Opinion
99 Civ. 8636 (KMW) (JCF).
August 31, 2004
REPORT AND RECOMMENDATION
TO THE HONORABLE KIMBA M. WOOD, U.S.D.J.
The plaintiffs in this action, Harold Hofmann and Anthony Lawson, allege that they were terminated from their employment with District Council 37, American Federation of State, County, and Municipal Employees, AFL-CIO ("DC37") and/or the DC37 Benefits Trust Fund ("BFT") on the basis of their age in violation of the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. § 621 et seq., and the New York Human Rights Law, N.Y. Exec. Law § 296. In addition, the plaintiffs assert that these defendants violated contractual obligations to pay pension benefits, disability benefits, and severance pay. The plaintiffs have also sued Perot Systems Corporation and several of its employees (collectively referred to as "PSC" or the "Perot Defendants") for tortious interference with contract and tortious interference with business relationships on the ground that the Perot Defendants contributed to the termination of the plaintiffs by making false statements critical of their performance. The plaintiffs' claims of defamation against these defendants were previously dismissed.
The individual Perot employees named as defendants are John Bavis, David McKay, Dick Meyer, Jack Demme, and Mitch Cohn. The correct names of the last three defendants are Richard Meyer, Jack Demmie, and Mitchell Cohen.
All defendants now move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons that follow, I recommend that summary judgment be denied with respect to the age discrimination claims asserted against DC37 and BFT but granted with respect to the breach of contract claims. As to the Perot Defendants, I recommend that summary judgment be granted on the claims of tortious interference with contract and denied on the claims of tortious interference with a business relationship.
Background
From 1988 to 1998, Harold Hofmann was Director of Information Systems for DC37 and/or BFT, and Anthony Lawson was Associate Director. (Fifth Amended Complaint ("Fifth Am. Compl."), ¶¶ 3-4). In late 1997, DC37 began an effort to upgrade its computer systems and accomplish year 2000 ("Y2K") remediation. (Fifth Am. Compl., ¶¶ 49, 57). Part of the responsibility for these tasks was contracted out to Perot Systems Corporation, which began work in early 1998. (Fifth Am. Compl., ¶¶ 50-59). According to the plaintiffs, the project was plagued by cost overruns, the incompetence of Perot personnel, and the failure of Perot to communicate with DC37. (Fifth Am. Compl., ¶¶ 69-75). Moreover, Perot employees blamed the problems on the plaintiffs. The plaintiffs further claim that the Perot Defendants falsely stated that the plaintiffs lacked competence, that they had been informed of the incipient problems but had withheld that information, that they had attempted to cover up the difficulties, and that the plaintiffs had been provided technical data that they failed to incorporate in the project. (Fifth Am. Compl., ¶¶ 75-76, 78-79, 82-92). The Perot employees also allegedly urged that Mr. Hofmann be taken off the project and terminated. (Fifth Am. Compl., ¶ 80).
On August 11, 1998, both plaintiffs were discharged. (Fifth Am. Compl., ¶¶ 95-96). Although they contend that they were entitled to severance pay, a longevity bonus, pay for unused vacation and sick days, and pension payments, the plaintiffs have received no such benefits. (Fifth Am. Compl., ¶¶ 101-02).
