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Hagelthorn v. Kennecott Corp.

June 14, 1983


Defendant Kennecott Corporation appeals from a May 6, 1982 order of Judge Griesa of the Southern District of New York entering judgment on a jury's verdict for the plaintiff, Thomas Hagelthorn, on his claim under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (1976 & Supp. V 1981). The district court denied defendant's motions for a directed verdict, a judgment n.o.v. and a new trial, and doubled the damages pursuant to 29 U.S.C. §§ 216(b) (Supp. V 1981) & 626(b) (1976). Affirmed. Plaintiff appeals from the court's orders denying him attorney's fees and reducing the award to offset pension benefits. The reduction of the award is affirmed and the denial of fees reversed. Remanded for the determination of a reasonable fee.

Author: Lumbard

Before: LUMBARD, MANSFIELD and KEARSE, Circuit Judges.

LUMBARD, Circuit Judge:

On March 29, 1982, a jury of the Southern District of New York returned a verdict for the plaintiff, Thomas Hagelthorn. Finding that he had been fired because of his age by the defendant, Kennecott Corporation, in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (1976 & Supp. V. 1981), the jury awarded him $82,350 in lost wages and benefits. Judge Griesa entered judgment for the plaintiff, reduced the award to offset pension payments paid by Kennecott to Hagelthorn, and doubled the remainder per 29 U.S.C. §§ 216(b) (Supp. V 1981) & 626(b) (1976), which provide double liquidated damages for "willful" violations.

Kennecott Corporation appeals from orders denying its motions for summary judgment, a directed verdict, a judgment n.o.v., and a new trial. We affirm. The verdict was supported by sufficient evidence, and the trial court did not abuse its discretion in refusing to grant a new trial.

Hagelthorn appeals from that portion of the court's order reducing the judgment to offset pension payments. Finding no error in the reduction, we affirm. Hagelthorn also appeals from an order of March 29, 1982, denying his application for attorney's fees. We reverse that order and remand for determination of a reasonable fee.


Thomas Hagelthorn served as Kennecott's Office Services Manager from March 1960, until he retired twenty years later at the age of sixty-three. He and two assistants supervised thirty-five employees, who in turn provided duplicating, maintenance, delivery and other such services for the several hundred people at Kennecott's New York City headquarters.

In May, 1979, Kennecott announced that it was moving its headquarters to Stamford, Connecticut. An internal memorandum promised that all employees whose positions were transferred to Stamford would be invited to make the move, provided they were "in good standing", i.e., there was nothing to the contrary in their files. Hagelthorn's file contained one letter of commendation from the company president, dated May 1978, and nothing of adverse nature.

Sometime in late August or early September, 1979, before Kennecott had decided who in Office Services would be invited to Stamford, Hagelthorn met with Arthur Preisner, the Manager of Facilities and Services and Hagelthorn's immediate superior. Hagelthorn testified that he and Preisner

were discussing various problems and situations concerning the move. And he suddenly said that, well, your division, Office Services, is expected to go to Stamford to complete the move on or about January 1, 1980, but I would not go, I would be terminated because of my age.

According to Hagelthorn, Preisner attributed the decision to Edward Belanger, Senior Vice President of Finance. The defendant apparently concedes that Belanger had ultimate responsibility for the decision to terminate Hagelthorn.

According to the testimony of both Hagelthorn and Preisner, during the same conversation they discussed the possibility of Hagelthorn's retiring early, at the age of sixty-three, before the company moved to Stamford. Preisner agreed to ask Belanger whether Hagelthorn could receive a pension supplement to compensate for the smaller pension payments he would receive if he retired at that time rather than waiting until he was sixty-five.

Beyond this, Preisner's recollection of the August conversation was somewhat different. Preisner did admit speaking with Belanger about Hagelthorn a few weeks before. Indeed, he admitted that Belanger had told him that Hagelthorn "should be fired." Preisner denied, however, mentioning this to Hagelthorn. And he emphatically denied telling Hagelthorn that he would be fired for his age. Preisner observed at trial that it would have been "stupid... to say anything like that," since age discrimination is unlawful.

Hagelthorn's version of Preisner's remarks was indirectly supported by two other witnesses. Mary LaVerme, Hagelthorn's secretary, testified that after Preisner left, "... Hagelthorn came out, and he said to me, 'Mr. Preisner said that I was not going to Connecticut because of my age.'" Joseph Carr, Hagelthorn's friend, provided similar testimony. He claimed that Hagelthorn had told him of Preisner's remarks in mid-September.

