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Ferguson v. Lander Co.

April 2, 2008

THOMAS FERGUSON, PLAINTIFF,
v.
LANDER CO., INC., DEFENDANT.



The opinion of the court was delivered by: David E. Peebles U.S. Magistrate Judge

DECISION AND ORDER

It is sometimes said that an old dog cannot be taught new tricks. In some instances, there may be a modicum of truth to the saying; the inertia that comes with time and experience can sometimes prove a powerful resistence to change and the implementation of new ideas and techniques. It does not necessarily follow, however, that in an employment setting age is a reliable barometer of performance and an employee's receptiveness to change and direction. Congress enacted the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., to combat reliance by employers upon the stereotypical view that older workers are less capable than their younger counterparts when making employment decisions. As the Supreme Court has noted,

[i]t is the very essence of age discrimination for an older employee to be fired because the employer believes that productivity and competence decline with old age. . . . Congress' promulgation of the ADEA was prompted by its concern that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes.

Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 113 S.Ct. 1701, 1706 (1993) (internal citation omitted). When employment decisions are swayed by such thinking, an employee's rights under the ADEA are violated. This is such a case.

Plaintiff Thomas Ferguson, who for more than six years prior to September of 2004 served as the Controller of a plant operated by defendant Lander Co., Inc. ("Lander") in Binghamtom, New York, has commenced this action against his former employer asserting federal and state law claims arising from his discharge by the company, slightly more than a year after acquisition of the company's assets by a new management group. Plaintiff asserts that the termination of his employment was motivated by his age, in violation of both the ADEA and the New York Human Rights Law ("HRL"), N.Y. Executive Law § 290 et seq.,and additionally that it was prompted by his filing in August of 2004 of a request for leave under the Family and Medical Leave Act of 1993 ("FMLA"), 29 U.S.C. § 2601 et seq., to permit him to assist in the medical care of his son. Defendant vehemently denies having violated plaintiff's rights under those three statutory provisions, and asserts that the loss of his employment with the company resulted from a combination of the need to trim the company's workforce, in order to reduce expenses and meet the demands of its primary lender, and plaintiff's subpar job performance.

Plaintiff's claims were tried to the court, beginning on February 4, 2008.*fn1 Based upon the evidence adduced at trial, I find that while Ferguson's filing of a request for FMLA leave did not influence defendant's determination, plaintiff has established by a fair preponderance of the evidence that age was a motivating factor in the decision to terminate his employment, and therefore conclude that he is entitled to much of the relief now sought. The following decision incorporates within it my findings of fact and legal conclusions regarding the matter.

I. BACKGROUND

Plaintiff was born on September 9, 1948, and for some thirty-six years has been married to Geraldine Ferguson. While plaintiff lives during the week in an apartment in Harrisburg, Pennsylvania, where he is presently working, the plaintiff and his wife have maintained a residence in Scranton, Pennsylvania for the past thirty-one years, including during the time of his employment with Lander.

Plaintiff holds a Bachelor of Science Degree in Business Administration (Accounting) from the University of Scranton, and a Masters in Business Administration ("MBA") degree in the field of Finance from Marywood University. Prior to becoming employed at Lander, Ferguson worked extensively in the area of finance and management, including at Ingersoll-Rand Corporation in Scranton, Pennsylvania, from 1973 until 1981, where he held several positions including as Accounting Supervisor, Manager, and Financial Control Manager, and later with Chamberlain Mfg. Corp., also located in Scranton, Pennsylvania, from 1981 until 1996, serving as Controller of that company for the last ten years of his employment there. After leaving Chamberlain, Ferguson was employed for two years by Highlights for Children, Inc., a family owned children's magazine and book publishing company located in Honesdale, Pennsylvania, as the company's Director of Business Operations.

At the times relevant to plaintiff's claims, Lander was a corporation engaged in the business of manufacturing health and beauty care products, an industry affecting interstate commerce, with corporate headquarters located in New Jersey.*fn2 Because Lander does, and at all applicable times did, employ at least fifty individuals for each working day in each of twenty or more calendar weeks in the preceding year, it was therefore an employer as defined under the ADEA, FMLA, and HRL, and therefore subject to the requirements of those enactments.

