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Pierce v. Atchison

August 30, 1995




Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 91 C 3776--Joan Gottschall, Magistrate Judge.

Before RONEY, *fn* FLAUM, and KANNE, Circuit Judges.

FLAUM, Circuit Judge.



Santa Fe Railroad ("Santa Fe") appeals from a jury verdict against it on Eugene Pierce's allegation of age discrimination. Santa Fe asserts that Pierce signed a release barring this recovery, that it did not discriminate against him, let alone willfully, and that the court erred in calculating Pierce's front pay award. In his cross-appeal, Pierce maintains that if we vacate the age discrimination verdict, we should remand for reconsideration of his race discrimination claim. We remand for further consideration the issue of whether Pierce executed the release knowingly and voluntarily, affirm, but vacate pending remand, the finding of discrimination and the award of front pay, and reverse the finding of willfulness.


Eugene Pierce, an African-American, began working for Santa Fe in June, 1977. He held several union posts until March 1, 1988, when Santa Fe promoted him to a nonunion position as a Senior Analyst in its Intermodal Marketing Group. In this job, Pierce received rate proposals from field sales representatives and was responsible for entering data into a computer, analyzing the relevant information, and accepting or rejecting the suggested rate.

In July, 1989, Santa Fe terminated Pierce from his Senior Analyst position. Santa Fe explained to Pierce, then 51 years old, that this action was pursuant to a reorganization/reduction in force of his department. Santa Fe actually may have added Senior Analyst positions and one such spot remained open after Pierce's discharge. Santa Fe asserts that all but two of the slots entailed different duties than Pierce's former job, but Pierce was the only former Senior Analyst not retained. In addition, Santa Fe's 1989 Annual Report stated that its new intermodal department was its "most promising growth area."

Pierce rejected a severance package, including $19,000, that required him to sign a general release of claims against Santa Fe. Instead, Pierce exercised his union seniority rights and became a file room clerk. Two days later a more senior union employee took that job from Pierce, who then accepted a position as an assistant file room clerk. This job paid less than his previous Senior Analyst position and required Pierce to deliver and pick up files from the people now performing his former duties. In November, 1989, Pierce learned that his department was being relocated out of the state, although he had heard rumors to that effect before taking the position. Pierce met with George Pacocha, the director of administration, about his possible eligibility for a one-year severance package if he resigned.

Leighton Broxterman, an employee in Santa Fe's personnel department, approved the one-year deal if Pacocha could complete it within the three business days before Thanksgiving. At trial, Pacocha could not recall why Broxterman imposed this time constraint. Pacocha never informed Pierce that Pierce was not otherwise entitled to this package although Pacocha and Broxterman gave conflicting testimony regarding whether a one-year severance package was standard company practice.

As part of the package, Pacocha presented Pierce with a general release stating:

I further understand that this voluntary resignation constitutes full settlement and release of any and all claims of any nature, known or unknown, which I may or might have against said Railway Company, including, but not limited [to], claims which derive from or are based on any aspect of my preceding employment relationship with said Railway Company or my resignation of such employment. I have received over $36,000.00 in exchange for signing this release. (emphasis added).

Before signing the release, Pierce informed Pacocha that he had filed a claim with the Equal Employment Opportunity Commission ("EEOC") alleging age and race discrimination from his termination as a Senior Analyst. Pierce asked Pacocha whether the release covered civil rights claims, and the parties agree that in response, Pacocha stated he did not think it did, but rather, only waived bodily injury actions. Pierce also recounted that Pacocha told him he would not receive the severance package unless he signed the release immediately. Pierce, however, asked for and received at least one more day to consider the release. Pacocha said he would consult with Santa Fe's legal department to clarify the scope of the release and suggested that Pierce could also consult an attorney. Pierce instead chose to confer with an EEOC employee, whose advice he did not disclose at trial.

Pacocha testified that when he and Pierce met again, on the Monday following Thanksgiving, he told Pierce that the release would bar his discrimination claim; another Santa Fe employee recounted hearing Pacocha's statement. Pierce stated that the men actually met the day after their initial meeting, the Wednesday before Thanksgiving, and that Pacocha again assured him the release would not cover his discrimination actions. Pierce signed the release, received the money and then, on June 18, 1991, filed the instant action.

The parties consented to disposition by a Magistrate Judge. The Magistrate Judge allowed the issue of whether the release barred Pierce's claims to go to the jury, which found that it did not. The jury further found that Santa Fe had discriminated against Pierce because of his age and awarded Pierce in excess of $47,000 in back pay. The jury further found that Santa Fe had acted willfully and thus doubled Pierce's back pay award. In its advisory capacity, the jury found that Santa Fe had not discriminated against Pierce because of his race, a conclusion also reached by the court. Santa Fe filed a motion for judgment notwithstanding the verdict ("JNOV") (now called judgment as a matter of law), which the court denied. The court then held a hearing on damages and subsequently awarded Pierce $392,482 in front pay and lost benefits. Both parties appealed, raising numerous challenges to the verdicts.

On appeal, Santa Fe argues that the court erred in denying its motion for a JNOV because the release Pierce signed barred these claims and because it did not discriminate against Pierce or do so willfully. Santa Fe also argues that the court erred in calculating front pay. Pierce asserts that if we reverse the jury's verdict, we must remand for reconsideration by the court of his race claim.


We review the court's denial of Santa Fe's motion for judgment notwithstanding the verdict de novo. Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1139 (7th Cir. 1994). We view all evidence and permissible inferences in favor of Pierce and disregard conflicting testimony and determine whether sufficient evidence supported the jury's verdict that the release did not cover his claims. King v. Fairman, 997 F.2d 259, 261 (7th Cir. 1993). "A motion for judgment notwithstanding the verdict should only be granted when there can be but one conclusion from the evidence." McNabola v. Chicago Transit Auth., 10 F.3d 501, 515 (7th Cir. 1993). Pierce's arguments against the validity of the release span both state contract law and federal civil rights law. We address the ramifications of each in turn.


We start by noting that the release, on its face, plainly covers Pierce's claims. It is written in extremely broad terms and its "any and all" language is not ambiguous. Constant v. Continental Tel. Co., 745 F.Supp. 1374, 1380 (N.D. Ill. 1990); see also Lohman v. Morris, 146 Ill.App.3d 457, 497 N.E.2d 143, 146 (3d Dist. 1986) ("any and all" is clear and unequivocal). Pierce asserts that "my previous employment relationship" is unclear because he held more than one position as a Santa Fe employee. While that phrase could be read to mean either his job as an assistant file room clerk or his entire employment relationship with Santa Fe (in our view the most natural reading), in no way does this possible ambiguity affect the clear import of the "any and all . . . including, but not limited [to]" language preceding it. The release clearly encompassed Pierce's discrimination claims.

Pierce, however, argues that the contract contains an extrinsic ambiguity. We have recognized that parties can "present evidence outside of the contract to show that although the contract appears to be clear to a typical reader of English, anyone who understood the circumstances in which the contract had been intended to apply would know that it does not mean what it seems to mean." Home Ins. Co. v. Chicago & Northwestern Transp. Co., 56 F.3d 763, 768 (7th Cir. 1995). In order to protect what parties apparently have bargained for by reducing their agreement to writing, we only allow litigants to introduce objective evidence to show the contract has a different meaning. AM Int'l, Inc. v. Graphic Management Assoc., Inc., 44 F.3d 572, 575 (7th Cir. 1995). We permit objective evidence--that supplied by disinterested third parties such as custom or trade usage--because the parties to ...

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