Kelley v. Airborne Freight Corp.

• Decision Date: 07 April 1997
• Docket Number: No. 96-2057,96-2057
• Citation: 140 F.3d 335
• Parties: 76 Fair Empl.Prac.Cas. (BNA) 1340, 73 Empl. Prac. Dec. P 45,294, 73 Empl. Prac. Dec. P 45,383, 49 Fed. R. Evid. Serv. 203 John M. KELLEY, Plaintiff, Appellee, v. AIRBORNE FREIGHT CORPORATION d/b/a Airborne Express, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 335

140 F.3d 335

76 Fair Empl.Prac.Cas. (BNA) 1340,

73 Empl. Prac. Dec. P 45,294,

73 Empl. Prac. Dec. P 45,383,

49 Fed. R. Evid. Serv. 203

John M. KELLEY, Plaintiff, Appellee, v. AIRBORNE FREIGHT CORPORATION d/b/a Airborne Express,

Defendant, Appellant.

No. 96-2057.

United States Court of Appeals, First Circuit.

Heard April 7, 1997.

Decided April 7, 1998.

James W. Nagle, with whom Wilfred J. Benoit, Jr., Anthony M. Feeherry and Goodwin, Procter & Hoar LLP were on brief for appellant.

Stephen S. Ostrach and Cynthia L. Amara, New England Legal Foundation, on brief for Associated Industries of Massachusetts, amicus curiae.

David G. Hanrahan, with whom Ross D. Ginsberg and Gilman, McLaughlin & Hanrahan, LLP were on brief for appellee.

Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, and STAHL, Circuit Judge.

STAHL, Circuit Judge.

Defendant/appellant Airborne Freight Corporation ("Airborne") appeals from a jury verdict in favor of plaintiff/appellee John Michael Kelley ("Kelley"). After a ten-day trial, a jury found that Airborne had wilfully discriminated against Kelley on the basis of his age in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. ("ADEA") and knowingly violated its state law counterpart, Mass. Gen. Laws ch. 151B ("ch.151B"). The district court accordingly entered judgment for Kelley in the amount of $1,244,152.24 on the ADEA claim, $3,136,858.29 on the ch. 151B claim and awarded attorney fees of $190,000. Airborne seeks a new trial, contending that (1) various evidentiary rulings affected the verdict and (2) the jury instructions were incomplete and misleading. In addition, Airborne claims that the district court improperly calculated the damages. We disagree and affirm.

I. Background

On appeal we examine the facts, consistent with record support, in the light most favorable to the verdict-winner. See Cumpiano v. Banco Santander P.R., 902 F.2d 148, 151 (1st Cir.1990).

Airborne delivers time-sensitive packages. In 1974, at age twenty-eight, Kelley quit college to join Airborne as a District Manager in Tucson, Arizona. Kelley rose through the ranks, progressing through a series of jobs with increasing responsibility. During the mid-1980s, the Northeast Region, which consists of the New England states and most of New York, was beset by operational problems that were undermining sales in the Boston area. Airborne asked Kelley to transfer from Miami to Boston to improve the company's operations in the region. In July 1987, at age forty-one, Kelley was promoted to Regional Field Services Manager ("RFSM") for the Northeast Region.

Airborne is divided into two divisions: sales and field services. The sales division sells Airborne's services and maintains active client accounts. The field services division, also referred to as "operations," is responsible for ensuring the timely delivery of parcels. As RFSM, Kelley was in charge of the operations side of the business for the entire Northeast Region.

President and Chief Operating Officer Robert Brazier was in charge of both divisions nationally. Executive Vice President Raymond T. Van Bruwaene, who reported to Brazier, managed three Area Vice Presidents, including Kelley's supervisor, William Simpson. Kelley was one of five RFSMs working under Simpson. Regional Sales Manager James Guiod, was in charge of the sales division in the Northeast Region. Guiod and Kelley were at the same managerial level and essentially ran the region together with divided responsibility. Richard Goodwin directed Airborne's human resources division.

Airborne performs annual reviews of its managers and collects various data to assess their performance. During Kelley's initial tenure from mid-1987 to mid-1990, the reviews he received from Simpson were mixed. Although the quality of Airborne's service in the region improved, the region demonstrated some continuing problems in meeting profit goals.

