Concerning the employee’s duty to mitigate damages following his or her termination

Concerning the employee’s duty to mitigate damages following his or her termination
Rongiger v McCall, USDC, SDNY, [unpublished]*

The Rongiger case discusses a somewhat infrequently encountered aspect in litigation involving alleged violations of an employees civil rights: the duty of a dismissed employee to mitigate damages and the proof an employer must produce to show that the employee failed to mitigate, or attempt to mitigate, his or her damages following the termination.

George P. Rongiger sued then State Comptroller H. Carl McCall for damages, claiming that McCall had terminated him in retaliation for his exercising his right to free speech in violation of his civil rights. One of the significant major issues in this litigation concerned the question an individual’s duty to mitigate damages.

Rongiger, who had been serving in the Office of the State Deputy Comptroller for the City of New York, a division of the Office of the State Comptroller, alleged that he was terminated after making politically embarrassing statements in deposition testimony concerning correspondence between McCall and then-Mayor David Dinkins in connection with New York City’s efforts to prevent a downgrading of its bond rating.

Did Rongiger have a duty to mitigate damages by seeking substitute employment following his dismissal? In a word, yes! As Federal District Court Justice Sweet noted, citing Dailey v Societe Generale, 108 F.3d 451, an employee who has been subject to discriminatory discharge is required to mitigate his damages.

In Greenway v Buffalo Hilton Hotel, 143 F.3d 47, the Second Circuit explained that this duty means that the discharged employee ‘must use reasonable diligence in finding other suitable employment,’ which need not be comparable to [his] previous positions.

Since the employer charged with discrimination is required to prove any failure on the part of the employee to mitigate damages, McCall retained Dr. Charles L. Sodikoff as an expert on the issue of mitigation and asked him to prepare a report as to his findings.

Sodikoff’s report set out his opinion concerning the length of time it should have taken Rongiger to find a comparably paying job or to build a profitable consulting practice, and the reasonableness of Rongiger’s job search.

Sodikoff concluded that Rongiger should have obtained comparable work within six to ten months of his termination and that he should have built a consulting practice sufficient to replace his compensation in 1994 within two years of his termination. Rongiger challenged the admission of Sodikoff’s report.

After noting that such expert testimony was relevant, Justice Sweet discussed the methods used by Sodikoff in preparing his report and his conclusion. Based on his evaluation of the procedures used by Sodikoff Justice Sweet granted part of Rongiger’s motion to exclude expert testimony.

In contrast, there is no duty on the part of individual who has been terminated after being found guilty following disciplinary action taken pursuant to Section 75 of the Civil Service Law to mitigate his or her damages.

Civil Service Law Sections 76 and 77, which, respectively, deal with reinstatement by a Civil Service Commission or a court following a successful appeal of as Section 75 dismissal and the annulment of the termination, provide that an employee who is reinstated is to receive the salary or compensation he or she would have been entitled by law to have received in his or her position for the period of removal including any prior period of suspension without pay, less the amount of any unemployment insurance benefits he may have received during such period.*

Thus mitigation is not a factor as even if the individual obtains employment after being discharged, any monies earned thereby would not be considered in determining the amount of compensation to be paid as back salary upon reinstatement -- only unemployment insurance benefits are to be considered in determining the back salary due upon reinstatement.

* This is an unpublished opinion. A court may not prohibit or restrict the citation of federal judicial opinions, orders, judgments, or other written dispositions that have been (i) designated as "unpublished," "not for publication," "non-precedential," "not precedent," or the like; and (ii) issued on or after January 1, 2007.

** Sections 76 and 77 of the Civil Service Law originally provided for an adjustment in consideration of earnings received from other sources, thereby implying a duty to mitigate damages. Chapter 710 of the Law of 1984 deleted the phrase compensation which he may have earned in any other employment or occupation.... from the law.