Judge Barrington Parker
A jury found in 2008 that Noel was fired from the Central New York Psychiatric Center in violation of Title VII of the Civil Rights Act. The jury awarded him $210,000 in back pay and $70,000 in front pay. An amended judgment for $318,217 included $280,000 for front and back pay. Without notice to Noel or the court, the New York State Office of the Comptroller (OSC) made various deductions and mailed Noel a check for $139,582. OSC took the position that the front and back pay awards constituted “wages” so that under Internal Revenue Code and state law it was obligated to make the deductions and forward them to the relevant taxing authorities. In 2010, district court entered a $164,987 judgment for Noel, holding the OSC improperly made income tax, Federal Insurance Contributions Act (FICA) tax and other deductions from a Title VII award. On appeal after the state’s payment of the award representing a second payment of monies previously withheld and paid over, the circuit held that payments under Title VII for back and front pay are “wages” as defined under the IRC, and as such, employers are required to withhold income and FICA taxes. Thus, the double payment to Noel was a windfall to which he was not entitled.