No. 03-5124
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
JAMES R. MILLSAP, et al.,
Plaintiffs-Appellees
v.
McDONNELL DOUGLAS CORPORATION,
Defendant-Appellant
On Appeal from the
United States District Court
for the Northern
District of Oklahoma, Case No. 94-CV-633H
Judge Sven Eric Holmes
___________________
BRIEF OF THE
SECRETARY OF LABOR AS AMICUS CURIAE
IN SUPPORT OF
PLAINTIFFS-APPELLEES
URGING AFFIRMANCE
___________________
HOWARD M. RADZELY
Acting Solicitor of Labor
TIMOTHY D. HAUSER
Associate Solicitor
Plan Benefits Security Division
ELIZABETH HOPKINS
Counsel for Appellate and Special Litigation
Plan Benefits Security Division
MARK E. PAPADOPOULOS
Attorney
U.S. Department of Labor
Room N-2700
Plan Benefits Security Division
200 Constitution Avenue, N.W.
Washington, DC 20210
TABLE OF CONTENTS
STATEMENT OF THE CASE
Back to Top
I.Statutory Awards of Back Pay are Equitable Where They are Intertwined with and Made
Part of an Equitable Remedy
II. Mertens and Great-West Involved Common Law Claims and Remedies and Do Not Control This Case
III. Broader Statutory and Policy Considerations Favor Back Pay as Equitable
Relief Under Section 502(a)(3)
CONCLUSION
ADDENDUM
Millsap, et al. v. McDonnell Douglas Corp. (Millsap II), No. 94-CV-633-H, 2002 WL 31386076 (N.D. Okla.
Sept. 25, 2002)
Millsap, et al. v. McDonnell Douglas Corp. (Millsap III),
No. 94-CV-633-H(M), 2003 WL
21277124
(N.D. Okla. May 28, 2003)
Myers v. Colgate-Palmolive Co., No. 00-3174, 2002 WL 27536 (10th Cir. Jan. 8, 2002)
Oliver-Pullins v. Associated Material Handling Indus.,
Inc., No. l:03CV0099-JDT-WTL, 2003
WL 21696207 (S.D. Ind. May 20, 2003)
Nicolaou v. Horizon Media, Inc., No. 01 CIV. 0785 (BSJ), 2003 WL 22208356 (S.D.N.Y.
Sept. 23, 2003)
TABLE OF AUTHORITIES
Cases:
Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)
Anglin v. Sears, Roebuck & Co., 139 F. Supp. 2d 914 N.D. Ill. 2001)
Atlas Roofing Co., Inc. v. OSHRC, 430 U.S. 442, 454-55 (1977)
Barbour v. Dynamics Research Corp., 63 F.3d 32 (1st Cir. 1995)
Bertot v. Sch. Dist. No. 1, 613 F.2d 245 (10th Cir. 1979)
Cannon v. Univ. of Chicago, 441 U.S. 677 (1979)
Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558 (1990)
Curtis v. Loether, 415 U.S. 189 (1974)
DeSimone v. Transprint USA, Inc., No. 94 CIV. 3130 (JFK), 1996
WL 209951 (S.D.N.Y. Apr. 29, 1996)
Earlie v. Jacobs, 745 F.2d 342 (5th Cir. 1984)
Folz v. Marriot Corp., 594 F. Supp. 1007 (W.D. Mo. 1984)
Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992)
Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) passim
Heimann v. Nat'l Elevator Indus. Pension Fund, 187 F.3d 493 (5th Cir. 1999)
In re Monumental Life Ins. Co. v. W. & S. Life Ins. Co., 343 F.3d 331 (5th Cir. 2003)
Lorillard v. Pons, 434 U.S. 575 (1975)
Marks v. Prattco. Inc., 660 F.2d 1153 (5th Cir. 1979
McCue v. State of Kansas, 165 F.3d 784 (10th Cir. 1999)
Mertens v. Hewitt Assocs., 508 U.S. 248 (1993)
Millsap, et al. v. McDonnell Douglas Corp. (Millsap I), 162 F. Supp. 2d 1262 (N.D. Okla. 2001)
Millsap, et al. v. McDonnell Douglas Corp. (Millsap II), No. 94-CV-633-H, 2002 WL 31386076 (N.D. Okla. Sept. 25, 2002)
Millsap, et al. v. McDonnell Douglas Corp. (Millsap III), No. 94-CV-633-H(M), 2003 WL 21277124 (N.D. Okla. May 28, 2003)
Mitchell v. Robert De Mario Jewelry, Inc., 361 U.S. 288 (1960)
Myers v. Colgate-Palmolive Co., No. 00-3174, 2002 WL 27536 (10th Cir. Jan. 8, 2002)
Nicolaou v. Horizon Media, Inc., No. 01 CIV. 0785 (BSJ), 2003 WL 22208356 (S.D.N.Y. Sept. 23, 2003)
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)
NLRB v. W. Ky. Coal Co., 116 F.2d 816, 821 (6th Cir. 1940)
Oliver-Pullins v. Associated Material Handling Indus., Inc., No. l:03CV0099-JDT-WTL, 2003
WL 21696207 (S.D. Ind. May 20, 2003)
Pegg v. Gen. Motors Corp., 793 F. Supp. 284 (D. Kan. 1992)
Pickering v. USX Corp., Nos. 87-C-838J, 88-C-763J & 91-C-636J, 1995 WL 584372 (D. Utah May 8, 1995)
Porter v. Warner Holding Co., 328 U.S. 395 (1946)
Russell v. Northrup Grumman Corp., 921 F. Supp. 143 (E.D.N.Y. 1996)
Sailor v. Hubbell, Inc., 4 F.3d 323 (4th Cir. 1993)
Sandberg v. KPMG Peat Marwick, LLP, 111 F.3d 331 (2d Cir. 1997)
