was $ 130,000. In 1989, Weinstein received a bonus of $ 25,000.
Weinstein filed his charge of age discrimination with the EEOC on or about March 6, 1991. Thereafter, Weinstein commenced an action against AC&R on June 11, 1991, and by letter dated June 17, 1991, the EEOC advised that it had terminated its investigation in the matter of Weinstein's dismissal based upon the filing of this action.
Prior thereto, no civil action had been commenced by the EEOC.
The positions that plaintiffs held at the time that Rose dismissed them shared several important common characteristics. All three plaintiffs had direct client contact, made presentations in client meetings, and required as a necessary part of their positions the confidence of AC&R's clients. Similarly, their ability to function at AC&R required the trust and confidence of their colleagues in senior management, with whom they worked closely, as well as the respect of the people who reported to them directly.
Prior to terminating plaintiffs, Rose approached Alvin Chereskin ("Chereskin"), then the Vice Chairman of AC&R, Harry Koenig ("Koenig"), the Chief Financial Officer, and other members of the Executive Committee. Chereskin consented to the proposed action, as did the other members of the Executive Committee. Plaintiffs did not have personal knowledge that Chereskin had acquiesced in their termination, however, and believed that Chereskin did not participate in the decision. S:918; 1014. Koenig claimed at trial that he had endeavored to dissuade Rose from terminating Weinstein, albeit solely out of concern for the company's long-term interests. S:266; 734-35.
AC&R's clients were advised concerning the termination of plaintiffs. O:338. The termination of plaintiffs and the subsequent litigation caused the agency's clients to be concerned about the stability of the agency. O:400-05; 500.
Following Miano's dismissal, Rose promoted two men who had previously reported to Miano, Robert Goolrick and Richard Cohn, to the position of Co-Directors of Creative Services. Goolrick and Cohn were informed by Karen Amorelli, then the President of AC&R's New York office, that they would have to compete with each other for the position of Director of Creative Services. By mid-April, Cohn was terminated and Goolrick remained as the sole Director of Creative Services. O:537. Goolrick had previously experienced a strained working relationship with Miano, displaying some degree of hostility as well as impatience with some of Miano's orders. O:48-49
Rose replaced Widener with Randy Novick ("Novick"), whom he regarded as being more adept at making presentations to clients than Widener. However, the management at AC&R came to believe that Novick did not possess Widener's administrative ability, and Harry Koenig, now the Chief Operating Officer, determined that the Media Department had fallen into disarray.
In May 1990, shortly after his termination by Rose, Miano had a meeting with Koenig, then the Chief Financial Officer to address personnel matters in connection with his departure. At that meeting, Koenig encouraged Miano to file an age discrimination suit and assured him, somewhat cryptically, that proof existed to support his claim. S:1210. Koenig did not immediately elaborate on this revelation. However, Koenig met Miano over lunch on several subsequent occasions throughout the year, during which meetings Koenig related names of certain individuals who were present at a meeting in Irvine, California, where Rose discussed recent personnel changes in New York and allegedly made statements about his termination of plaintiffs and the subsequent promotion of Goolrick, Cohn and Novick. The content of those statements, if ultimately found to have been made by Rose, would be evidence that plaintiffs were terminated by reason of their age.
Koenig discussed with Miano who, if anyone, should be sued in addition to AC&R. S:1215. Koenig even mentioned that his own daughter was a labor lawyer and suggested that Miano retain her for the case at bar! Id.
The court need not find nor, indeed, can it determine what motivated Koenig to expend so much effort secretly launching the Miano action at a time when Koenig was still a highly placed officer of defendant. Koenig's sudden alliance with Miano is all the more puzzling when one considers that the two men were not friends. S:1209. Moreover, during the 1980's, Koenig had behaved abusively to members of Miano's staff, including Miano's assistant, Elaine Vetter. Miano ultimately confronted Koenig angrily on one occasion and even asked Rose to discipline Koenig for his behavior. S:1202; O:53. In any event, whatever the motive may have been for Koenig's assistance to Miano, Koenig later came to regret his indiscretion.
Weinstein's dealings with Koenig were similarly marked by mutual antagonism. S:1041. During Weinstein's tenure at AC&R, he dealt with Koenig purely in administrative matters involving personnel, finances and business operations, but did not report to Koenig. O:1017. Weinstein experienced numerous conflicts with Koenig over a fifteen year period, and on occasion expressed his grievances directly to Rose. O:1035. As a result, Weinstein learned that Koenig had referred to him within the company as a "backstabber," among other personal insults. Weinstein returned the insult, calling Koenig a "vantz", meaning a bug, or a nobody. S:336-37.
