Maldonado-Maldonado v. Pantasia Mfg. Corp.
| Decision Date | 30 September 1997 |
| Docket Number | Civil No. 92-1609(DRD). |
| Citation | 983 F.Supp. 58 |
| Parties | Manuel MALDONADO-MALDONADO, Plaintiff, v. PANTASIA MANUFACTURING CORPORATION, Defendant. |
| Court | U.S. District Court — District of Puerto Rico |
Enrique J. Mendoza-Mendez, Mendoza & Baco, San Juan, PR for plaintiff.
Graciela J. Belaval-Bruno, Martinez, Odell & Calabria, Hato Rey, PR, for defendant.
On May 6, 1992, Mr. Manuel Maldonado filed a civil action against his former employer, Pantasia Manufacturing Corp., for alleged violations of the Age Discrimination in Employment Act of 1967 ("ADEA"), § 2 et seq., as amended, 29 U.S.C. § 621 et seq. and Puerto Rico Law 100 of June 30, 1959 (P.R. Laws Ann. tit. 29 § 146 et seq.) and Law 80 of May 30, 1976 (P.R. Laws Ann. tit. 29 § 185).
Mr. Maldonado prevailed under the summary judgment standard by producing sworn statements which created controversy on genuine issues of fact as to whether age animus was demonstrated by Pantasia, whether Mr. Maldonado was qualified or not, and as to whether he was substituted by a younger employee or not. See Opinion & Order, Docket No. 28. During pre-trial procedures Mr. Maldonado moved to waive trial by jury, Pantasia and the Court acquiesced. See Docket Nos. 39 and 40. The case was set to be bench trial beginning on August 26, 1997.
The case was called to be heard on August 26, 1997. In support of his case, Mr. Maldonado offered his own testimony, and that of former employees Juanita Rivera, and Divina Díaz Cintrón and the expert testimony of psychologist Urbano Cuesta Hernandez. Mr. Maldonado also offered the documentary evidence previously submitted with his opposition to motion for summary judgment. Pantasia offered in evidence the material facts uncontested at summary judgment by Mr. Maldonado, and other documentary evidence all of which was unopposed by Plaintiff.
The court, having considered the uncontested material facts and stipulations, heard the testimony of the witnesses, and observed their demeanor and having examined the evidence, makes the following findings of fact and subsequent conclusions of law.
Pantasia Manufacturing Corporation (Pantasia) was a manufacturer of lingerie located in Manatí, Puerto Rico up to November 4, 1992, when the factory closed operations. The plant manufactured undergarments for brand names. Mr. Manuel Maldonado was hired on April 26, 1971, by Pantasia, as Assistant Manager, at the age of forty (40). Two years later, in 1973, Mr. Maldonado was named General Manager. He was terminated at the age of sixty (60) on March 28, 1991.
The company was originally owned by two brothers, Marvin and Irwin Greenwald. By 1986, the profits from Pantasia had dipped perilously low, with a return on investment of 1.5%. See infra note 6. Until 1987, Mr. Maldonado reported directly to Irwin Greenwald, who purchased the fabrics, but had no manufacturing experience, and relied on Mr. Maldonado for manufacturing decisions. That year, Irwin Greenwald retired, and sold his interest in the company to his brother and partner, Marvin Greenwald. Mr. Marvin Greenwald was sixty-one at the time he terminated Mr. Maldonado.
Up to 1987, Mr. Maldonado ran the manufacturing operations practically by himself, with a floor lady, Francisca Muñiz, in charge both of production and quality control, and a series of line supervisors reporting to her. These supervisors were hourly paid. Mr. Maldonado also had a cutting room supervisor, Victor Otero, and a warehouse supervisor reporting directly to him.
In 1987, Marvin Greenwald hired Jack Handler to oversee the Pantasia operations. By 1988, income from operations had dipped even lower, to 0.9%. Ex. H. Thereafter, in May, 1988, Mr. Handler gradually began to take powers away from Mr. Maldonado. Mr. Handler hired Mr. José Torres, age 58 at the time of hire, as Production Manager.
Mr. Torres reported to work in June 1988. He had to learn the procedures followed by Mr. Maldonado by observing the operations. According to Mr. Maldonado, he had been a friend of Mr. Torres, notwithstanding their working relationship gradually deteriorated. Mr. Maldonado would disauthorize Mr. Torres, and revert the operational changes instituted by Mr. Torres to Mr. Maldonado's old systems. Mr. Maldonado recommended that Mr. Torres be fired, however the recommendation was not followed by the owner.