In October, 1979, Belanger signed letters of invitation for almost everyone in Office Services, except. Hagelthorn. Allegedly because "everyone in the organization [was] complaining" about Hagelthorn, Belanger requested an assessment of Hagelthorn and a recommendation concerning his future employment. This task fell to Philip Feick, an Assistant Treasurer with supervisory authority over the Services and Facilities Division.

Feick, Preisner and Personnel Practices Manager Kenny met with Hagelthorn on October 23, 1979. Feick testified for the defendant that he began the meeting with some brief comments concerning complaints about Hagelthorn's performance and attitude. Hagelthorn interrupted with the claim that Preisner had told him he was to be fired because of his age. Preisner denied making such a statement. A heated exchange between Preisner and Hagelthorn followed, after which Kenny responded to Hagelthorn's inquiry into the availability of a pension supplement. She explained that Kennecott's policy was to provide supplements only for those employees who were forced to retire when their positions were eliminated. Since Kennecott would still require an Office Services Manager in Stamford, Hagelthorn's position would not be eliminated, and he would not be eligible for a supplement. Feick testified that after Kenny's remarks, he and Preisner discussed with Hagelthorn what came to be known as the "nine critical tasks," tasks that he and Preisner had previously outlined for assignment to Hagelthorn. Feick told Hagelthorn that if he completed the tasks satisfactorily, he would be invited to Stamford. Hagelthorn claims that he had no such understanding until Feick sent him a memo to this effect three days later.

Just after the meeting, Preisner expressed his opinion to Feick that Hagelthorn was preparing to bring an age discrimination suit. Preisner wrote a memo for the file to this effect two days later. Plaintiff's theory at trial was that everything Kennecott did after the October 23 meeting was to prepare for that anticipated suit and to rationalize a decision already made.

At trial, the parties disputed the extent to which the "nine critical tasks" were completed as well as the extent to which some of the tasks were outside the scope of responsibility or the competence of an office services manager. In any event, at the end of the probationary period, Feick reported that Hagelthorn's performance had been unsatisfactory. Accordingly, in a memorandum of January 23, 1980, he recommended that Hagelthorn be terminated, with a slight qualification. He noted that his recommendation was: based on the Company's previous position that a supplemental pension would not be approved since Mr. Hagelthorn's position was to be transferred to Stamford. Based upon my revision of the Facilities and Services Department which we have discussed, the position of Manager of Office Services has totally been eliminated. In consideration of Mr. Hagelthorn's near 20 years' service to this organization, I will recommend to the Management Development Committee reconsideration of this request for supplemental benefits.

Feick testified that as a consequence of his recommendation, technically speaking, Hagelthorn had not been fired. He had retired. Feick noted Hagelthorn would have been fired even if his job had not been eliminated. However, the elimination had afforded Kennecott the opportunity to increase Hagelthorn's pension benefits "as substantially as we could."

It was not, however, Feick's position that the desire to increase Hagelthorn's pension had motivated the reorganization of management in the Office Services Department. Rather, Feick explained that Hagelthorn's two assistant managers didn't seem to be managing and that Office Services had too many managers per employee.

Hagelthorn attempted to show that, notwithstanding the complex changes reflected on Kennecott's personnel charts, Hagelthorn's position had not actually been "eliminated." His two assistants had simply taken over his job. Testimony was elicited from Preisner that Hagelthorn's former assistant was the "senior office services man" in the Connecticut office and that five of his six tasks had previously been assigned to Hagelthorn.

In addition to challenging Hagelthorn's version of Preisner's allegedly discriminatory remarks, Kennecott attempted to establish its long-standing unhappiness with Hagelthorn. Kennecott introduced testimony to show that Hagelthorn had been insubordinate one or two years earlier when Preisner was first promoted above Hagelthorn and that as a consequence Hagelthorn had been denied a raise for six months. There was also evidence of complaints over the years about Hagelthorn's attitude and performance. Preisner testified that he had been dissatisfied with Hagelthorn's assistance in preparation for the move to Stamford. Feick testified about Hagelthorn's unsatisfactory probation performance. In addition, Kennecott introduced statistical evidence to establish that its termination decisions during the reorganization did not have a disparate impact on older employees.

After the plaintiff had rested, the defendant's motion for a directed verdict was denied. At the close of evidence, the court submitted to the jury the simple question whether Kennecott had violated the ADEA.*fn1 The court instructed the jurors that they could find for the plaintiff even if they determined that several factors influenced Kennecott's decision, so long as they also found it more likely than not that "but for this factor of age, plaintiff would not have been terminated." After deliberating for a day and a half, the jury found, in answer to special interrogatories, that "age was a determinative factor in Kennecott's ...

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