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Scott v. IBM Corporation

September 27, 2000


The opinion of the court was delivered by: Simandle, District Judge



In this federal employment discrimination case, plaintiff Henderson Scott brings suit against his former employer, IBM, alleging, inter alia, that IBM discriminated against him on the basis of his race, age, and disability in contravention of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans With Disabilities Act (ADA), 42 U.S.C. § 1981, and the New Jersey Law Against Discrimination (NJLAD) when it terminated him from employment as part of a company-wide reduction-in-force in 1996. Presently before the Court are the parties' cross-motions for summary judgment pursuant to Rule 56, Fed. R. Civ. P., and plaintiff's motion in limine to exclude certain recently disclosed evidence. As discussed in further detail herein, IBM has conceded that plaintiff has satisfied his burden of stating a prima facie case of race and age-based discrimination under the McDonnell Douglas framework, but argues that plaintiff has failed to make out a prima facie case under the ADA.

The main issues for decision in the present cross-motions are (1) whether plaintiff has stated a prima facie case of discrimination under the ADA, (2) whether plaintiff has created a genuine issue as to whether IBM's proffered legitimate reasons for terminating Mr. Henderson were pretextual, and (3) whether, as plaintiff argues, IBM's alleged misconduct during discovery warrants sanctions up to and including striking IBM's proffered defenses to plaintiff's claims.

For reasons now discussed, the Court finds that plaintiff has not stated a valid ADA claim, but has created triable issues as to his ADEA and Title VII claims. The Court also finds that IBM's conduct during discovery does not merit the more severe sanctions plaintiff seeks, but it is suitably addressed by an instruction to the jury regarding the "spoliation inference", a permissible inference that certain documents IBM destroyed would have been harmful to its case. Accordingly, defendant's motion will be granted to the extent that it seeks dismissal of plaintiff's ADA claims, plaintiff's time-barred NJLAD and § 1981 claims, and his superfluous fraud claim, *fn1 but is otherwise denied. Plaintiff's cross-motion will be denied, as will his motion to strike the defendant's untimely disclosed evidence.


Mr. Scott, a black male, began working for IBM in April 1973, and worked there until his termination in March 1996 at the age of 52. (Compl. ¶¶ 3-4.) During his employment at IBM, Mr. Scott worked at various jobs, including customer engineer and customer service representative. (Scott Dep. I at 22, Def. Ex. 1.) From 1983-1996, Mr. Scott worked as a customer engineer, and his primary duty was the installation and maintenance of large mainframe computers. (Id. at 34:2-4.)

Mr. Scott was involved in automobile accidents in 1957 and 1967 which left him with a noticeable limp and loss of flexibility in his back. The 1957 accident broke his lower back and caused his "foot drop". (Id. at 11-12.) The 1967 accident aggravated his condition, and required two spinal fusion operations, one in 1967, the other around 1970. (Id.) Following medical examination at IBM in the mid-to-late-1970s, IBM placed into Mr. Scott's personnel filed a medical notation stating that Scott should not "lift over 35 pounds" or engage in "pushing or pulling motions". (Id. at 13-20; Notation, Pl. Ex. H at 1.)

Around 1995, Mr. Scott for the first time complained of discrimination at IBM. This complaint stems from the substance and timing of a written evaluation prepared by Scott's supervisor Bruce Johannessen, a white male, in January 1995. While the overall tone of the evaluation was positive, and stated that "Henderson does a fine job with the traditional [Customer Engineer] job," Johannessen's report recommended that Scott "take a more active role in helping management by providing solutions in addition to providing or identifying job inhibitors." (1995 Evaluation, Def. Ex. 19 at D-57.) The report concluded that Scott's overall performance rating should be graded at level "3" or "contributor", down from level "2" or "high contributor", the rating Scott received the previous year. Curiously, Johannessen delivered the evaluation to Scott while he was on-site at the Sak's Fifth Avenue computer center in New Jersey, one of Scott's major accounts.

Mr. Scott took issue with the timing and substance of the evaluation, and suspected that his race was a factor in his downgrade. (Scott Dep. I at 123:21-124:1.) In February 1995 Scott contacted Rick Weiss, head of IBM personnel in the New York region to complain about Mr. Johannessen's timing as well as the content of the evaluation. (Id. at 129.) Scott told Weiss that he thought it was "totally inappropriate" the way Johannessen gave him the report, and asserted that Johannessen had no facts to justify the evaluation downgrade. (Id. at 133.) Weiss suggested that Scott discuss the evaluation with Pamela Biggs, Johannessen's supervisor. (Id. at 135.) Soon thereafter, Scott called and later met with Ms. Biggs and aired his concern that Johannessen "had no facts" to justify the overall "3" rating. (Id. at 137.) Scott says that he might have mentioned to Biggs that the only justification he could think of was the color of his skin. (Id. at 134-37.) After a second conversation, Biggs told Scott that she found the "3" rating to be justified and that it would not be changed. (Id. at 146-150.)

