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Lewis v. Depository Trust & Clearing Corp.

August 29, 2006


The opinion of the court was delivered by: Gerard E. Lynch, District Judge


Defendants in this employment discrimination case move for summary judgment under Federal Rule of Civil Procedure 56(c) on all of plaintiffs claims. The motion will be granted.


I. The Parties

The Depository Trust & Clearing Corporation ("DTCC") is, according to the parties, "the largest financial services post-trade infrastructure organization in the world," offering "clearance settlement, custody and information services for equities, corporate and municipal debt, money market instruments, American depository receipts, exchange-traded funds, insurance products and other securities." (D. Local R. 56.1 Statement ("D. 56.1 Statement") ¶ 1; P. Local R. 56.1 Counterstatement ("P. 56.1 Counterstatement") ¶ 1.) The organization "provides custody and asset servicing for more than two million securities issues worth trillions of dollars." (D. 56.1 Statement ¶ 1; P. 56.1 Counterstatement ¶ 1.) Defendants Hutton, Portannese, Scalzo, Lippa, Merckling, Esposito, Auletti, McGuire, Mirchandani and Killela (collectively with DTCC, "defendants") are employees of DTCC.

Plaintiff Sydney Lewis ("plaintiff7 or "Lewis"), a black man of Jamaican origin, has been a DTCC employee since February 1979. In 1999, he was promoted from Senior Research Clerk to Supervisor of Aging Transfer, a department within DTCC7s Operations Division. In January 2002, he became supervisor of the Troubleshooting Department, which is also within the Operations Division. (See D. Mem. in Support of Mot. for Summ. J. ("D. Mem.") at 7; P. Mem. in Opp. to Mot. for Summ. J. ("P. Mem.") at 3; Lewis Dep. 43: 14-19, 60:2-3, 60:10-12; id. Ex. 25.)

II. The Events at Issue

A. Plaintiffs Initial Written Warning

The events giving rise to this action began in November 2001, when plaintiffs superiors expressed dissatisfaction with certain evaluations plaintiff had drafted concerning his subordinates7 job performance. According to defendants, plaintiffs superiors found discrepancies between the high ratings plaintiff had given the employees and plaintiffs written descriptions of their work; plaintiff was thus directed to provide more detailed descriptions to justify the high ratings or to adjust the ratings to a more appropriate level. (D. 56.1 Statement ¶¶ 13- 14.) Plaintiff, defendants contend, exerted little effort to address these concerns; he simply reduced the ratings without altering the descriptive appraisals, and then told his subordinates during improperly short interviews that "this is what managements deems you deserve." (Id. ¶ 14 (citation and internal quotation marks omitted); see also D. Mem. at 8.)

Plaintiffs subordinates took issue with the edited evaluations and filed a complaint with DTCC's Human Resources Department, arguing that they had been treated unfairly and deserved higher ratings. Their complaint, a copy of which appears in the record, was rife with direct attacks on plaintiffs character, claiming that Lewis lacked integrity, honesty, discipline, and credibility, and that he had destroyed his subordinates' "morale" and "sense of fair play." (Lewis Dep. Ex. 12.) An investigation into the matter by plaintiffs superiors concluded that plaintiff had conducted the evaluations "improperly and poorly," that he had "demonstrated insubordinate behavior during the appraisal preparation process . . . by failing to provide [his] manager examples to support the performance ratings," and that he had failed to "act in good faith, on behalf of [his] employees, when [he] merely [lowered] the ratings on the appraisals." (Id. Ex. 13.) Plaintiff was issued a "Written Warning" that "any further occurrences of this nature could result in further disciplinary action up to and including termination." (Id.)

Plaintiff does not contest the above characterization of the investigation's conclusions, but argues that the discipline was unjustified. According to plaintiff, he simply administered the evaluations in accordance with his supervisor's instructions, despite having been given insufficient time and inadequate guidance. (P. 56.1 Counterstatement ¶¶ 13-14.) He alleges that defendant Esposito, the manager of the Aging Transfer Department, "brusquely ordered [him] to make the ratings changes or risk being cited for insubordination." (Id. ¶ 13; see also Lewis Dep. 5 1:8-12.) Plaintiff also claims that he unsuccessfully pleaded with the department's director and vice-president (defendants Lippa and Hutton) to intervene in the matter. (P. 56.1 Counterstatement ¶ 14.) When his subordinates later complained about their ratings, plaintiff contends, "Esposito, Lippa and Hutton chose to use [plaintiff] as a scapegoat and close[d] rank[s] against him." (Id.) Plaintiff concedes that the Written Warning played "an important role" in future disciplinary action taken against him. (D. 56.1 Statement ¶ 17; P. 56.1 Counterstatement ¶ 17.)

B. Plaintiffs Transfer and Final Warning

Plaintiffs employment troubles continued the following year. In January 2002, DTCC instructed plaintiff and fellow supervisor Richard Merckling to switch positions, so that Merckling would become a supervisor in the Aging Transfer Department, and plaintiff would become a supervisor in the Reject Processing Department. Both departments formed part of the company's Operations Division. (D. 56.1 Statement ¶ 19; P. 56.1 Counterstatement ¶¶ 19.) According to plaintiff, his employers ordered the switch in position while plaintiff was on vacation in an effort to better situate Merckling for promotion to a vacant managerial position. (Id.; Complaint 7 XI(c).) Defendants claim that management transferred Lewis to the new position "to expand the breadth of his knowledge and expertise." (D. Mem. at 7.)

Soon after the transfer took place, a dispute arose as to the proper procedure for dealing with stock certificates confiscated by transfer agents. For purposes of the present dispute, a thorough understanding of the procedure in question is unnecessary. It suffices to note that according to defendants, the correct procedure "dictated that as soon as a transfer agent notified DTCC that it had confiscated a stock certificate . . . , DTCC was immediately to debit the participant's . . . account by the number of shares that had been confiscated." (D. 56.1 Statement ¶ 2 1 .) In contrast, under the procedure established by plaintiff when he took over as supervisor of Reject Processing, confiscated certificates were placed in a special status called "Stop" or "STP" status, and participants' accounts were not adjusted unless the transfer agent first provided "replacement certificate numbers." (Id.; P. 56.1 Counterstatement ¶ 21; P. Mem. at 6-7.)

Plaintiff contends there was no uniform procedure in place to deal with confiscated certificates when he became supervisor of Reject Processing, and that he adopted the supposedly "new" procedure primarily "because it was the same procedure that his previous department followed." (Id. at 6; see also Lewis Dep. 120:5-15.) He claims that his superiors, including defendants McGuire and Lippa, initially approved of his actions. (Id. at 126: 19-25.) According to defendants, however, plaintiffs actions constituted a unilateral and unjustified change in an important, "long-standing" procedure. (D. 56.1 Statement ¶ 21.) Plaintiffs preferred method, defendants argue, exposed both DTCC and its clients to financial risk. (Id. ¶ 22.)*fn1

Regardless of whether plaintiff actually acted improperly, there is no dispute that his preferred procedure was ultimately rejected and that his superiors initiated an investigation into his conduct. Nor is there any dispute that plaintiff vigorously resisted defendants' efforts to discipline him for the allegedly unauthorized policy change. After being notified, for example, that defendant Hutton was considering issuing a "final warning" to plaintiff for insubordination, plaintiff filed a formal complaint with DTCC's general counsel, denying that he had acted improperly and claiming that his superiors, particularly defendant McGuire, were "deliberately engaging in actions designed to bring harm to and ultimately destroy [his] professional career at DTCC." ...

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