Damages Under the Age Discrimination in Employment Act (ADEA)

Damages Under the ADEAThe remedies to a plaintiff who brings a claim under the Age Discrimination in Employment Act (ADEA) are similar to those of a Title VII plaintiff, but with a few major differences. As in a Title VII case, an ADEA plaintiff can recover attorney’s fees, back pay, and reinstatement or front pay. However, unlike Title VII, the ADEA does not allow the recovery of compensatory (e.g., emotional distress) or punitive damages. However, a plaintiff under the ADEA can recover a type of damages not available to the Title VII plaintiff. In cases in which the employer commits a “willful violation” of the ADEA, the plaintiff can recover liquidated damages equal to the amount of his or her back pay award.

ADEA Damages — Back Pay

Back pay in ADEA cases starts from the time of the discriminatory act which results in financial harm (lower pay, termination, etc.) and continues through the date of settlement or judgment — assuming that the employer doesn’t voluntarily remedy the situation beforehand. Back pay is not limited to lost wages. It also includes lost bonuses, commissions and benefits such as health insurance, stock options and pension benefits.

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In cases where an employer commits age discrimination, but afterward discovers evidence which would have legally justified its employment action (called “after-acquired evidence cases”), back pay can still be awarded through the time that the employer discovered the new evidence.

ADEA Damages — Reinstatement or Front Pay

The preferred form of future damages in most employment discrimination cases, including ADEA cases, is for the court to order the employer to place the employee in the position he would have held had the discrimination not occurred. So, terminated employees will be re-hired, employees passed over for promotion will be promoted (this can also include an order to demote the employee who received the position) and employees who were paid less will now be paid more.

Unfortunately, reinstatement is not always a viable option, as the animosity between employer and employee may be too great to expect them to ever work together again. In these cases, the court will instead order front pay, which, like back pay, includes more than just wages. Of course, the amount of front pay will take into account the employee’s ability to obtain alternate employment — the employee can’t just choose to sit on the couch from now on — and the front pay will attempt to make up the difference between what the employee will earn at a different employer and what he could have earned at the discriminating employer.

ADEA Damages — Duty to Mitigate

A plaintiff under the ADEA is required to mitigate his damages, when possible. This usually applies to terminated employees or people who were wrongfully denied employment. They will be expected to obtain alternative employment while their discrimination claim is pending, and their back pay and future pay claims will be reduced not only by actual employment they obtained, but also by employment which was available and not taken. The burden rests with the defendant/employer to prove that the employee failed to mitigate his damages. Note that unemployment benefits, pension benefits and/or social security benefits that an ADEA plaintiff received do not reduce his back pay award.

ADEA Damages — Liquidated Damages

As stated above, ADEA plaintiffs cannot recover compensatory or punitive damages. They can, however, recover liquidated damages equal to the amount of their back pay, in cases where the employer “willfully” violates the ADEA. What makes a violation “willful”? A willful violation is one where the employer actually knew that its conduct violated federal law or showed reckless disregard for that fact. One way to prove this is by demonstrating that the employer’s stated, non-discriminatory, reason for its employment action was a deception calculated to cover up the fact that it knew its actions violated the ADEA.

ADEA Damages — Attorney’s Fees

Prevailing plaintiffs under the ADEA are awarded their attorney’s fees as part of their damages. These fees are calculated by multiplying the number of hours your attorney spent on the case (he keeps track of this) by a reasonable hourly rate, determined by the court by looking at prevailing market rates in the legal community. The fact that you likely hired your lawyer on a contingency fee does not alter or affect this calculation. The court does not award you the percentage stated in your fee contract. It will always be based on an hourly rate.

How an award of attorney’s fees affects how much you need to pay your lawyer will depend on your fee contract. Most contingency fee contracts in cases where attorney’s fees can be awarded provide that the lawyer will be paid the greater of: (1) the court awarded attorney’s fee or (2) the percentage stated in the fee contract, as applied to the combined total of your damages and the attorney’s fee award.

As an example, in a case with a 40% contingency fee where the plaintiff has $50,000.00 in damages and the court awards $30,000.00 in attorney’s fees, the attorney would take $32,000.00 in fees (40% of $80,000.00), as that amount is greater than the $30,000.00 court awarded fees. The plaintiff would then get $48,000.00. Using the same facts and a court awarded fee of $35,000.00, the lawyer would take the $35,000.00 court-awarded fee, as it is greater than 40% of $85,000.00 ($34,000.00). The client would then get $50,000.00 (which are his full damages).

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