Schwartz v. Gregori, 45 F.3d 1017 (6th Cir. 1995)
Skinner v. Total Petroleum, Inc., 859 F.2d 1439 (10th Cir. 1988)
Slack v. Havens, 522 F.2d 1091 (9th Cir. 1975)
Smith v. Diffee Ford-Lincoln-Mercury, Inc., 298 F.3d 955 (10th Cir. 2002)
Stiltner v. Beretta U.S.A. Corp., 74 F.3d 1473 (4th Cir. 1996)
Thomas v. National Football League Players Ass’n,, 131 F.3d 18 (D.C. Cir. 1997), vacated in part on
rehearing by, 1998 WL 1988451 (D.C. Cir. 1998)
Tull v. United States, 481 U.S. 412 (1987)
Virginia Ry. Co. v. Sys. Fed’n No. 40, 300 U.S. 515 (1937)
Waldrop v. S. Co. Servs., 24 F.3d 152, 159 (11th Cir. 1994)
Warner v. Buck Creek Nursery, Inc., 149 F. Supp. 2d 246 (W.D. Va. 2001)
Wilson v. Belmont Homes, Inc., 970 F.2d 53 (5th Cir. 1992)
Wooddell v. Int'l Bhd. of Elec. Workers, Local 71, 502 U.S. 93 (1991)
Zimmerman v. Sloss Equip., Inc., 835 F. Supp. 1283 (D. Kan. 1993)
Zimmerman v. Sloss Equip., Inc., 72 F.3d 822 (10th Cir. 1995)
Statutes and Regulations
Age Discrimination in Employment Act
Civil Rights Act of 1964
Clean Air Act, 42 U.S.C. § 7622
Education Amendments of 1972, 20 U.S.C. § 1681
Employee Retirement Income Security Act of 1974,
29 U.S.C. §§ 1101-1169
Section 502(a)(3), 29 U.S.C. § 1132 passim
Section 502(a)(5), 29 U.S.C. § 1132(a)(5)
Section 510, 29 U.S.C. § 1140
Equal Opportunity Act of 1972, 42 U.S.C. 2000e-5(g) (1981)
Fair Labor Standards Act, 29 U.S.C. § 201
29 U.S.C. § 215(a)(3)
Family and Medical leave Act, 29 U.S.C. § 2615
Labor Management Reporting and Disclosure Act of 1959
Mine Safety and Health Act, 30 U.S.C. § 815(c)
National Labor Relations Act, Section 8(a)(3)
9 U.S.C. § 151
Rehabilitation Act of 1973
Sarbanes-Oxley Act,
18 U.S.C. § 1514A(c)(2)(C)
42 U.S.C. § 1981, Section 1981
42 U.S.C. § 1983, Section 1983
42 U.S.C. § 2000(e)
Federal Rules of Appellate Procedure 29(a)
Other Authorities:
119 Cong. Rec. 30044 (1973)
H.R. 2, § 693, 93d Cong., 2d Sess., reprinted in 3 Leg. Hist. at 3816
H.R. Rep. No. 93-453, reprinted in 1974 U.S.C.A.A.N. 4639, 4655
S. Rep. No. 93-127, reprinted in 1974 U.S.C.C.A.N. 4838, 4871
5 Arthur L. Corbin, Corbin on Contracts § 1107
(1964)
Dana M. Muir, Plant Closings and ERISA's Noninterference Provision, 36 B.C. L. Rev. 201 (1995)
Daniel P. Westman, Whistleblowing: The Law of Retaliatory Discharge 188-97
(1991)
I George E. Palmer, The Law of Restitution § 4.1
(1978)
Restatement (Second) of Contracts § 367 (1981)
Restatement (Second) of Contracts § 373 (1981)
Robert Belton, Remedies in Employment Discrimination Law, § 9.1 (1992)
§ 9.34 (1992)
2 Dan B. Dobbs, Law of Remedies, § 6.10(1)
§ 6.10(5) (2d ed. 1993)
3 Dan B. Dobbs, Law of Remedies, § 12.21(4) (2d ed. 1993)
Labor and Employment Law, Employee Benefits Law, 1175 (2d ed. 2000)
Back to Top
STATEMENT OF
INTEREST
This case involves an action under Title I of
the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§
1101-1169, and presents an important and recurring question: whether Section 502(a)(3) of ERISA, 29
U.S.C. § 1132(a)(3), authorizes back pay as "appropriate equitable
relief" to remedy a violation of Section 510, 29 U.S.C. § 1140. The Secretary of Labor is authorized under
Section 502(a)(5), 29 U.S.C. § 1132(a)(5), to bring civil actions to obtain
"appropriate equitable relief" to redress violations of, and to
enforce, Title I of ERISA. Accordingly,
this Court's determination of what constitutes "appropriate equitable
relief" may affect not only the scope of private civil actions under
Section 502(a)(3), which are a necessary complement to actions by the
Secretary, but also the scope of the Secretary's own authority to enforce Title
I of ERISA. The Secretary respectfully
submits this brief pursuant to Federal Rules of Appellate Procedure 29(a).
This Court accepted the
following certified question for appellate review on July 14, 2003: "Whether in this ERISA § 510 case, and
as a result of Great-West Life & Annuity Ins. Co. v. Knudson, 435
U.S. 204 (2002), back pay (and as a result, any other damages based upon back
pay) are available as 'appropriate equitable relief' to the class members
pursuant to ERISA §502(A)(3)."
