Fontaine v. Ebtec Corp.

Citation613 N.E.2d 881,415 Mass. 309
CourtUnited States State Supreme Judicial Court of Massachusetts
Decision Date21 May 1993
Parties, 64 Fair Empl.Prac.Cas. (BNA) 1618 Robert J. FONTAINE v. EBTEC CORPORATION & another. 1

John J. Egan (Maurice M. Cahillane and David G. Cohen, Springfield, with him), for plaintiff.

Richard D. Hayes, Springfield, for defendants.

Stephen S. Ostrach and Emily R. Livingston, Boston, for Associated Industries of Massachusetts, amicus curiae, submitted a brief.

George P. Napolitano, Salem, for Massachusetts Com'n Against Discrimination, amicus curiae, submitted a brief.


GREANEY, Justice.

In January, 1988, the plaintiff was discharged from his position as vice president of Ebtec Corporation, an American subsidiary of Thermal Scientific, PLC, a British company (defendants). A jury in the Superior Court found for the plaintiff in his ensuing claims that the defendants had violated G.L. c. 151B, § 4(1B) (1990 ed.), the Massachusetts statute which prohibits age discrimination, and 29 U.S.C. §§ 621 et seq. (1988), the Federal Age Discrimination in Employment Act (ADEA). The jury concluded, in response to special questions, that the defendants' violations had been wilful. 2 The jury awarded the plaintiff actual damages for lost wages and benefits ($270,422) and for emotional distress ($80,000), 3 and also assessed punitive damages ($600,000). On the basis of G.L. c. 151B, § 9, as amended through St.1990, c. 395, the judge doubled the award of actual damages, and he also awarded $132,323 in attorney's fees. See G.L. c. 151B, § 9 (1990 ed.). An amended judgment was entered which awarded the plaintiff $590,844 in actual damages, 4 and $600,000 in punitive damages, and $132,323 in attorney's fees on his claims under G.L. c. 151B, and $1 on his claim under the ADEA. 5 Both sides have appealed, and we granted the plaintiff's application for direct appellate review. In part I of this opinion, we deal with the issues pertaining to liability and a new trial, concluding that the jury's liability verdict was warranted and that there is no basis for a new trial. In part II of the opinion, we discuss the issues relating to damages. We conclude that amendments to G.L. c. 151B, § 9, which provide for punitive and multiple damages, should not have been applied retrospectively in this case and, consequently, that the plaintiff is not entitled to recover enhanced damages under State law. We discuss the appropriate measure of damages in an age discrimination case brought pursuant to G.L. c. 151B. We conclude that the plaintiff is entitled to enhanced damages for lost wages and benefits under the ADEA. In part III of the opinion, we take up the issues relating to attorney's fees and interest.

I. Liability and New Trial Issues.

We first discuss the defendants' assertions that judgment notwithstanding the verdict (n.o.v.) should have entered in their favor or, at the very least, that they are entitled to a new trial.

1. The defendants argue that their motion for judgment notwithstanding the verdict (n.o.v.) should have been allowed because the evidence was insufficient, as matter of law, to warrant a finding by the jury that they had discharged the plaintiff in violation of age discrimination laws. At the time of his discharge, the plaintiff was fifty-one, and, consequently, within the class of persons (over forty years of age) protected by the age discrimination laws. G.L. c. 151B, § 1(8) (1990 ed.). The plaintiff presented evidence which made out a prima facie case that his discharge was discriminatory. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); Smith College v. Massachusetts Comm'n Against Discrimination, 376 Mass. 221, 229, 380 N.E.2d 121 (1978); Wheelock College v. Massachusetts Comm'n Against Discrimination, 371 Mass. 130, 135 n. 5, 355 N.E.2d 309 (1976). The defendants presented evidence which would have warranted a finding that the plaintiff was discharged for unsatisfactory job performance. See McKenzie v. Brigham & Women's Hosp., 405 Mass. 432, 435, 541 N.E.2d 325 (1989); Wheelock College v. Massachusetts Comm'n Against Discrimination, supra, 371 Mass. at 138, 355 N.E.2d 309. See also Trustees of Forbes Library v. Labor Relations Comm'n, 384 Mass. 559, 565-566, 428 N.E.2d 124 (1981). On the judgment n.o.v. point, therefore, the issue on appeal comes down to whether the evidence considered in the light most favorable to the plaintiff, and with all reasonable inferences drawn in his favor, see Boothby v. Texon, Inc., 414 Mass. 468, 470, 608 N.E.2d 1028 (1993), warranted the jury's finding that the plaintiff's allegedly poor job performance was merely a pretext for a discharge actually based on concerns about his age. 6

