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Wakefield v. Northern Telecom Inc.

decided: August 5, 1985.


Appeal from a judgment of the United States District Court for the Southern District of New York (Leonard J. Sand, Judge), following a jury trial, awarding plaintiff Wilfred J. Wakefield $111,079.87 in damages for breach of contract.

Feinberg, Chief Judge, Oakes and Winter, Circuit Judges. Oakes, Circuit Judge (concurring in part and dissenting in part).

Author: Winter

WINTER, Circuit Judge:

This is an action by a salesman against his former employer for damages arising out of the termination of the employment relationship. A jury awarded the plaintiff, Wilfred Wakefield, $111,079.87 on a breach of contract claim. Northern Telecom, Inc. ("NTI"), the employer, appeals. We reverse the damage award and remand for a new trial. We further dismiss Wakefield's age discrimination claim with prejudice.


Wakefield began working as a salesman for Danray, Inc. in 1975, selling Danray's telephone switching systems. In 1978, commissions on sales of Danray equipment were governed by a "Sales Incentive Plan" that stated it would be in effect from January 1, 1978 to December 31, 1978.

In January, 1978, NTI, which is a wholly owned subsidiary of Northern Telecom Ltd., and sells switching systems similar to Danray's, acquired Danray. On October 26, 1979, Danray discharged 57 employees, one of which was Wakefield. The parties dispute the events leading up to the termination of Wakefield's employment, but those disputes do not affect the legal issues raised on this appeal.

Following his termination, Wakefield, who was 50 years old, filed age discrimination complaints with the New Jersey Civil Rights Division and with the EEOC and then brought the present action alleging age discrimination. An amended complaint added claims for wrongful termination of employment, unjust enrichment, breach of contract, and quasi-contract. On the sixth day of the eight-day trial, Wakefield withdrew the age discrimination claim. Later he also withdrew the unjust enrichment and quasi-contract claims, and Judge Sand dismissed the wrongful discharge claim. Only the contract claim went to the jury, which returned a verdict for Wakefield.

After the district court entered judgment for Wakefield, NTI moved for judgment n.o.v., for a new trial, and for an order dismissing the claims that had been withdrawn or dismissed. The district court denied the motions for judgment n.o.v. and a new trial. It did not rule on the remaining motions. NTI notified the district court that it did not believe the judgment was final and appealable because it did not dispose of all of Wakefield's claims; nevertheless, NTI filed a notice of appeal. The parties by stipulation withdrew the appeal without prejudice, while NTI submitted a proposed supplemental judgment to the district court. The district court first denied NTI's motions to dismiss, but later entered an amended judgment dismissing the unjust enrichment, quasi-contract, and wrongful termination claims with prejudice, but dismissing the age discrimination claim without prejudice.

NTI, faced with an administrative proceeding in New Jersey arising out of an age discrimination claim filed there by Wakefield, applied to this court for a writ of mandamus ordering Judge Sand to dismiss the age discrimination claim in the instant case with prejudice. On February 20, 1985, a panel of this court denied NTI's petition but expedited this appeal.


NTI raises several claims of error, which we treat seriatim.

The district court applied New Jersey law to Wakefield's breach of contract claim. NTI argues that this was error, and that the district court should have applied the substantive law of New York. We need not decide this issue, because New Jersey and New York contract law do not differ so far as the legal issues before us are concerned.

Wakefield's claim is that NTI breached its contract to pay him commissions on sales of switching equipment by dismissing him after he had performed services that assured a number of sales in the future. The parties agree that the NTI commission plan constituted a binding contract, although they dispute the precise terms of the plan in effect at the pertinent times. NTI claims the relevant contract is the 1978 ...

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