STATEMENT OF THE CASE
On December 3, 1993,
Appellant McDonnell Douglas Corporation ("Defendant") announced that
it was closing its Tulsa, Oklahoma facility.
Millsap, et al. v. McDonnell Douglas Corp., 162 F. Supp. 2d 1262,
1264 (N.D. Okla. 2001) (Millsap I).
Plaintiffs-Appellees were employees of the facility at the time of the
announcement and participants in one of two qualified retirement plans and one
health care plan. Id.
In June 1994, Plaintiffs
filed this lawsuit in the United States District Court for the Northern
District of Oklahoma, alleging Defendant had violated ERISA Section 510, by
"clos[ing] its Tulsa facilities for the purpose of depriving Plaintiffs of
benefits covered by ERISA[.]" Millsap
I, 162 F. Supp. 2d at 1264.
Plaintiffs sought all appropriate equitable relief under
Section 502(a)(3), including lost benefits, back pay, and reinstatement or
front pay in lieu of reinstatement. Millsap,
et al. v. McDonnell Douglas Corp., No. 94-CV-633-H, 2002 WL 31386076 (N.D.
Okla. Sept. 25, 2002) (Millsap II).
Back to Top
The case was bifurcated into
separate liability and damages phases, and the court conducted a bench trial on
liability in April 1999. Millsap I,
162 F. Supp. 2d at 1263. On September
5, 2001, the court ruled in Plaintiffs' favor on the Section 510 claim. Id. at 1309. Based on the evidence presented, the court
concluded that the company's "inability to produce financial and economic
bases for the Tulsa closing and its overall lack of credibility about its
decision-making process [was] probative of pretext, and [was] legally
sufficient, combined with the other circumstantial evidence presented by
Plaintiffs, to support the inference that the proffered reason was not the true
reason for the employment decision, and interference with Plaintiffs' rights
was." Id. at 1307.
On September 25, 2002, the
court ruled on Defendant's motion to exclude certain remedies including back
pay. Millsap II, 2002 WL
31386076, at *1. The principal ground
for Defendant's motion was that the Supreme Court's decision in Great-West
"precludes an award of back pay as a remedy for a violation of ERISA
§ 510." Id. at
*2. The court denied the motion, noting
that every court that had considered the question had found back pay to be an
available remedy under Section 502(a)(3), which authorizes civil actions to
obtain "appropriate equitable relief" to redress violations of ERISA
including Section 510. Id. at
*4. The court rejected the notion that Great-West
implicitly overturned this established precedent or controlled this case,
pointing out that "[t]he holding in Great-West Life does not
address back pay as a remedy[,] . . .
does not arise in the context of an ERISA § 510 discrimination claim . .
. [and] [t]hus . . . does not mandate a determination that back pay is an
unrecoverable remedy in this case."
Id. at *3. The district
court acknowledged that Great-West further refined the definition of
"equitable relief" under Section 502(a)(3) by clarifying that
not all forms of restitution are equitable and by requiring courts to
"determine whether [the plaintiff is seeking] a legal or equitable type of
restitution." Id.
The district court also
noted that the Tenth Circuit had previously considered whether back pay was
equitable in the Title VII context:
"'[T]he characterization of back pay as legal or equitable has been
determined by whether the plaintiff has requested back pay as an adjunct to the
equitable relief of reinstatement, in which case it has been characterized as
equitable, or as an element of the plaintiff's damages for the breach of his
employment contract.'" Millsap
II, 2002 WL 31386076, at *3 (quoting Skinner v. Total Petroleum, 859
F.2d 1439, 1443-44 (10th Cir. 1988)).
Applying the same rationale, the court found that "Plaintiffs
[sought] back pay as part of an aggregate equitable remedy that will restore
them to the status quo ante, that is, their rightful
positions absent the discriminatory discharge resulting from the closing of the
Tulsa facility." Id. at
*4. Under the precedent of Great-West
and Skinner, "the Court [found] that back pay, as a remedy for an
ERISA § 510 violation, constitutes equitable restitution and therefore
'equitable relief' under section 502(a)(3).'" Id.
Back to Top
Finally, the court concluded
that footnote four of Great-West, which contains a discussion of Title
VII back pay, "is dicta." Millsap
II, 2002 WL 31386076, at *5. The
court also stated footnote four would not change the outcome of the case
because Plaintiffs were not seeking back pay as a "freestanding"
claim for money damages as in Great-West but rather were seeking back
pay in conjunction with other remedies, such as lost pension benefits and front
pay in lieu of reinstatement. Id.
On February 3, 2003, the
parties filed a stipulated settlement with the court, resolving all claims in
the lawsuit except back pay. Millsap,
et al. v. McDonnell Douglas Corp., No. 94-CV-633-H(M), 2003 WL 21277124, at
*2 (N.D. Okla. May 28, 2003) (Millsap III). The settlement permitted Defendant to appeal the court's
determination on back pay but was contingent on this Court accepting the
district court's certification of the back pay issue, id., which this
Court did on July 14, 2003.
Back pay is an appropriate
equitable remedy under Section 502(a)(3) for violations of Section 510, as
virtually every court to date has concluded.
The Supreme Court has held that back pay is an equitable remedy where it
is intertwined with equitable relief or is made an integral part of an overall
equitable remedy. See Chauffeurs,
Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 571 (1990); Curtis
v. Loether, 415 U.S. 189, 197 (1974).
