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Hughes v. AT&T Corp.

May 29, 2008


On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-479-04.

Per curiam.


Argued April 21, 2008

Before Judges S.L. Reisner, Gilroy and Baxter.

This is an age discrimination case filed under the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. Defendant AT&T Corporation cross-appeals from a jury verdict in favor of plaintiff Thomas Hughes. Plaintiff appeals from trial court orders dismissing his claim for punitive damages and disallowing certain aspects of his claim for counsel fees.


Plaintiff filed a complaint alleging that during a reduction in force, AT&T selected him for a layoff from his position as a manager based on his age while retaining younger managers in his work group. After extensive discovery, trial commenced on December 6, 2005.

During jury voir dire, one of the jurors revealed that her brother was employed by AT&T and had worked there for twenty years. She indicated that the fact of her brother's employment would not influence her in deciding the case; neither side challenged her. Several months later, a telephone call she made after the trial was over would become the subject of controversy.

Before the trial commenced, plaintiff moved in limine to preclude the defense from attempting to limit plaintiff's damages by introducing evidence that additional downsizing had occurred after he was laid off. Plaintiff contended that defense counsel had not disclosed this evidence in discovery. The trial judge agreed with plaintiff and granted the motion in limine based on his conclusion that defendant had failed to advise plaintiff in its interrogatory answers that defendant intended to rely on a subsequent reduction in force (RIF) as a defense to the lost wage claim, and had failed to name any witness who "is going to testify as to this [RIF]," "how the [RIF] would have applied to the plaintiff," and a host of other relevant details.

Prior to the opening statements, the judge strongly admonished the jury that the statements of counsel were not evidence. In his opening statement, plaintiff's counsel argued to the jury that plaintiff had been a highly-rated employee for thirty-one years and that his only negative evaluation was made in connection with the RIF. He also contended that the negative evaluation was done after plaintiff's managers had decided to choose plaintiff for termination based on his age. In that connection, he indicated that plaintiff's evaluation form was actually prepared after his termination and that the date on the form was later altered from "10/28/03" to "10/08/03" to make the form appear to have been prepared earlier. Defense counsel did not object.

According to plaintiff's trial testimony, he worked for AT&T for thirty-one years. He recounted his career progress at AT&T, starting as a mail clerk at age nineteen, and working his way up to a manager position earning $100,000 a year. He had received good performance appraisals and salary increases throughout his tenure. From 1994, until the date of his termination on October 17, 2003, plaintiff was a systems manager "testing software . . . for telemarketing to consumers." He was promoted in 1996 and 1998. Michelle (Mimi) Pascale signed the promotional resumes that were required for these promotions as well as his performance appraisals between 1994 and 1998. As a result of the 1998 promotion to B-band manager, plaintiff was placed in charge of a team of software testers and supervised the testing instead of doing most of it himself. In that capacity he was highly-rated, as demonstrated in his 2001 evaluation.

In March 2002, his boss Jeffrey Kressen*fn1 asked plaintiff to join a project called "plug and play" in which plaintiff no longer managed a team but instead became the lead tester on the project; in this assignment, plaintiff performed testing himself. Although Kressen did not provide plaintiff with a written evaluation in 2002, plaintiff received a merit raise and a $12,000 bonus on September 1, 2003. A month and a half later, on October 17, 2003, plaintiff was fired.

While he worked in the plug and play unit, plaintiff had three co-employees, whose ages he described as mid-30's, 40 and early 30's. The youngest employee, Lori Eddy, joined the unit in April 2003 as an A-level manager. She was promoted to B-band, the same level as plaintiff, on August 1, 2003. In mid-August 2003, Kressen left the company and Mimi Pascale replaced him as manager of the plug and play unit. Pascale, who was in her mid-40's, stayed for two weeks, and was replaced in turn by Maria Candanedo-Hudak, who was in her late 30's. Although the plug and play unit was located in Morristown, Hudak worked out of Piscataway. She reported to a division manager named Chris Moretti, who was in her early 40's.

None of these three managers ever observed plaintiff performing his testing duties and none ever complained about his job performance or advised him that AT&T was considering abandoning the plug and play unit. He was unaware of any customer complaints other than one complaint which was unfounded and to which he responded in a way his supervisors apparently found satisfactory. At the time he was terminated, plaintiff was working sixty hour weeks and the unit was understaffed.

When Moretti called him into her office and told him he was terminated, she also told plaintiff that Alex Papadopolo, who was thirty-five years old, would be replacing him. Although Moretti told plaintiff that he was being terminated because he had "the lowest score on [his] skills assessment," she was unable to provide him with a copy of the assessment. When plaintiff asked for a copy, she responded that she "didn't know" where it was, and gave him a blank assessment form. At that time, plaintiff also told Moretti that he had not received an assessment for 2002, which he would need to apply for other jobs within AT&T; Moretti promised to find his 2002 form or create another one for him, but she never did despite plaintiff's prompt and repeated follow-up e-mails to her. Those e-mails were introduced in evidence.

