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LaFranco v. Avaya Inc.

September 8, 2009


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-184-03.

Per curiam.


Submitted: May 13, 2009

Before Judges Fisher, C.L. Miniman and Baxter.

Defendant Avaya Inc. (Avaya), appeals from that portion of a final judgment entered on October 13, 2006, in favor of plaintiff Mark LaFranco, awarding $158,310 in lost wages, $1000 in emotional distress damages, and $10,600.26 in prejudgment interest based on a jury verdict finding "that Avaya retaliated against [plaintiff in violation of New Jersey's Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49,] because of his statement to defendant [Patrick] Iraca that he was in fact of Jewish ancestry."*fn1 Plaintiff cross-appeals from the October 13, 2006, judgment "to preserve and protect his rights" should a new trial be ordered, contending that a new trial should include all of his discrimination and retaliation claims against Iraca and Avaya--not just the retaliation claim against Avaya. Plaintiff also cross-appeals from the dismissal of his claim against Avaya for punitive damages.*fn2 We affirm.


The evidence at trial, viewed in a light most favorable to plaintiff, demonstrated plaintiff had been employed as a client executive by Avaya, a telecommunications company, and its predecessors for over eleven years as of 2001. During the course of his career, plaintiff developed a specialty selling large, computerized phone systems to the education market. He regularly exceeded his sales quotas and received large commissions in addition to his base pay. He earned roughly $200,000 from Avaya in 1999; $152,500 in 2000; and $182,000 in 2001. His performance reviews from 1997 through 2001 were all positive.

Plaintiff was assigned to work out of Avaya's sales office in Mt. Laurel. He had been given permission to work from home so long as he attended weekly sales meetings. Plaintiff's peers in the Mt. Laurel office were John Ungvarsky, Bob Boiano, Dianne Smith, Mike McAndrews, and Joe McGarvey.

In August 2001, Iraca joined Avaya and became the sales manager to whom plaintiff directly reported. Initially the two got along well. Plaintiff recalled that Iraca complimented him on $2.5 million in sales he booked in September, and told him that his former manager had described him as "the strongest guy" he had. Plaintiff was the most experienced member of Iraca's team in 2001 and was considered an asset to the company.

In early October 2001, plaintiff learned that, due to a significant problem with the computer system Avaya used to keep track of sales orders and the commissions due its sales force, three sales that he had submitted in August had not been credited to him for the fiscal year that ran from October 1, 2000, to September 30, 2001. As a result, he had been denied $10,000 in commissions and an all-expenses-paid trip to Hawaii as a member of Avaya's Achievers Club. Plaintiff mentioned this issue to Iraca. In order to book the sales for the now-closed fiscal year, Iraca advised he would have to get the approval of his supervisor, Nancy Maluso, who had just started at Avaya as vice-president of area sales. Maluso's approval had to be secured by November 1, 2001.

During the last week of October 2001, plaintiff and Iraca attended a multi-day school board convention in Atlantic City to secure new school-district business. One evening, while waiting for a banquet to begin, plaintiff was chatting with Iraca when he noticed Maluso enter the room. Plaintiff said, "Pat, here's Nancy Maluso. Let's go talk to her about that $10,000." According to plaintiff, Iraca responded, in a disgusted voice, "What are you, a Jew?"

Plaintiff was shocked and insulted because he was in fact half Jewish. Plaintiff turned, looked Iraca in the eye, and responded, "Yeah, I am." Plaintiff thought Iraca would apologize, since plaintiff was obviously offended, but Iraca, who appeared very angry, said nothing as the two stared at each other for two seconds. Iraca then turned and stormed out of the room and did not speak to plaintiff for the rest of the evening.

