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BERMINGHAM v. SONY CORP. OF AMERICA

November 20, 1992

JOHN BERMINGHAM, Plaintiff,
v.
SONY CORPORATION OF AMERICA, INC., SONY U.S.A., INC., SONY CORPORATION and SHINICHI TAKAGI, Defendants.



The opinion of the court was delivered by: LECHNER

 This employment discrimination action *fn1" is brought by plaintiff John Bermingham ("Bermingham") against Sony Corporation of America, Inc. ("Sony America"), Sony U.S.A., Inc. ("Sony USA"), Sony Corporation ("Sony Japan") *fn2" (collectively, the "Sony Corporation") and Shinichi Takagi ("Takagi") (collectively, the "Defendants"), pursuant to section 1981 ("Section 1981") of the Civil Rights Act of 1866 (the "Civil Rights Act"), as amended, *fn3" 42 U.S.C. § 1981 et seq., 42 U.S.C. § 2000e et seq., as amended ("Title VII"), the New Jersey Law Against Discrimination (the "NJLAD"), N.J.S.A. 10:5-1 et seq., and New Jersey common law. Jurisdiction appears to be appropriate pursuant to 28 U.S.C. §§ 1331, 1343 and 1367.

 Count I is a claim for violation of section 1981 under both the Civil Rights Act and the 1991 Civil Rights Act. Id., P 218. Count II is a claim for breach of an employment-at-will contract which also is alleged to violate the NJLAD and the federal public policy of Title VII. *fn4" Id., P 225-228. Count III is a claim for tortious discharge which is alleged to violate the public polices of both the NJLAD and Title VII. *fn5" Id., P 232. Count IV is a claim for breach of contract. Id., P 237. Count V is a claim for knowing and malicious defamation and slander. Id., PP 241-243. Count VI is a claim for prima facie tort. Id., PP 247-250. Count VII is a claim for intentional and malicious infliction of emotional harm. Id., P 253. Count VIII is a claim against Takagi for tortious interference with contract. Id., P 258.

 Bermingham seeks fifteen million dollars in compensatory damages and one hundred million dollars in punitive damages on each of Counts I through VII. With regard to Count VIII, Bermingham seeks thirty million dollars in compensatory damages and thirty million dollars in punitive damages. *fn6"

 Currently before the court is the motion of the Defendants to dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6). *fn7" For the reasons set forth below, the Defendants' motion is granted; the Amended Complaint is dismissed.

 Facts8

 The Parties

 Bermingham is a forty-seven-year old caucasian. Amended Complaint, PP 15, 45. He resides in Kinnelon, New Jersey. Id., P 45. He was first employed by Sony Corporation in 1982 *fn9" and contends he developed an "impeccable employment history." Id., P 4. He received numerous commendations from superiors, who expressed expectations of his promotion. Id. He received numerous salary increases, bonuses and promotions stemming from his first position at Sony Corporation as Vice President of Sony Tape Sale Company ("Sony Tape") in 1982. Id. He became the President of Sony Tape in 1989. *fn10" Id. Presently, Bermingham's position at Sony Corporation is Executive Vice President of Sony Electronics Group ("Sony Electronics"). Id., PP 4, 5.

 Sony Corporation is a Japanese corporation with its principal place of business in Tokyo, Japan. Id., P 16. Sony U.S.A. is a wholly owned subsidiary of Sony Corporation. It is organized and exists under the laws of Delaware and has its principal place of business in New York City. Id., PP 17, 20. Sony America is a wholly owned subsidiary of Sony U.S.A. It is organized and exists under the laws of Delaware and has its principal place of business in Park Ridge, New Jersey. Id., PP 18, 19. Although Sony Tape and Sony Magnetic are not named in the Amended Complaint, they are mentioned. Id., P 21.

 The top senior management of Sony Corporation is allegedly Japanese and the senior corporate structure of Sony Corporation is predominately Japanese. Id., PP 22, 23. Sony Corporation is alleged to be comprised of "Japanese" companies. Id., P 24.

