the testimony of headquarters

personnel as to their subjective intent. For example, the pink

slip should be available, and testimony as to when the envelopes

were stuffed should be as well. If there were no documents or

external events to confirm the “decision” to discharge the plain-

tiff imminently, the contingent nature of the event testified to,

compounded by the speculative nature of the testimony, counsels

against permitting any discount of damages on that testimony.

(a) First, the questions of whether the employee in-

fraction would have been discovered by the employer, and

if so when, involve many contingent circumstances.

(i) It might be supposed that these two questions can

be answered in a nonspeculative manner by proof as to

whether and when the information was in fact discovered.

But where the information came to light in the course

of litigation, that fact does not provide the answer to the

pertinent question, which is what would have happened

had the plaintiff employee's employment simply continued,

without any unlawful discharge. See Albemarle Paper

Co., 422 U.S. at 418-19 (“The injured party is to be

placed, as near as may be, in the situation he would have

occupied if the wrong had not been committed”) (quot-

ing Wicker v. Hoppock, 6 Well. 94, 99, 18 L.Ed. 752

(1877)). Since, absent the earlier, illegal discharge there

is no reason to believe there would have been any law-

suit at all, there is no logical basis for the proposition

that the information“ebtained in the course of that law-

suit is information that the defendant employer would

have obtained absent the lawsuit.

Permitting employers who are defendants in lawsuits

, brought to enforce anti-discrimination statutes to use in-

formation about employment matters, dehors the merits,

that is brought to light through the, litigation process to

limit their damages for committing a statutory wrong

would, moreover, undermine the efficacy of the overall

statutory system designed to prevent the commission of

such wrongs.

If an employer had a policy of investigating wrong-

doing more vigorously for women than for men, for

blacks than for whites, or for older workers than for

younger workers, and discharging those found in such in-

vestigations to have committed wrongs presenting grounds

for discharge. that practice in itself would be discrimina-

tion based on a proscribed criteria, and illegal. Cf. Mc-

Donald, supra. Similarly, an employer who automatically

ran a background check on any employee who filed a

complaint of age discrimination with the EEOC but not

on any other present employees and took action based

on the information obtained could well be held to have

“discriminate[d ] against any individual . . . because such

individual . . . has opposed any practice made unlawful

by this section, or because such individual . . . has made

a charge . . . under this chapter.” 29 U.S.C. §

See Francis v. AT&T, 55 FRD. 202 (DDC. 1972).

The effect of permitting employers to use information

obtained as a result of a discrimination lawsuit to create

a hypothetical, earlier discharge as of the time of the

litigation discovery of adverse information is precisely

the same as sanctioning actual discharges on the basis of

discriminatory or retaliatory investigations. Both practices

are antithetical to the anti-discrimination goals of the

ADEA and should not be permitted.”*

(ii) At a minimum, then, to limit damages, an em-

ployer would have to prove two entirely speculative

facts—that absent the lawsuit, the adverse information

would have been discovered, and would have been dis-

covered at some particular time.’” While it is possible to

18 Questions concerning whether information revealing em-

ployee misconduct obtained after discharge is admissible at the

liability stage present very different issues, and need not be ad-

dressed in this case. For example, there may be circumstances in

which resume misrepresentations discovered after dlechares are

pertinent for impeachment purposes, either to contest some affirma-

tive plaintiff testimony or to; demonstrate that the plaintiff has

made misrepresentations at ather times. Or it is possible that

where an employer is trying to prove a neutral, nonpretextual basis

fora discharge, evidence that an employee at other times committed

acts similar to those for which he or she was discharged might be

probative in showing that he or she in fact committed the act for

which the discharge was imposed. Ordinary evidentiary principles

concerning the balance of probative value against probable srele-

dicial impact would apply to these circumstances, see Fed.R.Evid

403, which are quite different from those discussed in the text. .

. on We note that even where there are objective facts sufficient to

indicate that the information would have come to light eventually

concrete information concerning when that information would have

been discovered is likely to be more difficult to come by.

