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Case Study - Offer of reinstatement

Sheng v. M&T Bank Corp. (2nd Cir. 2/2/17)

Plaintiff was an employee of M&T in its Central Technology Department.  When she decided to resign to relocate across the country, the bank offered her a position working remotely through an alternative work arrangement policy.  Plaintiff worked remotely for a period of time.  

In 2012 the bank decided to revisit the remote work policy.  The day after it announced that the policy would be revisited, Plaintiff reported to her supervisor that she was pregnant, and that she was concerned about the policy changes. Shortly thereafter M&T advised Plaintiff that she would need to start commuting from Los Angeles to Buffalo, NY, two days per week.  In response, Plaintiff requested a delay the start of her commute until after she gave birth.  Her request was denied, and Plaintiff was told that she could report to Buffalo, take a short-term disability leave, or be terminated.

Plaintiff hired a lawyer, who wrote to M&T advising that its actions had “effectively terminated” Plaintiff because of her pregnancy in violation of the law.  The lawyer likewise advised the company that he was writing, in part, to offer the company the opportunity to avoid costly litigation.  In response, M&T's general counsel called Plaintiff's attorney on the phone – during which both agreed that FRCP 408 would govern the call – thereby rendering any offers of settlement inadmissible in later proceedings.  Plaintiff's attorney then made a monetary settlement demand, which was denied by M&T's counsel, who made a counter proposal of reinstatement.  The counter proposal did not expressly condition the offer on the execution of a release, however M&T's counsel later made statements to the EEOC essentially stating that the bank was seeking to avoid litigation with its offer.  

Plaintiff went on to bring a lawsuit for violation of the FMLA, NYSHRL and ADA, among others.  Before trial Plaintiff's counsel filed a motion in limine seeking to exclude any offers made by M&T to reinstate Plaintiff in exchange for settling the case.  M&T opposed the motion, first stating that the offer showed that Plaintiff had failed to mitigate her damages, and second because the offer was unconditional – that it was not contingent upon Plaintiff's releasing the bank from liability.  The court denied the motion, and allowed the evidence of the offer at trial.  The jury found in favor of M&T.

On appeal, the Second Circuit concluded that the District Court erred in admitting evidence of M&T's offer of reinstatement.  First, the Court found, the express reliance upon FRCP 408 made clear that the parties intended to discuss a full settlement of the matter.  Second, the Court found that the statements of M&T's counsel at the EEOC constituted an admission that the reinstatement offer was conditioned upon dropping the lawsuit, “and its monetary demand eliminating, as a matter of law, any factual issue as to whether the offer was conditional.”  Because the offer was not unconditional, proof of it should not have been admitted at trial and such proof was prejudicial to the Plaintiff. 

Vacated in part and remanded.

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