In recent years, Lander's manufacturing activities have been chiefly concentrated at two facilities, one located in Binghamton, New York, where in excess of two hundred workers are stationed, and a second situated in Toronto, Ontario, where approximately eighty individuals are employed.*fn3 With approximately 125,000 square feet of operating space, the plant in Binghamton was the larger of the two Lander manufacturing facilities, and the sales out of the Binghamton operations, on average, were three times those attributable to its Canadian counterpart.

In April of 1998, Ferguson was hired by John Boylan, Lander's Chief Financial Officer ("CFO"), as the Plant Controller for the company's Binghamton manufacturing facility. At the outset of his employment with the company, plaintiff's base salary was established at $75,000 per year, with an additional yearly travel allowance of $3,000 to account for the fact that Ferguson resided in Scranton, Pennsylvania, approximately one hour in driving time from the Binghamton plant, and intended to commute to work daily rather than relocating with his family to the Binghamton area. In his position at Lander, plaintiff did not have a written employment contract. In the early years of his employment with the company, plaintiff enjoyed a good relationship with CFO Boylan, and received generally positive written evaluations from him in July of 1999, and again in August, 2000.

In June of 2003 the Hermes Group, LLC ("Hermes") purchased some of Lander's assets from Claneil Enterprises, the company's previous owner.*fn4 During the years immediately prior to the Hermes takeover, Lander, which operates in an industry known for its modest profit margins, was generally unprofitable. Of those years, only in the year 2000 did the company's books not reflect a loss.

The primary lender for Lander during the time of the Hermes operation was the CIT Group/Business Credit, located in New York City. At the times relevant to plaintiff's claims, the company management was under pressure from CIT to initiate measures calculated to effectuate substantial cost savings.

As a result of the Hermes acquisition a new group, which included some of the Hermes investors, assumed responsibility for management of Lander. In June of 2003, during that transition, Mark Massad assumed the position of the company's Senior Vice President for Finance and CFO, replacing John Boylan, who left Lander at or about the time of the acquisition. Other executives joining Lander in or about that same timeframe included Joseph Falsetti, Chairman and Chief Executive Officer ("CEO"); Frank Pettinato, Senior Vice President for Operations; Bill Acheson, Executive Vice President for Sales and Marketing; and Harrie Driessen, Executive Vice President for International Sales.

As part of the restructuring John Nabial, an individual with significant accounting and management background in both public accounting, and in the private sector as a management consultant, was appointed in or about April of 2003 to fill a newly-created position of Corporate Controller, designated in the reporting structure to be between the CFO and the Plant Controllers at Binghamton and Toronto. From June of 2003 until the termination of plaintiff's employment on September 17, 2004 Nabial, who at the time was in his mid-forties, served as Ferguson's immediate supervisor.*fn5

Immediately prior to the plaintiff's layoff there were two Lander workers reporting directly to him, including Steven Hess, hired by Ferguson in August of 2003 as a Cost Accountant, and Lisa Wascalis, an Accounts Payable Clerk. In June of 2004 plaintiff was asked by Tara Di Bari, the company's Human Resource ("HR") Director, to evaluate those two directly-reporting employees, utilizing the standard Lander exempt employees performance planning and review form used earlier by John Boylan to complete plaintiff's evaluations in 1999 and 2000. Plaintiff complied with that directive and, in accordance with established company procedures, completed those evaluations and discussed the results with the two employees.

In his position, plaintiff had primary responsibility for oversight of all financial aspects of the Lander operation at Binghamton. Plaintiff's duties as Plant Controller were summarized as follows in a written job description for the position:

Responsible for directing, coordinating and controlling the accounting systems that properly reflect the financial position of the Binghamton plant. Monitors policies and procedures and recommends improvements. Consults with the Management Team on all business issues and policy considerations. Participates in establishing and implementing major goals and objectives.

Serves as a resource in all aspects of operations.

Ensures accurate internal and external recording and reporting financial transactions. Directs and oversees budget development and composition of a $12 million divisional operation. Oversees accounts payable in excess of $36 million annually; fixed asset request, development, management and control. Ensures accuracy of inventory cost issues for $5.6 million inventory. Ensures that operational activities are in accordance with the established legal, regulatory and Company procedures in support of 60-80,000,000 sales.

