Verdicts & Settlements

3rd Circuit: Verdicts May Compensate for Taxes on Back Pay

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A federal appeals court has ruled trial judges may increase awards to compensate for taxes a plaintiff will have to pay on lump-sum awards for back pay.

The ruling by the Philadelphia-based 3rd U.S. Circuit Court of Appeals “sharpens a split in the circuits,” the Legal Intelligencer reports. The 3rd Circuit followed a 1984 decision by the Denver-based 10th U.S. Circuit Court of Appeals. Rejecting that approach, the U.S. Court of Appeals for the D.C. Circuit refused additional awards to cover taxes in a 1994 decision, the story says.

The ruling in Eshelman v. Agere Systems Inc. upheld a $200,000 award to a woman who claimed her layoff after receiving chemotherapy violated the Americans with Disabilities Act.

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