Maiorino v. Schering-Plough Corp., SCHERING-PLOUGH

• Decision Date: 25 June 1997
• Docket Number: SCHERING-PLOUGH
• Parties: , 79 Fair Empl.Prac.Cas. (BNA) 921 Ferdinand C. MAIORINO, Plaintiff-Respondent and Cross-Appellant, v.CORPORATION, James Reed, Ronald Martino, and Jerome A. Sherman, Defendants-Appellants and Cross-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 323

302 N.J.Super. 323

695 A.2d 353, 79 Fair Empl.Prac.Cas. (BNA) 921

Ferdinand C. MAIORINO, Plaintiff-Respondent and Cross-Appellant, v. SCHERING-PLOUGH CORPORATION, James Reed, Ronald Martino, and Jerome A. Sherman, Defendants-Appellants and Cross-Respondents.

Superior Court of New Jersey,

Appellate Division.

Argued Dec. 17, 1996.

Decided June 25, 1997.

Vincent J. Apruzzese, Warren, for defendants-appellants and cross-respondents (Apruzzese, McDermott, Mastro & Murphy, attorneys; Mr. Apruzzese, of counsel; Mr. Apruzzese, Sharon P. Margello, Richard C. Mariani, Warren, Jerrold J. Wohlgemuth, Westfield, and Daniel P. Murphy, Newark, on the brief).

Bruce P. McMoran, Newark, for plaintiff-respondent and cross-appellant (Barry & McMoran, attorneys; Mr. McMoran, of counsel; Mr. McMoran, John J. Barry, Colleen D. Shiarella, and Carmen J. DiMaria, on the brief).

Before Judges MICHELS, MUIR, Jr., and COBURN.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Defendants Schering-Plough Corporation (Schering), James Reed (Reed), Ronald Martino (Martino), and Jerome A. Sherman (Sherman) appeal (1) from a judgment of the Law Division entered on a jury verdict that awarded plaintiff Ferdinand C. Maiorino (Maiorino) (a) compensatory damages in the total The proofs at trial established that Schering is a manufacturer of pharmaceutical products with a net worth of approximately $1,820,800,000 and an annualized 1994 net income of $987,800,000. Reed was Schering's District Sales Manager of the South Jersey District from 1987 through July 1991, and supervised Maiorino. Martino was Schering's Mid-Atlantic Regional Director from 1987 through December 1990, and was Reed's supervisor. Sherman replaced Martino as Schering's Mid-Atlantic Regional Director in January 1991.

                amount of $435,000, consisting of $180,000 for back pay, $200,000 for front pay, and $55,000 for pain, suffering, and humiliation, and (b) punitive damages in the amount of $8,000,000 against Schering;  (2) from an award of attorneys' fees and costs totalling $396,989.35;  and (3) from a post-judgment order that denied their motions for judgment notwithstanding the verdict, a new trial, or a remittitur in this age discrimination suit brought pursuant to the provisions of the New Jersey Law Against Discrimination,  N.J.S.A. 10:5-1, et seq.   Maiorino cross-appeals from that portion of the judgment that awarded him attorneys' fees and costs totalling $396,989.35, contending that the trial court should have applied a contingency fee enhancer to the lodestar to increase his award of attorneys' fees
                

Maiorino, who was born on February 18, 1928, began working for Schering in March 1956. Although he had various titles, Maiorino was essentially always a sales representative, which required him to sell Schering's products to physicians, pharmacists, and hospitals. In his performance reviews from 1956 through 1987, Maiorino was rated between satisfactory and very good. During that period he was never warned about his attendance, placed on probation, or suspended.

In September 1987, Reed evaluated Maiorino's performance for 1985 and 1986. Schering's performance evaluation had seven possible rankings: O--Outstanding; V--Very Good; G--Good; I--Improvement Needed; U--Unsatisfactory; and N--Not Rated. An "Outstanding" rating indicated that "performance is exceptional Based on sales performance and standard subjective sales skills, Reed rated Maiorino's 1985 and 1986 performance "Good." For the period, Maiorino ranked ninth in the district in the sale of prescription drugs and fifth in the district in the sale of over-the-counter medicines. His composite rank was tenth. The record, however, does not reflect the total number of salespersons against whom Maiorino was compared. In eight of the subjective criteria, Maiorino was ranked "Good," while in two he was rated "Very Good." Reed testified, however, that just comparing the number of ratings, for example the number of "Very Goods" to the number of "Goods," did not play a large role in his evaluation process. Reed gave Maiorino an overall rating of "Good" for the period. In the comments section of the evaluation, Reed noted that "Mr. Maiorino is a true professional sales representative."