 Takagi, the only individual named in this action, "is an employee and agent of" Sony Corporation. Id., P 25. He is the president of Domestic Sales and Marketing of Sony Recording Media of America ("Sony Media America") and is the president and Chief Operating Officer of Sony Media America. *fn11" Id., P 25. Takagi is Japanese. Id., P 26.

 The following individuals are mentioned in the Amended Complaint. Masaaki Morita ("M. Morita") is Chairman of the Board and Chief Executive Officer of Sony America, Sony Engineering and Manufacturing of America ("Sony Engineering and Manufacturing") and Sony Media America. Id., P 27. He is also the Vice Chairman of the Board of Sony USA. Id. M. Morita is Japanese. Id., P 28. Norio Ohga ("Ohga") is the Chairman of the Board of Sony USA. Id., P 29. Ohga is Japanese. Id., P 30. John Stern ("Stern") is the Executive Vice President of Human Resources at Sony America. Id., P 31. Stern's race is not alleged. Akio Morita ("A. Morita") is Chairman of the Board of Sony Corporation and an officer and director of Sony USA and Sony America. Id., P 32. A. Morita is Japanese. Id., P 33. Before 1 April 1989, John Hollands ("Hollands") was president of Sony Magnetic Products Group (the "SMPC"). Hollands' race is not alleged. Before 1 January 1992 Neil Vander Dussen ("Vander Dussen") was the Vice Chairman of Sony America, Sony Engineering and Manufacturing and Sony Media America. Id., P 35. His race is not alleged. Dr. T. Aoki ("T. Aoki") is Managing Director of Sony Recording Media Group ("Sony Recording Media"). Id., P 36. T. Aoki is Japanese. Id., P 37.

 Employment With Sony Corporation12

 In 1982, Sony Corporation hired Bermingham as a Vice President of Sales and Marketing for Sony Tape, a division of Sony America. *fn13" Id., P 55. Bermingham contends that "it is precisely because of (his) proven talents and history of successful employment that he was hired by Sony [Corporation]." Id., P 54. During the nine years of his employment with Sony Corporation, Bermingham contends he was responsible at different times for the "sales, marketing, and distribution of magnetic media . . . in the United States and, for a significant portion of that time, was also responsible for finance and operations." Id., P 85. Bermingham asserts he developed Sony Corporation's magnetic products business from a thirty million dollar business to a seven hundred and fifty million dollar business. Id., P 87.

 In 1986 he "redeveloped Sony [Corporation's] professional video and audio tape business" turning it into the number one market share holder and "greatest profit producer for Sony [Corporation] in the Magnetic Products Group in the United States." Id., P 90.

 In 1991 Bermingham further established strategic plans for Sony Corporation's entry into the American market for alkaline, lithium and rechargeable batteries. Id., P 91. Bermingham's contends his employment record with Sony Corporation indicates exceptional performance and he provides the following table for support: Areas of Performance 1982 1990 Sales $ 30 M $ 750 M Constant $ 2.8B Audio Tape 1% 23% Video Tape 3% 15% Pro Tape Single Digit 24%-80% Data Media 0% 20%-45%

 Id., P 92. To further evidence his track record at Sony Corporation, Bermingham refers to his salary increases, employment reviews and promotions.

 On 1 September 1983, 1 September 1984 and 17 September 1985, he received "substantial salary increases." Id., PP 59, 60, 61. On 2 September 1986, Hollands reviewed his employment progress and stated: "Mr. Bermingham's general performance is 'very good, he normally achieves objectives, budgets, sales, etc. leading to high rate of success, and his special success was [the] 1986 national sales meeting.'" Id., P 62. Hollands listed Bermingham's "major strengths" in the following way: "1. - product knowledge; 2 - managing people; 3- presenting ideas and concepts; 4 - interface with Japan; 5 - enthusiasm." Id., P 63. Hollands stated with regard to Bermingham's overall performance that he "meets targets; performed all assigned responsibilities and, accomplished all job objectives since the last review, [and] made effective contributions to the unit." Id. Bermingham alleges that, as a consequence of this review, he received an eight-thousand dollar salary increase in September 1986. Id., P 64. He also received another "substantial" salary increase one month later and a promotion to Senior Vice President of Sony Tape. Id., PP 65, 66.

