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Cancellier v. Federated Dep't Stores - 672 F.2d 1312 (9th Cir. 1982)

Rule:

29 U.S.C.S. § 216(b) makes employers liable for unpaid minimum wages or unpaid overtime compensation and an additional equal amount as liquidated damages. Thus, an employer who violates the Age Discrimination in Employment Act (ADEA), 29 U.S.C.S. §§ 621-634 is liable for back wages and benefits, as well as an additional equal amount as liquidated damages for willful violations. The award of liquidated damages is in effect a substitute for punitive damages and is intended to deter intentional violations of the ADEA.

Facts:

Plaintiffs Philip D. Cancellier, John W. Costello and Zelma Smith Ritter, were former executives of defendant Federated Department Stores d/b/a/I. Magnin. In early 1978 they were terminated after having been employed at I. Magnin for 25, 17, and 18 years, respectively. Thereafter, they brought an action in the United States District Court for the Northern District of California alleging that their terminations violated the Age Discrimination in Employment Act (ADEA). They sought back pay, liquidated damages, reinstatement to their former positions, and an injunction against further age discrimination at I. Magnin. Plaintiffs also raised claims under California law for breach of employment contract and breach of the implied covenant of good faith and fair dealing. Costello sought additional relief claiming fraud in connection with a promise of future employment at I. Magnin. The district judge instructed the jury that "age must be a determining factor in an employer's personnel policies or practices before violation of the Act occurs." The jury returned general verdicts in favor of plaintiffs. Federated appealed on grounds of improper jury instructions, use of a general verdict, and an erroneous award of damages for breach of the implied covenant.

Issue:

Should the judgment in favor of plaintiff former employees be reversed on the grounds of improper jury instructions, use of a general verdict, and an erroneous award of damages for breach of the implied covenant?

Answer:

No.

Conclusion:

On appeal, the Court of Appeals for the Ninth Circuit held that while the instructions approved in Kelly v. American Standard, Inc., and separate verdict forms for each claim, as well as a separate verdict form for punitive damages, were preferred, the trial judge did not commit reversible error in instructing the jury on "determining factor" under the ADEA, in using a general verdict, or in allowing tort damages on pendent state claims. According to the Court, plaintiffs were entitled to reasonable attorneys' fees in light of the outcome on appeal. Hence, the judgment of the district court was affirmed.

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