Stanojev v. Ebasco Services, Inc.

• Citation: 643 F.2d 914
• Decision Date: 04 March 1981
• Docket Number: D,No. 161,161
• Parties: 25 Fair Empl.Prac.Cas. 355, 25 Empl. Prac. Dec. P 31,618, 2 Employee Benefits Ca 1990 Alexander C. STANOJEV, Plaintiff-Appellee, v. EBASCO SERVICES, INCORPORATED, Defendant-Appellant, and John Scarola, Richard Albosta and William Wallace, III, Defendants. ocket 80-7476.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 914

643 F.2d 914

25 Fair Empl.Prac.Cas. 355,

25 Empl. Prac. Dec. P 31,618,

2 Employee Benefits Ca 1990

Alexander C. STANOJEV, Plaintiff-Appellee, v. EBASCO SERVICES, INCORPORATED, Defendant-Appellant and John Scarola, Richard Albosta and William Wallace, III, Defendants.

No. 161, Docket 80-7476.

United States Court of Appeals Second Circuit.

Argued Oct. 6, 1980.

Decided March 4, 1981.

Louis H. Willenken, New York City (Reid & Priest, John M. Nonna, Deborah A. Pitts, New York City, of counsel), for defendant-appellant.

Nancy Packes, New York City, for plaintiff-appellee.

Before FEINBERG, Chief Judge, VAN GRAAFEILAND, Circuit Judge, and BLUMENFELD, District Judge. ^*

BLUMENFELD, District Judge:

In October 1978 Alexander Stanojev was discharged by Ebasco Services, Inc. from his position as Vice President for Special Assignments. He brought suit under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-34 (1976 & Supp. II), claiming that he had been fired because of his age. After trial before Judge Brieant in the Southern District of New York, a jury returned a verdict for the plaintiff awarding $800,000 damages. The court ordered a remittitur of damages in excess of $250,000 which Stanojev accepted in lieu of a new trial. Ebasco brings this appeal claiming error in the jury instructions, insufficient evidence to support the verdict, and passion and prejudice on the part of the jury. Ebasco also contests the measure of damages applied by the judge. We reverse and remand.

I. The Facts

When plaintiff Stanojev was 51 years old in 1966 he was employed as a vice president of an engineering firm in Michigan which provided engineering and consulting services to companies operating power plants to generate electricity. His work history included some earlier experience in the field of building construction. Because of his family's unhappiness, attributed to living in the Midwest, Stanojev responded favorably to enquiries from New York-based Ebasco Services, Inc. Ebasco was engaged not only in providing engineering and consulting services, but also in the actual construction of electricity-generating power plants fueled by nuclear energy. After a few meetings, spaced over several weeks, Stanojev agreed to go to work for Ebasco. There was no written contract of employment, and this was an ordinary case of employment at will. Although Stanojev became a part of management at a high executive level, he did not move into any defined position. As he testified, "I just didn't have one special job to do." He was given the title of "utility consultant."

When he was thus injected into the management cadre so haphazardly it was thought by the company that qualifications suggested by Stanojev's experience would enable him to fit into the company's program to get new customers and contracts to construct nuclear power plants. It didn't work out that way.

A. Stanojev's Job History at Ebasco

In the mid-1970's, the market for nuclear power plants began to decline. Competition among construction engineering and consulting firms such as Ebasco consequently intensified. This situation required the development of a more aggressive marketing strategy merely to maintain market share. Stanojev was at this time Vice President of Business Development, Ebasco's marketing department. In 1974 Ebasco's market share began to diminish, and the company brought in a Mr. Liberatore as Senior Vice President of Business Development, over Mr. Stanojev. In 1976 Mr. Liberatore removed Stanojev from Business Development because of dissatisfaction with his performance and management capabilities. Stanojev makes no claim of any impropriety with respect to this removal. For approximately one year after his removal from Business Development, Stanojev held the title of Vice President for Nuclear Standardization. This job had not previously existed. He prepared his own description of the position. No one reported to Stanojev in the Nuclear Standardization position, whereas between 10 and 120 employees had been responsible to him in Business Development. Nuclear Standardization was essentially a project rather than a structural position within the Ebasco organization. At the end of 1977 Ebasco's new chief executive made Stanojev Vice President for Special Assignments. After Stanojev was transferred, the Nuclear Standardization work was done by a 65-year-old vice president; Stanojev was then about 61. The new position also did not exist before or after Stanojev held it, and, as the title implies, consisted of a number of special projects. ¹ Ebasco's top management continued to be dissatisfied with Stanojev's performance in the new position.

