758 F.2d 1435 (11th Cir. 1985), 84-7233, Goldstein v. Manhattan Industries, Inc.

Docket Nº:84-7233.
Citation:758 F.2d 1435
Party Name:Lawrence GOLDSTEIN, Plaintiff-Appellee, Cross-Appellant, v. MANHATTAN INDUSTRIES, INC., a corporation, Defendant-Appellant, Cross-Appellee.
Case Date:April 25, 1985
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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758 F.2d 1435 (11th Cir. 1985)

Lawrence GOLDSTEIN, Plaintiff-Appellee, Cross-Appellant,



Defendant-Appellant, Cross-Appellee.

No. 84-7233.

United States Court of Appeals, Eleventh Circuit

April 25, 1985

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[Copyrighted Material Omitted]

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C. Richard Langley, Albany, Ga., for defendant-appellant, cross-appellee.

John C. Falkenberry, Birmingham, Ala., for plaintiff-appellee, cross-appellant.

Appeals from the United States District Court for the Northern District of Alabama.

Before KRAVITCH and JOHNSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.

TUTTLE, Senior Circuit Judge:

This is an action brought in the Northern District of Alabama by Lawrence Goldstein against his former employer, Manhattan Industries, Inc. ("Manhattan"), alleging

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that his employment was terminated in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Sec. 621 et seq. The employer appeals from a judgment rendered on a jury's verdict for the plaintiff, and the employee cross-appeals from the district court's selection of remedies.


A. Goldstein's Discharge

Goldstein took a job with Manhattan Industries as a sales representative for its ladies' shirts and blouses, sold under the "Lady Manhattan" label, in 1960, when he was 38 years old. From that time until his dismissal in 1982 at age 60, Goldstein was Manhattan's exclusive representative in Alabama, Georgia and the Florida panhandle. Much of Goldstein's income was derived from his major store accounts, particularly Rich's and Davison's in Atlanta.

In 1979, Manhattan decided to reorganize its marketing arrangement and decided that sales representatives would no longer sell to the major department stores in their territories. Instead, those stores were to become "house accounts" administered in the company's New York office. To compensate their sales representatives, such as Goldstein, for the resulting reductions in their income, the company agreed to allow them to represent non-competing apparel lines along with Manhattan's products. After the first year of this arrangement, Manhattan also agreed that Goldstein could display and sell these "outside lines" in Manhattan's permanent showroom in the Atlanta Apparel Mart, so long as he paid the rent and expenses on the showroom.

Subsequently, Goldstein regularly attended seasonal apparel shows in Atlanta and Birmingham. He advertised in trade papers that not only his Lady Manhattan products but also his other lines would be exhibited at his assigned location. Goldstein paid for the advertisements, paid the rent on the Atlanta showroom space at the Atlanta Apparel Mart and paid all charges for exhibition space at other shows. Using Lady Manhattan as his "headliner" and the company's desirable location in the Apparel Mart, Goldstein successfully attracted customers for all of his merchandise.

In 1980, Goldstein generated $1,020,165.83 in sales of Lady Manhattan products despite the loss of the Rich's and Davison's accounts. This was the third highest net sales figure among the company's sales representatives that year. In 1981, Goldstein's sales figure was $830,311.06, fourth highest for the company. 1 Goldstein's earnings from both Manhattan and his outside lines from 1974 to 1983 are set forth in the margin. 2

Apparently the Lady Manhattan division was in a shaky financial condition from 1979 to 1981. The plan to handle major store accounts from the New York office proved ill-conceived. Moreover, Goldstein testified that the company produced a poor product line during those years. Sales were down nationally.

In early 1982, Bob Guberman, age 41, and Preston Imber, age 39, took over management of the Lady Manhattan division, Guberman as vice president and Imber as

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national sales manager. They apparently determined to phase the exclusivity requirement back in and selected six sales territories, including Goldstein's, in which the sales representatives would be required to abandon their outside lines. According to Imber, 12 territories had been returned to exclusivity by the end of 1983 and all of the sales representatives in those territories had received back their major accounts. Eight territories situated in various parts of the United States remained non-exclusive.

On March 3, 1982, Guberman traveled to Florida to interview applicants for sales representative positions. On Thursday, March 4, he stopped in Atlanta to meet with representatives of Rich's and Davison's and to interview Michael Eiseman, age 46, as a possible replacement for Goldstein. He called Eiseman up at 11:00 p.m. and told him to come to an interview at 11:30 p.m. at the Hyatt Regency Hotel in Atlanta. Eiseman had previously applied for the position and had met with Guberman in New York in February.

