## Facts

- John Pierce, age 63, worked for approximately twenty years as controller for F.R. Tripler & Co., a wholly owned subsidiary of Hartmarx Specialty Stores, Inc.
- Hartmarx implemented a reorganization that eliminated Pierce’s controller position; Pierce was discharged in May 1986.
- Pierce’s claim did not challenge the discharge; it alleged age discrimination based on Tripler’s failure to promote him to General Manager after the incumbent retired.
- Tripler awarded the General Manager position to Peter Van Berg, age 39, whom Hartmarx had hired earlier with the intent to prepare him for that role.
- After Pierce asserted an ADEA claim through counsel, the parties engaged in discussions aimed at resolving the dispute.
- During those discussions, defendants (through counsel) conveyed a job offer for a financial position at another Hartmarx subsidiary.
- Pierce rejected the offer and filed suit; defendants later sought to introduce the offer to support a mitigation-of-damages argument.

## Issues

1. Whether the trial evidence was sufficient to support the jury’s finding that defendants violated the ADEA by failing to promote Pierce because of age.
2. Whether the evidence supported the jury’s finding that the ADEA violation was willful, warranting doubled back pay under 29 U.S.C. § 626(b).
3. Whether Federal Rule of Evidence 408 barred admission of a job offer made during settlement discussions when offered by defendants to reduce damages based on alleged failure to mitigate.
4. Whether Rule 11 sanctions were proper against defendants for attempting to introduce the job-offer evidence.

## Decision

- The Second Circuit affirmed the judgment for Pierce on the ADEA failure-to-promote claim.
- The court affirmed the finding of willfulness and the resulting doubling of the back-pay award.
- The court affirmed exclusion of the job-offer evidence under Federal Rule of Evidence 408.
- The court reversed the Rule 11 sanctions imposed on defendants.

## Legal Principles

- An ADEA violation is willful when the employer knew, or showed reckless disregard for whether, its conduct was prohibited by the ADEA; a willfulness finding supports liquidated (doubled) back pay under § 626(b).
- Federal Rule of Evidence 408 excludes evidence of offering valuable consideration in compromising or attempting to compromise a disputed claim when offered to prove or disprove the claim’s amount, including efforts to reduce damages through mitigation arguments.
- Rule 408’s exclusion applies regardless of which party offers the settlement evidence; the policy of encouraging settlement would be impaired if an offeror could later use its own settlement offer against the opposing party.
- A job offer communicated in the context of settlement discussions, and not clearly separate from compromise efforts, may be treated as part of settlement negotiations and excluded under Rule 408.
- Rule 11 sanctions are inappropriate where the party advances a nonfrivolous, colorable legal argument on a debatable evidentiary question, even if the argument is rejected.

## Conclusion

The Second Circuit upheld a jury finding that defendants willfully violated the ADEA by failing to promote an older employee, affirmed doubled back pay, and held that a job offer conveyed during settlement discussions was inadmissible under Rule 408 to reduce damages, while reversing Rule 11 sanctions because defendants’ evidentiary position was not frivolous.


Pierce v. F.R. Tripler & Co., 955 F.2d 820 (2d Cir. 1992)