USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit











No. 97-2011



                      FREDERICK C. MELTZER,



                       Plaintiff, Appellee,



                                v.



          COMERICA, INC. and MUNDER CAPITAL MANAGEMENT,



                     Defendants, Appellants.



                       ____________________



           APPEAL FROM THE UNITED STATES DISTRICT COURT



                FOR THE DISTRICT OF MASSACHUSETTS



           [Hon. Nancy J. Gertner, U.S. District Judge]

                       ____________________



                              Before



                      Boudin, Circuit Judge,



                  Aldrich, Senior Circuit Judge,



                    and Lynch, Circuit Judge.



                       ____________________



     Gary D. Friedman with whom Kenneth M. Bello, Joseph P. Curtinand Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. were on

brief for appellants.

     Frank J. Teague with whom Edward T. Patten and Mills, Teague

& Patten were on brief for appellee.









                                

                                

                         April 3, 1998

                                

                                

                                

  BOUDIN, Circuit Judge.  Frederick Meltzer brought suit in

state court, claiming that he had been discharged without cause and

without the compensation specified in his employment contract.  The

    case was removed to federal court based on diversity of

citizenship.  Following a trial, the jury found in favor of Meltzer

and awarded him almost $400,000 in damages.  This appeal by the

              district-court defendants followed.

     The main issue on appeal is whether the defendants were

entitled to judgment notwithstanding the verdict.  In substance,

 defendants claim the jury was obliged to find that Meltzer had

engaged in "an act of serious misconduct" which under his contract

would have justified dismissal without further compensation.  We

set forth the facts in the light most favorable to the verdict. 

Transamerica Premier Ins. Co. v. Ober, 107 F.3d 925, 929 (1st Cir.

                             1997).

      In 1993, Comerica, Incorporated, formed a wholly owned

subsidiary, World Asset Management.  The following year the new

 subsidiary hired Meltzer as the managing director of its fixed

 income bond department.  To lure him away from his job with an

established Boston firm, World Asset Management gave him a three-

year contract at a high salary with a guaranteed minimum bonus. 

The contract provided that if terminated without cause, Meltzer

would receive the balance of compensation specified for the entire

 contract.  "Cause" was further defined as including "an act of

                      serious misconduct."

      During 1994, World Asset Management had under lease a

portable computer terminal from Bloomberg LP, a device known in the

trade simply as a "Bloomberg," providing access to real-time stock

and bond market quotes and other information. Meltzer's company

also leased software, used in risk management for bond portfolios,

from Capital Management Sciences, a competitor of Bloomberg LP. 

 World Asset Management secretly lent the Bloomberg computer to

Capital Management Sciences in exchange for a discount on the cost

                of the risk-management software.

      The persons primarily responsible for the decision to

loan the Bloomberg were Meltzer's superior, Charles Kelso (CEO of

World Asset Management) and Meltzer's subordinate, Jonathan Jensen. 

Meltzer was present at the meeting in which Jensen proposed the

 loan and Kelso approved it.  According to Meltzer, he made no

comment on the proposal, nor did he attempt to raise the matter

  with higher level officials at Comerica.  The meeting was in

September 1994, and the Bloomberg was actually loaned to Capital

             Management Sciences in December 1994.

     In the meantime, Comerica affiliated itself with another

   company, Munder Capital Management, and the two companies

reorganized World Asset Management as a partnership between them. 

Kelso was replaced as head of World Asset Management by Stephen

Albrecht.  Meltzer said at trial that he told Albrecht about the

loan of the Bloomberg during December 1994, and Albrecht approved

the plan.  In any event, Albrecht made further inquiries of Meltzer

  in February 1995 and ultimately told Meltzer to retrieve the

                 Bloomberg, which Meltzer did.

          In February 1995, Albrecht discharged Meltzer,

purportedly on the ground that his involvement in the loan of the

  Bloomberg constituted "serious misconduct."  Meltzer in turn

brought the present action against Comerica and the Munder firm. 