At 8:00 the same evening, Guberman called Goldstein at his home in Birmingham, Alabama, to tell him that the company would no longer permit Goldstein to sell outside product lines and that it expected him to return to an exclusive basis. Guberman told him that sales representatives who returned to exclusivity would be assured a $25,000 yearly salary plus a $25,000 draw, or advance, against future commissions.

Goldstein insists that Guberman said nothing about returning the Rich's and Davison's accounts to Goldstein and that Guberman in fact said they would remain house accounts. Guberman, however, contends that he did offer to return these accounts to Goldstein and that such an offer would have been consistent with the company's policy of returning the major accounts to the sales representatives.

Goldstein telephoned Guberman in New York on Monday, March 8, with a counter-proposal, whereby Goldstein's nephew would take over primary responsibility for the outside lines. He suggested trying this out on a season-to-season basis. Goldstein claims that in that conversation he protested to Guberman that it was unfair for the company to ask him to give up his outside lines without receiving the Rich's and Davison's accounts in return.

Guberman rejected Goldstein's proposal by certified letter dated March 11, which was not received by Goldstein until March 15. The letter restated Guberman's position that Goldstein would have to give up his outside lines, but said nothing about the major store accounts. 3

Two earlier drafts of this letter were introduced. In a handwritten draft, apparently prepared on March 8 or 9, Guberman referred to substandard sales figures in Goldstein's territory. He then continued,

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"Your present target for the fall 82 season is $350,000. Excluding Richs & Davidsons." Guberman testified that the major stores were excluded from the target figure because the projections for those accounts were as yet unknown.

A typed draft of a letter dated March 10 did not describe the company's offer or refer to poor sales in Goldstein's territory.

Meanwhile, the company had deleted Goldstein's name from the official brochure for its 1982 fall fashion season, which was mailed to 6,830 customers on March 9 and 10, including 245 in Goldstein's territory. The brochure listed other sales representatives by name. Goldstein's name had been included on the 1981 brochure.

On March 12, 1982, Guberman wrote a letter to Goldstein advising him that his employment would be terminated effective March 15. The letter was not mailed until March 15. By that time Guberman had already hired Eiseman to replace Goldstein. Eiseman was to be an exclusive sales representative for Lady Manhattan in Goldstein's territory, and he was also to receive the Rich's and Davison's accounts.

Goldstein did not receive Guberman's March 11 letter until March 15. He sent an immediate mailgram accepting the company's offer. When Guberman received the mailgram agreeing to his terms, he apparently rescinded Goldstein's March 15 termination and withdrew his offer to hire Eiseman.

Goldstein had not received the termination letter before he set out for New York for a company sales meeting, scheduled for March 19, 1984. At the conclusion of the sales meeting, Goldstein met with Guberman and Imber. Goldstein recalled that other salesmen had informed him that, while they had returned to exclusivity, they had also had their major accounts returned to them. He stated that in his meeting with Guberman and Imber, he complained that he was not being given the same consideration as other salesmen, whereupon Guberman became angry, accused Goldstein of never intending to accept the job and told Goldstein that he was fired.

Guberman and Imber, on the other hand, recalled that Goldstein, having been assured that he would receive back the Rich's and Davison's accounts, nevertheless informed them that he had decided he was not going to give up his outside accounts. He adhered to this position even after he had a telephone conversation with company chairman Lawrence C. Leeds, Jr. Leeds also testified that it was clear in his conversation with Goldstein that Goldstein understood he was to get back the Rich's and Davison's accounts. When Goldstein refused to commit himself to exclusivity, Guberman became irritated and terminated Goldstein's employment.

When Goldstein returned home to Birmingham, he found Guberman's March 12 letter of termination waiting for him.

Goldstein filed a charge with the Equal Employment Opportunity Commission ("EEOC") on June 21, 1982, alleging that his discharge and replacement with Michael Eiseman violated the ADEA. This suit followed on October 5, 1982.

B. Plaintiff's Evidence of a Pattern of Discrimination

Goldstein introduced evidence concerning the termination and replacement of other sales representatives. The evidence focused on a number of sales representatives who were replaced in 1982.

In March 1982, Robert Autenrieth, age 52, with 28 years of service, was replaced by Stan Blackman,...

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