Reducing Damages Exposure

How the Rejection of an Unconditional Offer of Reinstatement Impacts
Damages

The U.S. Supreme Court has held that a former employee's rejection of an unconditional offer of reinstatement (i.e., one that does not require the plaintiff to waive or compromise his or her discrimination claim) to a substantially equivalent position tolls the accrual of the employer's back pay liability:

An unemployed or underemployed claimant, like all other Title VII claimants, is subject to a statutory duty to minimize damages ' . This duty, rooted in an ancient principle of law, requires the claimant to use reasonable diligence in finding suitable employment. Although the unemployed or underemployed need not go into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to back pay if he refuses a job substantially equivalent to the one he was denied. Consequently, an employer charged with unlawful discrimination often can toll accrual of back pay liability by unconditionally offering the claimant the job he sought, and thereby providing him with an opportunity to minimize damages.

Ford Motor Co. v. Equal Employment Opportunity Comm'n, 458 U.S. 219, 231-32 (1982). The U.S. Supreme Court has further held that such an offer (hereinafter, “Ford Motor Offer”) need not include retroactive seniority or any other type of “make-whole” relief:

An employer's unconditional offer of the job originally sought to an unemployed or underemployed claimant, moreover, need not be supplemented by an offer of retroactive seniority to be effective, lest a defendant's offer be irrationally disfavored relative to other employers' offers of substantially similar jobs. The claimant, after all, plainly would be required to minimize his damages by accepting another employer's offer even though it failed to grant the benefits of seniority not yet earned. Of course, if the claimant fulfills the requirement that he minimize damages by accepting the defendant's unconditional offer, he remains entitled to full compensation if he wins his case. A court may grant him back pay accrued prior to the effective date of the offer, retroactive seniority, and compensation for any losses suffered as a result of his lesser seniority before the court's judgment.

Id. at 232-34.