In a review conducted in June 1990, Simpson was critical of Kelley's management skills. Betsy Tate, a lower-level manager in Rochester, New York, had complained to Simpson that Kelley was sexually harassing her. Simpson confronted Kelley concerning Tate's complaints and issued him a verbal reprimand. In a written review, Simpson noted that the region had failed certain "quality-of-service" audits, that Kelley at times displayed a sexist attitude, and that he failed to follow company policy on sexual harassment. Simpson placed Kelley on probation and informed him that, if improvements were not made, he would be discharged at the end of the year, but if improvements were made, Simpson would try to have the incident removed from Kelley's record.

Despite these management problems, Kelley's region enjoyed some notable successes. In January 1988, Brazier instituted an incentive program called the "Top Gun" Contest, which awarded $10,000 to the pair of Sales Managers and RFSMs who had the greatest volume increase in domestic and international outbound express shipments and revenue each quarter. Between 1988 and 1991, Guiod and Kelley won the Top Gun award four times, more than the managers in any other region, prompting Brazier to commend them in December of 1991 for "being better at selling and servicing than any of [their] peers." Each letter spoke of Kelley and Guiod in glowing terms.

Following the June 1990 review, Kelley apparently made the improvements Simpson requested. In his evaluation covering the period from October 1990 to October 1991, Simpson rated Kelley as "Superior to Outstanding" in each performance category: service, productivity, cost control, net profit, progress toward improvement, problem solving, leadership/management skills, knowledge and technical competence, and communication skills.

In late September 1992, Simpson received several complaints about local service failures within Boston. For reasons that remain less than precisely clear, Airborne had developed a practice of sending all packages originating in Boston--including those destined for Boston-area delivery--on airplanes to Ohio, where the packages destined for local delivery were sorted and then routed back to Boston. Despite this circuitous delivery route, local packages were still delivered on-time the next day unless the airplane suffered a mechanical failure or there was a weather-induced delay which made the packages late on arrival. These mechanical failures occurred on a number of occasions, which understandably prompted complaints from three Boston customers (Thomas Cook, Bank of Boston, and Teradyne) because they saw no need to send local packages to Ohio for sorting. Simpson verbally directed Kelley to set up a local "sort" process to obviate the need to send local packages on this seemingly unnecessary round-trip. Although service failures were a consistent occurrence in the delivery business, mistakes like the sort problem caused Airborne to lose customers, straining the relationship between Kelley and Guiod.

During this time, Simpson complained about the inept performance of a manager under Kelley's supervision, Bob Cox, who was also Kelley's brother-in-law. Cox managed the region's North Shore Station, a station beset with operational problems. The most notorious gaffe involved an incident in which a driver from Cox's station failed to deliver over one hundred parcels for Miles Agfa, a new multi-million dollar national account, leaving the parcels on a truck parked on Airborne's lot for an entire weekend. Company policy required supervisors to accompany drivers when first servicing large new accounts, but Cox failed to do so. As required by the company's progressive discipline policy, Kelley gave Cox time to improve his performance but eventually fired him in February 1993.

In the summer of 1992, shortly after having suffered a minor stroke, Kelley attended a meeting with Simpson, Goodwin, Van Bruwaene, and other RFSMs from Simpson's area regarding a planned reduction in force ("RIF"). Goodwin, who managed the Human Resources Division, informed those present that age was one of the relevant characteristics in deciding whom to fire. Simpson said, in substance, that the RIF would "be an excellent opportunity to get rid of some of the older mediocre managers" in Area 1.

That summer, Airborne terminated thirty-four employees as part of the RIF, including the oldest manager in Kelley's region, who was in his mid- to late forties.

In 1992, a price war broke out between Airborne and Federal Express, placing considerable pressure on managers to meet customer expectations. During this time, the company regularly performed quality-of-service audits to measure the efficiency of the operations within a region. In July 1992, Kelley's region, which Airborne admitted was one of the more difficult regions in the country to manage, was the only region under Simpson's control that met Airborne's goal of delivering ninety-five percent of the packages before noon. In August 1992, Simpson informed the RFSMs that Kelley's region had passed all quality-of-service audits and congratulated him for this accomplishment. In October 1992, Simpson sent an E-mail message to his subordinates recognizing Kelley's Northeast Region for having the best average score of any region in the company on quality of service audits conducted during the year. In November 1992, Simpson again congratulated Kelley for "tearing them up" because the region continued to perform well on the quality of service audits. As a result, Simpson informed Van Bruwaene that Kelley was performing quite well. Van Bruwaene was "elated" with Kelley's performance, agreeing that Kelley's region was performing well as measured by the audits.

On December 5, 1992, three and one-half months prior to his termination, Kelley received his annual performance review from Simpson. Airborne used the appraisals to "determine how various people of various management levels are doing in comparison to...