the Age Discrimination in Employment Act, Congress included a remedial section
which specifically spells out the types of damages that are recoverable for a
violation of the Act. Calculating damages recoverable under the ADEA is demanding
and challenging. The ADEA provides for recovery of liquidated damages for willful
violations of the Act. ADEA damages are divisible into 3 general categories: backpay,
compensatory or liquidated damages, and attorneys fees and expenses. Back pay
is money awarded to compensate the employee for the pay that he or she lost because
of the unlawful discrimination. At trial, back pay can be determined from the
day that the unlawful discrimination occurred until the day the judgment is entered.
Back pay can also include payments for benefits lost during that same time period,
including those payments that an employer would have made to an employees
pension fund. In general, liquidated damages are computed by doubling the amount
of back pay awarded to a successful plaintiff.
Also permitted under the Act, a jury can order reinstatement
to the same or similar position. If no position is immediately available,
or if there is substantial animosity between the parties, then an award
of front pay may be appropriate. The decision to award front pay is in
the discretion of the jury. Front pay can be awarded for a specific length
of time, or it can be awarded until the age at which the plaintiff would
have retired. Because the jury has broad discretion in its decision-making
authority, this uncertainty presents a unique legal challenge for both
In situations where reinstatement is not granted, the
pension issue can complicate the case valuation. If the former employees
pension fund would have continued to accumulate until a given point in
the future if not for the unlawful discrimination, then that amount can
be recovered as well. Of course, recovery of future payments will be discounted
to present value.
Age discrimination plaintiffs have a duty to mitigate
their damages by seeking other employment. Income from a new job, contributions
to pension funds, and severance pay will be subtracted from the awards
of back and front pay. After a successful trial, the elements of recovery
include pre- and post-judgment interest on the award. In addition, the
ADEA expressly provides an opportunity for the jury to award attorneys
fees and costs of litigation.
The legal team must have the financial education and expertise
to properly assist the forensic economist expert. Discipline is required for successfully
determining "every dime" a former employee is due. In the end, this
analysis always pays off.