The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
This is an action alleging age discrimination and retaliatory
discharge in violation of the Age Discrimination in Employment
Act ("ADEA"), as amended, 29 U.S.C. § 621 et seq. Defendant
moves pursuant to Rule 56 of the Federal Rules of Civil
Procedure for summary judgment dismissing plaintiff's age
discrimination claim in Count 1 of the amended complaint. For
the reasons set forth below, defendant's motion is denied.
KPMG Peat Marwick ("Peat Marwick"), formerly Peat, Marwick,
Mitchell & Co., is a public accounting and consulting firm
employing thousands of professionals, approximately 1350 of
whom are partners or principals. Caruso Aff. filed Feb. 13,
1989 ¶ 6. In May 1969, at the relatively older age of 34,
Conrad Caruso ("Caruso") joined Peat Marwick as a Senior
Consultant in the Management Consulting Department of Peat
Marwick's New York office. Id. ¶ 2. In 1970, Caruso was
promoted to the position of manager and began to develop a
practice in the field of government contracts. Id.
Caruso was under the direct supervision of the
Partner-in-Charge ("PIC") of the New York Management Consulting
Department, who from July 1978 was Russell Peppet ("Peppet").
Peppet Aff. ¶ 2. Peppet promoted Caruso's candidacy for
election to the Peat Marwick partnership.*fn1 Id. ¶ 5. The
department nominated Caruso in the fall of 1979 and Caruso was
elected the partnership in the spring of 1980. Id.
In 1981 William Hasler ("Hasler") replaced Peppet as
Partner-in-Charge, a position Hasler held until the fall of
1984. Hasler Aff. ¶ 1. In the course of acquainting himself
with the partners in the department, Hasler states he found
Caruso to have among the lowest performance levels in the
department. Id. Partner performance at Peat Marwick is measured
by two figures, "accountancy income" and "chargeability."
"Accountancy income" is the amount of fees billed to clients
for engagements generated by and managed by a particular
partner. Id. ¶ 5 n. 5. "Chargeability" is the percentage of an
individual's available time — normally 2080 hours per year —
which is billed to clients. Id. ¶ 3 n. 4. After two to
three years, partners at Peat Marwick were expected to generate
$800,000 in accountancy income and achieve 40-60%
chargeability. Id. ¶ 3; Montgomery Aff. ¶ 4.
In June 1983, when Caruso had been a partner for three years,
Hasler conducted Caruso's annual performance review and
expressed concern about Caruso's performance. Caruso's 1983
Performance Evaluation shows that his accountancy income for
the preceding year was $300,000 with 34%, chargeability, short
of the firm's goal for him of $600,000 in accountancy income
and 45% chargeability set during the preceding year's review.
Hasler Aff. ¶ 5 & Exh. B. For 1984 Caruso and Hasler set a goal
of $750,000 in accountancy income and 45% chargeability for
Caruso. Id. In a separate evaluation form not shown to Caruso,
Hasler ranked Caruso 27th out of 29 partners
and principals in the Management Consulting Department.
Id. ¶ 6.
In February 1984 Caruso began appearing on "watch lists"
identifying persons being tracked by the Operating Committee
whose resignations were likely to be sought if their
performance failed to improve. Hasler Aff. ¶ 10; Peppet Aff. ¶
7. One such list dated February 20, 1984 entitled "Sub-Standard
and Marginally-Performing Partners" and addressed to members of
Peat Marwick's Operating Committee lists Caruso as one of nine
such partners in the Northeast Region. Hasler Aff., Exh. D. A
second undated watch list appears in the record entitled
"Counseling of Partners" and lists Caruso under the heading
In May 1984, Hasler conducted Caruso's 1984 Performance
Evaluation. Far from meeting the goal of $750,000 set the
previous June, Caruso had achieved accountancy income of less
than $400,000 in the preceding year.*fn2 Hasler Aff. ¶ 7.
Hasler made plans to conduct a mid-year review with Caruso in
December 1984. Id. Hasler claims that mid-year reviews are
"extremely rare" at Peat Marwick and that he intended to seek
Caruso's resignation after the mid-year review if his
performance did not substantially improve. Id. ¶ 8. In the
confidential portion of the Evaluation, Hasler ranked Caruso
29th out of 31 partners and principals in the department but
[Caruso] did respond to last year's counseling by
attempting to diversify his government contracting
practice into defense industries with some
success. . . . This momentum, plus his continued
professionalism and dedication, offers some
potential for improved success in FY 85.
Id., Exh. G at 5. Hasler gave Caruso an overall rating and a
rating for Practice Development of "A" or "Needs Improvement,"
a rating which calls for "constructive counseling." Id. at 6;
Garcia Aff., Exh. D.
Caruso's December 1984 mid-year review did not take place
because in October 1984 John Montgomery ("Montgomery") replaced
Hasler as Partner-in-Charge of the New York Management
Consulting Department. Montgomery Aff. ¶ 1. Montgomery states
that as the new PIC, he "was not prepared to seek Mr. Caruso's
resignation immediately." Id. ¶ 5. He states he was however
prepared to do so after conducting Caruso's 1985 Performance
Evaluation in May or June of 1985 if Caruso's performance
failed to show substantial improvement. Id. Caruso alleges that
Montgomery did not counsel him about his performance at any
time. Caruso Aff. ¶ 5.
In October 1984, the Board of Directors of Peat Marwick
proposed an Enhanced Early Retirement Program ("EERP") designed
to reduce the total number of units in the partnership through
a program whose terms would "encourage the early retirement of
a number of partners whose contribution to the Firm had leveled
off." Hasler Aff., Exh. E. William Mecklenburg, a member of the
Operating Committee, testified at his deposition that the
program was more broadly aimed at "partners who were getting up
in years who were tired, whose contribution to the partnership
was not what it had previously been commensurate with their
earning capacity." Garcia Aff., Exh. N at 15.