Clements, Jr. v. CenturyLink Inc., No. 15-35160 (9th Cir. 2017)
Annotate this CaseDistrict courts have discretion to award the equitable relief of a "gross-up" adjustment to compensate for increased income-tax liability resulting from a plaintiff's receipt of a back-pay award in one lump sum. In this case, the Ninth Circuit vacated the district court's order denying plaintiff a tax adjustment of a damages award in a Title VII case. The jury awarded damages for back pay and emotional distress, as well as punitive damages. The district court refused to consider adjusting plaintiff's lump sum back-pay award to account for the corresponding increse in his tax liability. The panel reversed and remanded for further proceedings, and addressed other issues in a concurrently filed memorandum disposition.
Court Description: Labor Law. The panel vacated the district court’s order denying the plaintiff a tax adjustment of a damages award in a Title VII case. Agreeing with the Third, Seventh, and Tenth Circuits, the panel held that in Title VII cases, district courts have discretion to award the equitable relief of a “gross-up” adjustment to compensate for increased income-tax liability resulting from a plaintiff’s receipt of a back-pay award in one lump sum. The panel remanded the case for further proceedings. It addressed other issues in a concurrently filed memorandum disposition.
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