In the spirit of National Equal Pay Day on Tuesday, I wanted to share the important gender discrimination case of Donlin v. Phillips Lighting North America Corp. decided by the Third Circuit last week.

Here’s what happened in the case.

Colleen Donlin was hired by Phillips as a temporary warehouse employee at its Mountaintop, Pennsylvania distributions center. Her job was to help prepare orders for shipment.

Like other temporary workers, Donlin applied for a permanent position. She was not hired and her eight month temporary assignment ended.

Donlin got two other jobs after she left Philips. At the first job, Donlin earned  $14.70 an hour, but it was a 32-mile commute.

She left that job and found a job closer to home at which she made $13.00 an an hour. Had she been hired by Philips, she would have earned $14.67 an hour as a base salary

Donlin learned that Phillips hired several men for the position she had applied for after it refused to hire her.  She filed a Title VII lawsuit for gender discrimination,  won the trial and was awarded damages.

In discrimination cases, the compensation which can be awarded by a judge or jury is designed to make victims whole and put them in the position they would have been in had they not been discriminated against.

A winning employee can recover “back pay” and “front pay.”

• Back pay represents losses from the the time of the discrimination up to the time of trial.

• Front pay represents the losses that the victim will experience in the future if he or she does not find a comparable position.

Based on the premise that Donlin would have worked for another 25 years, an advisory jury awarded Donlin:

• $63,050 in back pay

• 395,795 in front pay

• for a total of $458,845

The award was based on the difference in pay and benefits between the $13.00 hour job she was holding at the time of trial and the $14.67 hour job she would have had at Phillips had she not been discriminated against when Phillips refused to hire her.

The judge modified the front-pay award by reducing it to account for 10 years of damages instead of 25, finding that a 25 year period was too speculative — so the total award was $164,850.

Phillips appealed and the decision came out last week. The issues decided are very important for both victims of discrimination and their lawyers.

Here are the highlights:

1. Front Pay:

Donlin was in her 30’s at the time of her employment with Phillips and 40 at the time of trial. The question presented was: was how far into the future can a younger employee like Donlin claim economic loss?

For those of us who represent individuals in employment cases, the issue has always been a hard one to deal with when it comes to a younger worker.  The reason is because past damages can be calculated with certainty, but future losses can not:

• Is the person going to get another job?

• If so when and for how much?

• How do we know what someone will be doing 20 or 30 years from now?

When we represent someone in an age discrimination case, and the terminated employee is 55 for example,  it’s easy for us to project damages until age 65 or 70  (whatever the age is that the person was likely to retire).

It’s not speculative to assume that the person would have worked for another 10 or 15 years, and it’s not hard to calculate what he or she would have earned and what the total losses are.

It’s much more complicated when we represent a younger person.  Since the law does not allow “speculative” damages, it’s simply very difficult to predict how far into the future the court will allow us to project.

In this case, the  district court judge ruled that Donlin was entitled to receive damages for economic loss for 10 years into the future. The Court of Appeals affirmed the ruling :

We note that there will often be uncertainty concerning how long the front-pay period should be, and the evidence adduced at trial will rarely point to a singe, certain number of weeks, months , or years.  More likely, the evidence will support a range of reasonable front-pay periods.  Within this range, the district court should decide which award is most appropriate to make the claimant whole …

We find that the District Court did not abuse it’s discretion when it awarded Donlin front- pay for 10 years.

This means that we now we have a decision with a sound analysis for front -pay involving a relatively young employee from a high level court.  It’s a decision that other victims and their lawyers can rely on and it’s a decision that carries considerable weight. It’s very good news.

2. Mitigation

In an employment case, the employee  who has lost a job has a duty to mitigate — which means that she  (or he) must make reasonable efforts to minimize her loss of income. The precise language of the statute says

Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable.

In other words:

• a person who is claiming damages in an employment case has a duty to look for work

• damages into the future end if an employee gets an equivalent job or better job

• the right to damages end when that opportunity becomes available

In this case, Donlin first got a job in which she earned $14.70 and hour.  The problem was that it was a 32 -mile commute. She worked at the job for two years, and then found a job closer to home at which she made $13.00 an an hour.

She would have received $14.67 an hour as a base salary had she been hired at Philips.

Phillips argued:

• Donlin’s “voluntary transfer” to a lower-paying job was inconsistent with her “duty to mitigate”

• Phillips should not have to make up the difference.

Donlin argued:

• once you factor the cost of the commute

• the the two jobs were substantially the same.