Title VII back pay is the prototypical example of back pay that has been
made part of an overall equitable remedy, which the Supreme Court acknowledged
most recently in Great-West, 534 U.S. at 218 n.4. Section 510 was specifically modeled after
Title VII -- as demonstrated by both the text and legislative history of
Section 510 -- and courts look to the law of Title VII in deciding Section 510
cases. Congress, moreover, enacted
ERISA shortly after Title VII and against a backdrop of courts interpreting
equitable relief broadly in the employment and public policy context. In prohibiting discriminatory and
retaliatory conduct under Section 510 and allowing that right to be remedied
through "appropriate equitable relief," Congress intended to pick up
no less than the full range of equitable remedies available to Title VII
plaintiffs (including back pay). Courts
are nearly unanimous in the view that back pay is an available equitable remedy
under Section 502(a)(3) for a Section 510 violation.
Back to Top
The Supreme Court has never
decided this issue under Section 502(a)(3), including in Mertens v. Hewitt
Assocs., 508 U.S. 248 (1993) and Great-West, 534 U.S. 204. In the context of the common law remedies
sought in those cases, the Court held that "appropriate equitable
relief" under Section 502(a)(3) refers to "those categories of relief
that were typically available in equity." Mertens, 508 U.S. at 256; Great-West, 534 U.S. at
210. The Court left unresolved the
question of how to classify purely statutory remedies such as back pay, which
were unknown at common law in either courts of equity or courts of law. The back pay discussion in footnote four of Great-West,
534 U.S. at 218 n.4, is not to the contrary.
Broader statutory and
equitable considerations also counsel in favor of back pay as an available
remedy under Section 502(a)(3). Every
major anti-retaliation provision (including whistleblower provisions
administered by the Department of Labor) either explicitly or implicitly allows
back pay to remedy an unlawful discharge.
Precluding back pay in Section 510 cases would uniquely single out
Section 510 from all other anti-retaliation and anti-discrimination
provisions. Such a statutory construction
is not only unjustified but would also create perverse incentives for employers
to delay litigation to the point where indisputably equitable remedies such as
front pay and reinstatement are unavailable, thus leaving plaintiffs with no
remedy.
I.
Statutory Awards of Back Pay are Equitable Where They are Intertwined
with and Made Part of an Equitable Remedy
Back to Top
Back to Top
ERISA Section 510, which
forbids both discriminatory treatment in regard to employee benefits and
retaliatory treatment for testifying or engaging in other protected conduct,
was modeled in significant part after Title VII. Specifically, Section 510 mimics Title VII
in its prohibition against "unlawful discharge" of employees. See 29 U.S.C. § 1140 ("It shall
be unlawful for any person to discharge . . . a participant or beneficiary for
exercising any right to which he is entitled under the provisions of an
employee benefit plan . . . or for the purpose of interfering with the
attainment of any right to which such participant may become entitled under the
plan[.]"); 42 U.S.C. § 2000e-2 ("It shall be an unlawful employment
practice for an employer . . . to discharge any
individual . . . because of such individual's race, color,
religion, sex, or national origin.").
Legislative history confirms that Section 510's language was based upon
Title VII and that the available equitable remedies under Section 510 should be
interpreted consistent with Title VII.
During the debates leading to the passage of ERISA, Senator Javits of
New York characterized Section 510 as "provid[ing] a remedy for any person
fired such as is provided for a person discriminated against because of race or
sex, for example." 119 Cong. Rec.
30044 (1973). Senator Javits
reemphasized that Section 510 "gives the employee the same right[s]"
as a person discriminated against on the basis of race or sex
discrimination. Id. Still other evidence indicates that Congress
intended Section 510 plaintiffs to possess the same broad equitable
remedies that are available under Title VII, presumably including back pay and
reinstatement. In enacting Section 510,
both houses of Congress specifically noted:
"The enforcement provisions have been designed specifically to
provide . . . beneficiaries with broad remedies for redressing or preventing
violations of the Act. The intent of
the Committee is to provide the full range of legal and equitable remedies
available in both state and federal courts[.]" H.R. Rep. No. 93-453, reprinted in
1974 U.S.C.C.A.A.N. 4639, 4655 (emphasis added); S. Rep. No. 93-127, reprinted
in 1974 U.S.C.C.A.N. 4838, 4871.
Courts have therefore looked
to Title VII in interpreting Section 510.
See, e.g., Heimann v. Nat'l Elevator Indus. Pension
Fund, 187 F.3d 493, 505-06 (5th Cir. 1999) (relying on Title VII and its
case law to interpret meaning of same "discriminate against" language
in Section 510); Barbour v. Dynamics Research Corp., 63 F.3d 32, 37-38
(1st Cir. 1995) (applying Title VII burden-shifting framework to Section 510
case and noting the "number of circuits [that] have applied the McDonnell
Douglas framework to section 510 claims"). A prime example of Title VII's influence on ERISA is the remedial
language in Title VII permitting "any other equitable relief as the court
deems appropriate." See
Equal Opportunity Act of 1972, 42 U.S.C. § 2000e-5(g)(1981)). This language was inserted into Title VII in
1972, shortly before ERISA's enactment.
The Supreme Court in Mertens interpreted Section 502(a)(3)'s
related "appropriate equitable relief" in pari materia
with Title VII's "other equitable relief." The Court reasoned that "though we have never interpreted
the precise phrase 'other appropriate equitable relief,' we have construed the
similar language of Title VII of the Civil Rights Act of 1964 . . . to preclude
'awards for compensatory or punitive damages.'" 508 U.S. at 255 (citations omitted). For this reason, though not specifically decided in Mertens,
compensatory and punitive damages have generally been disallowed under Section
502(a)(3) as well. See Zimmerman
v. Sloss Equip., Inc., 72 F.3d 822, 828 (10th Cir. 1995).