After first presenting their age discrimination claims to the United States Equal Employment Opportunity Commission (the "EEOC") and the New York State Division of Human Rights, the plaintiffs filed the instant action. In an Order dated March 23, 2000, the Court, among other things, dismissed the plaintiffs' breach of contract claims but permitted them to replead. After the plaintiffs had amended the complaint, the defendants again filed a partial motion to dismiss. By Order dated February 23, 2001 (the "Feb. 23, 2001 Order"), the Court granted the motion with respect to the contract claims, finding that the plaintiffs were at-will employees and had failed to establish that the employer had an express written policy limiting its right of discharge. (Feb. 23, 2001 Order at 11-13). Then, in an Order dated June 12, 2001 (the "June 12, 2001 Order") the Court denied reconsideration of its decision on the contract claims, though it did permit the plaintiffs to file a Second Amended Complaint. (June 12, 2001 Order at 4-6). Finally, by Order dated August 31, 2001 (the "Aug. 31, 2001 Order"), the Court rejected the plaintiffs' effort to replead their breach of contract claim with respect to their termination. (Aug. 31, 2001 Order at 8-13). However, the Court determined sua sponte that the plaintiffs had stated a valid breach of contract claim with respect to BFT's alleged failure to pay certain promised benefits at the time of termination. The Court found that "[a]lthough such promises do not affect plaintiffs' at-will status, or suggest that plaintiffs had an employment contract, these promises may represent binding commitments on the part of DC37 BFT." (Aug. 31, 2001 Order at 13).
The plaintiffs then filed a Third, a Fourth, and, finally, a Fifth Amended Complaint. Following the completion of discovery, the defendants filed the instant motions. I will address each motion in turn, referring to additional facts as necessary. Discussion
A. Summary Judgment Standard
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Andy Warhol Foundation for the Visual Arts, Inc. v. Federal Insurance Co., 189 F.3d 208, 214 (2d Cir. 1999);Tomka v. Seiler Corp., 66 F.3d 1295, 1304 (2d Cir. 1995). The moving party bears the initial burden of demonstrating "the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party meets that burden, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial," Fed.R.Civ.P. 56(e), by "a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial."Celotex, 477 U.S. at 322.
In assessing the record to determine whether there is a genuine issue of material fact, the court must resolve all ambiguities and draw all factual inferences in favor of the nonmoving party.Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986);Vann v. City of New York, 72 F.3d 1040, 1048-49 (2d Cir. 1995). But the court must inquire whether "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party," Anderson, 477 U.S. at 249 (citation omitted), and grant summary judgment where the nonmovant's evidence is conclusory, speculative, or not significantly probative. Id. at 249-50. "The litigant opposing summary judgment may not rest upon mere conclusory allegations or denials, but must bring forward some affirmative indication that his version of relevant events is not fanciful." Podell v. Citicorp Diners Club, Inc., 112 F.3d 98, 101 (2d Cir. 1997) (internal quotations and citations omitted); see also Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (a nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts"); Goenaga v. March of Dimes Birth Defects Foundation, 51 F.3d 14, 18 (2d Cir. 1995) (nonmovant "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible"). In sum, if the court determines that "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 288 (1968)).
B. The Perot Defendants
1. Tortious Interference with Contract
In the August 31, 2001 Order, the Honorable Kimba M. Wood, U.S.D.J., determined that the plaintiffs were at-will employees and could not assert that their termination constituted a breach of contract. (Aug. 31, 2001 Order at 11-13). Nevertheless, the Court also found that the plaintiffs could plead contract claims against BFT for its alleged failure to provide certain benefits at and after the plaintiffs' discharge. (Aug. 31, 2001 Order at 13). Then, in a Report and Recommendation issued on May 9, 2002, I suggested that while the plaintiffs had not articulated a valid claim for tortious interference with contract against the Perot Defendants, they should be permitted to replead if they could "allege that the Perot Defendants did know of the agreement to provide the plaintiffs with severance and other benefits and intentionally interfered with that commitment." (Report and Recommendation dated May 9, 2002 at 7-8 n. 4). Judge Wood then adopted that recommendation. (Order dated Aug. 26, 2002 at 2-4, 6). In the Fifth Amended Complaint, the plaintiffs allege that they explained to the Perot Defendants the benefits to which the plaintiffs were entitled, including severance, pension payments, and disability benefits. (Fifth Am. Compl., ¶¶ 60-62). The plaintiffs also allege that the Perot Defendants were made aware that the plaintiffs could lose these benefits if they were terminated for cause. (Fifth Am. Compl., ¶ 60). Then, according to the plaintiffs, the Perot Defendants interfered with their receipt of these benefits by making false accusations designed to result in the plaintiffs' discharge. (Fifth Am. Compl., ¶¶ 63-64).
