III. Count I - Violations Of The New Jersey Law Against Discrimination
The New Jersey Law Against Discrimination ("NJLAD"),
like the federal Age Discrimination in Employment Act ("ADEA"),
prohibits employers from basing hiring or other employment decisions on an individual's age.
In applying the NJLAD, the courts look to correlative federal law to supply the analytical framework and relevant standards for evaluating the claim. See Abrams v. Lightolier Inc., 50 F.3d 1204, 1212 (3d Cir. 1995) ("New Jersey courts in applying the NJLAD generally follow the standards of proof applicable under the federal discrimination statutes[.]"); Maidenbaum v. Bally's Park Place, 870 F. Supp. 1254, 1258 (D.N.J. 1994), aff'd, 67 F.3d 291 (1995); Giammario v. Trenton Bd. of Educ., 203 N.J. Super. 356, 361, 497 A.2d 199 (App. Div.), certif. denied, 102 N.J. 336 (1985).
There are two categories of cases which occur in the employment discrimination context. The first type, called the "mixed motive" case, is analyzed under the standards set forth in Price Waterhouse v. Hopkins, 490 U.S. 228, 104 L. Ed. 2d 268, 109 S. Ct. 1775 (1989). In the typical "mixed motive" case, the plaintiff "offers 'direct evidence' of unlawful discrimination and the evidence as a whole permits a conclusion that both permissible and impermissible considerations played a role in the employer's decision, the plaintiff need only show that the unlawful motive was a substantial motivating factor in that decision." Miller v. CIGNA Corp., 47 F.3d 586, 594 (3d Cir. 1995). The burden, both of production and ultimate persuasion, then shifts to the defendant to show, by a preponderance of the evidence, that it would have taken the same employment action even if it had been free of the discriminatory motive. Price Waterhouse, 490 U.S. at 258.
Although Kapossy begins his brief in opposition to defendant's motion by arguing that his is a "mixed motive" case and that he should benefit from the Price Waterhouse allocation of burdens, he has simply produced no "direct evidence" of discrimination.
The second, and by far the larger category of employment discrimination cases, are so-called "pretext" cases.
In these cases, the burden of persuasion remains at all times with the plaintiff, who must prove, by direct or circumstantial evidence, that the adverse employment action was a result of discrimination. St. Mary's Honor Center v. Hicks, 509 U.S. 502, , 113 S. Ct. 2742, 2749, 125 L. Ed. 2d 407 (1993).
The familiar analytical framework for Title VII discrimination claims announced in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), applies in "pretext" cases. In brief, McDonnell Douglas places the initial burden of production on the plaintiff to establish a prima facie case of discrimination. Once the plaintiff has established a prima facie case, the burden of production then shifts to the defendant to articulate a legitimate, non-discriminatory reason for its actions. McDonnell Douglas, 411 U.S. at 802-04. Ultimately, the plaintiff must show that the defendant's proffered reasons for its actions are not worthy of belief and that the defendant acted with the intent to discriminate. Id.
Once a plaintiff has made out a prima facie case of discrimination, however, he or she may defeat a motion for summary judgment "by either (i) discrediting the proffered reasons, either circumstantially or directly, or (ii) adducing evidence, whether circumstantial or direct, that discrimination was more likely than not a motivating or determinative cause of the adverse employment action." Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994).
A. Kapossy's Prima Facie Case
The elements of a prima facie case of age discrimination in employment vary slightly according to nature of the claim. Kapossy makes a two-pronged attack on McGraw-Hill, alleging that in the elimination of the ASD job, the so-called "reduction in force" was a mere pretext for age discrimination and, secondly, that his employer's failure to place him in another position within the company was similarly motivated by age-based discrimination. For the purposes of this Opinion, Kapossy's two separate theories of NJLAD violations shall be described as the "reduction in force" claim and the "failure to hire" claim.
In a case of dismissal for allegedly discriminatory reasons, as in Kapossy's "reduction in force" claim, a plaintiff must show that: (1) he or she is a member of the protected class; (2) he or she was qualified for the position; (3) he or she suffered adverse job action; and, (4) he or she was replaced by a sufficiently younger individual to permit a reasonable factfinder to infer age discrimination. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 897 (3d Cir.) (citations omitted), cert. denied, 483 U.S. 1052, 97 L. Ed. 2d 815, 108 S. Ct. 26 (1987); Ezold v. Wolf, Block, Schorr & Solis-Cohen, 983 F.2d 509, 522 (3d Cir. 1992) (citations omitted), cert. denied, 126 L. Ed. 2d 56, 114 S. Ct. 88 (1993).
