Weems v. Tyson Foods, Inc.
665 F.3d 958 (2011)
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Rule of Law:
Under Federal Rule of Evidence 408, an offer to compromise a disputed claim, such as an employment separation agreement, is inadmissible when offered to prove liability for that claim. A claim is considered "disputed" when there is an actual difference of opinion regarding liability, even if litigation has not yet been threatened.
Facts:
- Retha Weems began working as the plant manager at Tyson Foods' troubled Noel, Missouri, plant on September 1, 2006, after receiving assurances she would be given the time and support to improve its performance.
- After Chip Miller became Weems' new division vice president, she fell out of favor with her supervisors.
- Weems testified that she overheard Miller tell her supervisor that "women had no business being plant managers; they couldn’t handle the heat."
- On October 24, 2007, Weems' supervisor informed her she was being removed as plant manager and would be placed on a 30-day administrative leave to find another position within Tyson, or her employment would be terminated.
- In November 2007, Weems told Greg Nelson, a Tyson human resources manager, that she "felt like [she] was discriminated against because [she] was female."
- Following this conversation, Nelson arranged for Weems to be sent a "Separation Agreement and General Release," which offered her continued pay in exchange for releasing all legal claims against Tyson.
- Weems did not sign the agreement and ultimately accepted a different position within the company.
Procedural Posture:
- Retha Weems filed a lawsuit against Tyson Foods, Inc. in federal district court, alleging gender discrimination under Title VII and the Arkansas Civil Rights Act.
- At trial, the district court admitted a separation agreement offered by Tyson to Weems into evidence, over Tyson's objection that it was inadmissible under Federal Rule of Evidence 408.
- A jury returned a verdict in favor of Weems and awarded her damages for lost wages, as well as compensatory and punitive damages.
- The district court entered judgment against Tyson but reduced the total award to comply with statutory damage caps.
- The district court denied Tyson's subsequent motion for judgment as a matter of law or for a new trial.
- Tyson Foods, Inc. (appellant) appealed the judgment to the United States Court of Appeals for the Eighth Circuit, and Retha Weems was the appellee.
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Issue:
Does Federal Rule of Evidence 408 prohibit the admission of an employment separation agreement into evidence when the agreement was offered to an employee after she was removed from her position and had complained of discrimination, and was subsequently used at trial to prove the employer's liability?
Opinions:
Majority - Riley, Chief Judge
Yes, Federal Rule of Evidence 408 prohibits the admission of the separation agreement. Admitting an offer to compromise a disputed claim to prove liability violates the rule's exclusionary principle. The court reasoned that a claim becomes "disputed" for the purposes of Rule 408 as soon as there is an "actual dispute or difference of opinion," which existed here when Weems was removed from her position and subsequently complained of gender discrimination to human resources. The separation agreement, offered after these events, constituted an offer to compromise this disputed claim. Weems offered the agreement not for a permissible 'other purpose,' but to prove Tyson's bad faith and consciousness of liability, which is inextricably linked to the ultimate question of liability and is therefore prohibited by the rule. The admission was a prejudicial error that affected Tyson's substantial rights, as evidenced by counsel's emphasis on it during closing arguments and the jury's specific written question about it during deliberations, necessitating a new trial.
Analysis:
This decision reinforces the broad protective scope of Federal Rule of Evidence 408, particularly in the employment law context. It clarifies that a "disputed claim" can exist well before a lawsuit is filed or even threatened, triggered by an adverse action and an employee's informal complaint. The court's narrow interpretation of the "other purpose" exception signals that evidence of compromise offers cannot be used to prove an element of the underlying claim, such as bad faith, when that issue is inseparable from liability. This precedent strengthens the public policy of encouraging settlements by allowing employers to offer separation agreements without fear that the offer itself will be used against them as an admission of wrongdoing in subsequent litigation.
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