. There may be circumstances, of course, in which the information

in question was in fact uncovered after the discharge but inde-

- ”

imagine circumstances in which these oe thgo

proven to a fair degree of certainty : “yt h. petit

inty than the “doom

to a lesser degree of certain ad

ship” example considered too speculative in the tort con

text), those circumstances are likely to be rare.

(b) Second, there are the a nage ge A

i lover, having obtainea

tions whether or not the employer =

adverse information, would have in fact — Sc

plaintiff; if so, whether that discharge — ave “it

legitimate rather than discriminatory or oar jatory;

if so, when the discharge would have occurred.

These complex, interrelated questions — yh

swered simply by showing that area we ett

mi infracti tablished rule, ev

itted an infraction of an es

pon As McDonald, supra, and er amcngeer’ —

supra, indicate, employers do not at ta -4 = -

action i eri wrong ,

tion even against serious

prom a myriad of competing considerations, powered

‘cone is discharge, including: an employee:

where the issue is discharge, | ogre

ial, i ills: the state of the marke

special, irreplaceable skills; dae

sates employees; the length of an employee's pn to

ment and his previous employment record; any “ _

ing circumstances that explain the rule violation; whe

lal da . i t.

i f any discriminatory inten

tly of the lawsuit and free o 1

sean Be an employer might be able to ecm say =the fool

‘ plainti ‘ i d but before the dl

i after a plaintiff was discharge | “gn

yeas or lawsuit was filed, the ss, did a geyser be

i i yer ‘

i course of business whic uncovere ‘

porteorsrcins Se errors. Such a showing acne ageggnnat= A pe —

‘en of discovery of the adverse information as a en aoe

but would leave hypothetical the question whether or no ; 0

idual would have been fired as a result of that information '

if so, when. ) )

2® For example, in the situation posited in the previous eae

it is possible that a ap igen ont pgenrscrend sollbe

i that almost c

each year and in a way

peed nee A errors, would suffice to demonstrate be

ponte would have occurred even if the audit a sco vl ~

the error took place after the employer learned of the rec

ing error through discovery in the lawsuit.

6 bee Ne Ree eR SN ee

the employee has taken concrete steps to correct the

circumstances that gave rise to the violation, such a3

undergoing treatment for alcoholism after driving while

drunk; the likely impact of discharging a particular individ-

ual or individuals upon the morale of the workplace or the

performance of other employees; whether the rule in-

fraction actually caused any concrete harm to the em-

ployer; and intangible considerations such as the friend-

ship between the employee and his or her superiors, or

between the employee and other individuals or firms upon

whom the employer is economically dependent.

Personnel directors and other managerial personnel

responsible for discipline of employees take just such

considerations into account, as the literature concerning

the complex calculations thai go into discharge decisions

attest. See, e.g., Buckman, 70 Fire or Not to Fire, in

Stone, ed., The American Management Association Hand-

book of Supervisory Management (1989). Arbitrators

too take these considerations into account in determining

whether or not a particular discharge was for “just cause”,

and regularly reinstate individuals as having been dis-

charged without “just cause” where, for example, the in-

fraction, albeit a fairly serious one, was an isolated event

in a long, favorable employment record. Frank Elkouri &

Edna Elkouri, How Arbitration Works 670-88 (4th ed.

1985); see also id. at 692 (“in the vast majority of cases

there is no . . . ‘automatic’ basis for discharge; . . . all

factors relevant to industrial discipline may be considered

by the arbitrator in determining whether the employee

deserved discharge, some lesser penalty, or no penalty at

all—each case is thus decided on the basis of its own

facts and circumstances.” )

Recreating the balancing of competing factors that the

employer would have arrived at absent the discriminatory

discharge would seem unduly speculative in almost all

circumstances.”

*1 Again, it is possible to imagine very limited circumstances

in which such proof would rise to a fair level of certainty. An

2. Proof of Economic Damages: Assuming that the

defendant employer, although found to have violated the

ADEA, were permitted to reduce Ms. McKennon’s eco-

nomic damages award by proving such contingent facts,

the adequacy of the evidence proffered by the employer

to prove those facts would have to be analyzed in the

context of settled principles regarding the proof of com-

pensatory damages, and of the equally settled principles

regarding competent evidence.

