Smith v. World Ins. Co.
| Citation | 38 F.3d 1456 |
| Decision Date | 21 November 1994 |
| Docket Number | Nos. 93-1558,93-1559,s. 93-1558 |
| Parties | 66 Fair Empl.Prac.Cas. (BNA) 13, 65 Empl. Prac. Dec. P 43,344, 18 Employee Benefits Cas. 2408 Thomas Dean SMITH, on behalf of himself and all others similarly situated, Appellee/Cross-Appellant, v. WORLD INSURANCE COMPANY, Appellant/Cross-Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
John H. Cotton, Phoenix, AZ, argued (Paula M. DeMore, on the brief), for appellant.
Edward D. Hotz, Omaha, NE, argued, for appellee.
Before LOKEN, Circuit Judge, HEANEY, Senior Circuit Judge, and HANSEN, Circuit Judge.
World Insurance Company (World) appeals the district court's order denying World's motion for new trial or judgment as a matter of law filed after the district court entered judgment and awarded damages to Thomas Dean Smith on a jury verdict finding that World constructively discharged him in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634. World also appeals the district court's order awarding Smith front pay. World argues that it is entitled to a new trial or judgment as a matter of law because (1) there was insufficient evidence on which to submit Smith's claim of constructive discharge to the jury; (2) Smith's election to take early retirement equitably estops Smith from claiming constructive discharge; (3) the jury was allowed to award backpay for the time period after Smith rejected World's offer of reinstatement; and (4) the jury failed to deduct from the backpay award various benefits Smith received as part of his early retirement agreement. World also argues that the district court erred by awarding Smith front pay after he rejected World's offer of reinstatement. Smith cross-appeals arguing that the district court erred by failing to include prejudgment interest on the damage awards. We affirm in part, reverse in part, and remand.
World hired Smith as a stock clerk in 1950, when Smith was 19 years old. Smith worked his way up in the company for the next 35 years. In 1976, World promoted him to Assistant Vice-President of Home Office Services, where his duties included product purchasing, supervision of mail room, filing, and warehousing, and printing all of World's policies, contracts, advertising brochures, and newsletters. In 1986, World promoted him to Assistant Vice-President for Purchasing.
In 1985, World hired a management consulting group to analyze the strengths and weaknesses of World's operations. After the consulting group finished its review, it recommended some changes in the management structure at World. After receiving those recommendations, World hired Alan Jackson as a new vice-president to oversee many areas of World's operations, including many of the areas under Smith's supervision. Smith began reporting to Jackson on July 7, 1986. Prior to July 7, 1986, Smith had reported to World's president, Tom Eilers.
Smith reported to Jackson for approximately one month during which Jackson and Smith met a few times. Jackson admitted to another employee during that time that he was building a record against Smith and other older employees in order to get rid of them. On August 8, 1986, Jackson told Smith that he had the option of staying with World and risking termination or taking early retirement. Jackson gave Smith the weekend to decide. On Monday, August 8, 1986, Smith informed World that he would take early retirement.
On August 18, 1986, Smith signed a memorandum agreement with Tom Eilers, on behalf of World, setting out the details of the early retirement package. Smith agreed to retire voluntarily on November 1, 1986. World agreed, among other things, to pay Smith a bonus based on six-weeks of his annual salary, to provide health insurance to Smith and his dependents for six weeks, to provide Smith group life insurance for a year, to provide Smith with the services of an employment agency to help him locate work, and to provide Smith with office space and telephone service until December 15, 1986. Smith was 54 years old when he agreed to early retirement. The person that filled his position was in her mid-30's. Smith found another job in the purchasing department of Mutual of Omaha and began work on December 16, 1986. Smith's new salary was approximately $11,000 a year less than he was making at World.
On the day Smith left World, he filed a complaint with the Nebraska Equal Opportunity Employment Commission. On August 11, 1987, Smith filed a complaint against World in the United States District Court for the District of Nebraska alleging that World had violated the ADEA by constructively discharging him by forcing him to take early retirement because of his age. On June 16, 1989, World offered to reinstate Smith to his former position of Vice President of Purchasing. On July 6, 1989, Smith rejected World's offer of reinstatement.
