By Deryn Sumner, November 15, 2017
We’ve discussed a few times how important it is to value a case, even if you represent the agency, and even if you think your case is a slam dunk. Nothing is predictable with certainty in litigation, and you don’t want to have to inform your settlement authority or client that you don’t know how much the agency is liable for because the agency lost the case. We typically discuss this in the context of requesting information about compensatory damages during discovery. You don’t want to be caught unaware of the types of pecuniary and non-pecuniary damages a complainant intends to seek.
But another large source of monetary damages that the agency can be on the hook for is back pay. Although an exact accounting of how much back pay would go to a complainant may be well beyond the wheelhouse of you as the agency representative, you should have a general idea of the overall amount. And so how do you start with such calculations?
Well, of course, this is only going to apply in cases where pay is at issue, such as non-selections at a higher grade and terminations. First, figure out what the relevant timeframe is and what the employee was earning at the time and what he or she would have earned if what is being claimed in the formal complaint is proven. The OPM website has salary scales for many years — don’t forget to account for locality pay!
The Commission’s Management Directive 110, Chapter 11 spells out aspects that should be considered in calculating back pay. Remember the guiding principle: the goal of remedies is to place the complainant as closely as possible in the position he or she would have held but for the discrimination. Thus, back pay calculations should consider any step increases, pay differentials, overtime that would have been earned if the employee had been in the position, and any other pay differential, such as premium pay. Back pay also includes other benefits of employment, such as leave, health insurance contributions, and retirement contributions.
You should also consider whether subsequent events impact an award of back pay, such as subsequently receiving a higher paying job, being unable to work because of a medical condition, or voluntary retirement or resignation from a job. Benefits such as unemployment compensation should not be deducted from back pay. However, worker’s compensation benefits may be deductible, depending on the type.
If an employee has been terminated from employment, he or she must take efforts to mitigate damages before the EEOC (the same does not hold true before the MSPB). Again, you should use the discovery process to find out about these efforts.
The goal here is to have a sense of how much the agency could be on the hook for should it not win its case. Even if you don’t know down to the penny, having a general range can be essential for settlement discussions and accurately valuing your case. [email protected]