Plaintiff again called Weiss after the second conversation with Biggs and learned that Weiss concurred with Biggs. Plaintiff then informed him that he felt the poor evaluation was motivated by racial animus, and that he had been denied a promotional opportunity because of his race. *fn2 According to Mr. Scott, Weiss responded hotly "that's an inflammatory remark, and if you make it again, I will call your branch office and have the appropriate action taken against you." Scott then asked for the name of Weiss's boss, which plaintiff contends he provided along with the naked threat of "let me give you some friendly advice, think of your career before you do or say anything else." (Id. at 151:19-152:12.)

Unhappy with Ms. Biggs's refusal to adjust his overall rating and Weiss's comments, Scott on March 1, 1995 submitted an internal complaint pursuant to IBM's "Speak Up" program, which is intended to allow any employee to raise issues generally applicable to a number of employees. (Speak Up Grievance, Def. Ex. 21.) Mr. Scott's Speak Up complaint referred to his conversations with Mr. Biggs and Mr. Weiss, and referenced the past promotional opportunity he felt he lost on account of race sensitivities at IBM. As relief, Scott requested to have appropriate action taken, and to have Mr. Scott's grievance heard concerning Johannessen's allegedly unfair evaluation. (Id.)

IBM management responded quickly to Scott's Speak Up complaint. A representative of IBM's chairman, Lou Gerstner, called plaintiff to inform him that his concerns would be handled through an IBM program known as "Open Door". The Open Door policy is an internal grievance procedure at IBM under which an employee can raise concerns about any IBM manager to a more senior manager. (Open Door Policy, Def. Ex. 22.) On March 3, 1995, two days after he filed his Speak Up complaint, Scott received another call telling him that IBM had commenced an internal "Open Door" investigation concerning his complaints. (Scott Dep. I at 190:7-191:8.)

IBM assigned an black executive level employee, Mark Eaton, to conduct the Open Door investigation. (Id. at 191:19-20.) Eaton met with Scott on several occasions, and also met with Johannessen, Weiss and Biggs. Scott complained to Eaton that Johannessen's evaluation was not based on sufficient information, and maintained that race somehow must have been involved. (Id. at 194-95.) Eaton's investigation led him to conclude that Johannessen had mishandled the evaluation with respect to the manner in which he delivered the report to Scott, but found no grounds to change Scott's rating from a "3" to a "2". Eaton also concluded that Scott's claim of a denial of promotional opportunity referred only to a temporary assignment in 1982, some thirteen years earlier, and that there was no evidence of race discrimination with respect to the 1995 or 1982 incidents. Finally, Eaton found that while Weiss's tone and word selection could have been perceived as threatening, Weiss did not intend to threaten Scott. (Eaton Report, Def. Ex. 20 at D-902.) Eaton discussed these findings with Scott. (Scott Dep. I at 207-208.) Based on Eaton's findings, on April 5, 1995 IBM sent plaintiff a letter informing him that Mr. Johannessen should have handled the January 1995 performance evaluation in a "more appropriate manner", but that Mr. Scott's evaluation rating would not change. (Ltr. From J.R. Canavan, Def. Ex. 32.)

In a move unconnected with Scott's above-detailed complaints, IBM in December 1994 appointed Mark Warren, a black male, to replace Bruce Johannessen as the manager for the group of customer engineers that included Mr. Scott. (Biggs Dep. at 67-68, Def. Ex. 9.) After managing Scott for several months, Mr. Warren met with him in mid-1995 to discuss the concept of "teamwork" on the teams charged with installing large mainframe computers, and the related necessity of employees to seek out greater responsibilities to broaden their work experiences. The conclusion Warren reached from his discussion with Mr. Scott was that:

Mr. Scott chose not to be a volunteer for anything. He would prefer to act as a team player as to support the guys back in the field rather than volunteer [for additional training or classes]. If guys wanted to go to school and/or things like that, Scott would cover them, cover their territory, and that was his way of being a team player. (Warren Dep. I at 102:2-8, Def. Ex. 3.)

Warren told Scott he wasn't satisfied with Scott's response, and that he should be looking to enhance his own skills by participating in different types of installations and by volunteering for large system install teams. (Id. at 103, 106:13-107:1.)