 On or about 1 October 1987, Hollands again reviewed Bermingham's employment status. Id., P 67. It is alleged Hollands stated: "[Bermingham] consistently performs at high levels." Id., P 68. Hollands' review isolated Bermingham's major strengths as interfacing well with customers, other departments and Japan. Id., P 69. Bermingham was also considered to be excellent in dealing with human resource situations and with marketing programs. Id. Hollands concluded that Bermingham's next position "would logically be company or division President." Id. Hollands' 1987 review gave Birmingham the highest rating. Id., P 70. Bermingham's salary was again increased in 1987 and 1988. Id., PP 71, 72.

 Hollands next reviewed Bermingham's employment performance, on 11 November 1988. Id., P 73. Hollands stated: "Overall effectiveness very high; Sales are up; Cost are down; [and] Profits are up." Id., P 74. Hollands could describe no weaknesses in Bermingham's performance. Id., P 75. It is alleged Hollands also stated: "Within two years [he] should become a division or company head." Id., P 76. Bermingham contends that he was given the overall highest possible rating. Id., P 77. On 1 January 1989 and 1 April 1989, Bermingham's salary was increased. Id., PP 78, 79.

 On 1 October 1989, Bermingham's salary was raised for the third time in that year accompanied by a promotion to Executive Vice President of Sony Tape. Id., P 80. In 1989, Bermingham was promoted to President of Sony Tape with the approval of M. Morita and Vander Dussen. *fn14" Id., P 81.

 On 1 April 1991, Bermingham received a seven percent salary increase and on 14 June 1991 he received an employment compensation bonus at ninety-five percent of the incentive plan, allegedly as an acknowledgment of his performance. Id., PP 83, 84.

 The Alleged Discrimination

 In January 1991, Bermingham was asked by Takagi to represent Sony Corporation and two divisions of Sony Corporation, Sony Energy Tech and Sony Magnetic, during the negotiations of a contract dispute with Time Craft Industry, Inc. ("Time Craft"). Id., P 93. In July 1991, a settlement was entered with Time Craft for five hundred and sixty thousand dollars. Id., P 94. The Japanese managers who caused the dispute with Time Craft were retained by Sony Corporation without demotion. Id., P 95.

 As a result of the dispute with Time Craft, Bermingham contends he unknowingly became subject to a "secret scheme" instituted by Takagi to "destroy Bermingham's position, reputation, prestige and authority with Sony [Corporation]. . . ." Id. The scheme allegedly stemmed from the racially motivated activities of Takagi and Sony Corporation. Id. Bermingham asserts he discovered the scheme in August 1991. Id.

 To evidence the alleged discriminatory scheme, Bermingham contends that for the first six of his nine years with Sony Corporation, when he reported to Hollands, he never experienced an employment problem. Id., PP 96-97. Bermingham again contends that prior to 1 April 1989 through 31 March 1990, when he reported to H. Akita, he never experienced an employment problem. Id., P 98. However, Bermingham contends that when Takagi became his supervisor in April 1990, his employment problems began. *fn15" Id., P 99.

 On 11 June 1991, Bermingham, while attending a meeting at a Sony Corporation plant in Dothan, Alabama, was told "he had a major problem with . . . Takagi . . . and [was] asked whether [he] was aware of the problem." Id., PP 103, 104. He responded that he was not aware of a problem; however, he contends "the entire Japanese management of the company was aware of Takagi's secret campaign and his past history in this regard." Id., P 105.

