Injury to Reputation-the Overlooked Damage in Employment Cases

Injury to reputation is a remedy that can be overlooked in employment cases.  It is possible to recover both front pay and injury to reputation damages.  The injury to reputation damages can be found in a case from the 7th circuit, Williams v. Pharmacia, 137 F.3d 944 (7th Cir. 1998).  On appeal, Pharmacia argued that front pay and lost future earnings were not available because the two awards were overlapping and constituted a double recovery.  The court held that the lost future earnings and front pay were appropriate.  The court reasoned that when reputation injuries caused by an employer’s unlawful discrimination diminish a plaintiff’s future earning capacity, the plaintiff cannot be made whole without compensation for the lost future earnings she would have received absent the employer’s unlawful discrimination.  The court concluded that diminished future earning capacity is a non pecuniary injury that was added to the array of remedies available under Title VII.  The court rejected the employer’s contention that the awards for front pay and lost future earnings were duplicative reasoning that each remedy was based on a comparison of the employees earnings from the former position with the anticipated future earnings.  The court stated that the two awards compensate the plaintiff for different injuries.  Front pay in the case compensated the employee for the immediate effects of the employer’s termination of the employment.  The front pay award approximated the benefit the employee would have received had she been able to return to her old job and the district court limited the time of that award.  The lost future earnings award, in contrast, compensates her for a lifetime of diminished earnings resulting from the reputational harm she suffered as a result of the employer’s discrimination.  The court further stated that even if reinstatement had been feasible, the employee would still have been entitled to compensation for her lost future earnings.  The court further explained the separate nature of the two remedies by observing that the accrual of front pay terminates at the point at which the plaintiff finds employment comparable or superior to her previous employment.  This is the reason front pay awards are limited in duration.  By contrast, damages for future lost earning are not limited in duration in the same way.  A reputation injury that causes diminution in a plaintiff’s future earning capacity may remain with the plaintiff indefinitely.  Thus, the calculation of front pay differs significantly from the calculation of lost future earnings.  Front pay compensates the plaintiff for the lost earnings from her previous position for as long as the plaintiff may have been expected to retain the position.  A lost future earning capacity award compensates the plaintiff for the diminution in expected earnings in all of her future jobs for as long as the reputation damage or other injury may be expected to affect the plaintiff’s employment prospects.  No Texas case has addressed whether intangible reputation injuries are compensable under the Texas Commission on Human Rights Act but Texas law has long recognized the availability of compensatory damages to make the plaintiff whole from reputation injuries.  See, Bell Publishing Co. v. Garrett Engineering Co., 170 S.W.2d 197 (Tex. 1943) and Shearson Lehman Hutton, inc. v. Tucker, 806 S.W.2d 914 (Tex.App.–Corpus Christi 1991, writ dism’d).  Additionally, the EEOC has identified “injury to reputation” and “injury to character and reputation” as losses compensable under Section 1981a of the CRA (see EEOC Guidance at sec.11).