Trainor v. HEI Hospitality, No. 12-1152 (1st Cir. Oct. 31, 2012)

By Paul Mollica

A senior executive wins a jury trial for retaliation under the ADEA and Massachusetts state law, with an award of back and front pay, emotional distress damages and liquidated (double) damages. The First Circuit substantially preserves the judgment against the employer and affirms injunctive relief to restore plaintiff to the company’s benefit plans, though it tamps down the compensatory damage award on grounds of excessiveness.

Trainor v. HEI Hospitality, No. 12-1152 (1st Cir. Oct. 31, 2012): The plaintiff was recruited in 2006 to become the company’s senior vice-president for acquisitions and transitions (SVP). A couple of years into his employment, the company began to pressure Trainor to either relocate to its Norwalk, MA headquarters or to accept a demotion (to general manager of a hotel owned by the employer in Cambridge). Trainor complained that the choice was untenable – both involving significant hardship – and sent a letter to HEI executives complaining that it was a form of age discrimination (he was then age 61). The offer to transfer was then (according to the record) rescinded, leaving only the offer to manage the hotel.

The plaintiff filed a charge of discrimination on January 2, 2009, which plaintiff’s counsel transmitted to HEI. There hours later, Trainor was fired by email, on the ground that he had declined the hotel job (by not timely responding to the offer) and that his former executive position had been eliminated.

As the panel summarized, “an eight-day trial ensued. The jury returned a special verdict in which it found HEI liable for retaliation (but not for age discrimination) and awarded the plaintiff $500,000 in back pay, $750,000 in front pay, and $1,000,000 for emotional distress. Since the jury determined that HEI had knowingly violated state law, the court entered an order doubling the plaintiff’s damages.” The court cut the emotional distress damages to $500,000.

The First Circuit substantially affirms, making the following rulings:

1. There was sufficient evidence of causation to support the verdict. “[T]he record admits of conflicting interpretations about the events that transpired from November 2008 through January 2009. Although HEI suggests that a jury could not supportably find retaliation because the elimination of the plaintiff’s position and his eventual termination were part of a larger plan set in motion long before the plaintiff engaged in any protected activity, the plaintiff counters that matters were in flux until after he engaged in the protected activities.” In particular, the jury could have found that the withdrawal of the offer to transfer to Norwalk was never contemplated until after the plaintiff complained about discrimination, that the company’s actual corporate plan (to continue acquisitions) cut against its claim that it was eliminating the SVP position for business reasons, and the mere hours between the filing of a discrimination charge and termination bespoke an obvious intent to punish Trainor.

2. The record also supported the jury’s decision to reject a mitigation-of-damages defense. HEI claimed that Trainor could have accepted the lower-compensated hotel manager position, and still remained employed. “But the jury could reasonably have concluded that the negotiations concerning this position were cut short by Mendell’s abrupt termination of the plaintiff’s employment and that, Therefore, the option no longer remained open.”

3. Front pay is available even when the employee wins liquidated damages. Although a district court may in its discretion deny front pay when double-damages are awarded, the court did not abuse its discretion in this case by allowing both forms of recovery. Also, though questioning whether the jury should have decided the front pay issue at all (typically a bench issue), the panel holds that There was enough evidence to support that the executive intended to remain employed until 2013.

4. While affirming the reduced emotional distress award, the panel orders it remitted in light of the thin record. Emotional distress damages may be supported purely by lay evidence, as in this case, but “the plaintiff did not introduce any evidence that he received medical treatment, counseling, or There similar attention for his despondency. While evidence from a physician or There mental health professional is not a sine qua non to an award of damages for emotional distress, the absence of such evidence is relevant in assessing the amount of such an award. . . . Here, moreover, the plaintiff proffered no evidence that he suffered any physical infirmity as a result of his ouster. The only relevant evidence is anecdotal and, to some extent, self-serving.” Reviewing verdicts upheld in There comparable cases, the damage award is further remitted to $200,000.

5. The defense waived its right to challenge any inconsistency in the verdict regarding liquidated damages by failing to timely raise it while the jury was still empanelled.

6. The district court’s decision to award attorneys’ fees even for the hours committed to the losing age discrimination claim is affirmed as within the judge’s discretion.

7. Equitable relief to allow “the plaintiff a right to participate and vest in the There company-sponsored investment funds” is also affirmed. “The opportunity to participate in these investment vehicles was much coveted and viewed as a fringe benefit (and, thus, as part of an executive’s compensation package). HEI made the opportunity available only to selected employees – a grouping that included the plaintiff. The promise that he could participate in the funds was a critical factor in the plaintiff’s decision to join HEI.”