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8 PJI 4.3 | Third Circuit (US)
HB-PJI-CA03-08S0403 Download

8 PJI 4.3 | ADEA | LIQUIDATED DAMAGES

If you find that [plaintiff] is entitled to recover damages for lost wages or benefits, then I will also ask you to decide a further question: whether [defendant’s] conduct was willful. For purposes of your answer to that question, [plaintiff] has the burden of proving willfulness by a preponderance of the evidence. You must find [defendant’s] violation of the ADEA to be willful if [defendant] knew or showed reckless disregard for whether the [challenged action] was prohibited by the law. To establish willfulness it is not enough to show that [defendant] acted negligently. If you find that [defendant] did not know, or knew only that the law was potentially applicable, and did not act in reckless disregard as to whether its conduct was prohibited by the law, then [defendant’s] conduct was not willful.
COMMENT Punitive damages are not available under the ADEA. Rogers v. Exxon Research and Engineering Co., 550 F.2d 834, 842 (3d Cir. 1977), overruled on other grounds by Holliday v. Ketchum, MacLeod & Grove, Inc., 584 F.2d 1221 (3d Cir. 1978) (en banc). 29 U.S.C. § 626(b) instead incorporates the liquidated damages provision of the Fair Labor Standards Act, 29 U.S.C. § 216(b). The statute provides that doubling of damages is mandatory if there is a finding that the defendant willfully violated the law.22 Instruction 8.4.3 does not tell the jury the reason it is being asked to determine willfulness; if the jury finds willfulness, then the court doubles the damages based on the jury’s finding. The concern is that, if the jury knows the effect of the willfulness determination, it might adjust its damages assessment in light of that information. Instructions for use in four other circuits similarly do not tell the jury the reason it is being asked to determine willfulness. See Seventh Circuit Instruction 3.06; Eighth Circuit Instruction 6.20; Ninth Circuit Instruction 11.14; Eleventh Circuit Instruction 4.10. But see Fifth Circuit Instruction 11.18 (instructing jury that “[a] plaintiff who proves that [his/her] [former] employer acted willfully in violating the ADEA is entitled to additional damages” – but without specifying the measure of those additional damages).

In Trans World Airlines v. Thurston, 469 U.S. 111, 128 (1985), the Court held that willfulness must be found under the ADEA if the employer either knew or showed reckless disregard of the fact that its conduct was prohibited by the statute. The challenged action in Thurston was the company-wide implementation of a policy that was found to violate the ADEA. The Court held that a willful violation could not be found under the circumstances, as the company had sought advice of counsel in advance of the implementation of the policy, and was told that the policy would not violate the ADEA.

The Third Circuit held after Thurston that a stricter standard of willfulness must be applied to discrete acts (as opposed to policies) found to violate the ADEA. The court in Dreyer v. ARCO Chem. Co., 801 F.2d 651, 656-57 (1986) explained as follows:
Many cases since Thurston have extracted from it the dual "knew or showed reckless disregard" test of willfulness to all claimed violations of the ADEA. However, there is a distinction between cases where the employer action that is claimed to violate the ADEA consists of adoption of a policy, as in Thurston, and cases where the employer action consists of a decision directed at an individual, such as termination or demotion. The "knew or reckless disregard" standard is particularly apt in the former situation... In such a situation, it is meaningful to inquire whether the employer knew that the action was in violation of the Act or whether it acted in reckless disregard of the prohibitions of the ADEA.

...

Where an employer makes a decision such as termination of an employee because of age, the employer will or should have known that the conduct violated the Act. Nonetheless, in order that the liquidated damages be based on evidence that does not merely duplicate that needed for the compensatory damages, there must be some additional evidence of outrageous conduct.
Four years after Dreyer, the Supreme Court decided Hazen Paper Co., v. Biggins, 507 U.S. 604 (1993). Unlike Thurston, Hazen Paper involved a discrete action against a single employee. In analyzing the possibility of liquidated damages in such a case, the Hazen Court rejected any requirement that the defendant’s action must be “outrageous” before liquidated damages can be imposed. It adhered to the Thurston “knowing/reckless disregard” test of willfulness for all acts of intentional age discrimination. Addressing the concern that liquidated damages would be automatic in all cases in which a discrete act was found to be intentional age discrimination, the Court declared as follows:
It is not true that an employer who knowingly relies on age in reaching its decision invariably commits a knowing or reckless violation of the ADEA. The ADEA is not an unqualified prohibition on the use of age in employment decisions, but affords the employer a "bona fide occupational qualification" defense, and exempts certain subject matters and persons, see, e. g., § 623(f)(2) (exemption for bona fide seniority systems and employee benefit plans); § 631(c) (exemption for bona fide executives and high policymakers). If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed.

Nor do we see how the instant case can be distinguished from Thurston... The only distinction between Thurston and the case before us is the existence of formal discrimination. Age entered into the employment decision there through a formal and publicized policy, and not as an undisclosed factor motivating the employer on an ad hoc basis, which is what respondent alleges occurred here. But surely an employer's reluctance to acknowledge its reliance on the forbidden factor should not cut against imposing a penalty. It would be a wholly circular and self-defeating interpretation of the ADEA to hold that, in cases where an employer more likely knows its conduct to be illegal, knowledge alone does not suffice for liquidated damages.

We therefore reaffirm that the Thurston definition of "willful" -- that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute -- applies to all disparate treatment cases under the ADEA. Once a "willful" violation has been shown, the employee need not additionally demonstrate that the employer's conduct was outrageous, or provide direct evidence of the employer's motivation, or prove that age was the predominant, rather than a determinative, factor in the employment decision.
507 U.S. at 616. Accordingly, the instruction does not include any requirement that the defendant’s conduct must have been outrageous. See Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1099, n.2 (3d Cir. 1995) (noting that the Third Circuit’s “outrageousness” requirement in Dreyer had been effectively overruled by Hazen).

The amount of damages to be doubled under the ADEA liquidated damages provision does not include front pay. Blum v. Witco Chem. Corp., 829 F.2d 367, 373 (3d Cir. 1987) (noting that a front pay award “is the monetary equivalent of the equitable remedy of reinstatement” and therefore is not part of the “wages” that are to be doubled under the terms of the statute).

Liquidated damages are of course not available in disparate impact cases, as liquidated damages are premised on a knowing or reckless disregard of the law. In contrast, disparate impact liability is not dependent on a knowing or intentional violation.

In Potence v. Hazleton Area School District, 357 F.3d 366 (3d Cir. 2004), the court held that the ADEA authorizes the imposition of liquidated damages against government employers who engage in willful age discrimination.

(Last Updated July 2019)

Footnotes

22 Cf. Marrow v. Allstate Sec. & Investigative Services, Inc., 167 F. Supp. 2d 838, 841 (E.D. Pa. 2001) (holding that punitive damages are available for claims of retaliation under the Equal Pay Act and Fair Labor Standards Act, and distinguishing ADEA actions, where punitive damages are not available for any claim).

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