Thus, Section 510 can only
sensibly be viewed as making back pay an integral part of an equitable remedy
in the tradition of Title VII. Under
Section 510, as under Title VII, back pay is integrally related to the equitable
remedy of reinstatement, even though reinstatement itself may not be available
in a particular case. Back pay awards to remedy Section 510 and
Title VII violations are not simply "freestanding claims for money
damages," of the kind rejected by the Court in Great-West, 534 U.S.
at 218 n.4, but are best viewed "as part of an aggregate equitable remedy
that will restore [employees] to the status quo ante,
that is, their rightful positions absent the discriminatory
discharge[.]" Millsap II,
2002 WL 31386076, at *4.
Back to Top
Of course, Section 510
itself does not authorize back pay or indeed any kind of remedy. Instead, Section 510, like most substantive
provisions of ERISA relies on the enforcement mechanisms of Section 502, which
contains more generally-stated remedial provisions such as Section 502(a)(3)'s
reference to "appropriate equitable relief." Nevertheless, courts have uniformly
recognized that reinstatement and front pay are available under Section
502(a)(3) to remedy violations of Section 510 even though those remedies are
not specified in the statute either. See
Great-West, 534 U.S. at 211, 214 nn.1 & 4 (reinstatement an
equitable remedy); Schwartz v. Gregori, 45 F.3d 1017, 1023 (6th Cir.
1995) ("Front pay is awarded [for a Section 510 violation] . . . when the
preferred remedy of reinstatement, indisputably an equitable remedy, is not
appropriate or feasible."); Warner v. Buck Creek Nursery, Inc., 149
F. Supp. 2d 246, 257 (W.D. Va. 2001) ("[F]ront pay, when sought as a
substitute for reinstatement, is an available equitable remedy under Section
502(a)(3)[.]"); see generally Smith v. Diffee
Ford-Lincoln-Mercury, Inc., 298 F.3d 955, 964 (10th Cir. 2002) ("Front
pay is an equitable remedy and its calculation and award are the responsibility
of the court[.]"). The absence of the
term "back pay" in Section 502(a)(3) is therefore unexceptional. Back pay, like reinstatement and front pay,
is "appropriate equitable relief" for a Section 510 violation.
Congress, moreover, is
presumed to legislate purposefully against the backdrop of existing law, see
Cannon v. Univ. of Chicago, 441 U.S. 677, 698-99 (1979), and existing law at the
time of ERISA's enactment would have held back pay within the realm of
appropriate equitable relief for a discriminatory discharge. Laws proscribing discrimination and
retaliation are based on important policy judgments of a national and public
character, see Albemarle Paper Co. v. Moody, 422 U.S. 405, 416
(1975), and courts generally retained broad equitable powers in enforcing these
statues. See, e.g., Porter
v. Warner Holding Co., 328 U.S. 395, 398-400 (1946) ("The inherent
equitable jurisdiction . . . clearly authorizes a court, in its discretion, to
decree restitution of excessive charges in order to give effect to the policy
of Congress."); Virginia Ry. Co. v. Sys. Fed'n No. 40, 300 U.S.
515, 552 (1937) ("Courts of equity may, and frequently do, go much farther
both to give and withhold relief in furtherance of the public interest than
they are accustomed to go when only private interests are involved."). This equity power included the power to
award back pay as part and parcel of a court's power to effectuate the purpose
of a statute. See Mitchell,
361 U.S. at 291-92 (Court retains "historic power of equity" to award
back pay to workers as part of larger injunction for reinstatement, thereby
effectuating anti-retaliation purpose of the Fair Labor Standards Act even
though statute by its terms did not authorize back pay awards).
Section 510 case law is in
accord: this Court and virtually every
court to consider back pay under Section 502(a)(3) as a remedy for a Section
510 violation has classified back pay as available equitable relief. See Myers v. Colgate-Palmolive Co.,
No. 00-3174, 2002 WL 27536, at *4 n.11 (10th Cir. Jan. 8, 2002) (Section
"510 broadly protects employees in the exercise of employment privileges .
. . and confines relief to the equitable remedies of backpay, restitution, and
reinstatement"); Sandberg v. KPMG Peat Marwick, LLP, 111 F.3d 331,
336 (2d Cir. 1997) (remedies available for violations of Section 510 include
"back pay, restitution, and reinstatement"); Schwartz v. Gregori,
45 F.3d at 1022-23 (back pay is equitable remedy available under Section
502(a)(3) for Section 510 violation); Warner v. Buck Creek Nursery, Inc.,
149 F. Supp. 2d at 257 ("back pay is available as an equitable remedy
under Section 502(a)(3)"); Anglin v. Sears, Roebuck & Co., 139
F. Supp. 2d 914, 920 (N.D. Ill. 2001) (back pay is "[a]rguably . . . [a]
monetary equitable remed[y]"); Russell v. Northrup Grumman Corp.,
921 F. Supp. 143, 149 (E.D.N.Y. 1996) ("lost wages [are] equitable in
nature and therefore appropriately recoverable under ERISA."); DeSimone
v. Transprint USA, Inc., No. 94 CIV. 3130 (JFK), 1996 WL 209951, at *6
(S.D.N.Y. Apr. 29, 1996) ("an award of back-pay is available to [the
Section 510] Plaintiff in this action."); Zimmerman v. Sloss Equip.,
Inc., 835 F. Supp. 1283, 1293 (D. Kan. 1993) (plaintiff's claims in Section
510 case including "back pay, front pay, reinstatement, [and] restitution of
forfeited benefits . . . are equitable in nature"), aff'd, 72 F.3d
822 (10th Cir. 1995); Folz v. Marriot Corp., 594 F. Supp. 1007, 1016
(W.D. Mo. 1984) (equitable relief for violation of ERISA includes back pay); cf.