In addition to his day-to-day duties as Plant Controller, during the late 2003 and early 2004 timeframe plaintiff was also involved in three significant company projects. The first of those was the implementation of a new cost accounting system. That project, the result of a major corporate initiative to be implemented companywide, involved allocation of overhead and other costs on a "granular" basis in order to permit a better understanding of the costs associated with the manufacture of the approximately three hundred fifty individual products, or stock keeping units ("SKUs"), being sold at the time by Lander. The avowed purpose of developing a new cost system was to calculate more definitively the expense of manufacturing each product line in order to position the company to determine profitability and value in the marketplace, and to more efficiently utilize manufacturing capacity.

The cost accounting project involved corporate representatives as well as a cluster of employees from each of the two Lander plants. At Binghamton, the group was comprised of the plaintiff, Stephen Hess, Robert Reardon, and Daniel Polhamus. The Canada team included Albert Au-Yueng, the Toronto Plant Controller, and Joe Earles. Weekly meetings were held during the course of the new cost system development, which extended from September of 2003 into March of the following year; those meetings were typically conducted by teleconference, and involved members of the two teams and the New Jersey headquarters coordinators, including Tony Todaro, the company's Manager of Business Systems, Nabial, and Ted Doyle, a Hermes investor who served as a consultant in connection with the endeavor. During the course of the project, in which the plaintiff was heavily involved, the Binghamton team was consistently on schedule with its assigned tasks -- unlike the Toronto group, which appeared to lag behind -- and those at corporate headquarters, including John Nabial, seemed pleased and expressed satisfaction with the Binghamton team project results.*fn6

The second of the major projects in which Ferguson was engaged was preparation of a yearly budget for the Binghamton plant. Between approximately September of 2003 and January, 2004, plaintiff was heavily involved in preparation of the Binghamton budget for the fiscal year ending 2005 ("FYE '05") budget, to cover the period between March 1, 2004 and February 28, 2005. Unlike its Canadian counterparts, whose budget for that period was fifty-four days late, the Binghamton budget team completed its work for the FYI '05 budget on time, and representatives of corporate headquarters expressed appreciation for plaintiff's work in connection with the project.

The third project of significance completed under the plaintiff's auspices during the relevant timeframe was the Binghamton plant inventory, which occurred in February of 2004 and entailed inventorying of plant assets exceeding twelve million dollars in aggregate value. That inventory, which was completed on time and successfully, was conducted in February of 2004, requiring a plant shutdown and coordination by the plaintiff of the work of between forty and sixty-five employees working in conjunction with the company's auditors, who were also present. Plaintiff worked closely with Robert Reardon, the Supply Systems Manager at Binghamton, in connection with the 2004 inventory. By all accounts, the 2004 inventory was similarly successful, and completed without complication.*fn7

In his position as the Binghamton Plant Controller plaintiff worked closely with Mark Watkins, the Plant Manager of that facility. Watkins, who is still employed with the company, reported to Frank Pettinato, the company's Senior Vice President for Operations, following the Hermes takeover in 2003. As the Binghamtom Plant Manager Watkins had daily contact with Ferguson, and both men considered the plaintiff to have a dotted line reporting relationship with Watkins as Plant Manager.*fn8 Watkins worked closely with Ferguson in formulating the budget for FYE '05 as well as on creation of the revised cost accounting system, and from what Watkins was able to observe while in attendance at meetings, it appeared to him that Nabial appreciated plaintiff's efforts in connection with those projects. Based upon his observations, Watkins had confidence in plaintiff's capabilities and judgment.

In addition to Watkins, other members of the Binghamton Plant management team generally held the plaintiff in high regard during his tenure at Lander, including Supply System Manager Reardon, Mixing and Production Manager Daniel Polhamus, Human Resources Manager Joan Lieb, and Cost Accountant Hess. Plaintiff was not similarly respected, however, by Accounts Payable Clerk Wascalis, one of his direct reports, who considered him completely incompetent and unapproachable in his position as a Plant Controller, and as her supervisor.