Under New York law, a claim for tortious interference with contract requires proof: "(a) that a valid contract exists; (b) that a `third party' had knowledge of the contract; (c) that the third party intentionally and improperly procured the breach of the contract; and (d) that the breach resulted in damage to the plaintiff." Finley v. Giacobbe, 79 F.3d 1285, 1294 (2d Cir. 1996) (citations omitted). Here, the Perot Defendants contend that there was no binding contract for post-termination benefits that they could have interfered with; that they had no specific knowledge of the alleged contractural arrangements; and that they did not intentionally induce DC37 or BFT to deny the plaintiffs any benefits. The last of these arguments is fully dispositive.
To establish their claim, the plaintiffs must "prove the existence of a valid contract and damages caused by the defendant's knowing and intentional interference with that contract[.]" Jews for Jesus, Inc. v. Jewish Community Relations Council of New York, Inc., 968 F.2d 286, 292 (2d Cir. 1992) (emphasis supplied). To be sure, the plaintiffs have raised a factual question of whether the Perot Defendants wrongfully induced DC37 and BFT to discharge them. That, of course, is not enough, since it has already been determined that the plaintiffs did not have an employment contract.
Moreover, the plaintiffs have proffered no evidence whatever that the Perot Defendants intentionally interfered with their post-termination benefits. The mere fact that the defendants may have been aware of such benefits is insufficient to show their intent to interfere with them. To the extent that there is proof that DC37 or BFT violated any obligation to pay severance, pension, or disability benefits, that violation has in no way been linked to conduct by the Perot Defendants. Therefore, summary judgment should be granted dismissing the Seventh and Eighth Causes of Action in the Fifth Amended Complaint.
In one sense, the plaintiffs would not have lost post-termination benefits if they had not first been terminated, an act that they attribute in part to the Perot Defendants. But this causal connection is too attenuated to satisfy the requirements for tortious interference with contract.
2. Tortious Interference with Business Relationships
Even in the absence of an employment contract, the plaintiffs here can still prevail against the Perot Defendants on a claim of tortious interference with business relationships. To do so, they must show: "(1) business relations with a third party; (2) defendants' interference with those business relations; (3) defendants acted with the sole purpose of harming the plaintiff[s] or used dishonest, unfair, or improper means; and (4) injury to the relationship." Purgess v. Sharrock, 33 F.3d 134, 141 (2d Cir. 1994) (citations omitted). The Perot Defendants have not argued that the plaintiffs' employment was not a business relationship, nor that this relationship was not injured by the plaintiffs' termination. Nor do the Perot Defendants seriously contend that there are no disputes of fact as to whether they played a role in the termination. The defendants focus instead on the third requirement: that they acted with malice or used improper means.
They are correct on the first point. In this context, "malice" refers to "act[ing] with the sole purpose of harming plaintiffs."Schoettle v. Taylor, 282 A.D.2d 411, 411-12, 723 N.Y.S.2d 665, 666 (1st Dep't 2001) (mem.); accord Scalise v. Adler, 267 A.D.2d 295, 296, 700 N.Y.S.2d 49, 51 (2d Dep't 1999). Yet, the plaintiffs themselves have asserted that the Perot Defendants sought to have them discharged in order to incur greater responsibility and profit for themselves. (Plaintiffs' Rule 56.1 Statement, ¶¶ 27, 70). This negates malice as a basis of liability for tortious interference. See Besicorp, Ltd. v. Kahn, 290 A.D.2d 147, 150, 736 N.Y.S.2d 708, 711-12 (3d Dep't 2002) (desire to maximize financial gain precludes finding of malice as sole motivation).
