Mcle Self-study: a Refresher on and Thoughts About Unconditional Offers of Reinstatement

• Publication year: 2019
• Author: By Andrew H. Friedman and Taylor Markey

MCLE Self-Study: A Refresher on and Thoughts About Unconditional Offers of Reinstatement

By Andrew H. Friedman and Taylor Markey

Andrew H. Friedman is a partner with Helmer Friedman LLP in Beverly Hills. Mr. Friedman represents individuals and groups of individuals in employment law, consumer rights, and personal injury cases. Mr. Friedman served as Counsel of Record in Lightfoot v. Cendant Mortgage Corp. (Case No. 10-56068), where he successfully convinced the U. S. Supreme Court to grant the petition for certiorari that he filed on behalf of his clients. In January 2017, the Supreme Court, in a unanimous decision authored by Justice Sotomayor, reversed the Ninth Circuit and ruled in favor of Mr. Friedman's clients. Mr. Friedman is the author of Litigating Employment Discrimination Cases (James Publishing 2005-2018). Taylor Markey is an attorney with Helmer Friedman LLP in Beverly Hills. Ms. Markey represents individuals and groups of individuals in employment law, consumer rights, and personal injury cases. Prior to joining Helmer Friedman LLP, Ms. Markey clerked for the Honorable Justice Norman L. Epstein of the California Court of Appeal, Second District, Division Four.

I. Introduction

The U.S. Supreme Court has explained that "cooperation and voluntary compliance" (as opposed to litigation "proceeding at its often ponderous pace") are the preferred means to accomplish the primary objective of Title VII—i.e., ending employment discrimination.¹ In a supposed effort to accomplish this objective, the Court, in Ford Motor Co.,² accepted a then-new rule "providing employers who have engaged in unlawful hiring practices with a unilateral device to cut off" ³ some, or potentially even all, liability for economic damages that would otherwise be owed "to the victims of their past discrimination."⁴ Absent special circumstances (which, as discussed below, went undefined), the Court held that employers could use this rule to toll the accrual of front and back pay damages by making so-called "unconditional offers of reinstatement" to fired employees.⁵ Notwithstanding the fact that unconditional offers of reinstatement are, in the vast majority of cases, nothing more than insincere attorney-driven artifices designed solely to minimize damages with no expectation or hope (but rather trepidation) that the employees will actually accept them, some courts have applied this federal doctrine to California state law employment cases, finding the doctrine to be in accord with the state's longstanding rule that wrongfully fired employees have a duty to mitigate their damages by seeking substantially similar employment.⁶

Given that much pre-litigation (and some post-litigation) arguing occurs between defense and plaintiff counsel regarding whether offers of reinstatement are unconditional or otherwise valid and whether the rejection of such offers is justified, this article will examine the contours of the law that has developed around unconditional offers of reinstatement (including addressing the most common questions asked in this area: What is a valid unconditional offer of reinstatement? What are the "special circumstances" justifying the rejection of such an offer? What are the consequences of an unjustified rejection? Who bears the burden of proof on the issues of whether an offer was "unconditional," and whether the rejection of the offer was reasonable? Who determines whether the rejection of the offer was justified? Does California even recognize the unconditional offer of reinstatement doctrine?

The article will then close with some brief thoughts about the future of this federal doctrine, including a discussion regarding whether the California Supreme Court should find that the more flexible "avoidable consequences" rule⁷ displaces the doctrine, as it found that the "avoidable consequences" rule displaced the federal Faragher/Ellerth⁸ defense.

II. What Is a Valid Unconditional Offer of Reinstatement?

Absent special circumstances (discussed below), a valid unconditional offer of reinstatement is an offer of reinstatement that satisfies a two-, and possibly three-pronged, test.

First, the offer must provide for reinstatement of the plaintiff to the same (or substantially equivalent) position that he or she formerly held, and must afford the claimant virtually identical promotional opportunities, compensation, job responsibilities, working conditions, and status.⁹ In this regard, some courts have held that the reinstatement offer "must be sufficiently specific for the plaintiff to be able to gauge whether the employment offered is comparable to the employee's previous job."¹⁰ Indeed, these courts have explicitly rejected defense arguments that, to the extent an offer is vague, the plaintiff has a duty to inquire into the specifics before rejecting the offer.¹¹

Second, the offer must, not surprisingly, be "unconditional"—i.e., it must not place any restrictions or conditions on reinstatement. In that regard, courts have specifically held that an offer is not "unconditional" if it requires the employee to compromise her legal claims.¹² Of course, courts have also held that an employer's mere offer to allow the plaintiff to apply or interview for a position does constitute an "unconditional" offer of reinstatement.¹³

Third, some, but not all, courts have further mandated that, in order to be deemed valid, an unconditional offer of reinstatement must be made in good faith.¹⁴

III. Exceptions to the Ford Motor Co. Rule: What Are "Special Circumstances"?

In Ford Motor Co., the Supreme Court held that "absent special circumstances, the simple rule that the ongoing accrual of backpay liability is tolled when a Title VII claimant rejects the job he originally sought comports with Title VII's policy of making discrimination victims whole."¹⁵ Unfortunately, the Court failed to provide any guidance on what circumstances might constitute "special" ones, other than providing a cursory example—if the claimant was "forced to move a great distance to find a replacement job, a rejection of the employer's offer might reflect the costs of relocation more than a judgment that the replacement job was superior, all things considered, to the defendant's job."¹⁶ Instead of providing any guidance in this area, the Court left this issue to the "sound discretion" of the trial court.¹⁷

Expanding on the Supreme Court's exception for "special circumstances," some federal courts have found that reinstatement is not always a reasonable remedy for plaintiffs in two general situations. First, some federal courts have held that rejection of an offer of reinstatement is justified when there is continuing hostility between the plaintiff and the employer or its workers.¹⁸ However, in this situation, the plaintiff's fear of hostility must be reasonable and not fanciful.¹⁹ Interestingly, courts seem to routinely reject plaintiff requests for court-ordered reinstatement as a remedy for illegal discrimination when employers argue that front pay would be more appropriate because the reinstatement would cause "discord and antagonism" between the parties.²⁰ Second, some federal courts have found that rejection of an offer of reinstatement is justified because of psychological injuries that the discrimination or wrongful treatment has caused the plaintiff and/or where the stress of returning to work for the employer would imperil the plaintiff's health and well-being.²¹

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IV. What Are the Consequences of Unreasonably Rejecting an Unconditional Offer of Reinstatement?

Absent special...