Smith's case against World went to trial on November 4, 1991. On November 13, 1991, the jury returned a verdict for Smith finding that World constructively discharged Smith because of his age. The jury assessed $67,321 of backpay damages and found that World's conduct constituted a willful violation of the ADEA. On the same day, the district court held a hearing on the issue of front pay and other damages. On October 16, 1992, the district court entered judgment on the jury verdict and awarded Smith $134,642 in backpay and liquidated damages (which doubles the backpay award), $124,954.40 in front pay, $113,628.75 in attorney's fees, and $4,194.87 in expenses.
Smith filed a motion seeking an amended judgment to include prejudgment interest on the damage awards. World filed a motion for judgment as a matter of law 1 or a new trial alleging a variety of errors in the trial and the computation of the damage awards. The district court denied both motions. World appeals and Smith cross-appeals.
World first argues that the district court erred in denying World's motion for judgment as a matter of law, or alternatively, for a new trial. We have applied the following standard of review to the district court's denial of such motions:
We review the district court's denial of a motion for judgment as a matter of law de novo using the same standards as the district court. Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1505 (8th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1048, 122 L.Ed.2d 356 (1993). A motion for judgment as a matter of law presents a legal question to the district court and this court on review: "whether there is sufficient evidence to support a jury verdict." White v. Pence, 961 F.2d 776, 779 (8th Cir.1992). We view the "evidence in the light most favorable to the prevailing party and must not engage in a weighing or evaluation of the evidence or consider questions of credibility." Id. Judgment as a matter of law is appropriate only when all of the evidence points one way and is "susceptible of no reasonable inference sustaining the position of the nonmoving party." Id.
We apply a much more deferential standard in our review of a district court's denial of a motion for a new trial under Fed.R.Civ.P. 59(a). "The [district] court's decision will not be reversed by a court of appeals in the absence of a clear abuse of discretion." Lowe v. E.I. DuPont de Nemours & Co., 802 F.2d 310, 310-11 (8th Cir.1986) (citations omitted) ... The key question is whether a new trial should have been granted to avoid a miscarriage of justice. See Beckman v. Mayo Found., 804 F.2d 435, 439 (8th Cir.1986) ().
Keenan v. Computer Assoc. Int'l, Inc., 13 F.3d 1266, 1268-69 (8th Cir.1994) (footnotes omitted). World asserts that it is entitled to judgment as a matter of law or a new trial on issues of both liability and damages.
World first argues that it is entitled to judgment as a matter of law or a new trial because there was insufficient evidence for the district court to submit to the jury Smith's claim that he was constructively discharged because of his age. We disagree.
" 'A constructive discharge exists when an employer deliberately renders the employee's working conditions intolerable and thus forces him to quit his job.' " Smith v. Goodyear Tire & Rubber Co., 895 F.2d 467, 472 (8th Cir.1991) (quoting Johnson v. Bunny Bread Co., 646 F.2d 1250, 1256 (8th Cir.1981)) (other source omitted). To make out a case of constructive discharge, a plaintiff must show that " 'a reasonable person would find the conditions intolerable.' " Id. (quoting Bunny Bread, 646 F.2d at 1256). The plaintiff must also show that the employer created the intolerable conditions intending to force the plaintiff to quit. Id. The plaintiff can satisfy the intent requirement by demonstrating that he or she quit as "a reasonably foreseeable consequence of [the] employer['s] discriminatory actions." Hukkanen v. International Union of Operating Eng'r, 3 F.3d 281, 285 (8th Cir.1993).
The mere offer of early retirement, however, does not establish a constructive discharge. See, e.g., James v. Sears Roebuck & Co., 21 F.3d 989, 993 (10th Cir.1994); Vega v. Kodak Caribbean, Ltd., 3 F.3d 476, 480 (1st Cir.1993); Gray v. York Newspapers, Inc., 957 F.2d 1070, 1081 (3d Cir.1992); Wilson v. Firestone Tire & Rubber Co., 932 F.2d 510, 514 (6th Cir.1991). Early retirement can be a humane and beneficial way for many older employees to leave the workplace. Coburn v. Pan Am. World Airways, Inc., 711 F.2d 339, 344 (D.C.Cir.), cert. denied, 464 U.S. 994, 104 S.Ct. 488, 78 L.Ed.2d 683 (1983); see also Henn v. National Geographic Soc'y, 819 F.2d 824, 826 (7th Cir.), cert. denied, 484 U.S. 964, 108 S.Ct. 454, 98 L.Ed.2d 394 (1987) (...
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