However, disputed issues of fact preclude a finding on summary judgment that the Perot Defendants did not use "dishonest, unfair, or improper means" to induce the plaintiffs' termination. The defendants argue, quite correctly, that "there is no liability in tort unless the means employed to effect the interference was wrongful; mere knowing persuasion would not be sufficient." Guard-Life Corp. v. S. Parker Hardware Manufacturing Corp., 50 N.Y.2d 183, 196, 428 N.Y.S.2d 628, 636 (1980) (footnote omitted). However, [t]he definition of wrongful means under New York law includes "physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure." Hannex Corp. v. GMI, Inc., 140 F.3d 194, 206 (2d Cir. 1998) (quoting Guard-Life, 50 N.Y.2d at 191, 428 N.Y.S.2d at 632). Here, the plaintiffs assert that the Perot Defendants presented false criticisms of their performance to DC37 and BFT and that this resulted in their being fired. If proven, this would constitute wrongful conduct supporting a claim of intentional interference with business relationships. See Cohen v. Davis, 926 F. Supp. 399, 403-04 (S.D.N.Y. 1996) (false and misleading reports about plaintiff's employment performance); Coliniatis v. Dimas, 848 F. Supp. 462, 470 (S.D.N.Y. 1994) (defamatory letter); Freedman v. Pearlman, 271 A.D.2d 301, 305, 706 N.Y.S.2d 405, 409 (1st Dep't 2000) (intentional false communication with prospective employer).
The Perot Defendants have not disputed that they provided negative information about the plaintiffs to BFT. For example, Mr. McKay, Mr. Demmie, and Mr. Cohen reported to their supervisor, Mr. Bavis, in mid-July 1998 that Mr. Hofmann had pressured them not to report significant problems with the Y2K Project at a meeting with BFT officials on July 14, 1998. (Deposition of John McKay, attached as Exh. 13 to Declaration of Lloyd M. Eisenberg dated Nov. 26, 2003 ("Eisenberg Decl."), at 256-63; Deposition of Jack Demmie, attached as Exh. 16 to Eisenberg Decl., at 239, 249-52; Deposition of John Davis, attached as Exh. 15 to Eisenberg Decl., at 138-47, 170-71). Mr. Bavis, in turn, alerted Stanley Hill, then the Executive Director of BFT, of the problems that PSC perceived. (Letter of John Bavis dated July 20, 1998, attached as Exh. 25 to Eisenberg Decl.). At a meeting on July 22 including representatives of BFT, DC37, and PSC, a DC37 official, apparently based on the representations of the Perot Defendants, accused Mr. Hofmann of providing misleading information. (Eisenberg Decl., Exh. 28).
Yet Mr. Hofmann squarely denies these charges. Indeed, he contends that the documents that the Perot Defendants supposedly wanted to present to BFT had in fact not been shown to him, but were fabricated after the fact. (Deposition of Harold Hofmann, attached as Exh. 18 to Eisenberg Decl., at 562-66). His testimony may strain credulity, but that is an issue for the jury to decide.
The Perot Defendants nevertheless raise two additional arguments, both based on the law of defamation, that they maintain relieve them from liability as a matter of law. Even assuming that defamation standards apply, they are incorrect. First, they contend that their statements to DC37 and BFT officials are protected as "opinion." This argument is belied by the example cited above. If the Perot Defendants stated that Mr. Hofmann directed them to withhold information from the BFT trustees, they made a factual assertion that could give rise to liability.
Second, the defendants argue that there is a qualified privilege for a communication made by one person to another on a subject in which both have an interest. This common interest doctrine applies when a consultant conveys to a company criticism of other contractors working for that company, where the consultant shares a financial interest in the contractor's work.See British American Eastern Co. v. Wirth Ltd., 592 F.2d 75, 81 (2d Cir. 1979). However, to be protected by the privilege, the communicator must have a good faith belief that the information is true. See Konikoff v. Prudential Insurance Co. of America, 234 F.3d 92, 98-99 (2d Cir. 2000) (proof of malice defeats qualified immunity); Feldschuh v. State of New York, 240 A.D.2d 914, 915, 658 N.Y.S.2d 772, 773 (3d Dep't 1997) (good faith belief in truth required). Again, in the example above, if the Perot Defendants who reported that Mr. Hofmann directed them to suppress information were not telling the truth, they could not have had the requisite good faith belief, and their statements would not be privileged.
