On January 29, 2015, the United States Court of Appeals for the Seventh Judicial Circuit affirmed the judgment of the district court, which awarded the plaintiff unusual equitable remedies in a Title VII lawsuit. Equal Employment Opportunity Commission v. Northern Star, et al., No. 14-1660 (7th Cir., 1-29-2015). The plaintiff, a male African-American cook, alleged that he was fired in retaliation for complaining about racial harassment. Coworkers had sketched racially inflammatory pictures on a dollar bill, which they showed to him. Shortly after he made a complaint of racial harassment to his employer, his supervisors began to criticize his work performance, and terminated his employment. Before he reported the harassment, the plaintiff had never received any complaints about his job performance.
The plaintiff won his retaliation case after a jury trial, but by then, his former employer had dissolved and was unable to pay the judgment. The district court remedied this by imposing successor liability on the company that had essentially assumed the operations of the former employer. The 7th Circuit affirmed, applying a five-part test for successor liability: (1) notice of the lawsuit by the successor; (2) the predecessor’s ability to provide the relief sought before dissolution; (3) the predecessor’s inability to provide the relief after dissolution; (4) the successor’s ability to provide the relief; and (5) continuity in the operations and work force of the predecessor and successor. Successor liability was warranted under these factors, particularly because the same individual owned both businesses as well as the building in which they operated.
The district court also awarded the plaintiff additional money damages to offset the increased tax liability that he incurred as a result of his lump-sum back-pay award, which put him in a higher tax bracket. The tax-component award, in the amount of the extra taxes, made the plaintiff whole. Courts have broad discretion under Title VII to design equitable remedies that effectuate its purpose of vindicating civil rights violations.