In cases alleging a "failure to hire" based upon age discrimination, the plaintiff must show that: (1) he or she belongs to the protected class; (2) he or she applied for and was qualified for the job; (3) despite being qualified, he or she was rejected; and (4) the employer either ultimately filled the position with someone sufficiently younger to permit an inference of age discrimination, or continued to seek applicants from among those having plaintiff's qualifications. Fowle v. C & C Cola, 868 F.2d 59, 61 (3d Cir. 1989) (citations omitted). See also Barber v. CSX Distribution Servs., 68 F.3d 694, 699 (3d Cir. 1995) (ADEA plaintiff need not show that the successful candidate was someone who was not in the protected class, i.e., below age 40, but must show that the beneficiary of the alleged discrimination is "sufficiently younger" to permit an inference of age discrimination).
McGraw-Hill does not contest that Kapossy is a member of the protected class. He was 54 years of age at the time he was notified of his termination.
Neither does McGraw-Hill dispute that either Andraca or Snook was sufficiently younger than Kapossy to support an age discrimination claim.
It is also undisputed that Kapossy suffered adverse job action.
Kapossy alleges two distinct adverse job actions, the dismissal itself, and McGraw-Hill's failure to hire him for another position. The contested elements of plaintiff's prima facie case vary according to the claims made. On the issue of whether McGraw-Hill "failed to hire" Kapossy because of age discrimination, the parties dispute whether Kapossy was qualified for the jobs for which he interviewed at McGraw-Hill, but which he did not receive. On the "reduction in force" claim, McGraw-Hill naturally contends that neither Andraca, nor Snook, "replaced" Kapossy.
In support of his "failure to hire" claim, Kapossy alleges that, because of age discrimination, he was denied training which would have prepared him for the other open positions at McGraw-Hill, i.e., Andraca's position and the PIMS job ultimately filled by Kissen, or which would have allowed him to remain in the redefined Hightstown position filled by Snook. Because slightly different legal standards apply to these two facets of Kapossy's NJLAD claim contained in Count I, the Court will consider them separately.
B. The "Failure to Hire" Claim
The Court will consider first Kapossy's claim that his employer's failure to place him in another position within the company was motivated by age discrimination. McGraw-Hill denies such discriminatory animus, and maintains that Kapossy was not qualified to assume the newly-created position ultimately given to Andraca, or to work in the PIMS project, or to remain in Snook's position. Therefore, the company argues, Kapossy has failed to make out a prima facie case of age discrimination based upon McGraw-Hill's failure to hire him for another position within the company.
Kapossy admitted at his deposition that he was not qualified for the job given to Andraca.
Nevertheless, Kapossy argues that although he was not qualified for Andraca's job, this resulted from age discrimination practiced by McGraw-Hill. According to Kapossy, McGraw-Hill provided preferential training for its younger employees, specifically training provided to Andraca immediately prior to the decision to eliminate Kapossy's job, and training provided to Kissen, after he was hired to fill the PIMS position for which Kapossy interviewed. Indeed, Kapossy sought discovery from McGraw-Hill on the issue of alleged preferential training given to Andraca immediately prior to his selection for the Senior Project Director position, on the theory that, on account of his age, Kapossy was denied training that would have prepared him for that job. On June 15, 1995, Magistrate Judge Wolfson entered an order granting Kapossy's request for discovery of:
all training received by Alvaro Andraca during the course of his employment at McGraw Hill, including the date time location and nature of training provided, for a period of one year prior to plaintiff's June 1992 termination, the Court finding that this discovery relates to plaintiff's allegation that defendant failed to offer him the same training as it offered Andraca.
Order of Wolfson, J., at 1-2. When counsel was asked at oral argument whether the discovery ordered by Judge Wolfson had revealed any evidence of preferential training given to Andraca and denied to Kapossy, Kapossy's counsel replied "nothing significant."
Similarly, Kapossy alleges that the person ultimately hired by McGraw-Hill for the PIMS project, Kissen, was no better qualified than he, but was given training after hiring which, if offered to Kapossy, would have qualified him for the PIMS position. Yet Kapossy points to no particular training given by McGraw-Hill to Kissen. Kapossy also alleges that age discrimination played a role in McGraw-Hill's decision to give Snook additional responsibilities at Hightstown, instead of retaining Kapossy, but, once more, he has produced no evidence to support his allegation that Snook benefited from training not offered to him.