Finally, the Perot Defendants maintain that their statements could not have been the cause of the plaintiffs' termination since the plaintiffs also allege that they were discharged because of their age. This contention fails for two reasons. First, the plaintiffs are permitted to plead in the alternative, and their subjective belief about the reasons for their termination does not preclude them from submitting proof based on another theory. Second, the plaintiffs' injury — their discharge — could have been the consequence of more than one cause. If DC37 and BFT acted both with discriminatory animus and in response to false charges leveled by the Perot Defendants, then both sets of defendants could potentially be liable.
The Perot Defendants' motion for summary judgment should therefore be denied with respect to the plaintiffs' claim of tortious interference with business relations.
C. The Employer Defendants
1. Age Discrimination
DC37 and BFT (collectively the "Employer Defendants") move for summary judgment dismissing the plaintiffs' age discrimination claims. For purposes of summary judgment, this motion is analyzed under the familiar burden-shifting rubric established inMcDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).See Abrahamson v. Board of Education of Wappingers Falls Central School District, 374 F.3d 66, 71 (2d Cir. 2004) (McDonnell Douglas analysis applies in ADEA cases). Under that scheme,
a plaintiff must establish a prima facie case of age discrimination. Once the plaintiff has made out a prima facie case, the employer is required to offer a legitimate, nondiscriminatory business rationale for its actions. If the employer articulates such a reason, the plaintiff has the burden of proving that his age was the real reason for his discharge.Schnabel v. Abramson, 232 F.3d 83, 87 (2d Cir. 2000) (citations omitted). The ultimate burden of proving that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff. Id. at 87 n. 2.
In order to establish a prima facie case of age discrimination in the context of termination, a plaintiff must show "(1) that he was within the protected age group, (2) that he was qualified for the position, (3) that he was discharged, and (4) that the discharge occurred under circumstances giving rise to an inference of age discrimination." Id. at 87 (citation omitted). "The burden of proof that must be met to establish a prima facie case is minimal." Hollander v. American Cyanamid Co., 172 F.3d 192, 199 (2d Cir. 1999). This analytic framework applies to claims brought under the New York State Human Rights Law as well as to ADEA claims. See Abdu-Brisson v. Delta Air Lines, Inc., 239 F.3d 456, 466 (2d Cir. 2001).
In this case, the Employer Defendants concede that the plaintiffs can satisfy the first and third requirements of the prima facie case: that they are members of the protected class and that they were terminated. The defendants argue, however, that the plaintiffs were unqualified for continued employment and that they have presented no facts from which an inference of discrimination could be drawn.
With respect to the requirement that the plaintiffs establish their qualifications, the Employer Defendants misconstrue the law:
[T]he qualification prong must not be interpreted in such a way as to shift into the plaintiff's prima facie case an obligation to anticipate and disprove the employer's proffer of a legitimate, non-discriminatory basis for its decision. To show "qualification" sufficiently to shift the burden of providing some explanation for discharge to the employer, the plaintiff need not show perfect performance or even average performance. Instead, [he] need only make the "minimal showing" that [he] possesses the basic skills necessary for performance of [the] job.Gregory v. Daly, 243 F.3d 687, 696 (2d Cir. 2001) (internal quotations, citations, and alterations omitted); see also Schappert v. Bedford, Freeman Worth Publishing Group, LLC, No. 03 Civ. 0058, 2004 WL 1661073, at *6 (S.D.N.Y. July 23, 2004) (only minimal showing of qualification required for prima facie case); Cordoba v. Beau Deitl Associates, No. 02 Civ. 4951, 2003 WL 22902266, at *8 (S.D.N.Y. Dec. 8, 2003) (same). Furthermore,
In a discharge case in which the employer has already hired the employee into the job in question, the inference of minimal qualification is, of course, easier to draw than in a hiring or promotion case because, by hiring the employee, the employer itself has already expressed a belief that [he] is minimally qualified. Moreover, when, as in this case, the employer has retained the plaintiff for a significant period of time and promoted [him], the strength of the inference that [he] possesses the basic skills required for [his] job is heightened.Gregory, 243 F.3d at 696. Such is the case here. Mr. Hofmann was Director of Information Services for DC37 and BFT for more than ten years when he was terminated. (Affidavit of Harold B. Hofmann dated Feb. 16, 2004 ("Hofmann Aff."), ¶ 2), while Mr. Lawson was employed in their Information Systems Department for about nine years when he was discharged. (Hofmann Aff., ¶ 3). While the performance issues identified by the Employer Defendants may ultimately have justified the plaintiffs' termination, they do not undermine the plaintiffs' qualifications for purposes of a prima facie case.
