## Facts

- Gerard A. Cassino worked for Reichhold Chemicals, Inc. from 1957 and became human resources director for the western region.
- Reichhold reorganized in 1981, disbanding Cassino’s division and reallocating its functions.
- In June 1983, at age 52, Cassino was terminated at the Tacoma, Washington plant as part of a group of sixteen discharged employees; fourteen were over age 40.
- About five weeks before the discharge, senior management discussed the company’s average employee age (47), possible pension plan changes, and a college recruiting program.
- At a contemporaneous meeting, the vice president for human resources stated the company wanted to “reduce the average age” of the workforce.
- Reichhold offered Cassino severance conditioned on signing a written agreement releasing age-discrimination claims; Cassino refused and sued under the ADEA and state law.
- A jury found for Cassino and awarded $492,000 in ADEA damages, including back pay, front pay, and liquidated damages.

## Issues

1. Whether excluding the severance-for-release agreement from the liability phase was error.
2. Whether the district court was required to give a separate “pretext” jury instruction in an ADEA disparate-treatment case.
3. Whether the district court improperly admitted lay opinion testimony regarding age-related motive.
4. Whether damages were tainted by inadequate mitigation instructions and improper exclusion of the employer’s mitigation expert testimony.
5. Whether the front pay and liquidated damages awards could stand in light of errors affecting the damages determination.

## Decision

- The Ninth Circuit affirmed the judgment as to ADEA liability.
- The court upheld exclusion of the severance-for-release document from the liability phase as an inadmissible compromise offer when used to prove liability.
- The court held the instructions, viewed as a whole, adequately required proof of intentional age discrimination; no special “pretext” instruction was required.
- The court found no abuse of discretion in admitting certain lay opinion testimony based on witnesses’ perceptions of workplace events and statements.
- The court reversed the damages award and remanded for a new trial on damages only because the jury was not properly instructed on mitigation and the employer’s mitigation expert evidence was improperly excluded.
- The remand encompassed back pay, front pay, and liquidated damages.

## Legal Principles

- ADEA disparate-treatment liability requires proof that age motivated the adverse employment action; direct statements about workforce age combined with disproportionate discharge of protected workers may support a finding of discriminatory intent.
- A trial court need not give a separate “pretext” instruction if the charge as a whole correctly states that the plaintiff must prove intentional discrimination.
- Under Federal Rule of Evidence 701, lay opinions may be admitted when rationally based on a witness’s perception and helpful to understanding facts such as motive inferred from workplace statements and observed practices.
- Under Federal Rule of Evidence 408, compromise offers (including severance conditioned on a release) are generally inadmissible to prove liability and may be excluded to avoid jury confusion and to protect settlement policy.
- Damages under the ADEA are subject to the plaintiff’s duty to mitigate by seeking comparable employment; the employer is entitled to present relevant evidence, including expert testimony, bearing on employability and the reasonableness of the job search.
- Front pay requires careful assessment of future employability and mitigation; errors affecting mitigation evidence and instructions can require retrial of front pay.
- Liquidated damages require willfulness; where the damages determination is procedurally flawed, liquidated damages may be retried with the other damages components.

## Conclusion

The Ninth Circuit upheld the jury’s finding that Reichhold violated the ADEA but ordered a new trial limited to damages because mitigation was not properly presented to the jury, including the exclusion of relevant expert testimony, which affected the awards of back pay, front pay, and liquidated damages.


Cassino v. Reichhold Chemicals, Inc., 817 F.2d 1338 (9th Cir. 1987)