Suing The Federal Government for Illegal Termination
I chose this topic because so many long-term employees were fired for retaliation and/or they were older and/or they were more costly employees to maintain. This is illegal conduct and because federal administrative law requires the federal department already found guilty of discrimination by a jury with furnishing a list of damages based on its findings does not mean that their position has any priority over what must be paid. It does work against the employee’s interest if they don’t hire their own expert because the federal government uses a shotgun method that is not properly structured and the government methodology helps them deflect away from the real value of damages when the plaintiff resorts to attacking their methodology. It will show the weakness in the government’s argument. But that won’t help establish all the damage “to restore the employee to the place he was before the illegal firing.” This is central to the plaintiff’s damages report. Pollard, 532 US 833 Employment Law is by far the most structured area of law and as such clearly identifies what damages can be won and what cannot be won but that requires the expert to know the extensive case law dealing with each.
Trying to attack theirs is a wasted effort because to find the restoral point in the “Make Whole Policy” one must identify where that begins in terms of its history. There could not be a better example than Williams v. Pharmacia, `137 F.3d 944 (7th Cir. 1998) to demonstrate why “the follow the money requirement” is inherent in the Make Whole Policy and manifestly is opposite to the shotgun approach the federal government uses after it has been found guilty by a jury. One thing routinely dismissed is when the new company has identical benefits there is still a significant front pay loss with benefits because retirement and welfare benefits base amounts on prior service, but no new identical benefit plan recognizes prior service worked at the federal government the employee was fired from, only theirs. Thus with vacation pay, a welfare benefit, it has a foundational piece when the amount of vacation time is conditioned with the full years worked.
This is a foundational component of front pay when worked in the future; but because it is permanently lost upon the firing it is lost in every forward-looking front pay amount and it is structurally included in back pay inasmuch as it is part of the back pay loss when the court fails to order reinstatement of the job. Normally, vacation pay is part of w-2 pay, so it seldom is a front pay loss. The only difference is one doesn’t have to work vacation time to receive the pay, but if the employee did it is a perk that is earned and owed. But because of this it could only be back pay and a very unsubstantial portion of the back pay loss. The foundational part of back pay is the only substantial portion of back pay loss when it is step rated which is a principal feature of government plans and almost always overlooked because most experts are not structured in their thinking and often use a shotgun approach themselves.
For purposes of demonstration government benefits can provide up to four weeks of vacation pay. Suppose an employee can receive two weeks for less than ten years of employment, 3 weeks for more than 10 but less than 20 and four weeks over 20. Suppose the worker was a lawyer making $200,000 per year and was targeted by Trump for political retribution. He or she was let go after 14 years of employment. From these facts, assumptions based on the employee’s history of employment (satisfying current circumstances, an evidentiary basis, in addition to a “highly likely basis” that these assumptions will be met) are formulated to determine a loss of $140,000 on the weeks of vacation pay lost even if he found a job replacing this even though the replacement job offers identical vacation benefits.
Finding 29 weeks of foundational pay included in the $140,000 loss is the equivalent to more than 8 years of front pay and close to half of that was already counted in back pay. The court would have to order 15 years of front pay before the lost front pay vacation loss equaled the back pay loss and that is based on the new job not providing over two weeks of vacation pay. That is just how significant that 29- week loss is. FERS Retirement benefits are determined at retirement with the pay at retirement. The case law has consistently concluded that the Make Whole Policy of restoring one to before the injury that no provision that applied before changed because the employee has not been restored and the government has been enriched by its illegal conduct. Restoring means his 14 years of benefit is measured at age 62, his retirement age. No company that offers a FERS Type benefit will pay the amount he would have gotten based on his salary at retirement because the first 14 years wasn’t worked at the new company. That is why this is a foundational benefit lost as part of back pay when the federal court didn’t order reinstatement.