According to plaintiff, Iraca's attitude toward him subsequently changed from friendly to hostile and malicious. He began undermining plaintiff's sales efforts and subjecting him to unwarranted scrutiny and criticism, which he shared with Maluso and Maluso's superior, regional vice-president John Rooney. Over the next seven months, plaintiff was not given credit by Iraca and Maluso for various sales he made, which prevented him from recognition in the Achievers' Club; was deprived of the trip to Hawaii; and was denied requested "holds" on sales, which would have given him credit for sales in a particular fiscal year without respect to reassignment of the account or territory. They also increased plaintiff's sales quota disproportionately to his peers based on territory size and permitted accounts; declined to give him a portion of another laid-off salesperson's territory; and failed to give him full credit for $2.5 million in sales. Iraca berated plaintiff at a team meeting for failing to generate business, which plaintiff disputed in writing; refused to intervene in the transfer of a technician despite the customer's upset over the transfer and plaintiff's concern for the potential loss of a $2 million sale to the customer; and criticized him for disclosing confidential business information about the transfer to the customer. Iraca also berated plaintiff for failing to attend a staff meeting, even though he knew that plaintiff had a doctor's appointment.

On May 28, 2002, Iraca gave plaintiff his performance review for October 2001 through March 2002. In it he noted that plaintiff had a "131% YTD Quota" attainment "after quota realignment" and that plaintiff had exhibited "velocity," was "result driven," and maintained a "high level of active opportunities." However, Iraca also noted that plaintiff [m]ust concentrate on keeping his Siebel entries and forecast accurate and entered on a timely basis. Mark has relayed company confidential information to his customer. This must never happen again. Commits for weekly sales are very seldom reported at all. He has missed 9 out of 16 weeks to date. Siebel entries are seldom accurate and updated.*fn3 A snapshot on 5/22 resulted in 30 errors within a total of 30 entries.

All entries should be accurate and updated 2X per week if necessary. In summary while Mark has a high degree of sales activities, he must immediately improve his below par accountability (will sell/did sell, commit, Siebel entries, confidentiality)[.]

Although plaintiff signed this review, he noted on it that he did not agree with it. He pointed out that his 131% year-to-date quota attainment placed him first on Iraca's sales team. He had also been rated "effective" in another company evaluation for this time period. Additionally, plaintiff had won Avaya's New Jersey Seibel activity award for the second quarter of 2002.

That same day, Iraca advised plaintiff that he was placing him on an open-ended development plan that required him, among other things, to provide weekly updates to Iraca regarding his sales activity and forthcoming appointments; have a weekly face-to-face meeting with Iraca; attend all sales meetings and training sessions; work in the Mt. Laurel office when not on sales calls; ensure that his Siebel inputs were complete and accurate; and maintain confidentiality when so instructed. Iraca told plaintiff that he had intended to fire him after he missed their meeting the prior week, but Human Resources had forced him to put plaintiff on this development plan and give him an opportunity to improve, because plaintiff was one of Avaya's "best" people. Iraca also said he could fire plaintiff whenever he wished now that plaintiff was on the plan.

Plaintiff believed that he was already meeting all of the criteria set forth in the plan. He attributed the elimination of his work-at-home privilege to Iraca's earlier, baseless questioning as to whether he had a second job. Aware that he was likely going to be fired, plaintiff called Avaya's Pennsylvania office and left a message inquiring if they had any openings. However, Iraca found out about the call and advised plaintiff that the manager there wanted nothing to do with plaintiff. Plaintiff never received a return call.

On June 4, 2002, plaintiff asked Iraca for permission to take a two-week vacation between June 11 and June 25, so that he could take a brief trip and then undergo shoulder surgery. He noted that the timing was good because the decisions on certain pending deals were not going to be made until well after this period. Iraca denied his request and also demanded to speak directly with plaintiff's doctor.

On June 11, 2002, plaintiff sent the following email to Avaya's CEO, Donald K. Peterson:

Thank you very much for attending the briefing for the Trenton School District last December. Last Wednesday we closed the voice portion of the deal for seven figures.... Unfortunately I may not be here to receive credit for that sale. In fact my manager specifically made the threat that I wouldn't.

