Justice Benjamin disagrees with front pay award in $2M case

By Nathan Bass | Jan 2, 2013

CHARLESTON – On Dec. 21, Chief Justice Brent D. Benjamin issued an opinion concurring in part and dissenting in part in an age discrimination case in which a plaintiff was awarded more than $2 million dollars in damages.

The majority opinion affirmed the Jackson County Circuit Court’s denial of a motion for a new trial submitted by defendants Burke-Parsons-Bowlby Corporation and Stella Jones Inc.

The case concerned the firing of Jerold John Rice, Jr., who began working for Burke-Parsons-Bowlby in 1985 and held the position of controller of the five-manufacturing plant corporation until shortly after the company’s acquisition by Stella-Jones in 2008.

Rice alleged he was “willfully, maliciously and unlawfully” terminated on March 12, 2009, and he filed a complaint based upon an allegation of age discrimination in April 2009.

The circuit court jury returned a verdict in favor of Rice and awarded him $2,133.991.00 in front and back pay. Back pay covers the amount that the plaintiff would have earned up to the time of the trial had he not been terminated while front pay calculates earnings until the time of reinstatement or at some point in the future if reinstatement is not feasible.

Stella-Jones appealed on several grounds, including “that the jury award of unmitigated back pay and front pay constituted a de facto finding of punitive damages.” The defendants argued that a new trial should have been granted on that basis.

The Court rejected that argument, writing, “[t]he amount awarded by the jury in wages was based on expert testimony. Upon determining that the actions of the defendants were malicious . . . the element of malice reflected in the verdict merely affected the level of Rice’s compensatory damages.”

Benjamin dissented to the award of unmitigated front pay damages.

“I concur in the Court’s judgment which affirms the finding that petitioner engaged in age-related discrimination against the respondent, Jerold John Rice, Jr., in violation of the West Virginia Human Rights Act. I also concur on the issue of the jury’s award of unmitigated back pay damages because the award is supported by our jurisprudence and the facts of the case," he wrote.

“However, I dissent to the award of unmitigated front pay damages because this is unsupported by our jurisprudence. Furthermore, damages awarded in excess of that which compensates a plaintiff for actual loss based upon a finding that the defendant engaged in malicious conduct toward the plaintiff are, by their very nature, punitive.

“Therefore, for such damage awards, the jurisprudence of this Court related to the reasonableness of a punitive damages award should apply.”

Benjamin argued that while the court has previously found, in the 1982 case Mason County Board of Education v. State Superintendent of Schools, that there is no duty to mitigate back pay when it is determined that the discharge was “malicious”, the Court has never extended this finding to front pay.

“In the instant case, the jury was instructed at trial, based on Mason County Board of Education v. State Superintendent of Schools, 170 W. Va. 632, 295 S.E.2d 719 (1982), that if it found Burke-Parsons-Bowlby Corporation acted maliciously in discriminating against Mr. Rice, then Mr. Rice had no duty to mitigate his damages," Benjamin wrote.

“The jury was also instructed that it was not required to reduce an award of back pay or front pay damages by any earnings and benefits that Mr. Rice had received or would have reasonably earned.

“The goal of punitive damages is deterrence. The rationale in Mason County for allowing unmitigated back pay awards in cases involving malicious conduct was ‘to discourage malicious discharges.’

“To the extent that the goal in allowing an unmitigated damages award is to deter malicious discharges, such an award is in fact punitive, rather than compensatory, in nature.”

Benjamin explained that when an award is punitive, the jury should be instructed to consider the appropriate factors for assessing whether the punitive damages are excessive.

“Where such an award is based on expert economic testimony, like in the instant case, and the damages projected are found to be rationally based and not simply plucked from thin air, a reviewing court may still find an unmitigated damages award based upon malicious conduct to be reasonable," he wrote.

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