The Court of Appeals agreed with Donlin:

An employee need not seek employment which involves conditions that are substantially more onerous than [her] previous position…

It is well settled that a claimant has not failed to make a reasonable effort to mitigate damages when she refuses to accept employment that is an unreasonable distance from her residence.

[T]he job at Mission constituted a substantially equivalent opportunity as that available at Romark.  Donlin should not be penalized for accepting that opportunity.

Accordingly, the District Court’s finding that Donlin sufficiently mitigated her damages was not clearly erroneous …

Certainly our clients still have a duty  to mitigate and make a “reasonable effort” to find comparable work if they intend to claim damages in a lawsuit.  This decision does not change that fact.

But this decision certainly delivers great news since it clearly states that a person is not required take a job which places an onerous burden on him (or her)  in order the meet that obligation.

On many fronts,  this is a hugely helpful case on questions of damages in employment cases. While we deal with these problems every day, it’s certainly not every day that we get federal circuit court case law on these particular issues.

It’s also a wake up  to employers to be careful about their hiring practices.

The bottom line is that Donlin worked as a temp at a company for eight months. Because she was discriminated against when the company hired a man instead of her into a permanent position, she is now entitled to all of her past losses plus 10 years of damages into the future. That’s a big win.

Images: images.businessweek.com

About the Author: Ellen Simon is recognized as one of the foremost employment and civil rights lawyers in the United States. Ms. Simon is the owner of the Simon Law Firm, L.P.A., and Of Counsel to McCarthy, Lebit, Crystal & Liffman, a Cleveland, Ohio based law firm. She is also the author of the legal blog, the Employee Rights Post. Her website is www.ellensimon.net.

It is the oldest adage in advertising: sex sells. But when does selling products with sex go too far?

In late August, LUSH Cosmetics led a protest against environmentally damaging product packaging by encouraging shoppers to go “naked” by purchasing products free of packaging. While this is a cute concept for a company whose products traditionally lack the common saran wrap sequence seen with other bath and beauty wares – the company also asked their employees to get naked to promote the cause.

While LUSH makes a compelling case against excess packaging – it contributes to two percent of overall greenhouse gases, plastic uses eight percent of the world’s oil resources, the U.S. consumes 79.6 million tons of packaging each year (over half of which still ends up in landfills) – the company crossed the line when it asked workers to educate others by eliminating their clothing.

The campaign may have made headlines, but did it really advance LUSH’s bottom line?

Another example of a company who got a little overzealous with image based marketing is Abercrombie & Fitch, who decided to promote employees based on their looks.

This story describes how a college student was pulled from a sales position of a Dallas Abercrombie & Fitch store, shoved to the backroom to fold clothes because she received a zero ranking on the district manager’s monthly audit report, which included the question, “Do all female models currently working have beautiful faces?”

According to the story, there were two choices – a ZERO or a FIVE (with the higher number signifying an approval rating for the “models,” which is an Abercrombie & Fitch term for sales representatives). Who knew that one had to participate in a “hot or not” contest just to earn a paycheck? Apparently, it’s part of the Abercrombie & Fitch business plan.

Whether it is discriminating against “ugly” people or selling soap without your skivvies – employers should understand all of the above could violate Equal Employment Opportunity laws.

While I do subscribe to the idea that sex can sell – there is no room within marketing tactics to allow employers to discriminate based on looks.

As someone who grew up with a father who was physically disabled, I learned at a young age that your image can mean a lot. My parents never allowed me to be so naive to think that I wasn’t going to be judged me based on how I looked – they had experience with many first hand misjudgments based on physical appearance. And as a result of being judged by their appearance, my father, in particular, always suggested that I look my best, stay healthy and dress appropriately for every occasion. I always keep his experience in mind when I hear people say that it doesn’t matter what you look like – often, it does. But, when employers make superficial requirements in order to earn paycheck, they walk the fine line between judgmental and breaking the law.

Thus, while it is one thing to understand how to market a product for profit – overselling the “sex” factor can lead to a formalized discrimination claim and probably won’t advance a bottom line or brand loyalty in the long run.

About the Author: Jen Nedeau is the Women’s Rights blogger for Change.org, a new blogger network of progressive causes that will be launching in mid-September 2008. Jen grew up in San Francisco, but left the West Coast to attend The George Washington University, where she obtained a B.A. in Journalism. She once pursued a career in political journalism where she wrote for the Washingtonpost.com and Stateline.org, but now works in marketing. She is a member of Women in Politics and Technology and Women Who Tech, in addition to being on the DC Advisory Board for the New Leaders Council. She currently resides in Washington, DC.