I've been with this company for 12 years come October. During that time I've exceeded 200% of quota six times and have never had a person in my office achieve a higher percentage of quota attainment than me. Three times I've been first in the State of New Jersey. Now I am being forced out. Why? During the first half of '02 I finished at 130%. Again first on my team. Not surprisingly I wasn't recognized by my manager as being first during the recognition meeting. I'm having a big third quarter and have a big fourth quarter lined up yet my manager, who has been here only 10 months and was below quota for the first half, is forcing me out of the company. Below I have document[ed] some of the incidents that have occurred in the last eight or nine months. Things are escalating and spiraling out of control. Today I met with a lawyer to represent my interest to HR.... If I'm to be forced out in this manner I feel I should be offered substantial severance by Avaya.

Plaintiff then described how Iraca had called him a Jew, raised his quota and decreased his territory, gave away his holds, berated him in front of the sales team, falsely accused him of insubordination by revealing confidential information, put him on a disciplinary plan, and denied him $100 worth of Avaya key chains on a $2 million sale.

Unbeknownst to plaintiff, five days before he sent this email, his superiors, Rooney, Maluso, and Iraca, had jointly decided to proceed with his termination after consulting with a Human Resources representative and in-house counsel. Nonetheless, in accordance with company policy, plaintiff's complaint to Peterson was transferred to Avaya's equal opportunity office.

On June 12, 2002, plaintiff was contacted by phone by Equal Opportunity Compliance Manager Terry Creighton. They spoke for twenty minutes. Creighton then spoke over the phone with Iraca and Maluso. Notably, Iraca first stated that he did not recall making the alleged anti-Semitic remark and then later stated that he had not made it. Creighton accepted Iraca's representations and concluded her investigation on June 13, 2002. She did not investigate whether Iraca had retaliated against plaintiff as detailed in his email because, she said, these matters were not equal-opportunity issues and did not fall under her purview.

On June 14, 2002, Iraca called plaintiff and told him that he was terminated. One hour later, plaintiff received a letter confirming the termination. Iraca testified that Rooney wanted to fire plaintiff following a management meeting in November 2001 based upon plaintiff's poor Siebel showing, but that he had intervened and McGarvey was laid off instead. Maluso and another Avaya management employee who attended that meeting, Robert Neydon, corroborated Iraca's testimony. Iraca also insisted that it was Rooney who initiated plaintiff's termination in June, but he acknowledged that he participated in that decision. Maluso testified it was Iraca's decision to fire plaintiff, but she and Rooney agreed with it.

The issues before us can best be understood in light of the procedural history of this case. On January 21, 2003, plaintiff filed an eight-count complaint against Avaya, Peterson, Iraca, and Maluso alleging, among other things, discrimination or retaliation in violation of the LAD and either breach of contract for failure to pay commissions or violation of New Jersey's Wage and Hour law, N.J.S.A. 34:11-4.1 to -67. The action against Peterson was later voluntarily dismissed by plaintiff with prejudice. On March 24, 2006, the judge granted summary judgment to defendants dismissing all claims against Maluso and dismissing all causes of action other than the three above-specified LAD and wage claims, but preserving plaintiff's punitive damage claims against Avaya and Iraca. None of the parties have appealed this summary judgment order.

The trial began early in May 2006 and the jury was charged on June 1 and 2, 2006, when it began its deliberations.

Although the jury resumed its deliberations on June 5, we have no transcripts of any further proceedings until June 8, 2006, when counsel argued the propriety of submitting the issue of punitive damages to the jury. In the meantime, the jury had reached a verdict.

The verdict sheet in relevant part provided as follows:

1. Do you find that plaintiff has proved by a preponderance of the evidence that defendant Avaya Inc. engaged in intentional discrimination by discharging plaintiff because of his Jewish ancestry?

Vote: Yes No √....



2. Do you find that plaintiff proved by a preponderance of the evidence that defendant Patrick Iraca knowingly and substantially assisted in Avaya's intentional discrimination against the plaintiff?

Vote: Yes No



3. Do you find that plaintiff proved by a preponderance of the evidence that Avaya retaliated against him because of his statement to defendant Iraca that he was in fact of Jewish ancestry?

Vote: Yes √ No....


4. Do you find that plaintiff has proved by a preponderance of the evidence that his termination was in retaliation for his June 11, 2002 ...

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