Graefenhain v. Pabst Brewing Co.

• Decision Date: 07 March 1989
• Docket Number: Nos. 88-1408,88-1429,s. 88-1408
• Citation: 870 F.2d 1198
• Parties: 49 Fair Empl.Prac.Cas. 829, 49 Empl. Prac. Dec. P 38,867, 57 USLW 2626, 13 Fed.R.Serv.3d 302 Gunther GRAEFENHAIN and Philip Miller, Plaintiffs-Appellants, Cross-Appellees, v. PABST BREWING COMPANY, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1198

870 F.2d 1198

49 Fair Empl.Prac.Cas. 829,

49 Empl. Prac. Dec. P 38,867, 57 USLW 2626,

13 Fed.R.Serv.3d 302

Gunther GRAEFENHAIN and Philip Miller Plaintiffs-Appellants, Cross-Appellees, v. PABST BREWING COMPANY, Defendant-Appellee, Cross-Appellant.

Nos. 88-1408, 88-1429.

United States Court of Appeals Seventh Circuit.

Argued Oct. 31, 1988.

Decided March 7, 1989.

Leonard N. Flamm, Hockert & Flamm, New York City, Frank Joseph Schiro, Frank Joseph Schiro, Ltd., Milwaukee, Wis., for plaintiffs-appellants, cross-appellees.

James A. Bowles, Hill Farrer & Burrill, Los Angeles, Cal., for defendant-appellee, cross-appellant.

Before CUMMINGS and CUDAHY, Circuit Judges, and PELL, Senior Circuit Judge.

CUDAHY, Circuit Judge.

In this appeal, appellants Gunther Graefenhain and Philip Miller and cross-appellant Pabst Brewing Company raise a plethora of issues surrounding the award of front pay damages under the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. Secs. 621-634. In a prior appeal, we reversed the district court's grant of judgment n.o.v. to Pabst, and reinstated the jury's finding that Pabst had willfully violated the ADEA. Graefenhain v. Pabst Brewing Co., 827 F.2d 13 (7th Cir.1987). On remand, the district court determined that Miller was entitled to front pay; after an evidentiary hearing the court awarded front pay in an amount it considered appropriate. The court held that Graefenhain was not entitled to front pay in any amount since his severance payments from Pabst and salary from his new job left him, in the aggregate, in a better financial position than if he had remained with Pabst. The parties appeal various aspects of these rulings. After a careful review of the applicable law and the record in this case, we affirm the district court's judgment in all respects, with one exception: the court deducted pension benefits received by Miller from his front pay award without considering all the factors relevant to this issue, necessitating a limited remand to allow the district court to reassess this aspect of Miller's damages. The facts relevant to our disposition of the various issues are stated in the body of our opinion.

Before considering the issues raised by the parties, it is important to stress the standard of appellate review applicable to an award of front pay. As an equitable remedy, the district court has discretion to decide whether to award front pay; the district court's decision will be overturned on appeal only if it constitutes an abuse of discretion. Rengers v. WCLR Radio Station, 825 F.2d 160, 163 n. 1 (7th Cir.1987), vacated, --- U.S. ----, 108 S.Ct. 1990, 100 L.Ed.2d 223 on remand, 857 F.2d 363 (7th Cir.1988); McNeil v. Economics Laboratory, Inc., 800 F.2d 111, 119 (7th Cir.1986), cert. denied, 481 U.S. 1041, 107 S.Ct. 1983, 95 L.Ed.2d 823 (1987). "Under the abuse of discretion standard, the proper inquiry is not how the reviewing court would have ruled if it had been considering the case in the first place, but rather, whether any reasonable person could agree with the district court." United States v. $103,387.27 in U.S. Currency, 863 F.2d 555, 561 (7th Cir.1988). Factual determinations made by the district court as a predicate to its award will be upset only if "clearly erroneous," Fed.R.Civ.P. 52(a); the reviewing court must be left "with the definite and firm conviction that a mistake has been made." United States v. United States Gypsum Co., 333 U.S. 364, 375, 68 S.Ct. 525, 532, 92 L.Ed. 746 (1948). ¹ Although the parties have selectively invoked and then ignored these sharply limited standards of review, we have attempted to apply these standards as evenhandedly as possible.

I. Appeal of Miller and Pabst's Cross-Appeal

At the end of the initial liability trial, the district court held that Miller was not entitled to front pay, since he had "failed to establish that reinstatement was either infeasible or inappropriate." Graefenhain v. Pabst Brewing Co., No. 83 C 1670, mem. op. at 9 (E.D.Wis. Mar. 11, 1985). Miller moved to alter or amend the court's front pay judgment on March 22. However, this motion was mooted by the district court's grant of judgment n.o.v. to Pabst on November 2, 1985. 620 F.Supp. 696. This court reversed the trial court's grant of judgment n.o.v., and remanded so that the jury's verdict in favor of Miller and Graefenhain could be reinstated. Graefenhain v. Pabst Brewing Co., 827 F.2d 13 (1987). We noted that, "[b]y reason of our reversal, plaintiffs' motion [to amend the front pay award] is again ripe for consideration by the district court." Id. at 23.