As to proof of discriminatory animus, Mr. Hofmann has testified that Stanley Hill, the Executive Director of DC37 who terminated the plaintiffs, and Roslyn Yasser, who recommended that they be discharged, both made repeated references to the plaintiffs' age in connection with their ability to continue performing their duties. (Deposition of Harold Hofmann ("Hofmann Dep."), attached as Exh. Y to Declaration of Dan Cherner dated Feb. 17, 2004, at 704-21; Hofmann Aff., ¶¶ 62-65). According to the Employer Defendants, however, this is insufficient to give rise to an inference of discriminatory intent for two reasons. First, at least as to Mr. Hofmann, he was replaced by another employee only six months younger than he was, thus negating any hint of age discrimination. Second, according to the defendants, the comments at issue were only stray remarks that do not support liability.
A closely analogous situation was presented in Morris v. New York City Department of Sanitation, No. 99 Civ. 4376, 2003 WL 1739009 (S.D.N.Y. April 2, 2003). There, the plaintiff claimed to have been constructively discharged on the basis of his race and age, and the employer moved for summary judgment on the ground that there was no showing of discriminatory animus because the plaintiff was replaced by an older employee of the same race.Id. at *5.
The court rejected this argument. First, it found that while proof of replacement by someone outside the protected class would be necessary if there were no other evidence of discriminatory animus, it was not necessary if there was independent evidence of bias:
Defendant argues that Morris fails to make out a prima facie case on either claim because he was replaced by another white male older than Morris. Morris does not dispute that he was replaced by a member of his protected classes, but he claims that this fact is not fatal. Both the Supreme Court and the Second Circuit have made it clear that a plaintiff is not required to show that he was replaced by someone outside of his protected class so long as he has presented some other evidence that gives rise to an inference of discrimination. Where no evidence giving rise to an inference of discrimination has been presented, the fact that a plaintiff is replaced with an individual within his protected class undermines his attempt to establish a prima facie case of discrimination. Thus, in order for Morris to satisfy the fourth element of his prima facie case for discrimination, he must produce some evidence of discrimination that is sufficient to raise an inference of discrimination.Id. at *5-6 (citations and footnote omitted). This approach is entirely logical. An employer, for example, who acts on the basis of bias may nevertheless realize thereafter the legal risks involved and attempt to minimize those risks by replacing the discharged employee with another from the same protected class. Doing so would not, of course, immunize the employer from liability under the anti-discrimination laws.