Mr. Maldonado was not the only Pantasia employee who disapproved of Mr. Torres. Pursuant to the testimony of former employee Divina Díaz Cintrón, the relationship was poor with plant personnel because Mr. Torres arrived at Pantasia with a bad attitude. He repeatedly addressed all the Pantasia employees, (about 300) telling them that the employees who had been working there for a long time showed bad habits and he threatened to dismiss them. When addressing the full complement of employees, Mr. Torres also stated that the employees had been spoiled by Mr. Maldonado, and he was going to get rid of all the old personnel (long-tenured) and recruit and train new employees. However, Mr. Torres addressed these statements to all employees, regardless of their age. There were twenty-year old, thirty-year old, forty-year old, in the employee complement that Mr. Torres addressed.1
A few months after Mr. Torres began working at the Manatí plant, Saul Gold, 58 years old at the time, was hired to evaluate the Pantasia operations. Mr. Gold then held an industrial engineering degree from the University of Maryland and had been involved in the needle industry for more than forty (40) years.
According to Mr. Maldonado, Mr. Gold, who was older than Mr. Maldonado, evaluated the Pantasia operations and began hiring new personnel leaving Mr. Maldonado "aside". Mr. Gold changed all the procedures established by Mr. Maldonado, stating to him that the new procedure was a more efficient, and asking Mr. Maldonado to follow the newly instituted procedure. Mr. Gold supported Mr. Torres in the management of the production floor.
The major deficiencies found by Mr. Gold were: the factory was disorderly and unkempt; thousands of boxes of incomplete repairs lined the walls; lack of adequate record keeping, the records prepared concealed the "make up paid" ("make up" is the amount of money that must be paid per hour to an operator that does not meet his or her piece rate), poor and unscientific costing of new models and inadequate quality control supervision. Nonetheless, Mr. Gold wrote a very kind reassuring note to Mr. Maldonado in December, 1988, telling him, in essence, that it was a pleasure working with such a knowledgeable, professional person. Income from operations had decreased from $964,700 (13%) in 1983 to $78,563 (0.9%) in 1988.2 See Ex. H.
Based on his findings, Mr. Gold recommended that the accountant be substituted, and an experienced industrial engineer and a quality control supervisor be hired. These recommendations were approved, and as a result, Mr. Robert Molina was hired as Comptroller. Mr. Gold also hired Mr. Héctor Rodríguez and an assistant as Industrial Engineers, and upon the retirement of the Floor Lady, Mr. Gold hired Ms. Benigna Feliciano, an experienced Quality Control Manager in her mid 40's.3
Mr. Maldonado alleges that prior to his discharge, his functions as General Manager were reassigned to Mr. Saul Gold, Vicepresident of Manufacturing, Mr. Joe Torres, Production Manager, Mr. Héctor Rodríguez, Industrial Engineer, and Mr. Robert Molina, CPA and Comptroller, all hired in 1988. Of these new managerial employees, only the Comptroller, Mr. Molina, and the engineers, Mr. Héctor Rodríguez and his assistant, Ms. Nancy Rivera, were under the age of forty. As to the duties of Mr. Molina, Mr. Maldonado recognized that he lacked education of an accountant and was not qualified to perform the work performed by Mr. Molina, who worked primarily in computerized inventory control. Similarly, Mr. Maldonado lacked the academic qualifications of Mr. Rodríguez, and Ms. Rivera who were industrial engineers.
It is uncontroverted that because of substantially higher labor costs, Puerto Rico was at a competitive disadvantage with the Dominican Republic, Mexico, or Taiwan. To be able to compete in the manufacture of undergarments for brand companies, costing was essential, and the clients' scheduling demands had to be met. Thus, the operations in Puerto Rico had to be specially efficient. Further as acknowledged by plaintiff at trial, products that are incomplete are not sellable and, therefore, the direct labor cost incurred and material used in the production of an incomplete style meant a loss for the company, which could not market the incomplete garments and lost the production costs thereof.
Beginning on 1987, Mr. Maldonado received several memos from Mr. Handler and the Greenwalds, bringing to his attention serious deficiencies in his performance, most specifically, improper costing of the garments produced, styles that were placed in production and could not be located, and most critical, styles which had been placed into production in spite of the fact that the material components were not complete.
By the end of 1990, the only function being performed by Mr. Maldonado was that of cutting room supervisor, and notwithstanding his displeasure as to loss of managerial functions, he remained with the General Manager title and pay. The duties of Cutting Room Supervisor had been performed previously by Evelyn Cruz, a long time supervisor of the crotch sewing operation at a salary of $175.00 to 200.00 a week, paid on an hourly basis. Ms. Cruz was relocated to the crotch operation freeing the cutting room duties for Mr. Maldonado.
The economic situation of the company continued to border on break-even at the end of 1990 (income from operations at only $44,163 (0.4%)). In early 1991, Pantasia offered Mr. Maldonado a separation package. (Mr. Maldonado had prior thereto cashed in his pension plan...
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