Pegg v. Gen. Motors Corp., 793 F. Supp. 284, 287 (D. Kan. 1992) (no jury
trial right for reinstatement and back pay claims under Section 510 which is
"relief that is equitable in nature"); see also ABA
Section of Labor and Employment Law, Employee Benefits Law, 1175-76 (2d
ed. 2000) ("The most commonly requested forms of relief in Section 510
cases are reinstatement and back pay, or front pay in lieu of
reinstatement."); but see Oliver-Pullins v. Associated
Material Handling Indus., Inc., No. 1:03CV0099-JDT-WTL, 2003 WL 21696207,
at *3 & n.2 (S.D. Ind. May 20, 2003) (Section 510 claim for lost wages is
legal and not equitable under Great-West); Nicolaou v. Horizon Media,
Inc., No. 01 CIV. 0785 (BSJ), 2003 WL 22208356 (S.D.N.Y. Sep. 23, 2003)
(same).
Back to Top
Most of these cases were
decided after Mertens's "typically available in equity"
formulation, see infra, pp. 18-22, and many of these courts found
back pay available under Section 502(a)(3) on multiple grounds including that
back pay under Section 510 is inextricably intertwined with injunctive relief
in a manner similar to Title VII. See,
e.g., Russell, 921 F. Supp. at 153 ("because [lost wages]
are intertwined with the injunctive relief of reinstatement sought . . . the
damages are properly recoverable as equitable relief under ERISA § 502(a)(3)");
DeSimone, 1996 WL 209951, at *6 ("claim for backpay . . . is also
properly viewed as equitable relief because it is intertwined with [a] request
for reinstatement"); Pickering v. USX Corp., Nos. 87-C-838J,
88-C-763J and 9l-C-636J, 1995 WL 584372, at *35 (D. Utah May 8, 1995) ("remed[y
of back pay is] consistent with those [remedies] awarded under similar
statutory schemes [to Section 510], and [is] consistent with the legislative
history") (quotation marks and citation omitted).
II. Mertens and Great-West Involved Common
Law Claims and Remedies and Do Not Control This Case
The issue of appropriate
equitable relief under Section 502(a)(3) has been the subject of two recent
Supreme Court decisions: Great-West,
534 U.S. at 210 and Mertens, 508 U.S at 255. Neither case considered "appropriate equitable relief"
in the context of a Section 510 retaliation case, and neither specifically held
that back pay is unavailable. Even
where the Court discussed back pay under Title VII in Great-West, the
Court was at pains to point out that it was not deciding any issue concerning
back pay (under Title VII or Section 510).
Importantly, the Court focused not on whether back pay was available at
common law but on the manner in which Congress had treated back pay in Title
VII as an integral part of an equitable remedy. Mertens and Great-West do not control this case.
Mertens was a breach of fiduciary
duty case. In Mertens, a class
of former employees sued the fiduciaries (including their former employer) and
a nonfiduciary actuary of a failed pension plan claiming the employer had
underfunded the retirement plan to the point of termination and the actuary had
knowingly participated in the breach of duty.
508 U.S. at 250-51. The Supreme
Court ultimately denied the monetary damages sought against the actuary,
holding that such damages do not constitute "appropriate equitable
relief." Id. at 255. In so holding, the Court stated that Section
502(a)(3)'s equitable relief encompasses "those categories of relief that
were typically available in equity (such as injunction, mandamus, and
restitution, but not compensatory damages)." Id. at 256. In
short, the remedy sought in Mertens was "nothing other than
compensatory damages," a remedy typically available at law and not
equity. Id. at 255.
Back to Top
Great-West was a breach of contract
case. Respondent Janette Knudson was
injured in a car accident and Great-West Life, on behalf of her husband's
employee health plan, paid her medical expenses. 534 U.S. at 207. The
health plan's reimbursement provision gave the plan the right to recover from a
beneficiary any payment for benefits paid by the plan, which the beneficiary
recovers from a third party. Id. When the Knudsons obtained a legal
settlement from the car manufacturer in a tort suit, Great-West sought to
enforce the plan through Section 502(a)(3) and recover its medical
expenses. Id. at 207-08. The Court characterized the reimbursement
relief sought as a legal claim for money damages under a contract and thus
outside ERISA's relief provisions. Id.
at 210. The Court repeated its Mertens
formulation that equitable relief under the statute is confined to those
remedies that were typically available in equity, refining the inquiry to
distinguish between restitution at law and restitution in equity: "[F]or restitution to lie in equity,
the action generally must seek not to impose personal liability on the
defendant, but to restore to the plaintiff particular funds or property in the
defendant's possession." Id.
at 214. Restitution sought under
Section 502(a)(3) must be restitution "in equity" as opposed to
restitution "at law." Id.
at 212-13. The remedy sought in Great-West,
like the remedy sought in Mertens, was one classically available in law,
not equity. Id. at 210.
In footnote four of Great-West,
the Court discussed back pay awards under Title VII in response to a point
raised in Justice Ginsburg's dissent.
