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KAPOSSY v. MCGRAW-HILL

March 21, 1996

STEPHEN KAPOSSY, Plaintiff,
v.
MCGRAW-HILL, INC., Defendant.



The opinion of the court was delivered by: ORLOFSKY

 ORLOFSKY, District Judge:

 Plaintiff, Stephen Kapossy ("Kapossy"), brings this action against his former employer, McGraw-Hill, Inc. ("McGraw-Hill"), alleging age discrimination in violation of the New Jersey Law Against Discrimination, N.J. Stat. Ann. §§ 10:5-1 to 5-38 (Count I), what the plaintiff calls wanton and willful conduct (Count II), breach of contract (Count III), breach of an implied covenant of good faith and fair dealing (Count IV) and wrongful discharge in violation of New Jersey's public policy (Count V). Jurisdiction is based upon diversity of citizenship and an amount in controversy in excess of $ 50,000.00. Presently before the Court is McGraw-Hill's motion for summary judgment on all five Counts of plaintiff's complaint.

 I. Facts and Procedural History

 Kapossy was employed by McGraw-Hill for twenty-two (22) years, most recently at the Hightstown, New Jersey facility of McGraw-Hill's subsidiary, Standard & Poors, as its General Manager of Applications Systems Development ("ASD"). ASD was the department responsible for maintenance of certain data systems, including the company's order-entry and billing system. Kapossy supervised a staff of five computer programmers and analysts.

 Until early 1992, Kapossy reported to Tom Conneally, Director of Business Systems Development ("BSD"). In April or May, 1992, BSD was consolidated with another department and eliminated as a separate entity. At this time, Kapossy began reporting, through William McDade ("McDade"), Vice President of Technology, to John Kerin ("Kerin"), Standard & Poors' Senior Vice President of Technology and Operations.

 Sometime in the Spring of 1992, Kerin decided to consolidate at least some of the functions previously performed by Kapossy and Alvaro Andraca ("Andraca"), Senior Project Director in the Equity Services Division, headquartered in New York City. According to McGraw-Hill, the merger of these two units resulted in the creation of a new position, Senior Project Director in charge of the combined organization.

 On May 26 and 27, 1992, respectively, Andraca and Kapossy were interviewed by McDade for the Senior Project Director's position. In a memo dated May 28, 1992, McDade reported to Kerin that he believed Andraca to be the more qualified candidate. On June 4, 1992, Kapossy was told that Andraca had been selected for the new position and that Kapossy's position would be eliminated effective June 15, 1992. Kapossy was instructed to report directly to Kerin until November 1, 1992, when his employment with McGraw-Hill would terminate, unless he found another position within the company prior to that date. The November 1, deadline was subsequently extended by McGraw-Hill to December 31, 1992.

 In June, or early July, 1992, Kapossy met with Ralph Denton ("Denton"), McGraw-Hill's Vice President of Human Resources, to review options for employment within the company. At about the same time, Kapossy also consulted with McGraw-Hill's Employment Manager, Hosie Scott, on interviewing techniques and resume refinement.

 In late October, 1992, Kapossy interviewed with Paul Malchow ("Malchow") for a position with the Project Information Management System ("PIMS"), a McGraw-Hill unit located in New York City, which Malchow headed. Kapossy was not selected. Ultimately, McGraw-Hill reached outside the company and hired Anatoly Kissen ("Kissen") to fill the PIMS position. McGraw-Hill contends that Kapossy was simply not qualified for the PIMS project. Kapossy claims that McGraw-Hill was obliged to give him additional training to prepare him for the PIMS position and that it did not offer him such training. Kapossy apparently did not interview for any other positions within McGraw-Hill between June and December of 1992.

 McGraw-Hill maintains that Kapossy was an "at will" employee and that the elimination of his position was the result of a necessary and legitimate "reduction in force." Plaintiff alleges that the "reduction in force" was a pretext for age discrimination and that Kapossy's duties were not assumed by Andraca, but were, instead, taken over by Richard Snook ("Snook") a McGraw-Hill employee at Hightstown, who is younger than Kapossy and whom Kapossy had previously supervised.

 Kapossy also alleges that McGraw-Hill failed to provide him with the necessary training to qualify him for another position, training that was promised in the employee handbooks and procedures manuals. It is McGraw-Hill's practice to give all employees a copy of its handbook entitled "McGraw-Hill and You" (the "Handbook"). During his employment with McGraw-Hill, Kapossy was given several different versions of this Handbook. Sometime in 1985, McGraw-Hill added a disclaimer to the section of the Handbook entitled "About this Book." This disclaimer states that the Handbook "is not meant to impose any legal obligations upon either you or McGraw-Hill." Affidavit of Ralph Denton ("Denton Aff."), exhibit A.

 Kapossy also received McGraw-Hill's Policies and Procedures Manual (the "Manual") which was given to all managerial employees. This Manual was revised and updated from time to time. Plaintiff contends that either one or both of these publications was reasonably construed by him to create an enforceable employment contract. In addition, Kapossy claims that the post-1985 disclaimers to the Handbook and Manual are ineffective to alter the terms of this contract. McGraw-Hill understandably urges that no contractual rights were ever created between it and the plaintiff and that Kapossy was at all times an "at will" employee. McGraw-Hill further contends that the post-1985 disclaimers are effective to defeat any assertion that an employment contract arose from the terms of either the Handbook or the Manual.

 II. Standard for Summary Judgment

 A party seeking summary judgment must "show that there is no genuine issue as to any material fact and that [he] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56 (c). See also Hersh v. Allen Products. Co., 789 F.2d 230, 232 (3d Cir. 1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983). In deciding whether there is a disputed issue of material fact the Court must draw all inferences from the underlying facts in favor of the non-moving party. See Hancock Indus. v. Schaeffer, 811 F.2d 225, 231 (3d Cir. 1987) (citation omitted); Pollock v. American Telephone & Telegraph Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

 The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The substantive law governing the dispute will determine which facts are material, and only disputes over facts "that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248.

 Once the moving party has properly supported its motion, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Nonetheless, defendant, McGraw-Hill, as the moving party on the motion, bears the ultimate burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 McGraw-Hill moves for summary judgment on each of the five counts in plaintiff's complaint. The court will therefore examine each count to determine whether there are any genuine issues of material fact and whether, given the evidence presented, a reasonable jury could find by a preponderance of the evidence in favor of the plaintiff.

 The New Jersey Law Against Discrimination ("NJLAD"), *fn1" like the federal Age Discrimination in Employment Act ("ADEA"), *fn2" prohibits employers from basing hiring or other employment decisions on an individual's age. *fn3" 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. *fn4" 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.

 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. *fn6" Neither does McGraw-Hill dispute that either Andraca or Snook was sufficiently younger than Kapossy to support an age discrimination claim. *fn7" It is also undisputed that Kapossy suffered adverse job action.

 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 ...


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