The first of the proof of damages principles is that,

where the fact of an injury can be proven, the plaintiff

is entitled to recovery even if contingencies prevent the

amount of damages from being ascertained with certainty.

“{T}here is a clear distinction between the measure of

proof necessary to establish the fact that petitioner had

sustained some damage, and the measure of proof neces-

sary to enable the jury to fix the amount.” Story Parch-

ment Co., 282 U.S. at 562; Charles T. McCormick,

Handbook of the Law of Damages §§ 26-27 (1935).

While “damages must be susceptible of ascertainment in

some manner other than by mere speculation, conjecture

or-surmise,” (22 Am. Jur. 2d, Damages § 489 (1988) ), it

is enough “if the evidence shows the extent of the damages

as a result of just and reasonable inference.” Story

Parchment, 282 U.S. at 563. So, for example, as a gen-

eral matter the fact that there is some possibility that an

employee might have ceased to be employed does not limit

the assessment of damages for wrongful! termination:

Plaintiff might become ill, or his employer might

terminate his employment for some reason or the

plant in which the plaintiff is working might be de-

stroyed. Yet the law permits recovery for wages lost

—

employer might be able to demonstrate with objective evidence of

past practice that its approach is not in fact to balance competing

considerations with regard to one or more particular, explicitly

forbidden infractions, but to apply an unalterable policy with re-

gard to any employee found to have engaged in that conduct.

(Again, however, even such proof would not survive the “doomed

steamship” analysis).

26 V Game

as a result of injury despite the possibility of the hap-

penings stated. [Nager v. Nager, 339 §.W.2d 492,

498 (Mo. Ct. App. 1960).]

See also, Story Parchment, 282 U.S. at 563 (“Where the

tort itself is of such a nature as to preclude the ascertain-

ment of the amount of damages with certainty, it would

be a perversion of fundamental principles of justice to

deny all relief to the injured party, and thereby relieve

the wrongdoer from making any amend for his acts.”’)

The second of these proof of damages principles is that,

while damages need not be certain to be recovered, nei-

ther can they be based on “mere speculation or guess.”

Story Parchment, 282 U.S. at 563: Palmer y. Connecticut

Ry. & Lighting Co., 311 US. 544, 559 (1941) (“an

- estimate [must] be made upon judgment and not guess-

work.”); Charles McCormick, Handbook of the Law of

Damages § 26 (“the jury must have factual data—some-

thing more than guesswork—to guide them in fixing the

award”). This rule applies both to contingencies sought

to be introduced to en*ance the damage award and con-

tingencies sought to be introduced to reduce the award.

See, e.g., Noble v. Tweedy, 203 P.2d 778, 782 (Cal.

Ct. App. 1949):

The possibilities of a breach by plaintiffs, or insolv-

ency, or of a destruction of the building, are wholly

speculative and fanciful. It is clear that damages

could not be granted upon the basis of anticipated

future injuries or other events as purely hypothetical

as these; and it follows that by way of analogy, that

they likewise do not constitute a basis for denying

a recovery for damages which are otherwise reason-

ably certain to be sustained. [Emphasis in original. ]

See also Proulx v. Citibank, N.A., 681 F. Supp. 199, 202

(S.D.N.Y. 1988). (refusing to award damages based on

conjecture that employee would have been fired at a

later date because “neither an award of damages, nor

denial of them may be based on speculation.” (citation

omitted) aff'd mem. 862 F.2d 301 (2d Cir. 1988)).

The third proof of damages principle is that, where it

is the defendant’s wrong that prevents a precise calcula-

tion of damages, the risk of this uncertainty must be borne

by the defendant. “The most elementary considerations

of justice and public policy require that the wrongdoer

shall bear the risk of the uncertainty which his own wrong

has created.” Bigelow v. RKO Radio Pictures, 327 US.

251, 256 (1946); Anderson v. Mt. Clemens Pottery Co.,

328 US. 680, 687-88 (7946); see McCormick, Hand-

book of the Law of Damages § 27.