534 U.S. at 218 n.4. Justice
Ginsburg argued that because Congress had treated back pay -- "a type of
restitution substantially similar to the [reimbursement] relief Great-West
seeks here" -- as an equitable remedy under Title VII, the restitutionary
relief in Great-West should also be considered equitable. Id. at 230 (Ginsburg, J.,
dissenting). The majority disputed that
Congress had ever regarded back pay as an inherently equitable remedy,
explaining that "Congress 'treated [backpay] as equitable' in Title VII
only in the narrow sense that it allowed backpay to be awarded together with
equitable relief. . . . Curtis
recognized that courts of appeals had treated Title VII backpay as equitable
because § 2000e-5(g)(1) had made backpay an integral part of 'an equitable
remedy[.]'" Id. at 218
(internal citations omitted). Thus, in
disputing the notion that "all forms of restitution are
equitable," the Court rejected that back pay is equitable because it is
restitutionary; instead, the Court recognized back pay under Title VII as
equitable in large part because it is intertwined with the equitable remedy of
reinstatement. Id. at 218 n.4. Because "the restitution sought here by
Great-West is not [equitable], but a freestanding claim for money
damages," the Court concluded that "Title VII has nothing to do with
this case." Id.
Back to Top
Importantly, the Court refrained from inquiring whether the
remedy of back pay was typically available in courts of equity. The Court might have said that back pay was
not a remedy available at all at common law (let alone one typically available
in equity), and thus back pay offers no support to Justice Ginsburg's
argument. Instead, the Court engaged in
a discussion of how Congress had treated back pay under Title VII, id.
at 218 n.4, presumably because what Congress has said about a remedy that it
created, like back pay, is helpful in understanding the nature of the remedy. The exact nature of back pay under other
statutes was not broached in Great-West. Instead, the Court held that back pay was not an inherently
equitable remedy. Id. While "Title VII has nothing to do with
th[at] case," id., Title VII has a great deal to do with a Section
510 case for back pay.
This is confirmed by the
Court's suggestion in Great-West that the answer to any Mertens/Great-West
inquiry can most often be "made clear" by reference to "standard
current works such as Dobbs, Palmer, Corbin, and the Restatements." 534 U.S. at 217. That the Court did not intend this common law inquiry to govern
cases involving purely statutory remedies like back pay is self-evident. Dobbs is the only one of the four texts cited
that purports to characterize back pay as either a legal or equitable
remedy. Though Dobbs suggests that back
pay "seems on the surface to be an ordinary damages claim . . . . which
would be tried to a jury if one is demanded," that same paragraph concludes
with a more ambiguous judgment:
"But in fact the cases do not yield up any such single
conclusion." 2 Dobbs
§ 6.10(5), at 226 (2d ed. 1993).
Later, in summarizing wrongful discharge and job discrimination law,
Dobbs states that "back pay and reinstatement remedies are usually
considered equitable." 2 Dobbs
§ 6.10(1), at 193 (emphasis added).
Dobbs thus provides no clear answer.
The other texts -- Palmer,
Corbin, and the Restatements -- serve to demonstrate chiefly that no remedy
like back pay existed at common law.
Traditional contract and tort remedies such as: (1) a quasi contract
action at law "for the value of goods or services transferred," I
George E. Palmer, The Law of Restitution § 4.1, at 365 (1978), or (2) an
employee's recovery of "quantum meruit for service rendered," 5
Arthur L. Corbin, Corbin on Contracts § 1107, at 577 (1964), or (3)
"restitution [for a terminated employee with a year-long contract] based
on the reasonable value of his services[,]" Restatement (Second) of
Contracts, § 373, at 212-13, cmt. d. illus. 12 (1981), are traditional
common law remedies still in existence today.
Each involves compensation for work or services performed, and is
therefore distinctly unlike the statutory remedy of back pay (often
accompanying reinstatement) where an employee is reinstated to his job and paid
for hours he did not work because of the termination.
Back to Top
This common law remedy does
not appear in these texts.
Reinstatement of an employee was, and still is, disfavored as a common
law remedy due in part to the inevitable friction and social costs of reuniting
an employer and an employee in a failed relationship. See 3 Dobbs § 12.21(4), at 489 ("traditional view is
that courts will not specifically enforce a personal services contract in favor
of either party . . . as to employment itself, the general rule leaves the
employee to a claim for damages or restitution."); see also Restatement
(Second) of Contracts § 367 (1981) (specific performance of employment
contracts disfavored). The four treatises
provide no evidence of common law compensation in the days of the divided bench
for hours not worked because the employee had been terminated on the basis of a
prohibited reason. "The truth is
that reinstatement of the employee and payment for time lost are remedies not
known to the common law but created by statute." NLRB v. W. Ky. Coal Co., 116 F.2d 816, 821 (6th Cir. 1940)
(Arant, J., dissenting in part). These
state and federal statutes were enacted in the latter half of the Twentieth
Century and displaced "[t]he traditional rule . . . that an 'at-will'
employee could be discharged at any time and for any reason." 2 Dobbs § 6.10(1), at 190.
III.
Broader Statutory and Policy Considerations Favor Back Pay as Equitable
Relief Under Section 502(a)(3)
The Secretary of Labor is
charged with administering more than a dozen anti-retaliation provisions
similar to Section 510. These
provisions are embedded in statutes directed at matters ranging from corporate
financial disclosure to waste disposal to mine safety. See, e.g., 18 U.S.C. §
1514A(c)(2)(C) (Sarbanes-Oxley Act); 29 U.S.C. § 215(a)(3) (FLSA); 29 U.S.C. §
2615 (Family and Medical Leave Act); 30 U.S.C. § 815(c) (Mine Safety and Health
Act); 42 U.S.C. § 7622 (Clean Air Act); 42 U.S.C. § 6971 (Solid Waste Disposal
Act). While each of these statutes
concerns a distinct subject matter (often substantively enforced by a different
agency), each retaliation provision concerns the same thing: protecting employees who engage in protected
conduct from adverse employment action.