Under the applicable n.o.v. standard, the jury could have found the following. In August, 1980, the plaintiff joined Ebtec, located in Agawam, as manager of the company's electron beam welding and laser "job shop." The company was at that time a closely held corporation, which was owned by two individuals. Under the plaintiff's management, the shop acquired new customers and sales and profits rose substantially. At the end of 1986, Ebtec was sold to Thermal Scientific, a British conglomerate. Thomas Liebermann was appointed to oversee Ebtec (and six other American operations owned by Thermal Scientific). Liebermann reported to Robert Huddie, who was responsible for all of Thermal Scientific's American operations.

In July, 1987, Liebermann promoted the plaintiff to executive vice president and general manager of Ebtec and gave the plaintiff specific goals in terms of pretax sales and profits. The plaintiff generally met those goals until the stock market "crash" of October, 1987, which had an adverse impact on many of the companies for which Ebtec performed services. In December, 1987, Liebermann evaluated the plaintiff. The evaluation was designed to identify for the plaintiff significant weaknesses in his management skills that would have to be addressed before the plaintiff's promotion to president of Ebtec could be considered. Liebermann disclaimed any intent of terminating the plaintiff's employment with Ebtec. According to Liebermann, the question was whether the plaintiff would work for Ebtec as a production manager or whether he would be promoted to president of Ebtec.

Also in December, 1987, Liebermann decided that, because of changes in the company's business goals caused largely by the October stock market crash, he would leave Thermal Scientific. He had conveyed this fact to Huddie by December, 1987, and had begun to disengage himself from the company's operations. Huddie, not Liebermann, made the decision to terminate the plaintiff.

On or about January 15, 1988, the plaintiff attended a meeting at which executives from Thermal Scientific's American companies presented their budgets. Huddie presided over the meeting. The plaintiff testified that Huddie, reflecting on the reports that had been presented to him, commented that "there was a real problem in [Ebtec and another company] because both managers were old. One was in his fifties and the other was in his sixties, and it was absolutely necessary to get young management into these companies as soon as possible." 7 The plaintiff became concerned for his job at this meeting. He was terminated ten days later. His replacement, a thirty year old Thermal Scientific executive to whom the plaintiff had given basic courses in the technology that constituted Ebtec's business, was given the title of president of Ebtec.

There was additional evidence from which the jury reasonably could have inferred that Huddie desired to replace older managers with younger ones. Liebermann testified that Huddie considered American age discrimination laws to be an unnecessary "fuss" and complained to him (Liebermann) about the age of certain managers in American Thermal Scientific companies. Liebermann also testified that he felt compelled to call the age discrimination laws to Huddie's attention, and to insist that he, Liebermann, would not participate in any adverse employment decision based on an employee's age. From this evidence, the jury reasonably could have inferred that Huddie had raised with Liebermann the possibility of an age-related discharge at a Thermal Scientific company under Liebermann's supervision.

In addition to this evidence of discriminatory intent, there was evidence from which the jury reasonably could have inferred that Huddie's stated reason for terminating the plaintiff (unsatisfactory job performance in the sense of a failure to perform in relation to budgets and forecasts) was a pretext. The jury could have concluded that Ebtec's declining profitability in November and December of 1987 was caused by the stock market crash, an event beyond the plaintiff's control. There was evidence that the plaintiff's superiors were fully aware of the effect of the stock market collapse on Ebtec's business. The plaintiff indicated that he was discouraged from attempting to adjust his forecasts to reflect changed circumstances. The jury also could have concluded that other evidence concerning the plaintiff's alleged poor performance was of little or no relevance, in light of Huddie's reason for the discharge. 8 The jury's verdict finding liability for discrimination under State and Federal law was supported by the evidence.

2. In February, 1991, the defendants moved for a firm trial date of either February 26, 1991, or on the first trial day in April, 1991, giving as a reason the conflicting travel schedules of their principal witnesses, Liebermann and Huddie. The motion judge scheduled the matter as first trial out in the March, 1991, inventory session. Because Huddie would be unavailable on this date, the defendants moved for reconsideration, seeking an April date, or, in the alternative,...

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