In Morris, the court went on to determine that age-related comments by supervisors were sufficient evidence of bias:
[W]hile the statements were not numerous, they were made by an individual with substantial influence over Morris' employment. Moreover, the nexus between [the supervisor's] comments and Morris' constructive discharge is apparent: the comment was made during a discussion of Morris' future employment options — be demoted or retire — as well as DOS's alleged desire to change the composition of its workforce. Moreover, the comments were made only four months prior to Morris' retirement by a person who claimed to be meeting with Morris on behalf of one in a position to demote Morris. For these reasons, we cannot dismiss these comments as stray remarks.Id. at *6 (citations omitted). Morris provides persuasive support for rejecting both of the defendants' arguments. First, the fact that Mr. Hofmann's replacement was close in age does not preclude him from claiming age discrimination, provided he presents other evidence of discriminatory animus. Second, he has proffered such evidence here: statements allegedly made by the very persons responsible for his termination which reflect bias on the basis of age. According to Mr. Hofmann, Ms. Yasser made such remarks as early as 1994 and repeated them with more frequency in 1998, when the terminations occurred. (Hofmann Dep. at 704-05; Hofmann Aff., ¶ 62). According to Mr. Hofmann, "there were several occasions where defendant Yasser would ask me my age, and hint that I should consider retirement." (Hoffman Aff., ¶ 62). Further,
defendant Yasser would say to me that I was having "senior moments" and expressed disbelief that I would be able to keep up with new systems that were coming to the market, or that I would be able to go to training courses and be able to learn about such new systems. Defendant Yasser expressed to me also that she thought that I was too old to learn anything new, and that I could not keep up with the pace of technology. These comments were made prior to 1998, but accelerated in 1998 after PSC started working on the Y2k project.
(Hofmann Aff., ¶ 63). Mr. Hofmann also alleges that Ms. Yasser displayed age bias concerning Mr. Lawson:
There were several occasions where defendant Yasser told me that Mr. Lawson was too old to work, that he was too old to learn anything new, and that I should fire him. These comments were made by Yasser mostly in 1997, and accelerated in 1998, after PSC started working on the Y2K project.
(Hofmann Aff., ¶ 62).
Likewise, Mr. Hofmann has asserted that Mr. Hill made age-related statements about both plaintiffs:
Defendant Hill also made comments about age, specifically stating that he noticed that Mr. Lawson was sleeping in meetings and that he was too tired and old to pay attention and do the work and to keep up. Defendant Hill made such comments on several occasions starting in 1997, and into 1998.
Defendant Hill would also make comments to me that I should retire, that it would be a good idea to consider retirement, that when people get older they slow down and get slower and should consider retirement, and that I should consider retiring. Defendant Hill made these comments on several occasions in 1997, and into 1998.
(Hofmann Aff., ¶¶ 64-65). Mr. Hofmann asserts that Ms. Yasser told him in July 1998, the month before the discharge, that he was too old to perform his job, and that Mr. Hill had suggested somewhat earlier in 1998 that he should think about retiring. (Hofmann Dep. at 712, 719).
Thus, the discriminatory statements attributed to the decisionmakers in this case were both more pervasive and closer in time to the adverse employment action than those in Morris, and cannot simply be dismissed as stray remarks. The plaintiffs have therefore satisfied the fourth prong of the prima facie case for purposes of summary judgment.
The Employer Defendants could still prevail if they are able to demonstrate that the plaintiffs can not rebut their proffered non-discriminatory reasons for the discharge. But "only occasionally will a prima facie case plus pretext fall short of the burden a plaintiff carries to reach a jury on the ultimate question of discrimination[.]" Zimmermann v. Associates First Capital Corp., 251 F.3d 376, 382 (2d Cir. 2001) (internal quotation marks and citation omitted). This is not that unusual case. To be sure, Mr. Hofmann's credibility will be sorely tested with respect to such factual questions as whether the defendants actually made age-related comments (witnessed by no one other than Mr. Hofmann) and whether the charges against him of withholding critical project information were based on "fabricated" documents. But those credibility determinations cannot be made at this stage. Since there are myriad factual disputes which, if resolved in favor of the plaintiffs, could result in a finding of liability, summary judgment should be denied on the age discrimination claims.
2. Breach of Contract
That is not the case with the plaintiffs' breach of contract claims. They allege that the Employer Defendants had legal obligations to provide pension benefits, disability benefits, and severance pay — obligations that these defendants violated. Yet, the plaintiffs have failed to produce evidence sufficient to submit these claims to the jury.