A significant new frontier in the employment discrimination field is finding ways to protect employees who are fired, denied a promotion, or harassed just for being lesbian, gay, bisexual, or transgender (LGBT). Already, 12 states and the District of Columbia prohibit discrimination based on sexual orientation as well as gender identity and expression. (Another eight states have legal protections only for sexual orientation discrimination.) Those laws protect not only lesbian, gay, and bisexual employees, but also transgender employees–those whose internal sense of themselves as male or female (their “gender identity”) and/or the way they express that gender identity through their appearance, clothing, or behavior (their “gender expression”) differs from the anatomical sex they were designated at birth.

As described in Phil Duran’s excellent recent blog post, we may see similar protections enacted in federal law in the near future. LGBT advocacy organizations and others are currently lobbying members of Congress to support a version of the proposed Employment Non-Discrimination Act (ENDA) that would prohibit discrimination based on both sexual orientation and gender identity and expression.

In the meantime, though, courts have been increasingly open to claims brought on behalf of LGBT employees who face discrimination, using what may seem like an unexpected theory: sex discrimination. In 1989 the U.S. Supreme Court held, in a case called Price Waterhouse v. Hopkins, that federal sex discrimination laws protect employees who are discriminated against because of their perceived failure to conform with gender stereotypes–that is, women who are perceived as too masculine, or men who are perceived as too feminine. Price Waterhouse was a case brought by a woman who was denied a promotion at an accounting firm, despite her excellent performance, because her supervisors considered her too “macho.” They suggested that she ought to “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” The Supreme Court held that discrimination based on that kind of gender stereotyping was a form of sex discrimination.

Even though no federal law currently prohibits employment discrimination based on sexual orientation or gender identity and expression, some LGBT employees have been able to successfully use gender-stereotyping arguments to bring sex discrimination claims when they are targeted because of their actual or perceived gender nonconformity. For instance, a sex discrimination claim may be viable when a gay man is harassed because of his co-workers’ perception that he is too feminine or when a lesbian is fired because she is seen as too masculine. Sex discrimination cases brought by lesbian, gay, or bisexual employees can be challenging to win, though, because some courts have expressed concern that the gender-stereotyping theory could be used as a back door means of recognizing what are “really” sexual orientation discrimination claims.  Unfairly, even when an LGBT employee is discriminated against because of gender stereotypes, some courts have denied relief simply because the plaintiff is gay or lesbian or because the discrimination appeared to be additionally motivated by anti-gay animus.

Interestingly, courts have been somewhat more receptive to gender-stereotyping claims brought by transgender employees.  In a groundbreaking decision just issued on September 19, 2008, Schroer v. Billington, a Washington, D.C. federal district court found that a transsexual job applicant had been discriminated against based on “sex.”  She had initially applied for the position–and been offered the job–while presenting as a man, but when she informed the employer of her intention to change her sex to female, the employer withdrew the offer.  The court not only found that gender stereotypes played an unlawful role in her hiring, à la Price Waterhouse, but also held that discrimination because a person changes their sex is “literally” sex discrimination – just as discrimination against those who convert from one religion to another would plainly constitute religious discrimination.  While no other court has yet recognized a sex discrimination claim based on transgender status per se, a number of other decisions have upheld sex discrimination claims brought by transgender employees where the employee can show some evidence that stereotypes played a role in the employee’s negative treatment.

The gender stereotyping theory of sex discrimination can provide valuable protection for lesbian, gay, bisexual, and transgender workers who face discrimination because of their perceived gender nonconformity, although some courts still fixate on the employee’s status as LGBT as a justification for denying an otherwise valid sex discrimination claim. That’s why it’s imperative to pass a fully inclusive version of ENDA: to make it clear to everyone, employers and employees alike, that it’s unlawful to mistreat employees because of traits like sexual orientation or gender identity and expression that have absolutely nothing to do with job performance.

About the Author: Ilona Turner is a staff attorney at the National Center for Lesbian Rights, a national legal organization committed to advancing the civil and human rights of lesbian, gay, bisexual, and transgender people and their families through litigation, public policy advocacy, and public education.  Prior to law school, she was the lobbyist for Equality California, the state’s leading LGBT political organization, where she helped win the passage of groundbreaking legislation that significantly expanded the rights of domestic partners under California law and prohibited discrimination based on gender identity and expression in employment and housing.  She received her J.D. from the University of California, Berkeley.