A recent Pennsylvania case highlights the substantial liabilities employers face in navigating the complexities of employment discrimination law and offers insight into how employers can limit their exposure. A person who wins an employment discrimination case can collect, among other funds, monies for back pay and front pay. Back pay is the difference between what an employee was paid and the amount the employee should have been paid, had there been no discrimination. Courts may order an employer to pay an employee back all underpaid monies from up to 2 years before the employee’s discrimination charge all the way up to the time of trial. Front pay damages can be even greater. Front pay consists of all monies the employee is expected to lose before finding a substantially equivalent position.
On April 23, 2009 in Donlin v. Philips Lighting North America Corp., the United States Court of Appeals for the Third Circuit found that a temporary warehouse employee who worked for an offending company for less than a year before being denied a permanent position could properly be awarded 10 years’ worth of front pay damages amounting to nearly $400,000.
Employers are always well advised to review their hiring, promotion and discharge practices with counsel to minimize the risk of discriminatory practices occurring. In light of the court’s decision, employers should in particular make sure that these same practices are just as carefully utilized in deciding upon the applications of temporary employees for permanent positions. As shown in Donlin, one discriminatory decision can be extremely costly. Finally, where an employment discrimination claim is brought, before digging in for a litigation battle, consideration should be given to whether the employee should be given the position sought or whether settlement negotiations should be quickly pursued, to limit the company’s exposure for the employee’s lost back pay and front pay.