Preserving Jury Instruction Objections and the Limits of Rule 408 in Retaliation Claims: 10th Cir.

Introduction

This commentary reviews the United States Court of Appeals, Tenth Circuit’s decision in the case of Qinghua Zhang and Steven Craig Heiland v. Federal Home Loan Bank of Topeka (2025, Case No. 24-3029). The case centers on claims of retaliatory termination and racial discrimination brought by Zhang and Heiland against their former employer, FHLB, under Title VII of the Civil Rights Act of 1964 and for common law retaliatory discharge. While the jury rendered a verdict in favor of FHLB at trial, the appellants pursued reversal on two main issues: an alleged error in jury instruction on pretext in discrimination claims, and the exclusion of evidence regarding severance offers under Federal Rule of Evidence 408.

The dispute highlights the importance of procedural safeguards such as preserving objections on the record, and the careful judicial balancing required in admitting evidence linked to settlement negotiations. The commentary below provides an in-depth analysis of the case, focusing on the new legal insights derived from the decision regarding jury instruction preservation and evidentiary exclusions under Rule 408.

Summary of the Judgment

The Tenth Circuit affirmed the district court’s judgment, which rejected the claims of retaliatory termination and racial discrimination, and denied the appellants’ motion for a new trial. Two principal issues were addressed:

Jury Instruction on Pretext: The appellants contended that the jury should have been instructed that if it disbelieved FHLB’s stated reasons for termination, it could conclude that those reasons were a pretext for racial discrimination. The Court, however, ruled that Zhang and Heiland did not preserve their objection properly at trial.
Evidentiary Exclusion under Rule 408: The appellants argued that evidencing severance offers would show that FHLB’s reasons for removal were pretextual and that their rejection of the offers supported a good faith claim of whistleblowing. The district court’s decision to exclude this evidence was deemed within its discretion and was affirmed.

Ultimately, the appeals court found no reversible error in either the jury instruction or the evidentiary rulings.

Analysis

Precedents Cited

The Court’s analysis drew heavily on several important precedents that frame the proper procedure for preserving objections in jury instructions and the admissibility of compromise negotiations under Rule 408:

REED v. LANDSTAR LIGON, INC. – This case emphasizes that any challenge to jury instructions must be preserved on the record. The court in the present decision highlighted that failure to object in court deprives an appellant of the opportunity to raise the issue on appeal.
First Am. Title Ins. Co. v. Nw. Title Ins. Agency – The requirement for renewing objection on the record was reinforced here. The court stressed that a mere suggestion or a tardy objection, without a clear record of objection to the exclusion, is insufficient.
BRADBURY v. PHILLIPS PETROLEUM CO. – This case supports the district court’s discretion in excluding evidence related to compromise negotiations, even under the alternative rationale provided by Rule 408(b), which allows for admission only “for another purpose.”
RURAL WATER DIST. NO. 4 v. CITY OF EUDORA – This precedent underlines the highly deferential standard of review for evidentiary rulings as long as the decision does not constitute a clearly erroneous finding of fact or an erroneous application of the law.

Legal Reasoning

The court’s reasoning was methodically structured and relied on two fundamental legal principles:

Preservation of Errors: The appellate court reaffirmed that objections to jury instructions must be explicitly and timely recorded at trial. While Zhang and Heiland had submitted a proposed instruction regarding pretext, they failed to object adequately to its omission during the critical stages of jury instruction finalization. Without a clear record, the appellate court could only review for plain error—a standard that was not met by the appellants.
Key takeaway: Appellants must take care to renew every objection on the record to preserve their rights for appeal.
Evidentiary Admissibility Under Rule 408: The court acknowledged the general inadmissibility of settlement negotiations under Rule 408. The appellants’ contention that the severance offers could have been admitted for a purpose other than proving or disproving a claim was dismissed on the grounds that the district court’s decision to exclude the evidence was within its discretionary authority. The court explained that even if the evidence might have buttressed the appellants’ pretext theory, the rule is clear about avoiding cumulative evidence.

Impact on Future Cases and Legal Field

This judgment reinforces strict procedural requirements in employment litigation, particularly in cases alleging retaliatory discharge and discrimination. Future litigants should note the following implications:

Strict Record-Keeping: The decision underscores the need for diligent preservation of all objections, especially when challenging jury instructions. Failure to object on the record can result in waiving critical issues on appeal.
Evidentiary Caution: The ruling affirms that evidence of compromise negotiations remains generally inadmissible under Rule 408 unless clearly falling within the narrow exceptions. This may affect strategies in presenting evidence that indirectly suggests pretext in discrimination or retaliation claims.
Procedural vs. Substantive Claims: As the court’s decision turned on procedural grounds rather than the merits of the underlying discrimination or retaliation claims, future litigants must be cautious to not let substantive claims overshadow the importance of adhering to procedural protocols.

Complex Concepts Simplified

Several legal concepts from the judgment are clarified below:

Preservation of Error: This means that if a party believes an error is made (for example, not including a jury instruction), they must formally object to that error during the trial. Otherwise, they may lose the right to challenge it on appeal.
Rule 408 Evidence: Federal Rule of Evidence 408 generally prevents the admission of evidence regarding offers to settle disputes because such negotiations are meant to encourage settlements and should not be used to influence the trial’s outcome.
Plain Error Standard: This is a high threshold for appellate courts to overturn a trial court’s decision. To succeed, an appellant must prove that the error was obvious, affected substantial rights, and compromised the fairness of the proceedings.

Conclusion

In conclusion, the Tenth Circuit’s decision affirms the district court’s judgment on two key fronts: the improper preservation of objections regarding jury instructions and the appropriate exclusion of severance offers under Rule 408. The judgment clearly reiterates that failure to object on the record prevents the appellate court from reviewing claims for error, and it underlines the courts’ deference in evidentiary rulings related to settlement discussions.

The case serves as an important reminder for litigants to meticulously follow procedural requirements during trial to preserve contested issues for appeal and reinforces the limitations on using compromise evidence in claims of pretext. This decision, while not binding as a precedent beyond its immediate context, carries persuasive value for future employment litigation in which procedural rigor plays a decisive role.

Preserving Jury Instruction Objections and the Limits of Rule 408 in Retaliation Claims