On the issue of "preferential training," proof of which is crucial to Kapossy's prima facie case on his "failure to hire" claim, he has failed to show the existence of any genuine issue of material fact.
Based upon Kapossy's own admissions in his deposition testimony, his counsel's concessions at oral argument regarding discovery, and the uncontradicted testimony presented by McGraw-Hill documenting the training which was available to Kapossy,
when viewed in the light most favorable to Kapossy, there are no genuine issues of material fact regarding Kapossy's lack of qualifications for the jobs for which he interviewed at the company. Therefore, as to plaintiff's claim that McGraw-Hill's failed to hire him for other positions in the company, based on age discrimination, Kapossy has failed to make out a prima facie case, and summary judgment must be granted to McGraw-Hill on this claim.
C. The "Reduction in Force" at Hightstown
McGraw-Hill does not contend, and the record does not reflect, that Kapossy was unqualified for the position of General Manager of ASD, the position which was eliminated in the "reduction in force." Nevertheless, McGraw-Hill argues that Kapossy cannot establish a prima facie case of age discrimination based on the "reduction in force" at Hightstown. Central to Kapossy's claim, McGraw-Hill argues, is his contention that he was "replaced" by either Andraca or Snook. On the contrary, McGraw-Hill states that Kapossy's position was simply eliminated and its job functions distributed between Andraca and Snook.
The Seventh Circuit has described the elements of a plaintiff's prima facie case of age discrimination in a "reduction in force" situation as follows: (1) that he or she was in the protected class of persons forty to seventy years old; (2) that he or she was performing according to his employer's legitimate expectations; (3) that he or she was terminated; and (4) that others not in the protected class were treated more favorably. King v. General Electric Co., 960 F.2d 617, 621-22 (7th Cir. 1992); see also Oxman v. WLS-TV, 846 F.2d 448, 455 (7th Cir. 1988). This formulation of the fourth element of a plaintiff's prima facie case, which does not require "replacement," is consistent with the Third Circuit's instruction that "the fourth element must be relaxed in certain circumstances, as when there is a reduction in force." Torre v. Casio, Inc., 42 F.3d 825, 831 (3d Cir. 1994). Under this statement of the legal standard, Kapossy can establish the final element of his prima facie case by showing that a younger person was treated preferentially. The record reveals that the reduction in force at the ASD at Hightstown resulted in the elimination of a single position, Kapossy's. The staff which Kapossy formerly managed, all younger than he, were spared. In fact, the "reduction in force" affected no one except Kapossy. When Kapossy "was terminated in the reduction in force, other, similarly-situated but younger employees were retained," specifically Andraca. Id. This is all that is required for Kapossy to make out his prima facie case of a discriminatory "reduction in force."
D. Employer's Burden to Articulate a Non-Discriminatory Reason for the Termination
Because Kapossy has made out a prima facie case of age discrimination resulting from McGraw-Hill's "reduction in force," the McDonnell Douglas analysis shifts the burden to McGraw-Hill to present a legitimate, non-discriminatory reason for the elimination of the Hightstown ASD position. The Third Circuit has described the employer's burden in this context as "relatively light." Fuentes, 32 F.3d at 763. McGraw-Hill need only proffer, not prove, its reason for dismissing Kapossy. Id. McGraw-Hill claims that the elimination of Kapossy's position was necessitated by business efficiency. Defendant's Brief at 7. A business decision to reduce the work force is a legitimate one as long as it is not motivated by discriminatory animus. Siegel v. Alpha Wire Corp., 894 F.2d 50, 54 (3d Cir.), cert. denied sub nom. Alpha Wire Corp. v. Siegel, 496 U.S. 906, 110 L. Ed. 2d 269, 110 S. Ct. 2588 (1990). Therefore, McGraw-Hill has met its burden of production in this part of the McDonnell Douglas analysis.
E. Evidence of Pretext in the "Reduction in Force"
Plaintiff contends that McGraw-Hill's proffered explanation for the elimination of his position, the "reduction in force," is a pretext, intended to disguise intentional age discrimination. In support of this assertion, Kapossy points to an April 27, 1992 telephone call. A contemporaneous message, apparently in Denton's handwriting, seems to discuss retaining Kapossy to age 55 and subsequent severance terms. Certification of Gregory S. Schaer, Esq. ("Schaer Certif."), exhibit 4, at 1.