Back pay is an available remedy under each of these statutes and under
every major federal retaliation provision.
See generally Daniel P. Westman, Whistleblowing: The Law of Retaliatory Discharge 188-97
(1991) (listing more than 20 federal retaliation statutes that provide back pay
as a remedy for aggrieved workers).
Indeed, back pay is available even under retaliation provisions that do
not explicitly provide for back pay. See
Mitchell, 361 U.S. at 292-93 (FLSA implicitly authorizes back pay
awards).
Back to Top
Section 510 should be read
consistent with these anti-retaliation provisions. There is no indication in the text or the history of ERISA that
Congress, in crafting Section 510's anti-discrimination and anti-retaliation
provisions and directing that these provisions be enforced through Section
502(a)(3), intended to shield uniquely ERISA employers from liability for their
unlawful conduct. Unlawful retaliation
or discrimination in the employee benefits context is no more acceptable than
in any other area of law.
Moreover, interpreting
Section 502(a)(3) to preclude back pay as an available remedy for violations of
Section 510 creates perverse incentives for employers and strips ERISA's
enforcement provisions of much of their broad remedial intent where, as here,
employees have been discharged to prevent the full attainment of their ERISA
benefits. Here the district court
entered a liability judgment not only after the plant was closed but after the
plant would have closed on its own accord for nondiscriminatory reasons, Millsap
II, 2002 WL 31386076, at *6, thereby rendering the equitable remedies of
front pay and reinstatement unavailable. If back pay is unavailable, a company would
be rewarded, even in a case of abuse, for effectively delaying a liability
judgment from the front pay or reinstatement period into the back pay period. Back pay therefore is encompassed within the
broad equitable power of a court to restore the status quo ante. See Tull, 461 U.S. at
424. A court may order, in effect, a
constructive reinstatement for the period that back pay was awarded. Here, as in Mitchell, the employer
"cannot be heard to assert that wages are ordered to be paid for services
that were not performed, for it was the employer's own unlawful conduct which
deprived the employees of their opportunity to render services." 361 U.S. at 293.
Finally, there is simply no
ERISA purpose that would be served by the denial of back pay. See Varity Corp. v. Howe, 516 U.S.
489, 515 (1996) ("We are not aware of any ERISA-related purpose that
denial of a remedy would serve."); see also Dana M. Muir, Plant
Closings and ERISA's Noninterference Provision, 36 B.C. L. Rev. 201, 254
(1995) ("The lack of such remedies for a successful section 510 plaintiff
seems anomalous, stripping Section 510 of its intended effect.") (internal
quotation marks omitted).
Back to Top
The
opinion of the district court should be affirmed on grounds consistent with the
views expressed herein.
Respectfully
submitted,
HOWARD M. RADZELY
Acting Solicitor of Labor
TIMOTHY D. HAUSER
Associate Solicitor
Plan Benefits Security Division
ELIZABETH HOPKINS
Counsel for Appellate and Special Litigation
Plan Benefits Security Division
__________________________
MARK E. PAPADOPOULOS, Attorney
U.S. Department of Labor
N-2700
200 Constitution Avenue, N.W.
Washington, DC 20210
(202) 693-5760 - Phone
(202) 693-5774 - Fax
Dated: October 9, 2003
Back to Top
CERTIFICATE OF COMPLIANCE
As required by Fed. R. App. P. 32(a)(7)(C), I
certify that this brief is proportionally spaced and contains 6,859 words. I relied on my word processor to obtain the
count and it is Microsoft Word 2000.
I certify that the information on this form is true
and correct to the best of my knowledge and belief formed after reasonable
inquiry.
_____________________
Mark E. Papadopoulos
CERTIFICATE OF SERVICE
I hereby certify that two true and correct copies of the
foregoing Brief of the Secretary of Labor as Amicus Curiae were mailed via
First-Class U.S. Mail, postage prepaid, this 9th day of October 2003, to the
following:
Joseph R. Farris, Esq. |
Thomas R. Meites, Esq. |
Paula J. Quillin, Esq. |
Michael M. Mulder, Esq. |
Jody R. Nathan, Esq. |
Paul W. Mollica, Esq. |
FELDMAN, FRANDEN, |
Josie Raimond, Esq. |
WOODARD, |
MEITES,MULDER, |
FARRIS & BOUDREAUX |
BURGER & MOLLICA |
1000 Park Centre, 525 S. Main |
208 S. La Salle St., Suite 1410 |
Tulsa, OK 74103 |
Chicago, IL 60604 |
|
|
Bill Brumley, Esq. |
Christopher G. Mackaronis, Esq. |
BRUMLEY & BISHOP |
BELL, BOYD & LLOYD |
Bank of America Center |
1615 L Street, N.W., Suite 1200 |
15 West 6th St., Suite 1303 |
Washington, D.C. 20036 |
Tulsa, OK 74119 |
|
|
|
John W. Walbran, Esq. |
Thomas E. Wack, Esq. |
McDonnell Douglas Corporation |
BRYAN CAVE LLP |
McDonnell Blvd. at Airport Road |
One Metropolitan Square |
St. Louis, MO 63611 |
211 N. Broadway, Suite 3600 |
|
St. Louis, MO 63102 |
|
|
Daniel S. Hoffman, Esq. |
|
Sean Connelly, Esq. |
|
HOFFMAN, REILLY, POZNER |
|
& WILLIAMSON, LLP |
|
511 Sixteenth St., Suite 700 |
|
Denver, CO 80202 |
|
|
|
|
|
|
|
|
|
_____________________
Mark
E. Papadopoulos
|
|
|