U.S. Equal Emp't Opportunity Comm'n v. Consol Energy, Inc.

151 F.Supp.3d 699 (Mem)

U.S. Equal Employment Opportunity Commission, Plaintiff,

v.Consol Energy, Inc. and Consolidation Coal Company, Defendant.

Civil Action No. 1:13CV215

United States District Court, N.D. West Virginia.

Signed August 21, 2015

Alan G. McGonigal, U.S. Attorney's Office, Wheeling, WV, Deborah A. Kane, Lisa H. Hernandez, Equal Employment Opportunity Commission, Pittsburgh, PA, Debra M. Lawrence, Ronald L. Phillips, Equal Employment Opportunity Commission, Baltimore, MD, for Plaintiff.

David L. Delk, Jr., Jeffrey A. Grove, Grove & Delk, PLLC, Wheeling, WV, for Defendant.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION IN LIMINE, GRANTING PLAINTIFF'S MOTION FOR PERMANENT INJUNCTION, AND AWARDING BACK PAY AND FRONT PAY DAMAGES

FREDERICK P. STAMP, JR., UNITED STATES DISTRICT JUDGE

I. Procedural History

This action was filed by the plaintiff, the United States Equal Employment Commission (“EEOC”), pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. In the complaint, EEOC seeks a permanent injunction and monetary relief for the charging party, Beverly R. Butcher, Jr. (“Butcher”). EEOC alleges that the defendants, Consol Energy, Inc. (“Consol Energy”) and Consolidation Coal Company (“CCC”) (collectively, “the defendants”), instituted practices that denied Butcher a religious accommodation.

Prior to trial, both parties filed motions in limine. One of those motions, defendants' motion in limine to exclude evidence of lost pension benefits, is still pending. After the trial concluded, a verdict in favor of EEOC was entered and the jury assigned only compensatory damages. Based on this Court's previous ruling, the jury did not assign an award for other damages.

This Court then entered an order establishing a briefing schedule regarding back pay, front pay, and other damages on behalf of Butcher. Thereafter, EEOC filed a motion for permanent injunction. The parties submitted briefs on these issues and this Court then heard oral argument and received evidence concerning those issues. After this hearing, this Court ordered the parties to complete supplemental briefing.

This Court is now prepared to review post-trial damages, the defendants' motion in limine, and EEOC's motion for permanent injunction.

For the reasons that follow, this Court finds that the defendants' motion in limine is DENIED and the EEOC's motion for permanent injunction is GRANTED. Further, this Court will set out its ruling on the remaining damages to be awarded in this action.

II. Discussion

A. Monetary Damages

Awarding back pay is a discretionary function of a trial court and must be made in consideration of Title VII's objectives of deterrence and making the claimant whole. Albemarle Paper Co., et al. v. Moody, et al., 422 U.S. 405, 418–20, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975) ; Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1358 (4th Cir.1995). It is also within this Court's discretion to allow a plaintiff to seek front pay or reinstatement. Doyne v. Union Electric Company, 953 F.2d 447, 448 (8th Cir.1992). Thus, this Court must determine if front pay should be awarded and the amount of front pay to be awarded. Id. (citing Duke v. Uniroyal, Inc., 928 F.2d 1413, 1424 (4th Cir.1991). The principles of mitigation and equity apply to such awards. Id. at 451 ; Albemarle, 422 U.S. at 421, 95 S.Ct. 2362.

1. The Collateral Source Rule

a. Arguments of the Parties

EEOC argues that the pension benefits that Butcher is receiving are collateral, not used for a determination of mitigation, and are not interim earnings that reduce back pay or front pay. Further, EEOC contends that because these payments are not paid directly from and entirely by the employer, the payment from a third-party source, the United Mine Workers of America (“UMWA”) Pension Fund, cannot be used in the back pay or front pay calculation. Additionally, EEOC contends that the payments are made based on years of service in the coal industry not just for years of service with a certain employer. Thus, EEOC asserts that the pension benefits are payments, bargained for by the UMWA, for work Butcher has already performed in the past, and not as indemnification for the employer.

The defendants argue that Butcher has not made contributions to the pension plan, the pension plan is totally employer funded, and is only administered by a third-party, and thus it is a non-collateral source. The defendants cite a United States Court of Appeals for the Fourth Circuit case, Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th Cir.1985), to support their argument that Butcher's pension benefits should be considered a non-collateral source. The defendants contend that if a setoff is denied, Butcher will receive a windfall, especially since he failed to seek employment in the coal mining industry because he was receiving pension benefits. Moreover, the defendants argue that EEOC cannot lay claim to lost benefits between 2012 and 2017 with its claim that Butcher is entitled to those lost benefits in the future as well. The defendants contend that EEOC cannot claim future lost pension benefits for the same reason as it cannot claim them for back pay, the benefits are non-collateral. These same arguments are forwarded by the defendants in the remaining motion in limine.

