Banaitis v. CIR, 340 F.3d 1074 (9th Cir. 2003)

In his tort claims against his former employer (Bank of California) and its successor (Mitsubishi Bank), Sigitas Banaitis alleged wrongful discharge and interference with his employment agreement. After losing at trial in Oregon state court (where Banaitis obtained a $6.27 million verdict in his favor) and failing in their appeals, Mitsubishi Bank and the Bank of California settled with Banaitis, paying $3.86 million to Banaitis’s attorney and $4.86 million directly to Banaitis. Banaitis excluded from his gross income the entire $8.73 million settlement amount. The IRS delivered a notice of deficiency to Banaitis and asserted that he owed an additional $1.71 million in 1995 federal income taxes. The Tax Court ruled in favor of the IRS, holding that Banaitis was not entitled to exclude from his income settlement amounts attributable to economic damages, punitive damages or the attorney’s fees that were paid directly to his lawyer. The Ninth Circuit affirmed the Tax Court judgment that settlement amounts attributable to economic and punitive damages should have been included in gross income because they were not “on account of personal injury or sickness.” However, the Court held that the settlement amount allocated to attorney’s fees was not taxable to Banaitis, because Oregon state law “affords attorneys generous property interests in judgment and settlements.” (The Court noted that other states’ law, including California’s, differs from Oregon’s.)
 

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.