In similar type issues the federal government has defended on basis projecting the future involves speculation, the appellate court rejected that and ruled market earning attach to thrift savings plan contributions and it is arrived at using assumptions exactly as laid out for valuing future vacation foundational component, which is what the court requires to uphold that calculation. Once that amount is determined the government deposits the value to the employee deposits deducted from back pay (to enjoy the earnings on the after taxes amount inside their plan.) If when he had 14 years of service, he was 42 years of age that would mean his earnings will have 20 years to grow. When 14 years of retirement benefit is recalculated after 20 years of salary increases it adds $14,000 pension increase based 40 years of history. It adds at least $163,000 to back pay based solely on FERS foundational increases permanently lost when the court fails to order reinstatement. The foundation increases alone it adds $303,000 to backpay.
To be clear, no one is stating that he earned more than $2,400 per year on the date he is fired. If the termination was for cause, that is all he would get. If he voluntarily quits his job that is all he will get. To be entitled to retirement benefits you have to work until retirement. Anything less is a deferred vested benefit. The employer cannot choose to instead pay a deferred vested benefit unless the employee voluntarily quits. The Make Whole Policy requires restoring him to the place he was before he was illegally terminated. It was his choice to continue to work and get the full 14-year benefit. It was a vested right of his. To find otherwise, the government can halve their liability by the illegal firing. This precise issue was challenged in Florida in 2013 when the state was challenged whether it could reduce the benefit formula or any of its features under Fla. Stat 121.011(d)(3), its vesting statute adopted in 1974, which follows precisely the federal statute. The Florida Supreme Court ruled that nothing inherent in the state statute prevented FRS from reducing or even eliminating future earnings; but the vesting statute prevented cutting back earnings that used salaries at retirement because they were vested. Thus, even though they would pay the lesser amount if he quits, the state could not eliminate ongoing liability for the future growth based on salary increases. Scott v. Williams, 107 So.3d 379 (Fla. 2013). Depriving him of his full years of benefit prevents him from achieving full recovery and rewards the federal government for its illegal conduct.
While the employee is not owed money for contributions that weren’t made to his thrift plan both the employer match and actual earnings attach to both. Both are determined based on history involving the employee. Both are determined based on history involving the employee, thereby satisfying both the evidentiary requirement and that assumptions require current circumstances be met in addition to a blended history incorporating time as an employee and time post separation for the earnings component. The government continues to ignore case law which means the hired expert must know the case law.
Ordinarily one overlooks future earnings if the court ordered reinstatement. But that doesn’t mean there are back pay issues dating from the illegal firing to the time the case is tried. Reinstatement only means the fired employee gets the job back. All foundational issues disappear and it would appear there should be no entitlement to front pay. Front pay should only be used to restore the employee to the place he was before the firing. It does not guarantee future employment. The person reinstated still faces an uncertain job market. Major economic downturn leads to major job loss. and when the afflicted is much older permanent loss of the job. An assumption is not speculative if there is an evidentiary basis supporting it and if it uses assumptions based on current circumstances. Knowing how to structure that depends on knowing plenty of case law, where the law is a huge component of money damages.
It sets up a proper structure for measuring that and ensures one doesn’t double-count or miss a large damage payment only because the court could not find it without engaging in speculation. Finally, after every damage has been properly measured, reinstatement does not protect for reputational damage, which occurs as loss with that economic downturn, or simply when one wants to change jobs. Reinstated or not the hole in the resume resurfaces when either occurs and it makes it much less likely that replacement work will be found. Pharmacia, supra. Because there are multiple issues involved it is a front-damage not a front pay issue because front pay isn’t always taken to retirement. Reputational damage often exceeds the amount of front pay to retirement because high-paid government workers will leave government service to take on much higher paying jobs in the private industry as they get closer to the earlier government retirement age. A simple demonstration will use up the entire amount permissible, which is a non-pecuniary loss and subject to the cap congress placed on it.
This closes out part 1 of this post. There will be several more before this topic is closed. After that we’ll close the topic. There are so many different damages topics to cover so that the plaintiff and defendant know what to expect. Up until the present time I’ve been an expert equally on both sides about 50/50. Neither side seems to know the structure of damages or any of the case law required for a successful outcome.
Any suggested topics you wish to see use the links provided to write to me. Pease leave comments or ask questions but stay on this topic so we can all benefit by this discussion.