Felts v. Radio Distributing Co., Inc.

637 F. Supp. 234, 47 Fair Empl. Prac. Cas. (BNA) 366, 1985 U.S. Dist. LEXIS 21710
District Court, N.D. Indiana·Decided March 15, 1985·No. S 83-321·Published·Cited by 1 cases

Opinion

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

Following the mandates most recently announced in Vera Horn v. Duke Homes, 755 F.2d 599, (7th Cir.1985), this court conducted an additional evidentiary hearing on damages on March 6, 1985.

I.

In determining the amount of damages to award in a Title VII case, the court must first determine two variables: (1) the amount of income the plaintiff would have earned per week had she been employed by the defendant; and (2) the total number of weeks the effects of the discrimination lasted. Once these two variables have been determined, the amount of damages is calculated by multiplying the weekly income times the number of weeks.

The first variable this court must determine is the average weekly income Felts would have earned had she continued in employment with Radio Distributing. Felts was a salesperson whose income is determined by combining her salary with commissions. The determination of Felts’ salary is not in dispute. She earned $4.70 per hour, which results in a $188.00 (40 hours X $4.70) weekly base salary.

The only figure that is in dispute is the determination of the commission figure that Felts would have earned during this period. To determine the commission figure this court must look to the actual sales figures of Shirley Felts while she was employed by Radio Distributing and apply the commission structure to those figures.

This method for calculation of commission earnings was approved by the Seventh Circuit in Unger v. Consolidated Foods Corp., 657 F.2d 909 (7th Cir.1981), vacated on other grounds, 456 U.S. 1102, 103 S.Ct. 1801, 76 L.Ed.2d (1982). In Unger, the plaintiff, a salesperson, claimed that her back pay should be calculated by adopting the pay earned by her successor. The district court disagreed, holding that the more accurate method of calculating back pay in a commission situation was to apply the actual sales figures of the plaintiff while employed with the defendant to the commission formula. The Seventh Circuit agreed with the district court that the calculation of commission back pay was to be determined by using plaintiff’s actual sales figures instead of adopting the income of her successor. In addressing this issue, that court stated:

Plaintiff, however, argues that the district court should have calculated the back pay award not on a speculative estimate of plaintiff earnings, but on the actual earnings of plaintiff’s successor in the Midwest territory, Tony Herrmann____
****** It is well established that the trial court has broad discretion in awarding back pay and that its method of assessing the amount of back pay will be set aside only for an abuse of discretion____
****** The district court’s findings discuss at length the court’s method and reasons for the award of back pay. The court stressed, among other things, the highly speculative and personal nature of sales, plaintiff’s intervening physical infirmities, and plaintiff’s actual sales performance. Although different considerations may be appropriate and within a court’s discretion, [citations omitted], we find no abuse of discretion in the District Court’s use of an estimate of plaintiff’s sales earnings as opposed to use of her successor’s sales record.

657 F.2d at 918-19.

Radio Distributing changed its commission structure effective September 1, 1982. *237 Rick Jones, controller of Radio Distributing, testified that the average weekly commission of Felts under the old commission formula was $13.79. Further, the average weekly commission under the new formula was $78.12. Therefore, for the seven-week period from July 12, 1982 through September 1, 1982, the weekly income from Shirley Felts with Radio Distributing was $201.79 ($188.00 + $13.79). For the period beginning after September 1, 1982, the weekly income for Shirley Felts was $266.12 ($188 + $78.12).

In Horn, supra, the Seventh Circuit acknowledges that a plaintiff has the burden to mitigate his/her damages. On page 607 of 755 F.2d 599, the court states:

Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce back pay otherwise allowable.

42 U.S.C. § 2000e-5(g) (1982)

This court has already held it will reduce the allowable back pay by any interim amounts earned by Felts through either unemployment compensation or earnings from other employment. Therefore, the only factor left to determine is the amount that Shirley Felts could have earned had she exercised reasonable diligence.

Felts failed in her duty to mitigate her damages when she terminated her employment with Inlander Steindler Paper Company in July 1984. Kent Dennis, the manager of Inlander Steindler’s South Bend office testified credibly that Felts quit Inlander Steindler the day after she returned from maternity leave. Mr. Dennis testified that, although Felts’ former position remained available to her, she no longer desired to work for Inlander Steindler because (1) she did not like the reorganization of the company and (2) she felt she could not handle her newly-reorganized responsibilities. Therefore, in failing and refusing to remain gainfully employed with Inlander Steindler following the birth of her second child, Felts failed to mitigate her damages.

II.

In employment discrimination actions, the Seventh Circuit places the question of whether to award prejudgment interest squarely within the trial court’s discretion. Taylor v. Philips Industries, Inc., 593 F.2d 783 (7th Cir.1979), involved a woman who brought a gender-based Title VII action against her former employer. The district court held that the woman succeeded in establishing that the employer had unlawfully discriminated against her, but rejected the woman’s claim for prejudgment interest. In affirming the district court’s denial of prejudgment interest to the woman, the Seventh Circuit said:

While we agree that interest on wages due and owing is an available remedy to a plaintiff in a Title VII action, ... the decision whether or not to award such interest is within the discretion of the trial court. See, e.g., Lodges 743 and 1746, International Ass’n of Machinists and Aerospace Workers, AFL-CIO v. United Aircraft Corp., 534 F.2d 422, 446 (2d Cir.1975), cert. denied, 429 U.S. 825, 97 S.Ct. 79, 50 L.Ed.2d 87 (1976). We find no abuse of that discretion in the present case.

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Felts v. Radio Distributing Co., Inc., 637 F. Supp. 234, 47 Fair Empl. Prac. Cas. (BNA) 366, 1985 U.S. Dist. LEXIS 21710 (N.D. Ind. 1985).

637 F. Supp. 234 (Felts v. Radio Distributing Co., Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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