The plaintiffs' pension rights are set forth in a plan governed by the Employee Retirement Income Security Act ("ERISA"). (Eisenberg Decl., Exh. 33). The plaintiffs do not contend that they did not receive the benefits as described in that plan, but rather that they were promised other, additional payments. This argument fails as a matter of law. "Plan modifications must be in writing; oral changes will not be enforced in the absence of fraud." Ramos v. SEIU Local 74 Welfare Fund, No. 01 Civ. 2700, 2002 WL 519731, at *5 (April 5, 2002) (citations omitted);accord Moore v. Metropolitan Life Insurance Co., 856 F.2d 488, 492 (2d Cir. 1988). Here the plaintiffs have offered no proof that would support a finding of fraud. Instead, they argue:
The issue with the pension is two-fold. First, it is believed that others have been given greater benefits than what is described in the pension plan document; however, Plaintiffs have been unable to confirm this fact because defendants have failed and refused to produce massive amounts of documents, including documents on this issue. Given such failures, defendants should be precluded from arguing their point. Second, the penalties that Plaintiffs have incurred with respect to having to take their pensions early, have been caused by the wrongful acts against them. In this regard, the "pension damages" are really a component of damages for Plaintiffs' other claims, notwithstanding the fact that they are valid parts of the tortious interference with contract/promises claims as well.
(Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment at 16).
Both arguments fail. The plaintiffs cannot defeat summary judgment by speculating that they could have presented evidence if the defendants had been forthcoming in discovery. Discovery is over, and the plaintiffs have not established that the defendants withheld relevant information. Nor can the plaintiffs manufacture a breach of contract claim from the fact that, because of their termination, they received lesser pension benefits than if they had been employed longer. The shortfall is, as the plaintiffs suggest, an element of damages if they prevail on their age discrimination claims; however, it is not an independent contract claim.
Mr. Hofmann was entitled to disability benefits through a policy issued by First Unum, an insurer independent of the Employer Defendants. (Hofmann Dep. at 425-26, 445-47; Eisenberg Decl., Exh 35. First Unum denied his claim on initial review and again on appeal. (Hofmann Dep. at 445-47; Eisenberg Decl., Exh. 35). Mr. Hofmann has proffered no admissible evidence that the Employer Defendants played any role in that decision. Although he alleges that First Unum's denial resulted from the Employer Defendants' "intentional and willful failure and refusal to respond to First Unum's requests for information" (Hofmann Aff., ¶ 71), the insurer's letter does not support this assertion (Eisenberg Decl., Exh. 35), and Mr. Hofmann has provided no first-hand information that would support his conjecture.
Finally, while the Employer Defendants may have provided severance benefits to some employees, they had no contractural obligation to do so. (Deposition of A. Kadlub, attached as Exh. 34 to Eisenberg Decl., at 102-04). The plaintiffs could overcome this hurdle if they were able to demonstrate that the defendants had a regular practice of making severance payments and that the plaintiffs had relied on that practice in accepting or continuing their employment. See Deutsch v. Kroll Associates, Inc., No. 02 Civ. 2892, 2003 WL 22203740, at *3-4 (S.D.N.Y. Sept. 23, 2003). But they have made no such showing. Instead, they have offered only vague assertions that severance was "always" paid. (Hofmann Aff., ¶ 72). They have not identified a single recipient, let alone established a practice.
Summary judgment should therefore be granted in favor of the Employer Defendants, dismissing the Fifth and Sixth Causes of Action in the Fifth Amended Complaint.
Conclusion
For the reasons set forth above, I recommend that the Perot Defendants' motion for summary judgment be granted to the extent of dismissing the plaintiffs' claims for tortious interference with contract but denied with respect to claims of tortious interference with business relationships. I further recommend that the motions of DC37 and BFT be granted to the extent of dismissing the plaintiffs claims of breach of contract but denied with respect to their age discrimination claims. Pursuant to Rule 72 of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from this date to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Kimba M. Wood, Room 1610, and to the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007.