From the time of the Hermes acquisition until June of 2004, Ferguson had overall positive interaction with those at corporate headquarters, including with John Nabial, receiving generally favorable feedback regarding his performance during that period, although with some exceptions. Over that period Nabial occasionally commended the plaintiff for his work on the various major projects, including his role in the development of a new cost accounting system, the preparation of the FYE '05 budget, and the inventory, and did not counsel the plaintiff in writing regarding the need to improve his performance or issue any written memoranda to apprise Ferguson that he was not performing up to Nabial's expectations.

This is not to say that there were no problems discerned with regard to plaintiff's job performance during that timeframe. In May of 2004 a question arose regarding discontinued items, with Nabial directing the plaintiff to complete a required worksheet. An earlier e-mail exchange in January of 2004 between Ferguson and Nabial also raised an issue regarding product invoiced, but not shipped. Additionally, concern was expressed at various times, by some, over whether the plaintiff had adequate command of BPCS, a resource planning computer software program utilized at the Binghamton facility to track costs.*fn9 Plaintiff was also criticized, at some point in or about the summer of 2004, for his resistance to a corporate wide initiative to extend out the period for making payments to vendors in order to alleviate a cash flow deficit, a matter of concern to corporate headquarters.*fn10 Nabial admitted, however, that most of those issues were not referenced in plaintiff's personnel file, nor did they appear to recur or evoke lingering concerns over plaintiff's job performance.*fn11

One area of criticism by Nabial related to a vacation taken by Ferguson in early July, 2004 without first having sought his approval, as plaintiff's supervisor. In scheduling that vacation Ferguson followed the established practice at Binghamton, noting his scheduled vacation on a master calendar maintained at the plant. While a memorandum was issued at the direction of higher management by Joan Lieb, the company's HR Manager at Binghamton, regarding vacations and specifically directing employees to seek prior approval from immediate supervisors for vacation scheduling, a procedure not followed on that occasion by the plaintiff, that memorandum was not issued until July 1, 2004, while he was in fact already on vacation. In any event, it was not until July 9, 2004, well after he had already made his recommendation regarding plaintiff's termination, that Nabial raised the vacation scheduling issue, to which plaintiff responded by apologizing, noting that he had simply followed the established practice of scheduling his vacation on the internal Binghamton Lander calendar.*fn12

Nabial testified that he became dissatisfied with plaintiff's performance beginning near the end of 2003 or very early during the following year. By May or June of 2004, Nabial formed the impression that plaintiff's employment at Lander should be terminated. According to Nabial, that opinion was based in part upon performance, including his inability to obtain desired financial information from the plaintiff, as well as his belief that a Plant Controller was no longer needed at Binghamton.

Since Nabial was not empowered to make the decision to terminate plaintiff's employment, however, he therefore recommended the change to CFO Mark Massad. Discussions ensued, involving Tony Todaro and Frank Pettinato, regarding the issue. As a result of those discussions Nabial was told by President, Chief Executive Officer ("CEO") and Board Chair Joseph Falsetti that the matter would be deferred in order to permit plaintiff's termination, if it was to occur, to coincide with a contemplated reduction in force.

In anticipation of completing an evaluation concerning Ferguson, on or about June 11, 2004 John Nabial initiated a process for acquiring information concerning the plaintiff's job performance. As part of that exercise Nabial sought input from Tony Todaro, the company's Manager for Business Systems; Ken Mitchell, the Assistant Controller for Lander; Mark Watkins, the Plant Manager at Binghamton; Renee Juro, a Senior Accountant assigned to work at corporate headquarters; Steven Hess, the Cost Accountant working under the plaintiff at Binghamton; and Lisa Wascalis, also working at Binghamton under plaintiff's supervision as an Accounts Payable Coordinator. In seeking information from employees who did not directly supervise the plaintiff, Nabial departed from the established procedure at Lander for evaluating management level employees, utilizing forms which were also not consistent with the traditional evaluation process at Lander. Each of the individuals whose opinions were solicited was asked to complete a form entitled "Performance Management Input Form -- 360 Feedback" and was advised that comments regarding the plaintiff's performance were being solicited on an anonymous basis.*fn13 Plaintiff was the only Lander employee evaluated utilizing this process in 2004, and company officials were only able to recall one other employee, Beth Chapin, who was evaluated using the 360 mechanism, that having occurred in 2003.