Denton explains the reference to plaintiff's age in this message as a "recommendation for a special pension enhancement for Mr. Kapossy," which McGraw-Hill customarily granted to employees 55 and older whose positions were eliminated. Supplemental Affidavit of Ralph Denton ("Denton Supp. Aff.") P 5. McGraw-Hill therefore asserts that the phone message and conversation are not material facts because they did not concern the decision to eliminate Kapossy's position.
However, Denton also states that he mistakenly testified at his deposition that he had spoken with Kerin about the special pension. Id. P 2. In his affidavit, Denton claims that the telephone conversation discussing Kapossy's age was not with Kerin but with Robert Gemignani ("Gemignani"), Human Resources Manager for Kerin's New York operations. Id. PP 2-3. Because this telephone conversation took place at about the time that Kerin made his decision to consolidate ASD with Andraca's department, and well before the date on which Kapossy was informed of the decision to eliminate his position, it is a material fact in this case bearing on McGraw-Hill's motivation. It is all the more probative if it records a conversation with Kerin, the ultimate decisionmaker on the elimination of Kapossy's position. Denton states that he, in fact, had a telephone conversation with Kerin in April, 1992, but he was not then informed which candidate, Kapossy or Andraca, would be selected for the new position. Id. P 4.
To discredit the employer's proffered reason for an adverse employment action, the plaintiff must demonstrate "such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions . . . that a reasonable factfinder could rationally find them 'unworthy of credence.'" Fuentes, 32 F.3d at 765 (citing Ezold, 983 F.2d at 527). On the important issue of Kapossy's age as a motivating factor in McGraw-Hill's decision to eliminate the Hightstown position, there are apparent inconsistencies and unresolved factual disputes which preclude the entry of summary judgment on Count I of plaintiff's complaint, insofar as that Count alleges that the "reduction in force" was a pretext for age discrimination. However, at trial, Kapossy will be restricted to presenting evidence of age discrimination relating to the elimination of his position.
IV. Count II - Allegation of Wanton and Willful Conduct
Count II of the complaint alleges that: "Plaintiff [sic] acts were done wantonly and willfully." Kapossy justifies this as "necessary . . . to seek punitive damages from the defendant." Plaintiff's Brief in Opposition to Defendant's Motion for Summary Judgment at 48 ("Plaintiff's Brief").
The parties agree, however, that punitive damages are available under the NJLAD upon a showing of the employer's participation in or willful indifference to the wrongful conduct on the part of upper management, and that the offending conduct was "especially egregious." Rendine v. Pantzer, 141 N.J. 292, 314-15, 661 A.2d 1202 (1995). An NJLAD claim will only rarely support an award of punitive damages. Id.
At oral argument, plaintiff's counsel conceded that Count II of the complaint is duplicative of Count I. In view of this concession, the Court will dismiss Count II without prejudice to plaintiff's right to seek punitive damages in connection with his NJLAD claim contained in Count I.
V. Count III - The Woolley Contract Claim
In Count III, Kapossy alleges breach of an express or implied contract of employment. Defendant naturally contends that Kapossy was an "at will" employee. It is undisputed that Kapossy was never employed under an express contract of employment. Nevertheless, in New Jersey, an implied promise of job security contained in an employee handbook can give rise to an enforceable contract. Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257, modified, 101 N.J. 10, 499 A.2d 515 (1985). Specifically, in Woolley, the New Jersey Supreme Court held that absent a clear and prominent disclaimer, an implied promise contained in a widely distributed employment manual that an employee would only be fired for just cause was enforceable, despite the fact that employees otherwise were terminable at will. According to the Woolley court, "when an employer of a substantial number of employees circulates a manual that, when fairly read, provides that certain benefits are an incident of the employment . . . the judiciary . . . should construe them in accordance with the reasonable expectations of the employees." Id. at 297-98. Thus, Kapossy's Woolley contract claim presents two issues: (1) whether the disclaimer in the post-1985 Handbook is sufficient to negate any implied contract; and if not, (2) whether the terms of the McGraw-Hill Handbook or Manual can give rise to an employment contract.
A. The Disclaimers
McGraw-Hill argues that its Handbook and Manual contained disclaimers which negate any implied employment contract. In Nicosia v. Wakefern Food Corp., 136 N.J. 401, 643 A.2d 554 (1994), a unanimous New Jersey Supreme Court repeated the Woolley holding that an "effective disclaimer by the employer may overcome the implication that its manual constitutes an enforceable contract of employment." Id. at 412. The Nicosia court went on to enlarge upon the qualities of an "effective" disclaimer under Woolley:
1) the language of the disclaimer must be straightforward, eschewing legalese.