Title VII permits award to be 'grossed up' for income tax consequences

The 9th Circuit Court of Appeals (whose rulings apply to all California employers) recently ruled trial judges have the discretion to adjust damages awards under Title VII of the Civil Rights Act of 1964 to account for higher income taxes the plaintiff will pay on a lump-sum amount received in one year versus what the taxes would have been if the amount had been paid over several years. This is sometimes referred to as "grossing up" the award for tax consequences.

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