In response to this request for input, only Watkins, Todaro and Mitchell completed and returned written 360 feedback forms.*fn14 The 360 evaluation completed by Binghamtom Plant Manager Watkins was generally complimentary of the plaintiff.*fn15 In his evaluation Tony Todaro expressed some criticism of the plaintiff, noting his view that the two employees working directly under him were not "comfortable" with his leadership, and suggesting that the plaintiff devote his attention less to assisting Watkins in managing the plant and more toward fulfilling his responsibilities as Plant Controller.*fn16 Ken Mitchell's 360 evaluation was significantly less flattering toward the plaintiff, suggesting that with the possible exception of coordinating the year-end physical inventory, he was not aware of any area in which Ferguson was particularly effective. It should be noted, though, that while Mitchell's evaluation of the plaintiff was undeniably negative, and significantly at odds with that of Plant Manager Watkins, many of his responses reflected "don't know" and, in the comment section, Mitchell stated in effect that he was unsure as to what the plaintiff exactly did at Lander, reflecting the reality that the extent of Ken Mitchell's interaction with the plaintiff was fairly limited.

In addition to the written 360 evaluations of the plaintiff completed by Watkins, Todaro, and Mitchell, at trial Lander offered into evidence 360 feedback forms completed by Nabial, allegedly based upon telephone interviews conducted on June 15, 2004 with Lisa Wascalis, who apparently was hesitant to complete a written evaluation out of concern that Ferguson might learn of her as the source of information gathered by Nabial, and Steven Hess, who had flatly refused to complete a 360 evaluation form regarding the plaintiff in light of the fact that the request represented a departure from the company's established practice for evaluating exempt employees. The form completed by Nabial utilizing verbal input received from Lisa Wascalis, which was significantly critical of the plaintiff's performance, is consistent with that individual's trial testimony regarding her assessment of plaintiff's performance and her comments to Nabial regarding Ferguson. The 360 feedback form attributed to Hess, however, is wholly at odds with his trial testimony regarding his opinions of the plaintiff.

The first page of the 360 evaluation form, utilized by Nabial to capture the verbal comments of Wascalis and Hess, sets out fifteen separate categories and requests a numerical rating in each, using the following code:

Numerical RatingDesignation Don't know 1Never 2Sometimes 3Often 4Always

The form inquires about such employee attributes as "[b]ehaves in a way which is respectful of others", "[s]hares credit for team accomplishments", and the like. According to Nabial's written summary, Hess rated Ferguson as a "1" -- the lowest rating aside from "don't know" -- in thirteen of the fifteen designated categories, and a "2" in the remaining two. Nabial's report of Hess's verbal evaluation also contains several negative comments in an explanation portion located on the second page of the feedback form.

Hess testified credibly at trial that Nabial's reporting of his verbal comments on the written 360 form did not accurately reflect his actual opinions regarding plaintiff's job performance, both as held and as shared with Nabial. Indeed, in contrast to the opinions attributed to him by Nabial, Hess testified at trial that for the most part he was extremely complimentary toward the plaintiff, and would have scored Ferguson as a "3" in three categories on the form, and in the highest category in the remaining twelve.*fn17

On June 18, 2004, based upon the written and verbal comments gathered, Nabial prepared a written evaluation of the plaintiff utilizing the standard Lander exempt employee evaluation form. The first portion of that form seeks an assessment of the employee's competence in various specified realms, listing possible responses as "exceeds expectations" "commendable", "effective", "marginal", and "unacceptable". The evaluation authored by Nabial set forth the following ratings for the plaintiff in the respective designated categories:

CategoryRating ProfessionalismUnacceptable AccountabilityMarginal FlexibilityMarginal Technical/Occupational KnowledgeEffective InitiativeUnacceptable PlanningEffective CommunicationMarginal JudgmentMarginal Problem SolvingMarginal Innovation and Risk TakingUnacceptable ...


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