Koenig's malevolent behaviour toward Weinstein continued unabated after Weinstein was discharged. For several weeks after Rose fired him, Weinstein was permitted to maintain an office in AC&R's annex, apparently to assist him in securing new employment. During that period, however, Koenig cut off Weinstein's use of photocopy, computer and telephone facilities. Weinstein protested, but Koenig laughed at Weinstein and responded by waiving his daughter's business card with the suggestion that Weinstein take the matter up with her. S:1073.
Moreover, and during the same period, Weinstein experienced a similar chill in his other relationships at AC&R. Weinstein testified that he was "ostracized" by members of the Executive Committee while he was at the annex. Additionally, although Chereskin initially undertook to assist Weinstein in securing a position at Spielvogel Bates, Chereskin then broke off contact with Weinstein. O:1036.
In mid-December, Rose announced his retirement from AC&R, shortly after his failure to persuade Saatchi & Saatchi to accept a management buyback bid led by him and other members of the Executive Committee.
The date when Rose stepped down as CEO and when his successor, Chereskin, assumed the title and function of CEO became the subject of considerable controversy during the trial. Plaintiffs insisted that Chereskin became the CEO in title and in reality by Christmas of 1990. Accordingly, plaintiffs argue, there was reason to doubt the bona fides of defendant's offer of reinstatement. Defendant sought to prove that Rose continued to hold the title of CEO until the expiration of his employment contract on March 31, 1991, and that due to a long-standing "cold war" between the two men, Chereskin refused to exercise the function of CEO until Rose left the premises of AC&R.
Koenig claimed at trial that his offers of reinstatement were sincere, inasmuch as there was an urgent need to fill the positions of Director of Creative Services and Media Director. S:288. Moreover, several witnesses for defendant, including Koenig, testified that they thought the reinstatement offers were a good idea, and that the reinstatement of plaintiffs was workable from their point of view. The court is skeptical of those claims in any case, but considering that defendant failed to make offers of reinstatement until many months after the termination of Miano, Widener and Weinstein--and eight months after Rose announced his resignation--the testimony of all those witnesses on that point is yet more dubious if Chereskin and Koenig had full control as early as January, not April 1991 as several of defendant's witnesses stated.
For the reasons that follow, the court resolves this dispute in favor of plaintiffs.
Rose admitted at trial that he had little or nothing to do with AC&R after December 1990. O:93. He informed Saatchi & Saatchi of his resignation on December 10, 1990, which was confirmed about a week later. O:106. What happened subsequently was less clear. It appears that Rose remained physically on the premises of AC&R for some of the time until March 31, 1991, during which period he was available to answer occasional questions and give some degree of advice to Koenig, who had been elevated to the position of Chief Operating Officer and assumed many of the responsibilities ordinarily exercised by the CEO. S:355, 361. Rose was otherwise uninvolved with the management of AC&R as of early January 1991.
Chereskin stated that he did not decide to accept the position of CEO until January, and did not actually acquire the job until April 1991. S:93. Koenig corroborated this testimony, stating that Chereskin refused to assume the role of CEO "until Mr. Rose stepped out of the building and did not show up again," presumably because, as far as Chereskin was concerned, Rose was still CEO until his contract expired on March 31, 1991. S:355-56. However, the balance of the credible evidence contradicts the testimony of defendant's witnesses on this point.
The former President of AC&R, Patrick King ("King") testified at the trial concerning a series of conversations that he held with Rose and other executives in mid December on the subject of Rose's retirement. His account of those conversations was detailed and extremely credible. King first testified that on or about December 14, 1990 he flew at Rose's behest to New York from AC&R's West Coast offices, where he was then based. O:224. He then had a dinner meeting with Rose, Koenig and another executive of AC&R, Karen Amorelli ("Amorelli") at which time Rose informed King that he would be stepping down as CEO immediately and that he would be succeeded by Chereskin. Following the dinner meeting, Koenig and Amorelli confirmed to King that Chereskin was in charge of AC&R and would be officially so as of January 1, 1991. O:222.
The following day, King met Rose at the New York office, where Rose repeated that he was no longer running the company and that Chereskin would be taking over immediately, although an official announcement would not be released to the advertising media until January. O:225.
It appears that King did not return to the West Coast until January, at which time he conferred by telephone with Rose, who was then preparing the press release. At Rose's request, King advised the management at the Los Angeles and Irvine, California offices concerning the imminent public announcement of Rose's departure. Subsequently in early January, King spoke with Chereskin, who acknowledged that he was CEO. O:227.
