Cassino v. Reichhold Chemicals, Inc.

817 F.2d 1338, 47 Fair Empl. Prac. Cas. (BNA) 865, 23 Fed. R. Serv. 17, 1987 U.S. App. LEXIS 6317, 43 Empl. Prac. Dec. (CCH) 37,062
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 15, 1987
DocketNo. 85-4182
StatusPublished
Cited by95 cases

This text of 817 F.2d 1338 (Cassino v. Reichhold Chemicals, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cassino v. Reichhold Chemicals, Inc., 817 F.2d 1338, 47 Fair Empl. Prac. Cas. (BNA) 865, 23 Fed. R. Serv. 17, 1987 U.S. App. LEXIS 6317, 43 Empl. Prac. Dec. (CCH) 37,062 (9th Cir. 1987).

Opinion

SCHROEDER, Circuit Judge:

Reichhold Chemicals, Inc. appeals a jury verdict awarding Gerard Cassino $492,000 in damages under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. Reichhold contends that the trial court made a number of erroneous evidentiary rulings and errors in jury instructions. The principal issues on liability involve the admissibility of Reichhold’s proposed “settlement agreement,” whether the district court should have given a pretext instruction, and the admissibility of certain lay witness opinion testimony. On damages, we are asked to review the sufficiency of the district court’s mitigation instruction, the exclusion of Reichhold’s expert testimony regarding Cassino’s mitigation efforts, the propriety of the front pay award, and the jury’s calculation of liquidated damages. We reverse and remand for a new trial on damages only.

Cassino began working for Reichhold in 1957 as a chemist, and later became human resources director for Reichhold’s western region. In 1981 Reichhold’s board of directors hired new management to reorganize the company. The division for which Cassino worked was disbanded and its functions were reassigned to other divisions.

Cassino was fifty-two years old in June 1983 when he was one of sixteen employees fired from Reichhold’s plant in Tacoma, Washington. Fourteen of the sixteen employees were over the age of forty. Five weeks before Cassino was fired, Reich-hold’s president and vice president for human resources spoke at a meeting of Tacoma employees. The officers stated, among other things, that the average age of Reichhold employees was forty-seven, that the company was considering improving its pension plan, and that the company was planning to institute a college recruiting program. The vice president also spoke at a meeting for Reichhold officials held at approximately the same time as the Tacoma employees’ meeting, and stated that the company wanted to reduce the average age of its workforce.

Reichhold officials, including the vice president for human resources, met with Cassino and informed him that he was fired and that the company was going to handle labor negotiations from its White Plains, New York, office. During the meeting, Reichhold offered Cassino a document entitled “Settlement Agreement and General Release.” The document, which Cassino refused to sign, offered $18,000 in exchange for Cassino’s release of all claims [1342]*1342against Reichhold “including, but not limited to, rights under federal, state or local laws prohibiting age or other forms of discrimination____” Shortly after Cassino left the company, Reichhold hired a thirty-two-year-old as its corporate director of labor relations in White Plains.

Cassino filed this suit in federal court alleging that his termination was based on age in violation of the ADEA and Washington’s anti-discrimination laws. A jury verdict in Cassino’s favor awarded him $81,000 in backpay, $150,000 in front pay, $246,000 in liquidated damages, and $15,000 in damages on state law claims not in issue on appeal.

LIABILITY

A. Termination Agreement

The district court admitted into evidence the “Settlement Agreement and General Release” that Reichhold offered to Cassino at his termination meeting. We review evidentiary rulings for abuse of discretion and will not reverse absent some prejudice. Kisor v. Johns-Manville Corp., 783 F.2d 1337, 1340 (9th Cir.1986).

The issue is whether the document was inadmissible under Fed.R.Evid. 408. That rule provides that evidence of offers “to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount.” See also E. Cleary, McCormick on Evidence § 274 (3rd ed. 1984) (offers to compromise actual disputes inadmissible). The district court admitted the agreement into evidence because Cassino had not asserted any claim at the time Reichhold asked for the release and, therefore, Rule 408 did not bar its admission. We find no abuse of discretion in admitting the proposed agreement under the circumstances of this case.

That conclusion follows from our review of many cases arising under the ADEA in which employers have sought releases of claims in return for monetary payment to dismissed employees. Our review reflects that such offers arise in at least two materially distinct contexts. The first is in connection with the negotiation and settlement of disputes arising after the termination. In these cases, an employee relinquishes the right to a judicial determination of an ADEA claim in return for valuable consideration after having asserted that he or she is a victim of illegal discrimination. See In re Lybarger, 793 F.2d 136, 137 (6th Cir.1986) (settlement of ADEA claim morning of scheduled trial); Runyan v. Nat’l Cash Register Corp., 787 F.2d 1039, 1040-41 (6th Cir.) (en banc) (release of all claims after allegation of age discrimination and acceptance of increased compensation for duration of consulting agreement), cert, denied, _ U.S. _, 107 S.Ct. 178, 93 L.Ed.2d 114 (1986). Such settlement offers are inadmissible to prove liability pursuant to Rule 408.

A second situation appearing in ADEA cases, and one more similar to this case, occurs when an employment relationship is terminated and the employer offers a contemporaneous severance pay package in exchange for a release of all potential claims, including claims for discriminatory acts that may have occurred at or before the termination. Such termination agreements are generally made a part of the record in the case and are considered relevant to the circumstances surrounding the alleged discriminatory discharge itself. The termination agreements, therefore, are probative on the issue of discrimination. See, e.g., Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539, 540 (8th Cir.1987) (termination agreement offering $39,000 severance pay and six months medical insurance premiums for general release); Moore v. McGraw Edison Co., 804 F.2d 1026, 1028-30 (8th Cir.1986) (termination agreement offering several employees severance pay for liability release); Sherrod v. Sears, Roebuck & Co., 785 F.2d 1312, 1314-15 (5th Cir.1986) (termination agreement offering approximately $5,000 in addition to accrued vacation and service allowances for release); Pruet Production Co. v. Ayles, 784 F.2d 1275, 1278 (5th Cir.1986) (termination agreement offering $120,000 if employee signed release). See generally R. Silberman & C. Bolick, The EEOC’s Proposed Rule on Releases of Claims under the [1343]*1343ADEA, 37 Lab.L.J. 195, 195-96 (1986) (discussing distinction between settlement agreements and termination agreements).

Reichhold cites no authority holding that termination agreements such as those cited above are inadmissible. This is no doubt because the protections of Rule 408 were designed to encourage the compromise and settlement of existing disputes. See United States v. Contra Costa County Water Dist., 678 F.2d 90, 92 (9th Cir.1982); Fed.R. Evid. 408

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817 F.2d 1338, 47 Fair Empl. Prac. Cas. (BNA) 865, 23 Fed. R. Serv. 17, 1987 U.S. App. LEXIS 6317, 43 Empl. Prac. Dec. (CCH) 37,062, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cassino-v-reichhold-chemicals-inc-ca9-1987.