On remand, the district court determined that Miller was in fact entitled to front pay; the court scheduled an evidentiary hearing to determine the amount of front pay which should be awarded. 670 F.Supp. 1415, 1418-1420 (E.D.Wis.1987). Prior to the first appeal, the parties had agreed to try damages questions, including the issue of front pay, to the court. See mem. op. at 2 (E.D.Wis. Mar. 11, 1985). On remand, Miller requested a jury trial of these issues. He argued that he should be relieved of his prior stipulation because circumstances had changed dramatically in the two and one-half years between the initial damages hearing and the hearing on remand. The district court refused to rescind the prior agreement, and front pay issues were once again tried to the court. 670 F.Supp. 1420, 1421 (E.D.Wis.1987). At the hearing, the court considered the reduction in force ("RIF") which Pabst had instituted in March, 1985, after the initial trial and damages award. The court concluded that Miller's employment would have been terminated in the RIF. Since a legitimate, nondiscriminatory reason for discharge terminated the accrual of damages, the court held that Miller was entitled to front pay for only five months, up to the time when he would have been terminated in the RIF.

A.

We initially address Pabst's cross-appeal. Pabst argues that the district court erred in awarding Miller any front pay, for two reasons: first, Miller refused Pabst's unconditional offer of reinstatement, which absolved Pabst of any liability for front pay; second, front pay damages were inappropriate because Miller had been awarded substantial liquidated damages. We consider these issues in turn.

1.

In Ford Motor Co. v. EEOC, 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982), the Supreme Court held that "absent special circumstances, the rejection of an employer's unconditional job offer ends the accrual of potential backpay liability." Id. at 241, 102 S.Ct. at 3070. But not every offer of reinstatement tolls the accrual of an employer's liability. An employee's obligation to accept an offer of reinstatement is based on the general rule that a discharged employee must mitigate damages by using "reasonable diligence in finding other suitable employment." Id. at 231, 102 S.Ct. at 3065 (emphasis added). Under the mitigation doctrine, the employee "need not go into another line of work, accept a demotion, or take a demeaning position." Id. An employee "need not 'seek employment which is not consonant with his particular skills, background, and experience' or 'which involves conditions that are substantially more onerous than his previous position.' " Id. at 231 n. 16, 102 S.Ct. at 3065 n. 16 (quoting NLRB v. Madison Courier, Inc., 472 F.2d 1307, 1320-21 (D.C.Cir.1972)).

Lower courts have recognized, both before and after Ford Motor, that "[i]n determining whether the right to relief extends beyond the date of an offer of reinstatement the trial court must consider the circumstances under which the offer was made or rejected, including the terms of the offer and the reasons for refusal." Claiborne v. Illinois Central R.R., 583 F.2d 143, 153 (5th Cir.1978), cert. denied, 442 U.S. 934, 99 S.Ct. 2869, 61 L.Ed.2d 303 (1979). An offer of reinstatement tolls the accrual of damages only if it "afford[s] the claimant virtually identical promotional opportunities, compensation, job responsibilities, working conditions, and status." Rasimas v. Michigan Dep't of Mental Health, 714 F.2d 614, 624 (6th Cir.1983), cert. denied, 466 U.S. 950, 104 S.Ct. 2151, 80 L.Ed.2d 537 (1984). ²

The accrual of damages for a discriminatory discharge is not terminated merely because the employee refuses an offer of reinstatement; instead, it is only "an unreasonable refusal ... [which] will preclude recovery of front pay." McNeil v. Economics Laboratory, Inc., 800 F.2d 111, 118 (7th Cir.1986) (emphasis added), cert. denied, 481 U.S. 1041, 107 S.Ct. 1983, 95 L.Ed.2d 823 (1987). Since the employer bears the burden of proof as to the adequacy of an offer of reinstatement, ³ the employer must initially make an offer which is sufficiently specific to support a finding that the tendered employment is comparable to the employee's prior job. Only after receiving an appropriately detailed offer is the discharged employee required either to accept the offer or to provide specific reasons why it is inadequate.

Whether an offer of reinstatement is adequate to trigger the Ford Motor rule is largely a fact question, which requires weighing the employee's prior experience and job skills against the terms and conditions of the offer. Ortiz v. Bank of America Nat'l Trust & Sav. Ass'n, 852 F.2d 383, 387 (9th Cir.1988); EEOC v. Exxon Shipping Co., 745 F.2d 967, 978 (5th Cir.1984). Since predominantly factual, the trial court's determination as to the adequacy of a reinstatement offer will be upset on appeal only if clearly erroneous. To the extent Pabst's argument is premised on the district court's misinterpretation of one of its own orders, Pabst faces an equally heavy burden--the district court's interpretation will not be upset unless it constitutes a clear abuse of discretion, since "[f]ew persons are in a better position to understand the meaning of a [court order] than the district judge who oversaw and approved it." United States v. Board of...