Thus, in evaluating any evidence concerning whether

the wrongfully terminated employee might have been dis-

charged at some later date, the law of damages makes

clear that (i) the possibility of such a contingency does

not prevent damages from being awarded; (ii) such a con-

tingency is not properly considered in calculating a dam-

~ ages award if the proffered evidence permits only sub-

stantial speculation or guesswork as to whether the con-

tingency might occur; and (iii) if the contingent event

cannot be proven with the requisite certainty because the

employee was first wrongfully terminated, that is a risk

the wrongdoer must bear.

Added to these considerations must be the general prin-

ciple, encompassed in Fed. R. Evid. §§ 602 & 701, that,

since admissible testimony must be based on personal

knowledge, non-expert testimony premised on speculation

or conjecture (including answers to questions about ; what

if’ something had happened) is generally inadmissible

entirely. 27 Charles A. Wright & Victor J. Gold, Federal

Practice & Procedure, § 6026, at p. 231 (1990);

Graham, Handbook of Federal Evidence § 611.18, at pp.

545-56 (1986); Joseph M. McLaughlin, Federal Evi-

dence Practice Guide § 16.17[2] (1994). On this basis,

courts routinely hold that “a witness may not testify to

what he would have done had the situation been different

from what it actually was.” E/yria-Lorain Broadcasting

Co. v. Lorain Journal Co., 298 F.2d 356, 360 (6th Cir.

1961): see also Evanston Bank v. Brink’s Inc., 853 F.2d

512, 515 (7th Cir. 1988) (objection to “question [as to]

a thee. IN Ne es Ei te lle ito

. . what the bank would have done under given circum-

stances” properly sustained because “this question would

have required [the witness] to speculate about what might

have happened”); Roberts v. Sears, Roebuck & Co., 531

F. Supp. 784, 788 n.5 (N.D. Ill. 1982).

Taking these various considerations together and ap-

plying them to the present circumstances, it is apparent,

first, that an employer’s hare testimony, whether on the

stand or by declaration, that an ADEA plaintiff would

have been discharged other than when she actually was,

and would have been discharged for a legitimate, non-

discriminatory reason, is simply inadmissible as conjec-

tural, and therefore insufficient to sustain the employer’s

burden on the damages issues in the case.**

Second, any objective evidence offered to prove the

hypothetical discharge must be sufficient to enable the

fact of such discharge to be found without substantial

speculation or conjecture. Thus, for example, proof of

the existence of a firm rule proscribing certain conduct or

of the seriousness of the offense, standing alone, will usually

be insufficient, given the complex factors that usually go

into discharge decisions, absent proof that the offense is

one that in the past has uniformly led to discharge once

discovered. If such proof is unavailable because the em-

ployer has not in the past dealt with a similar situation

22.On this basis alone, the judgment below should be reversed.

We note as well that even if such opinion testimony by parties

to the litigation were admissible, when submitted in declaration

form, on summary judgment, it is inadequate standing alone to

meet the employer’s affirmative burden of proof because “ ‘the mere

fact that the witness is interested in the result of the suit is

deemed sufficient to require the credibility of his testimony to be

submitted to the jury as a question of fact.’” Sartor v..Arkansas

Natural Gas Co., 321 U.S. 620, 628 (1944); compare Anderson v.

Liberty Lobby, 477_U.S. 242, 256 (1986) (holding that it is not

enough to defeat summary judgment concerning an issue of actual

fact (rather than opinion or conjecture) that the fact concerns

a state of mind and the testimony could be disbelieved, but not

overruling Sartor or addressing the question whether the rule

is the same for opinion testimony or for interested witnesses).

then, ordinarily; it would be speculative whether or not

a lawful and proper discharge would have occurred.