Around this same time, IBM was experiencing declining revenues and already had undergone two reduction in force actions. See Big Loss for IBM in Quarter, N.Y. Times, April 23, 1993 at D1; IBM Chief Making Drastic New Cuts; 35,000 Jobs To Go, N.Y. Times, July 28, 1993 at A1. IBM employees were informed during staff meetings around this time that IBM was "raising the bar". That is, IBM employees needed to be more productive in order for the company to remain competitive, and that more would be expected of them, "people would be asked to do more, take on more responsibility, more than they had in the past". (Eaton Dep. at 100:23-101:9.)

The revenues for Mr. Scott's particular area of expertise had been steadily declining throughout the 1990's. Computers were more reliable and needed less servicing, and IBM's mid-New Jersey branch had lost several accounts to smaller competitors. Accordingly, the workloads for customer engineers were down. (Eaton Dep. at 57-59; Johannessen Dep. at 26-27, 39, 75, Def. Ex. 8.)

In October 1995 Warren assigned Scott to be the primary customer engineer for a large computer center located at the McGraw Hill's New Jersey offices. Warren later testified that part of the reason that he assigned Scott to this account was to enhance Scott's rating by allowing him to manage a large account. (Warren Dep. II at 35, Def. Ex. 5.) Thereafter, Warren received two calls from McGraw Hill management complaining about Mr. Scott. In the first, a McGraw Hill representative complained about covers being left off a machine and cables not being properly placed under floor tiles, and said he no longer wanted Scott on the account. Warren replied that IBM couldn't simply move people on the basis of a single complaint, and that McGraw Hill needed to give Scott a chance. (Warren Dep. I at 141:9-16.)

The second call came in November 1995, when Warren received a call from another McGraw Hill representative stating IBM "had to remove [Scott] from the account because he was not working out with the McGraw Hill team". (Id.) In November or December 1995 Warren removed plaintiff from the McGraw Hill account. Warren acknowledges that he never heard any other complaints about plaintiff from any other customers. (Warren Dep. I at 146:10-13.)

In January 1996, Warren met with plaintiff to discuss Warren's annual appraisal of Scott under the Personal Business Commitments (PBC) evaluation program adopted in 1995. Under the PBC program, there were three categories used for overall ratings: (1) "results were extraordinary", (2) "results achieved all commitments", and (3) "more is expected". (1996 Evaluation, Def. Ex. 25 at D-53.) Warren rated Scott under the third category, "more is expected". Warren's "overall assessment" of Mr. Scott in the January 1996 PBC stated:

Henderson has shown at all times he could be a consistence [sic] contributor of most of the above objectives. The area I feel could be improved, is more consistency in Teamwork.

Henderson needs to get more involved with install teams in and outside of the territory. In [so] doing I feel he would have more of an opportunity to develop his skills and share more of his experiences. Though Henderson has made some contribution to our overall customer satisfaction objective, some improvement is still needed. (Id. at D-53.)

In December 1995, IBM manager Ken Boutot, who had replaced Ms. Biggs as Warren's supervisor, was informed by senior management that there would be an involuntary reduction in force (RIF) by IBM which would affect several regions within North America, potentially including customer engineers in New Jersey such as Mr. Scott. (Boutot Dep. at 67-72, Def. Ex. 12.) Boutot received a "manager's package" of information concerning the 1996 employee reduction, called the Availability Services Transition Payment Plan (ASPP), a plan governed by ERISA. (Id. at 79-81; ASPP Manager's Package, Def. Ex. 26.) The ASPP manager's package described procedures to be followed to identify employees to be included in the ASPP. According to a summary statement, under the ASPP plan managers were to "define skill families", "identify required skills/number to remain"; "review qualifications of each employee against requirements"; "document skills/assessment"; "select best qualified employee(s)"; and "identify surplus employee(s)". (ASPP Manager's Package at D-380.)

In January 1996, over the course of three meetings, Boutot distributed the ASPP directives to the 10 managers who reported to him. (Boutot Dep. at 91:16-25, Def. Ex. 12.) During the first meeting, Boutot tried to impress upon the managers the gravity of the task they were undertaking. Boutot emphasized that the determination of which workers should be fired, or "surplused", depended on an analysis of "what skills we need to go forward in the business." (Id. at 86:15-22.) However, during this first meeting, the managers did not specifically define how they intended to select the employees to be surplused.