Pursuant to its policy, AT&T provided plaintiff with an Age Distribution Report, showing which employees were in his same "universe" or group considered for layoff, and the ages of those employees. Plaintiff's universe was described as "B-band, E strategy, plug and play support in New Jersey." At age fifty, plaintiff was the oldest employee in this group, followed by two employees ages thirty-five and forty. However, the report did not include Lori Eddy, the youngest employee in the group, although she was still working in the plug and play unit at the time he was terminated.

According to plaintiff, Moretti finally had the human resources department send plaintiff his 2003 manager skills assessment, the document on which his layoff was based, on November 11, 2003. The document was signed by Hudak and Moretti. Although no one had ever told plaintiff that his work was deficient or that he required assistance or supervision to do his job, he was given low ratings appropriate to an employee who "requires assistance to address deficits" and "requires routine supervision to ensure consistent and effective application of this skill." At the time, neither Hudak nor Pascale had personally observed his testing work on the plug and play project. By contrast, when Pascale supervised him from 1994 to 1998, she gave him high ratings and referred to "his ability to effectively multitask managing not only a tremendous personal workload but the quality and accuracy of his team member[s'] work." She had also praised his "broad level of advanced technical knowledge" and his ability to work independently "with minimal guidance."

After his layoff, plaintiff conducted an extensive search for another job, including internet employment services, searches of "every major company's internet," and using a headhunter. He testified that he was still looking for comparable work as of the time of the trial. However, he had been unable to find comparable work. Consequently, he had gone into business cleaning houses and worked part-time as a courier at Federal Express. His total annual earnings were $28,000 a year, as compared to his $100,000 salary at AT&T. Plaintiff also testified to the salary increases and 401k contributions he obtained while at AT&T, and calculated that he would have earned $1.996 million had he stayed at AT&T until age sixty-five as he had planned to do before the layoff. Also as a result of the layoff, he was forced to take his AT&T pension early. He calculated that if he had stayed at AT&T, he would have had $850,000 in his pension account by age sixty-five.

Plaintiff testified that he felt "crushed" by his termination and by what he felt was a "bogus" final evaluation. He also had trouble sleeping and felt distrustful of people. He felt that he was letting his family down because he could not find employment. Later in the case, plaintiff's wife corroborated his testimony concerning his emotional response to the firing and his diligent search for another job.

On cross-examination, plaintiff admitted that Pascale had promoted him twice, when he was in his forties, and that he had a good working relationship with her. She had given him positive performance reviews and he considered her a friend. Until the time he was fired, he had not had any problem with Pascale, Moretti or Hudak. He also admitted that he somewhat inflated his credentials in the resume he used to seek employment after AT&T. However, defense counsel also sought to demonstrate that plaintiff had not diligently sought other jobs within AT&T or outside the company. Plaintiff also admitted that he did not report or pay taxes on the $200 per week he earned cleaning houses.

Plaintiff admitted that in calculating his wage losses he assumed higher bonuses than he had sometimes received, and a series of 4.56% annual raises, which was higher than the percentages he actually received in some years. He did not reduce his total future lost wage calculation to present value. He explained that he calculated a total loss of pension of $266,000.

On re-direct, plaintiff testified that while he was employed at AT&T, Kressen made derogatory statements about his age, such as calling him "old man" and "decrepit" and "you have Alzheimer's disease." At the time, plaintiff thought Kressen was joking. He also testified that Kressen told him that in submitting his recommendations for salary increases for his subordinates, he gave plaintiff a lower rating than some of the other folks so their salary would increase and - so we would all be kind of on a par. Because I had been there such along time . . . he would have to keep mine down a little bit so he could raise the other people's up a little bit.

The other employees were all younger B-band managers.

Plaintiff also testified that when the company announced possible voluntary/involuntary layoffs in September 2004, Pascale pointed out to him that the layoff program provided medical benefits to employees with age and service that totaled sixty-five. She told him "you should take note of the fact . . . that they're doing this. But pay particular attention to that." He also testified that he believed he was laid off due to his age:

. . . I was 50 years old. I was the oldest B-band manager. I was the only B-band manager that was fired.

I had been doing a good job. I had never been told I wasn't doing a good job.

That they created a bogus manager's skills assessment form. That they left out Lori [Eddy], the youngest person in my universe.

And that a younger person took over my job.

Plaintiff also called Christine Moretti as a witness to rebut representations defense counsel made in her opening statement, concerning the layoff of younger workers as well as older workers. Moretti confirmed that she was a division manager in 2003, with authority to fire B-level employees in her division. She authenticated an e-mail she sent to human resources manager Lorraine Volturo on September 26, 2003, designating the "universes" (i.e., work groups within which choices would be made of employees to be laid off) for her division and the "at risk" employees in each universe. She confirmed that although two of the employees on the list were younger than plaintiff, at ages 28 and 35, they were both working in a universe that was being entirely eliminated; hence there was no need to assess their skills or choose between them and other employees. She also admitted that an older employee, age 48, was chosen for layoff from a universe in which other employees were being retained.

Moretti admitted that of the six B-band managers, only plaintiff was let go. She testified to her conclusion that AT&T could reduce the plug and play unit by one employee. She admitted that as of September, when she compiled the list of plug and play employees from which one person would be chosen for layoff, Lori Eddy was still working in the plug and play universe. However, she contended that for purposes of the "at risk assessment," Eddy was listed in project management instead of plug and play. When confronted with Eddy's skills ...

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