 On 14 June 1991, Bermingham and Takagi met. Id., P 106. At this meeting, Takagi told Bermingham that Sony Corporation, other Japanese management and "he were disappointed with Bermingham's management style and his ability to manage the business." Id., P 107. Takagi also stated: "As far as Japanese management was concerned, Bermingham had no future" with Sony Magnetic or Sony Corporation. Id., PP 106, 108. Bermingham's management style was apparently problematic *fn17" for the Defendants because he "had an inability to supervise his employees, . . . failed to bring problems to his Japanese superior's attention," had an intimidating management style and developed extreme loyalty from his subordinates. Id., P 107. Bermingham, however, contends that Takagi's statements are belied by Bermingham's record at Sony Corporation. Id., P 114.

 Bermingham further contends that, at the 14 June 1991 meeting, Takagi "physically demonstrated" contempt for him by sitting with his feet on his desk, looking out the window, playing on his computer and reading his mail during the conversation. Id., P 112.

 Bermingham was "taken aback" by Takagi's statements during the 14 June 1991 meeting and alleges the statements were racially motivated and were designed to intimidate and humiliate Bermingham. Id., PP 110, 111. Bermingham contends, "then and there, [they] actually and constructively terminated his position of authority . . . because he was not Japanese." *fn18" Id., P 111.

 Bermingham contends the 17 June 1991 meeting only repeated the humiliation and "utter defiance on the part of . . . Takagi, for his caucasian subordinate. . . ." Id., P 143. Takagi concluded the meeting by stating to Bermingham that "he would continue to think about the situation for a few days and get back" to him by 20 June 1991. Id., P 144.

 At a 20 June 1991 meeting between Bermingham and Takagi, Takagi reiterated his earlier assessment of Bermingham's work. Id., P 163. Takagi concluded the meeting by telling Bermingham to find another position. Id., P 164.

 Bermingham contends that despite these meetings, Sony Corporation failed to comply with the Employment Guidelines. Id., PP 127, 142-43. Bermingham had asked for annual employment reviews from Takagi in March 1991, mid-April 1991, and early June 1991, but the reviews were put off by Takagi. Id., PP 128, 130-31. He asserts that prior to the 14 June 1991 meeting, he was not informed in either verbal or written communications that there was any criticism of his performance or quality or quantity of the work he produced. Id., PP 125, 126, 127, 143.

 Allegations of Takagi's Racial Intolerance

 Takagi allegedly has a history of eliminating Americans from senior management and replacing them with Japanese management. Id., P 132. The conduct was allegedly based upon racial intolerance which had no expressed or implied intent to further a corporate goal. Id., P 133.

 Bermingham contends Takagi treated Japanese managers differently than caucasian managers. Id., P 134. He specifically states that when there was a problem with a Japanese Vice President, Takagi reviewed the problem with the employee and specifically followed the Employment Guidelines. Id. In virtually every case involving a Japanese employee, it is asserted that the Japanese employee remained in his position. *fn19"

 Bermingham contends the discrimination practiced by the Defendants is continuing. Id., P 135. The continuation of the discrimination is allegedly evidenced by the failure of the other Defendants to rectify the situation with Takagi despite Bermingham's willingness to continue to work with Takagi. Id., PP 135, 137. The substance of the following meetings with various Sony Corporation people is offered to evidence this contention.

 In June 1991 Vander Dussen contacted Bermingham and expressed how "upset" he was over the situation with Takagi. Id., P 136. In later conversations, Vander Dussen stated he did not agree with Takagi and that it was a "Japanese thing." Id., P 157. He further told Bermingham he "felt . . . Bermingham had done a great job at Sony [Corporation] and . . . that what was happening . . . was totally unfair" and was "at the hands of Japanese management." Id., P 169. Vander Dussen stated he could not change the minds of Japanese management. Id. Vander Dussen also stated he ...


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