Between the first and second meetings, even before the managers had defined how they intended to evaluate the employees eligible for surplusing, plaintiff's supervisor Mr. Warren ranked his customer engineers, including Mr. Scott, using the type of criteria described in the manager's package. (Warren Dep. II at 9:5-23, Def. Ex. 5.) Scott ranked fourth out of five in this ranking. Warren maintains that he did this ranking without input from Boutot or other managers. (Id. at 34:18-35:7.)

At the second meeting, Boutot and his managers attempted to define the skills that would be evaluated, and tried to develop commonly understood terms to be used. Once the managers had fully discussed the parameters of the ASPP RIF, the ASPP directives were written on a flip chart in the corner of the room. On this chart there were two columns. On the left side were the terms to be used in assessing an individual employee's skill level and value to IBM. On the right side there was a further definition of the term and how to measure it. This flip chart was the sole documentation of how Boutot and his managers intended to implement the ASPP directives. (Id. at 92:13-24.)

Unfortunately, this flip chart was destroyed, probably the day after the meeting, denying plaintiff the ability to discover exactly what the managers wrote down during the decision-making process. Specifically, there now is no original documentation regarding the managers' definitions of what qualities and skills were important in determining which employees were to be surplused in accord with the ASPP directives. Boutot has testified that he does not remember what terms were defined and put on the flip chart, nor does he remember how many were used. (Id. at 94:19-95:3.)

At the end of the second meeting or the beginning of the third, the discussion between Boutot and his managers turned to focus on individual employees. There were a total of approximately 130 employees that reported to the 10 managers who in turn reported Boutot. Of this group of 130, 72 customer engineers, including Mr. Scott, who were in the "large systems skill group". (Id. at 146:19-22.) Warren has testified that the discussion at the third meeting focused on the "bottom individuals" which each manager had ranked before the meeting began, and that at some point during the discussions the customer engineers were ranked from one to 72. (Warren Dep. II at 10:7-22.) After this ranking of the 72 customer engineers had been completed, approximately nine employees were listed for potential termination, of whom five were eventually laid off. (Discharge List, Def. Ex. 30.) The five included Mr. Scott. Significantly, there is no original documentation as to who the nine potential surplus employees were, nor where Mr. Scott ranked on this list in relation to the others.

Warren met with Scott at the end of January 1996 to inform him that he had been declared surplus, and that unless he could secure other employment at IBM his last day would be at the end of March 1996. (Scott Dep. I at 274:20-275:9.) In the meantime, Warren explained, Scott did not need to show up to work, and his accounts would be distributed to other customer engineers, all of whom turned out to be white males younger than plaintiff. (Id. at 284:20-285:16.)

In an affidavit addressing his reasons for recommending that Mr. Scott be declared "surplus", Warren averred that, although he considered Scott a capable engineer, he lacked the attributes necessary for IBM to compete in the future with a reduced workforce. (Warren Aff. ¶ 5, Def. Ex. 6.) Specifically, Warren points out (1) Scott's failure to expand his work experiences by seeking additional work assignments, (2) Scott's inadequate ability to work independently and tendency to call for assistance on routine matters, and (3) Scott's inadequate leadership abilities and tendency to take a "back seat" to other engineers and specialists on install teams. (Id. ¶¶ 8-10.) A final matter listed by Warren was the situation at McGraw Hill, which he contends was significant because no other IBM customer had made a similar request to Warren to remove a specific engineer from a site. (Id. ¶ 10.)

After Warren informed Scott that he was to be laid off, Scott refused to sign the "no-sue" agreement required to receive severance pay. Scott continued to draw his paycheck from IBM over the next two months (Scott Dep. II at 9:6-10.)

Thereafter, plaintiff filed a discrimination complaint with the EEOC dated March 8, 1996. (EEOC Charge, Def. Ex. 29.) In this charge, plaintiff claimed that he had been discharged and retaliated against in violation of the ADEA, the ADA, and Title VII. (Id.)

By mid-March, 1996 Warren "had gotten word that Scott had mounted a lawsuit against IBM Corporation", and had also been informed "that Mr. Scott was still visiting certain accounts, IBM accounts, IBM assets." (Warren Dep. I 165:12-19.) Scott claims that these continued contacts with his old accounts were simply an effort by him to collect letters of reference to be used in his new job search.

In response to learning about the EEOC complaint and Scott's continued contact with his old accounts, Warren and head of human Jim Bowdre made the decision to "get [Scott] off PROFs". PROFs being IBM's internal network where all internal notices of jobs within IBM were posted. This decision was implemented by revoking plaintiff's password, which made it impossible for him to access IBM's internal network. Plaintiff alleges that this decision made it impossible for him to access internal job postings at IBM, which in turn made it harder for him to gain further employment at IBM, and thus he was harmed and retaliated ...

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