By: WISCONSIN LAW JOURNAL STAFF//January 30, 2015//
By: WISCONSIN LAW JOURNAL STAFF//January 30, 2015//
U.S. Court of Appeals For the Seventh Circuit
Civil
Employment – Discrimination – tax-component award
The district court properly awarded a prevailing employee an increased award to compensate him for his increased tax burden.
“Today, we join the Third and Tenth Circuits in affirming a tax-component award in the Title VII context. Upon Miller’s receipt of the $43,300.50 in back pay, taxable as wages in the year received, see IRS Pub. No. 957 (Rev. Jan. 2013), available at www.irs.gov/pub/irs-pdf/p957.pdf, Miller will be bumped into a higher tax bracket. The resulting tax increase, which would not have occurred had he received the pay on a regular, scheduled basis, will then decrease the sum total he should have received had he not been unlawfully terminated by Hospitality. Put simply, without the tax-component award, he will not be made whole, a result that offends Title VII’s remedial scheme. See Williams v. Pharmacia, Inc., 137 F.3d 944, 952 (7th Cir. 1998) (‘We have noted previously that “the remedial scheme in Title VII is designed to make the plaintiff whole.”’ (quoting McKnight v. General Motors Corp., 908 F.2d 104, 116 (7th Cir. 1990))).”
Affirmed.
14-1660 EEOC v. Northern Star Hospitality, Inc.
Appeal from the United States District Court for the Western District of Wisconsin, Crabb, J., Kanne, J.