On January 10, 1991, the following press release was disseminated:
(for release on January 10, 1991)
Stephen Rose will retire as Chief Executive Officer of AC&R Advertising, it was announced today by Robert Louis-Dreyfus, Chief Executive Officer of Saatchi & Saatchi Company in London. * * * *
He will be replaced immediately as Chief Executive Officer of AC&R by Alvin Chereskin, presently its Vice Chairman.
Plaintiffs Exhibit 40.
Additional evidence demonstrates that Chereskin began to assert his leadership of AC&R at a meeting of the Executive Committee on January 1991.
King did not speak again with Chereskin until early March of 1991, at which time Chereskin and Koenig came to see King in Los Angeles. O:229. They met at a restaurant in Malibu, where they discussed the recently filed lawsuits against AC&R, and Chereskin conveyed certain instructions to King at that time. O:266-67.
To be sure, there is some evidence that neither Rose nor the new CEO, Chereskin, were performing the duties of CEO during the first three months of 1991. However, the reason for this fact was not the purported desire of Chereskin to avoid friction with Rose; rather, Chereskin simply had little desire to immerse himself in the business of running the agency at all. Chereskin, unlike Rose, was not attracted by administration and preferred to concern himself primarily with the creative endeavors associated with hands-on management of client accounts, and the Estee Lauder account in particular. Estee Lauder was AC&R's largest single account and generated far more in billings than the second largest account.
With Chereskin concentrating on Estee Lauder, the business of running AC&R fell to Koenig as of January 1991, who was promoted from Chief Financial Officer to Chief Operating Officer ("COO"). It would appear, that although Chereskin was holding himself out to the agency's management and clients as the CEO, and established policy generally, Koenig had in actuality become a sort of "shadow CEO" for Chereskin. Thus, given Koenig's expanded role at AC&R, plaintiffs would have been subject to Koenig to a greater extent than they had been when he was the Chief Financial Officer. Although Koenig was performing Chereskin's function as CEO, it remains a fact that Chereskin and Koenig could have arranged to reinstate plaintiffs as early as January, should they have been so inclined; Rose would not have been an impediment. Indeed, Chereskin even discussed the matter with Amorelli at that time but took no action. Moreover, the possibility of reinstatement had been intimated to King, who then alerted Miano. Miano told King that if Chereskin were in fact contemplating reinstatement he should write him with the details; no such correspondence took place, however, until August 1991. S:974.
However, charges had already been filed with the EEOC, and Miano had been engaged in a particularly aggressive variety of pretrial discovery. Specifically, at Koenig's instigation, Miano telephoned several members of AC&R's senior management for the purpose of extracting information to help him in his lawsuit. He tape recorded those conversations without the consent of Chereskin, Koenig and the other people involved.
During one of these conversations, Koenig tried to persuade Miano to refrain from legal action against AC&R. S:376. Koenig was desperate to make the lawsuit "go away"; he plainly had not anticipated in May 1990 that in six months he would become the COO (and really, the surrogate CEO) of a company which he had willfully exposed to a lawsuit involving the scrutiny of the advertising industry, AC&R's parent company, and the agency's clients, not to mention a potential liability in the millions of dollars. Miano indicated that he intended to prosecute his lawsuit.
Once the lawsuit was filed, Koenig reacted angrily, and more so when he realized that Miano had taped his conversations, not only with Koenig's suggested list of informants but with Koenig himself. Early in 1991, Koenig initiated a campaign of isolation, directing that AC&R employees were no longer to have any communication with plaintiffs, and intimating to at least two employees, Elaine Vetter and Marge Langone, that their jobs would be in jeopardy if they did continue to speak to plaintiffs. O:184-86; O:823-25. Further, Koenig began referring to the three plaintiffs and another former employee, Ann Forgione,
in the presence of AC&R employees as "The Gruesome Foursome," (O:400-01) a fact that became known to plaintiffs by the time the reinstatement offers were ultimately made. O:4; O:953.
Thus, even if AC&R management were to instruct its employees to work with plaintiffs, Koenig had already put the staff on notice that plaintiffs were persona not grata.
