Reduction in Social Security Benefits: A New Element of Damage in Employment Discrimination Cases

Reduction in Social Security Benefits: A New Element of Damage in Employment Discrimination Cases


By Michael Siskin


Plaintiff’s lawyers are always seeking new theories of damage to enhance awards for their clients.  The Southern District of New York has granted a plaintiff damage of a type that has seemingly never been granted in any other published employment discrimination case.  In Shannon v. Fireman’s Fund Ins. Corp.,[i] the Southern District of New York awarded the plaintiff damage for the reduction in social security benefits caused by his job loss.  As with any element of damage, the key is to prove an actual loss and to fix the amount of the loss with reasonable certainty.

Precedential Basis for Social Security Loss Award

In 1992, in Miner v. City of Glens Falls,[ii] Senior District Judge Munson of the Northern District of New York faced the apparently first impression issue of whether to grant loss of social security benefits.  Although the District Court did not reject the availability of damages for loss of social security benefits, if found that the amount of damage was not proved with a reasonable certainty and denied relief on that basis.

The Court found insufficiencies in the evidence of social security benefit loss.  During the trial, the plaintiff offered testimony of an Economist who testified as to the amount the employer would have contributed had the plaintiff not been terminated.[iii]  During cross-examination, however, the Economist revealed that one-third of his total loss figure was attributable to the plaintiff’s wife.[iv] In addition, although the Economist calculated the amount of the plaintiff’s loss assuming that the plaintiff would have retired at age 62, the Court determined that the plaintiff would have retired at age 55.  Furthermore, in response to questioning by the Court during a hearing on damages, the Economist failed to explain the methodology the economist used in calculating the amount of the loss.[v] The Court found the data presented to the Court insufficient to recalculate the amount of damage and rejected plaintiff’s claim.

Neither the methodology nor the specific facts necessary for the court to recalculate plaintiff’s loss are contained iin the record.  Plaintiff’s economist did not explain how he derived any of the figures testified to, nor did plaintiff introduce into evidence as part of the economist’s file the actual calculation of lost social security contributions, through which the court could garner the information necessary to recalculate plaintiff’s loss up to retirement age 55.  Absent the essential data necessary to calculate damages on this particular claim with reasonable certainty, the court is compelled to deny plaintiff any relief on his claim for social security benefits.

Despite the rejection of the plaintiff’s claim for loss of social security benefits, the District Court did not suggest that such damage may not be compensable.  Thus, the District Court implied that it could be, given adequate proof.

The Shannon Case

The plaintiff in Shannon v. Fireman’s Fund Ins. Co., William H. Shannon, was an Underwriter for William H. McGee Insurance Company when it was merged into Fireman’s Fund Insurance Company (“Fireman’s Fund”).  In the process of the merger, the plaintiff was selected for inclusion in a reduction in force.  The jury found that the plaintiff was chosen over two younger Underwriters in his department on the basis of his age, and found Fireman’s Fund liable for discrimination in employment under the New York Human Rights Law[vi] and the New York City Human Rights Law.[vii]

Following a separate bench trial, in which the Court heard issues relating to back and front pay, the parties briefed all outstanding damage issues.  Among other elements of damage, the plaintiff requested compensation for his lost social security benefits.  Relying on Miner, the plaintiff claimed loss of employer contributions.



[i] 136 F.Supp.2d 225 (S.D.N.Y. 2001).

[ii] 1992 WL 349668, No. 89-CV-918 (N.D.N.Y. Nov. 12, 1992), aff’d 999 F.2d 655 (2d Cir. 1993) .

[iii] 1992 WL 349668 at *9.

[iv] Id.

[v] Id.

[vi] xxxxxxx

[vii] xxxxxx