in all areas and is easily recognizable as being far superior to others." "Very Good" meant that "results clearly exceed most position requirements. Performance is of a high quality and is achieved on a consistent basis." "Good" denoted a "competent and dependable level of performance. Meets all performance standards of the job." "Improvement Needed" indicated that the "incumbent meets minimal job standards, however, some improvement is desirable." "Unsatisfactory" demonstrated that "results are generally unacceptable and require immediate improvement. No salary increase should be granted to individuals with this rating, and a written action plan must be prepared by the unit manager and forwarded to personnel." "Not Rated" signified that the particular criteria was "not applicable or too soon to rate."

In August 1988, Reed evaluated Maiorino's performance for the period between June and December 1987. The evaluation was based on three different aspects: market share information, quota attainment, and subjective evaluations of various sales skills. In the evaluation, Reed attained a 124.74% figure in quota attainment which meant that he had exceeded his quota by 24.74%. As a result, he was ranked first of nine in his district and twelfth of For his achievement, Maiorino was named most valuable representative in the district for 1987. He also received a "Diamond 110 Club" award, which was given to sales representatives who attained at least 110% of their quota assignment. For earning the award, Maiorino received letters of congratulations from Reed and a Schering executive as well as a weekend trip to a local resort. Nonetheless, Maiorino only received an overall rating of "Good" for the period. His ranking was the lowest that Reed distributed for that period. Three employees who were younger than the fifty-nine year old Maiorino and who also had lower numerical standings nevertheless received higher overall ratings: Michael Geiger, who was forty, was rated "Very Good"; Barry Brader, who was also forty, was rated "Outstanding"; and Howard Abramson, who was twenty-eight, was rated "Very Good."

over one-hundred in his region. He also achieved a composite ranking of first in his district and eighth in the region. In addition, Reed rated Maiorino "Very Good" in six of the sales skills categories and "Good" in the remaining four.

At trial, Reed attempted to describe how he evaluated employee performances. First, Reed admitted that numbers play a "considerable" role; however, he also said that he did not just consider the numbers, but also considered the salesperson's success with "major" products, i.e., products that Schering was trying to push. He noted that on two major products Maiorino was ranked seventh and eighth in the district, but conceded that on two other major products Maiorino was ranked first and second. Reed also stated that he took into account extenuating circumstances in doing the evaluations. For instance, he noted that Abramson covered an "unsavory" neighborhood and also had to handle adversity when a large chain store switched products. In addition, Reed testified that the sales skill portion of the evaluation was subjective and that where such evaluations were permitted by the Schering's policy handbooks, they were to be limited.

The record is somewhat ambiguous as to the effect that the overall evaluation of "Good" had on Maiorino financially. Richard In 1988, Schering dropped the quota attainment criteria from its performance evaluation. From that point forward, performance evaluations were to be based on market share and market share change as well as sales skills. Under market share, a sales representative's performance would be compared to Schering's competitor's performance in the same area. Each representative's market share change--the difference in the market share from one period to another--was then compared to other Schering representative's in the same district and region.

Happel, Schering's Vice-President of Human Resources, testified that employees who received a rank of "Very Good" or better were eligible for an equity increase, while those who received a rank of "Good" were only entitled to a merit increase. Schering claims that as a result of Maiorino's 1986 "Good" rating, he received only a merit increase, while Maiorino contends that he received the merit increase as a result of his 1987 rating. At trial, Happel asserted that it was Maiorino's 1986 product data, rather than his sales skill ratings, which formed the basis of his merit increase in 1988.

In April of 1989, Reed evaluated Maiorino for his 1988 sales performance. Pursuant to the market share change criteria, Maiorino ranked above the district average on three products, below it on two, and suffered a very low ranking on one other product. According to a letter from Reed, Maiorino's incentives in 1988 earned him a ranking of eighth in a district of nine. In his sales review, Maiorino earned five marks of "Very Good," one of "Good Plus," and five of "Good," and his overall rating was "Good."

In May 1989, Schering offered the first of two voluntary early retirement programs. The early retirement program was offered to all sales employees over the age of fifty-five who had given Schering at least ten years of service. Schering had instituted the program in response to a number of requests by its sales employees who wanted to retire, but who felt that the pension plan was financially inadequate. Schering did not offer the program for its When it instituted the retirement program, Schering also hired more employees in the sales area than it normally would have hired since it had anticipated that a large number of...