The defendants accept responsibility for carrying out World Asset

Management's employment contract with Meltzer but insist that he

was fired for cause.  In returning a verdict in Meltzer's favor,

the jury found by special verdict that Meltzer had not engaged in

                "an act of serious misconduct."

    The parties agree that Meltzer's employment contract must

be construed in accordance with Michigan law.  The defendants point

us to case law in Michigan holding that an employer can establish

its own standards for job performance and can dismiss for cause any

employee who fails to adhere to those standards, even if the judge

  or the jury might think that the standards were unreasonably

demanding.  See Toussaint v. Blue Cross & Blue Shield of Michigan,

292 N.W.2d 880, 897 (Mich. 1980).  The gist of defendants' argument

on appeal is that the loan of the Bloomberg was manifestly improper

and that Meltzer's "participation" or "involvement" necessarily

    constituted "serious misconduct" providing cause for his

                          termination.

      Defendants argue at length that the loan violated the

 terms of the Bloomberg contract, the general provisions of the

   Comerica's code of ethics requiring employees to safeguard

     confidential information, and other civil and criminal

restrictions.  It is sufficient for us that the extent of Meltzer's

involvement or participation in the loan was disputed and that on

   one reading of the evidence he was no more than minimally

connected.  The jury was thus free to conclude that even if the

loan were serious misconduct, Meltzer's connection to it was not

               "serious misconduct" on his part.

       Defendants next assert that they were entitled to an

instruction that, although Meltzer asserted that Kelso had approved

 the loan, "[i]t is not a defense that a supervisor authorized

unlawful, unethical or unreasonable acts to be performed."  The

defendants' proposed instruction contained other language that the

district court did adopt, including the tamer statement that "[a]n

employer [sic] only has a duty to follow a supervisor's orders if

those orders are lawful," and "[a]n employee cannot be discharged

  for refusing to perform an unlawful act."  But obviously the

additional language requested by the defendants would have been

                   even more helpful to them.

    The difficulty is that the key sentence that the district

judge refused to charge seems to us to be misleading in the context

 of these facts.  While there is certainly some behavior that a

supervisor cannot "authorize," in the present case Kelso's alleged

   approval had at least some bearing on the question whether

Meltzer's failure to report or interfere with the transaction was

"serious misconduct."  Being unbalanced, the instruction as framed

 by the defendants did not have to be given.  See Harrington v.

      United States, 504 F.2d 1306, 1317 (1st Cir. 1974).

        The defendants further object that Meltzer's post-

    termination earnings should have been offset against his

compensation due under the contract.  Well before the scheduled

trial, defendants stipulated that if Meltzer was not discharged for

 serious misconduct, then his damages were the specific amount

calculated under his contract for the remainder of the three-year

 term, specifically, $398,773.97.  Ten days prior to trial the

defendants moved to set aside that stipulation, and, several days

later, they moved to amend their answer to assert an affirmative

                 defense of actual mitigation.

      We see no error in the district court's decision that

defendants' last-minute attempted change of position should not be

allowed because of the extreme delay and the prejudice to Meltzer. 

See Grant v. News Group Boston, Inc., 55 F.3d 1, 5 (1995) (denial

of leave to amend reviewed for abuse of discretion).  This makes it

unnecessary to consider the district court's alternative ruling

that, under the language of the contract, Meltzer was entitled (if

discharged for cause) to the balance of the prescribed compensation

   with no reduction on account of post-termination earnings

                           elsewhere.

     Finally, defendants' brief challenges several rulings by

the district judge on the admissibility of evidence during trial. 

We have examined her rulings and concluded that they are either

correct or, if not, that they did not constitute prejudicial error. 

Without going into detail, it is plain that the result of the case

  would have been no different if each of the three challenged

  rulings had been resolved by the trial judge in favor of the

                          defendants.

                             Affirmed.