The defendants further request in their motion in limine that this Court exclude any evidence that Butcher experienced any lost pension benefits as a result of his retirement in August 2012. Further, the defendants move to exclude any testimony of EEOC's expert witness Dr. Sovan Tun, Ph.D. (“Tun”). As background, the defendants aver that Butcher began receiving a monthly pension amount of $2,357.00 in September 2012 and if he had worked until 2017 he would have received $2,704.00 a month. Tun issued an expert report regarding lost wages which does not incorporate an offset of pension benefits. The defendants' expert, Dr. Homayoun Hajiran, Ph.D. (“Hajiran”), stated in his report that Butcher will not sustain a loss of pension benefits because he retired in 2012 but will actually receive a surplus of $67,530.00. Thus, the defendants argue that Tun's testimony would lead Butcher to receive a double recovery because it does not incorporate an offset.

In response, EEOC provides Tun's testimony regarding: (1) back pay for the period of August 10, 2012 to the present; (2) front pay in the form of lost wages for the period of January 2015 until Butcher's planned retirement date of July 31, 2017; and (3) front pay in the form of lost future pension value during the period of July 31, 2017 until the end of Butcher's life expectancy; and (4) supplemental pension benefits. EEOC argues that the pension benefits that Butcher is receiving are collateral, for the same reasons as addressed above. Further, EEOC argues that the defendants are not contesting the relevancy of Tun's report but the accuracy and thus it should not be excluded.

b. Applicable Law: Collateral Source—Generally

“The collateral source rule holds that ‘compensation from a collateral source should be disregarded in assessing [ ] damages.’ ” Sloas v. CSX Transp. Inc., 616 F.3d 380, 389 (4th Cir.2010) (internal citation omitted). Under the collateral source rule, an “employer-tortfeasor is not entitled to mitigate damages by setting off compensation received by the employee from an independent source.... The source of the funds may be determined to be collateral or independent, even though the employer-tortfeasor supplies such funds.” Haughton v. Blackships, Inc., 462 F.2d 788, 790 (5th Cir.1972) (citing United States v. Price, 288 F.2d 448 (4th Cir.1961) ; see Sloas, 616 F.3d at 390. Thus, importance should be placed on “the character of the benefit received and what such benefits were designed to do.” Haughton, 462 F.2d at 790 ; see also Sloas, 616 F.3d at 390 ; Price, 288 F.2d at 450–51. If the fund from which the employee is drawing compensation is not provided to be used for liability coverage but, instead, is “in effect part of the employee's income for services rendered[,]” that fund is a collateral source. Haughton, 462 F.2d at 791 ; see also Sloas, 616 F.3d at 390 ; Price, 288 F.2d at 451. Accordingly, the main question is whether the benefit paid for by the tortfeasor was intended to respond to potential future legal liability. Sloas , 616 F.3d at 390 ; Phillips v. Western C o. of N. America, 953 F.2d 923, 932 (5th Cir.1992).

The United States Court of Appeals for the Fifth Circuit has applied a five prong analysis: (1) Does or has the employee made any contribution to the funding of the payment?; (2) Does the benefit plan arise as the result of a collective bargaining agreement?; (3) Does the plan and the payments cover both work-related and non-work-related injuries?; (4) Are payments from the plan contingent upon the employee's length of service?; and (5) Does the plan contain specific language contemplating a set-off of benefits received under the plan against a court judgment? Id. If the answer is “yes” to all of those questions but the last, then the court should find that the source of the payment is a collateral source. Id. This analysis, although from another circuit, will be informative for this Court in applying the Fourth Circuit's “character of the benefit” rule.

c. The Pension Benefits are a Collateral Source

This Court finds that Butcher's pension benefits are a collateral source. The evidence provided by the parties shows that the pension fund is contributed to by different employers, including the defendants, who have entered collective bargaining agreements with the UMWA. The UMWA, a third-party, then distributes those funds to the retirees. The amount of the pension provided is based on years of employment in the coal industry at UMWA mines for work that has been completed by a certain employee.

There has been no evidence that the fund is meant to be used as an indemnifying fund for potential litigation that is not in an employer's favor....