Although reinstatement remained an option even after the filing of the instant actions, it certainly was not considered for the reasons Koenig and Chereskin offered at trial. Although Chereskin was unsatisfied with Goolrick, and Novick was new to administration, the court does not accept that the proposed reinstatement of plaintiffs was intended to fill gaps in creative and media leadership. Tellingly, King testified that Koenig told him during a telephone conversation in the spring or early summer of 1991 that if plaintiffs returned to work, they would be given an office, a salary, and no responsibilities. O:250-51. Although Koenig was recalled by AC&R as a rebuttal witness and denied having related such plans to King, the court considered King a completely truthful witness and discredits Koenig's denial. Accordingly, the court finds that AC&R had no intention whatsoever of genuinely reinstating plaintiffs to their former positions or to anything that could remotely be described as substantially equivalent positions. It should be noted, however, that the court finds no evidence that defendant's counsel, who wrote the reinstatement letters, was himself aware that Koenig contemplated such an unmitigated sham.
Nor was Koenig the only person at AC&R who would have prevented plaintiffs from exercising their previous function. For example, Martin Mitchell, Jr., the Director of Account Services, testified that he would have worked around Miano when generating the creative product for his accounts. Although he later equivocated, it remains a fact that Mitchell would not have submitted to Miano's leadership. O:737-38.
As concerns Widener, it was revealed that Widener would not have been permitted to make client presentations if he returned to work; that function would continue to be exercised by Novick. Widener would be limited to his prior administrative functions (if, indeed, he were permitted to perform any duties). S:578-81; O:503.
On June 17, 1991 Chereskin and Koenig presented a plan to Saatchi & Saatchi whereby they and several other members of AC&R management would buy back AC&R, forming a company called "Newco". Plaintiffs' Exhibit 34. Part of the representations made to Saatchi & Saatchi were that the new agency would retain substantially all its prior employees. Saatchi & Saatchi turned the offer down within one week.
On August 2, 1991 defendant made settlement offers to plaintiffs which provided, among other things, a cash settlement offer
and a condition that plaintiffs not seek further employment with AC&R. On August 6, 1991 Miano and Widener refused the settlement offers as inadequate.
On the following day, August 7, 1991, at the direction of Koenig and Chereskin, defendant's counsel communicated by letter with plaintiffs' counsel, offering each of the three plaintiffs reinstatement to their former positions at AC&R.
Defendant's Exhibits A1, A2 and A3 (Letters of Gerald S. Hartman, Esq., hereafter "the reinstatement letters"). Defendant offered to reinstate plaintiffs to the same positions that they held prior to termination, mentioning specifically their job titles and salary, and further reciting that their duties would be the same as before. Eligibility to receive yearly bonuses and fringe benefits would be "on the same basis as other executives at the agency on his level". As to each plaintiff, AC&R represented through its counsel that the offers were completely unconditional. In each letter, defendant's counsel recited, "in particular, the offer is in no way contingent or dependent upon Mr. [Name] dismissing or compromising his current lawsuit against AC&R." Id.
The letters also went on to state, again in each case:
As Mr. [Name] is no doubt aware, AC&R's profitability has been a source of concern for some time now and various measures have been implemented or suggested to remedy the situation. At the present time, efforts are underway to sell the assets of AC&R to a management group or other third party. In the event such a sale were to take place, AC&R would cease doing business and that entity would no longer employ any individuals. It would be totally outside of AC&R's control as to which, if any, AC&R employees would be hired by the purchaser.
The letters concluded by requiring an answer by August 13, 1991, and stated that a failure to respond by that time would be deemed a rejection of the offer. The deadline for plaintiffs initially to respond was extended by agreement to August 23, 1991. At the time the offers were made, plaintiffs were not otherwise employed.
Plaintiffs were informed by counsel of the substance of the offers. Although plaintiffs were cautiously receptive to the offers, they communicated several concerns to AC&R before deciding whether to accept or reject the offers. By letter dated August 23, 1991, plaintiffs' counsel related several concerns regarding the hostility that had been expressed to them in the course of the pending litigation and the hostility and suspicion that they should reasonably anticipate from the staff at AC&R in the event that they did return. Plaintiffs further sought reassurances concerning AC&R's reservation within the reinstatement letters, i.e., in which AC&R disavowed responsibility for plaintiffs' future at AC&R in the event that it was sold:
It is unclear whether AC&R's offer is intended to put my clients in the same position as would have been the case had they not been terminated. For example, if there is to be management buy out, my clients would have been expected to participate in that transaction. Alternatively, if a third party were to purchase the assets of AC&R, my clients would have expected to be provided with continuing employment guarantees as key member of AC&R's staff. Finally, the prospective sale of AC&R's assets has raised the issue of whether its reinstatement offer is a sham designed with the intention of terminating them again, this time in the context of a reorganization, in an attempt to cap damages.