In that event, the employer, as the adjudicated wrong-

doer and the party that by initially discharging the plain-

tiff unlawfully precluded the possibility of ascertaining

whether the legal discharge would have actually occurred

must bear the consequences of his wrongdoing—viz., that

it became impossible to prove what might have happened

without undue speculation. The employee would then be

entitled to full backpay relief to the date of judgment,

since the employee, as the party who does not bear the

risk of uncertainties in the calculation of damages, 1s

entitled to the normal presumption that her employment

would continue. ;

3. Reinstatement: In determining the availability of

reinstatement relief, the primary governing criteria, once

again, must be the twin goals of employment discrimina-

tion laws, eliminating discrimination generally and “mak-

ing whole” the individual discriminatee. Albemarle Paper

Co., 422 U.S. at 405. And, those criteria, once again,

lead at the very least to the conclusion that usually an

ADEA plaintiff who proves she was discharged for dis-

criminatory reasons should be reinstated unless the em-

ployer can demonstrate, on the basis of competent evi-

dence, that absent the discriminatory actions, the em-

ployer would have discovered that the employee committed

a dischargeable offense, and the employer would, in fact,

on that lawful basis, have discharged the employee.”

23 Reinstatement, unlike ADEA damages, is an equitable remedy,

and a remedy not covered by the well-developed principles con-

cerning the determination of damages discussed above. For both rea-

sons, it is possible that the level of proof with which the employer

must establish the hypothetical facts that could limit the ordinary

reinstatement remedy may be lower than is the case for damages.

Even so, the kind of evidence relied upon in this case—bare state-

ments by employer agents as to what would have happened—would

clearly be insufficient, because inadmissible for any purpose as

purely speculative: See p. 26, supra.

“ a |

TE li i A Pe i tee me

ae ell -

There are, however, circumstances in which this usual

rule should be modified, sometimes to the effect of deny-

ing reinstatement that would be mandated by the “make

whole” approach, and sometimes to the effect of requiring

reinstatement even where the é¢mployer could show that

the individual would not have been retained.

In the first category is the hypothetical circumstance,

cited often in the court of appeals “after-acquired” evi-

dence cases (see, e.g., Summers v. State Farm Mutual

Automobile Ins. Co.,. 864 F.2d 700, 708 (10th Cir.

1988) ), in which the individual in question held his or her

job illegally, because of lack of a required license (the

masquerading doctor example of Summers), failure to

reach the requisite legal age requirement, or failure to meet

some other explicit requirement set, not by the employer,

but by the government. Under those circumstances, where

reinstatement would violate clearly established public pol-

icy embodied in positive law, a court of equity should

deny reinstatement, without more. Cf. United Paper-

workers Int'l Union v. Misco, Inc., 484 U.S. 29, 42, 45

n.12 (1987).

On the other hand, an order of reinstatement is a form

of injunctive relief, and “[t]he injunctive remedy for a

proven violation of law will often include commands that

the law does not impose on the community at large.”

Teachers v. Hudson, 475 U.S. 292, 309-310, n.22

(1986). There may well be instances in which the em-

ployer’s discriminatory acts will be blatant, while the

employee's infractions, although constituting a discharge-

able offense under the employer's standards, are not as an

objective matter egregious. Under those circumstances. if

the discriminatee is not returned to the workplace, the

lesson conveyed to both the discriminatee and to other

employees of the employer would be that acts of serious

discrimination will not be fully redressed. In such cir-

cumstances, the employer’s usual managerial prerogatives,

exercised through nondiscriminatory application of work-

place rules, should not alone supply a basis for refusing

reinstatement relief.

;

The National Labor Relations Board takes essentially

this approach in determining whether to order reinstate-

ment of employees who were discriminated against but

have committed dischargeable offenses for which the em-

ployer would have fired them:

“While seeking to be excused from his obligation to

reinstate or pay backpay because of misconduct

which was not a factor in the discriminatory action,

an employer has a heavier burden than when he is

merely seeking to justify the original discrimination.

In the former case, he has the burden of proving

misconduct so flagrant as to render the employee

unfit for further service, or a threat to the efficiency

of the plant.” [Owens Illinois, 290 NLRB 1193

(1988), enforced without opinion, 872 F.2d 413

(3rd Cir. 1989), quoting Mandarin, 228 NLRB 930,

931-32 (1977).]

We would suggest that the considerations with regard to

reinstatement under the ADEA are the same, and that

the same principles should govern.

CONCLUSION

For the reasons stated above, the judgment of the Court

of Appeals should be reversed, and this case should be

remanded for further appropriate proceedings on the

plaintiff's complaint.

Respectfully submitted,

MARSHA S. BERZON