Tuesday, December 20, 2011

Sometimes it’s not all about the Benjamins: reinstatement in lieu of front pay

James McKelvey, an Army veteran, lost his right hand and suffered other serious injuries trying to defuse a roadside bomb in Iraq. As if his physical injuries were not enough for him to endure, upon returning home to a civilian job in the Army, his co-workers subjected him to more than a year of disability-related harassment. For example, they repeatedly called him “lefty” and “cripple.” He resigned, believing the work environment was so hostile that he had no realistic option but to quit. He also sued for constructive discharge, for which a jury awarded him nearly $4.4 million in front pay.

In McKelvey v. Secretary of the United States Army (6th Cir. 12/14/11) [pdf], the court concluded that the trial judge was correct by taking the monetary verdict away, and instead ordering that McKelvey return to his Army job (albeit with improved working conditions and higher pay):

McKelvey can be reinstated to work at the armory quickly, without disrupting operations and without displacing another employee. In point of fact, the Army continues to offer him a position at the armory at a higher salary than he was earning before and under new supervisors. McKelvey’s relatively young age, 38, likewise suggests that front pay is not appropriate, since it requires highly speculative projections about his earning capacity and about employment decisions decades into the future.

In this case, reinstatement was the court’s decision, not the employer’s. Nevertheless, it raises an interesting point. If you’ve been sued, and you’re reasonably confident that your company was in the wrong, and you are comfortable reintegrating a litigant into your workplace, don’t fail to consider an offer to bring the employee back to work. It’s called an “unconditional offer of reinstatement,” and when used correctly (with the right employee and in the right case), it is an extremely powerful tool. The key word is “unconditional.” The offer must be to the same or equal position, with equal (or better) pay and benefits, and with full back pay and restoration of other lost benefits. The benefits are several. Such an offer cuts of the employee’s entitlement to back pay or front pay, in addition to severely hampering one’s ability to prove a right to punitive damages.

Consider adding the “unconditional offer of reinstatement” to your quiver of litigation tools. It just might rescue a good employee from the litigation scrapheap, and save you a few dollars too.