Mr. Scarola, the new chief executive, had emphasized a policy of identifying marginal performers among Ebasco employees to find an area in which the employee could make a contribution, or, if he could not, to discharge the employee. Stanojev did not perform up to the company's expectations in his post-Business Development positions. On October 3, 1978, Mr. Scarola told Stanojev that he was discharged effective October 31, 1978. He was given six months' severance pay. ² He was not replaced. His position was discontinued.

Stanojev's belief was that he had become a scapegoat for Ebasco's decline which was precipitated by the fall in demand for nuclear power plants in the mid-1970's. Although he does not complain of any improper motive in his job transfers between 1974 and 1978, he contends that in 1978 Ebasco attempted to force him into early retirement not because of poor performance on his part, but because of his age. Stanojev was 63 in 1978. He contended that Ebasco was motivated to seek his retirement by the impending effective date of an amendment to the ADEA that extended its protection to age 70.

B. Ebasco's Dissatisfaction with Stanojev

The testimony of Stanojev's superiors told a different story. Stanojev was removed from Business Development because of dissatisfaction with his performance. The men to whom he reported while in that position testified that Stanojev was deficient in administration, in implementing recommended changes, and in recruiting and training new sales personnel. They felt that Stanojev had resisted needed changes at a time when innovation and imagination were especially important to the company.

Stanojev was therefore removed from Business Development and put into Nuclear Standardization, where his technical expertise would be useful, but his deficiencies as an executive would not affect the company's performance. But Stanojev's performance continued to be inadequate. Mr. Scarola, Stanojev's superior in Nuclear Standardization, testified that Stanojev required too much direction.

Stanojev's performance did not improve when he was transferred to his final position, in early 1978, as Vice President for Special Assignments. Mr. Wallace, to whom Stanojev reported in this last position, testified that Stanojev required too much direction, was too slow in completing projects, and did not offer sufficiently specific suggestions with respect to the problems he considered. Stanojev admitted that he had received criticism from Mr. Wallace, and that they may have had a personality conflict. Mr. Scarola, the chief executive, who had discussions with Mr. Wallace about Stanojev's performance during this period, concurred in the judgment that Stanojev required too much direction in comparison to what was expected of an employee at the executive officer level.

In short, Stanojev had performed well at Ebasco through 1973. From 1974 until his discharge in 1978, however, Stanojev's superiors were dissatisfied with Stanojev's performance as an officer. After removing Stanojev from Business Development in 1976, Ebasco's top management tried him in two further positions. But although Stanojev successfully completed the three projects he undertook in Special Assignments, he was not performing at the level that was expected of Ebasco officers at a time when the chief executive was emphasizing the corporate policy of removing marginal performers if it was found that they could not make a useful contribution in some other area.

The dissatisfaction with Stanojev to which Ebasco's officers testified is borne out by the record of Ebasco's concrete actions toward Stanojev. Ebasco was pleased with his performance and gave him merit raises each year through 1973. Stanojev received no raises during his last three years in Business Development. He did not receive a raise during the year he was in Nuclear Standardization, and he received only a "token" bonus, lower than any other officer's. Scarola's notation on the document which recommended bonuses said of Stanojev, "token award, rate as B group." At trial Scarola explained that "B group" referred to employees below the officer level. In 1978, while Stanojev was in Special Assignments, he was recommended for a "cost of living" increase, again the lowest of Ebasco's officers' raises that year.

Stanojev's case, apart from his theory that Ebasco was motivated by the impending change in the ADEA, was based entirely on two alleged irregularities in Ebasco's recordkeeping procedures. First, Stanojev introduced a section of Ebasco's personnel manual which stated that discharges were to be preceded by two oral warnings which must be confirmed in writing and filed in the employee's personnel file. No such filings were made in Stanojev's case. There was no evidence, however, that this procedure had ever been applied to employees at the executive level. Second, Ebasco was unable to produce documents giving written evaluations of Stanojev's performance. The Management Succession Charts, which contained evaluative information on employees still at Ebasco, had been discarded when the company moved to the World Trade Center in 1979. Stanojev argues that these alleged irregularities permit inferences that his discharge was motivated by his age. Since...