Reference no: EM131281498

Norma Drew was employed by Waffle House, Inc., as a restaurant manager in Hardeeville, South Carolina. In March 1993, she injured herself on the job while trying to secure a wind-blown sign in the restaurant parking lot. As a result, she had shoulder surgery for which she was authorized to take 12 weeks of leave from work. Although her supervisor authorized an extension of her leave, she was fired for absenteeism when she reported back to work.

She subsequently sued her employer, which ultimately resulted in a jury verdict in her favor on her cause of action alleging a violation of the FMLA. By agreement of the parties, damages were submitted to the trial judge for determination. Pursuant to the FMLA, the judge awarded$103,273 in back pay for her pretrial loss of wages, plus prejudgment interest of $32,756.90.

He further awarded $304,845.69 in "front pay." Finally, he calculated the amount of liquidated damages by adding the amount of back pay, pre-judgment interest, and front pay, for a total of $440,875.59 in liquidated damages. On appeal, Waffle House contested the award of front pay, claiming it was highly speculative because it was based on the assumption that Drew would have worked for Waffle House for another 19 years until her retirement at age 65.

The South Carolina Court of Appeals agreed and modified the front pay award from $304,845.69 to $84,251.80, based on 4 years of front pay rather than 19. Waffle House further argued to the court of appeals that the front pay award should not have been included in the calculation of liquidated damages. The court of appeals agreed and reduced the liquidated damages award from $440,875.59 to $136,029.90. The Supreme Court of South Carolina agreed to review the court of appeals decision.] MOORE, J.... Issues 1. Was front pay properly included in the calculation of liquidated damages?

2. Was the amount of front pay proper? Discussion 1. Liquidated damages The FMLA provides specific statutory relief for a violation of its provisions. Under 29 U.S.C. § 2617 (a)(1), an employer who violates the Act is liable to the employee:

(A) for damages equal to- (i) the amount of- (I) any wages, salary, employment benefits, or other compensation denied or lost to such employee by reason of the violation; or (II) in a case in which wages, salary, employment benefits, or other compensation have not been denied or lost to the employee, any actual monetary losses...; (ii) the interest on the amount described in clause (i) calculated at the prevailing rate; and (iii) an additional amount as liquidated damages equal to the sum of the amount described in clause (i) and the interest described in clause (ii) ...; and (B) for such equitable relief as may be appropriate, including employment, reinstatement, and promotion. (emphasis added).

Under this statute, the liquidated damages award is affected by whether front pay is classified as "damages" under clause (a)(l)(A)(i) or "equitable relief" under clause (a)(l)(B) because relief classified as equitable is not included in the calculation of liquidated damages. Citing federal case law, the Court of Appeals ruled front pay was equitable relief and therefore should not be included in the calculation of liquidated damages. The classification of front pay as legal or equitable relief impacts a substantial right of the plaintiff and therefore federal case law controls.... Applying federal precedent, we hold front pay is equitable relief under clause (a)(l)(B). Because liquidated damages do not include equitable relief, the Court of Appeals properly excluded front pay from the calculation of liquidated damages.

2. Amount of front pay award The Court of Appeals held the front pay award for nineteen years was "highly speculative and unsupported by the record." It then held, without explanation, that under its view of the preponderance of the evidence, four years' front pay was "a more appropriate award." Petitioner [Drew] contends the evidence supports the award because petitioner testified she would have worked at Waffle House until she retired at age sixty-five.... Front pay is awarded as a complement or as an alternative to reinstatement.

Duke, 928 F.2d at 1424. If reinstatement is shown to be infeasible, for instance because of a hostile atmosphere, front pay may be awarded in lieu thereof or to reimburse the employee until the time of reinstatement. See generally Pollard, 532 U.S. at 853-54, 121 S.Ct. 1946. Under the FMLA, an employee is entitled to reinstatement upon return from leave. 29 U.S.C. § 2614 (a)(l)(A). Once an employee proves she was denied reinstatement, the employer must prove the employee would have been laid off in any event for some other reason in order to defeat a claim for reinstatement. Smith v. Diffee Ford-Lincoln-Mercury, Inc., 298 F.3d 955 (10th Cir. 2002); see also 29 C.F.R. § 825.216(a) ("An employer must be able to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment.").

Similarly, the employer must bear the burden of proving the employee is not entitled to front pay, which is awarded in lieu of reinstatement, if the employee seeks front pay rather than reinstatement It is uncontested petitioner was denied reinstatement upon her return from FMLA leave.

She claimed front pay based on her entitlement to reinstatement. It was Waffle House's burden to show petitioner would have been terminated for an unrelated reason while on FMLA leave, or that her continued employment would have been limited, in order to defeat or reduce the claim for front pay; in the alternative, Waffle House could have asserted the feasibility of reinstatement in lieu of a front pay award. Waffle House failed to carry its burden on this issue. We defer to the trial judge's judgment and affirm the award of front pay. The Court of Appeals's decision vacating the award is reversed. [Affirmed in part; reversed in part.]

Case Questions

1. What significance is applied to classifying front pay as appropriate "equitable relief" rather than as "damages" in the calculation of liquidated damages?

2. Calculate the proper amount of damages owed Ms. Drew.

3. Assess the quality of the employer's decision to pay front pay to Ms. Drew rather than reinstate her to her manager's position.