By   Wong Fleming, PC  On Aug 20, 2009  @09:50

Donlin v. Philips Lighting North America Corporation d/b/a Philips Lighting Company, 2009 U.S. App. LEXIS 8408 (3d Cir. 2009)

The Third Circuit Court of Appeals recently upheld a District Court’s decision finding a Company liable for failing to hire a temporary worker as a full time employee, and remanded the case for a new trial on the issue of damages.

The facts of the case were as follows: Plaintiff, Colleen Donlin, worked as temporary employee for Philips Electronics North America Corporation (“Philips”) at its warehouse facility located in Mountaintop, Pennsylvania, where she prepared orders for shipment. Ms. Donlin applied for a full-time position at the warehouse, but was not hired.  Subsequently, Philips ended Ms. Donlin’s temp assignment claiming that there had been a decrease in sales and additional temporary help was no longer required.

Ms. Donlin filed suit against Philips in the United States District Court for the Middle District of Pennsylvania alleging that she had been discriminated on the basis of sex and retaliated against in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, et seq. Summary judgment was granted on Plaintiff’s retaliation claim, however the case was tried before a jury and Ms. Donlin was awarded $ 164,850 in compensatory damages on the discrimination claim.  Philips moved for judgment as a matter of law, and the District Court denied Philips's motion with respect to liability, but granted Philips motion with respect to punitive damages.  The jury originally awarded Ms. Donlin a total of $ 458,845 in front and back pay, but the Court later reduced the front pay award resulting in a total award of $ 164,850 in compensatory damages.  Philips then filed a motion for judgment notwithstanding the verdict, which was denied.

On appeal, Philips argued that the District Court’s jury instructions were flawed because it mischaracterized Philips’ reason for deciding not to hire Donlin as a permanent employee.     According to Philips the instruction, which did not accurately summarize the company's reasons for choosing not to hire Donlin, invited the jury to find that Philips's reason for not hiring Donlin was pretextual.  Philips contended that its witnesses testified that the company's hiring factors attendance, productivity, and quality of work, not accuracy.  On appeal, the Third Circuit found otherwise. In particular, Donlin's shift supervisor, Duane Wright, testified that the company considered production, attendance, and accuracy to be of "paramount importance." In addition, there was testimony regarding "picking errors," which could be considered errors involving accuracy.  The Court affirmed the liability verdict against Philips.

Philips also argued that the Court erred by allowing Ms. Donlin to provide expert testimony regarding her compensatory damages.  Specifically, with regard to back pay, the Court allowed Donlin to testify about her estimated lost earnings and pension benefits, and with regard to front pay, the Court allowed Donlin to testify regarding the number of years that she intended to work and the annual salary differential between Philips and the other companies where she was employed.  The Court also allowed Ms. Donlin to estimate her future pension value, perform a probability of death calculation, and reduce her front pay award to its present value.   The Third Circuit agreed that this testimony was of a specialized or technical nature, was not within Ms. Donlin's personal knowledge and that Ms. Donlin's testimony had “crossed the line” into subject areas that required expert testimony.  The Court vacated the judgment of the District Court with respect to compensatory damages and remanded the case for a new trial on damages.

The Court rejected Philips’ argument that Ms. Donlin should not be entitled to recover compensatory damages (front pay and back pay) because she found better employment after Philips refused to hire her.  The Court stated that the fact that Ms. Donlin found a job did not make her ineligible for back pay.  In order for Ms. Donlin to be ineligible for back pay the new employment had to be "better or substantially equivalent” to Ms. Donlin’s previous job, which was not the case.  Nor could Philips argue that Ms. Donlin was not entitled to front pay because she reestablished herself in the workforce, because the new job was not substantially equivalent to the position Ms. Donlin would have had, if Philips hired her as a full-time employee.

The Court also rejected Philips’ argument that Donlin had failed to mitigate her damages because she left a higher paying position for a position that was closer to her home., stating that a Plaintiff must only make "reasonable efforts" to mitigate her damages and that an employee “is not required to accept employment which is located an unreasonable distance from her home.”  The Court also rejected Philips's argument that the District Court's used an inappropriate comparator another Philips employee, Martha Matsick, to determine the compensation Donlin would have earned had she been hired by Philips.

Finally, the Court rejected Philips’ argument that the award of attorney’s fees was too high and Ms. Donlin’s argument that the award of attorney’s fees was too low and request for a multiplier. The Court stated that multipliers are appropriate "only in very rare circumstances where the attorney's work is so superior and outstanding that it far exceeds the expectations of clients and normal levels of competence."