Font Size: 
Avaya Hit With $10 Million in Punitives in Age Bias Case
New Jersey Law Journal
June 19, 2008
A Morris County, N.J., jury has returned a $10 million punitive damages verdict in an age discrimination suit against Avaya Inc. of Basking Ridge, N.J.
Tuesday's verdict, believed to be a record in New Jersey in an age bias case, came a day after the jury awarded $743,000 in compensatory damages to Nicholas Saffos of Yorktown Heights, N.Y.
Still to be added are legal fees and costs that Saffos' lawyer estimates are in "the seven-figure realm" after nearly four years of litigation.
Saffos alleged that his termination as business relationship manager in Avaya's real estate department on Sept. 26, 2003, was part of a purge of older workers carried out by a new department head, M. Foster Werner Jr., also a defendant in the case. Starting on Aug. 1, 2003, Werner allegedly fired eight people in the department, all but one of whom was replaced by a younger person, says Saffos' lawyer, Patricia Breuninger, of Breuninger & Fellman in Scotch Plains, N.J.
Most of those let go, including Saffos, were told of problems with their performance, placed on improvement plans and discharged when they failed to meet the plans' set goals, says Breuninger's law partner, Susan Fellman, who also worked on the case. The average age of those fired was 49 and those who replaced them 35, she says. Saffos, then 49, was replaced by someone 14 years younger.
Shortly after the firings, Werner, then 55, was himself fired for alleged misconduct and was replaced by a 40-year-old. It was Werner's assertion of his own age-discrimination claim against Avaya that provided what Breuninger calls "the smoking gun."
During discovery, she obtained from Avaya a copy of a demand letter sent to the company by Werner's lawyer, David Ben-Asher, of Rabner Allcorn Baumgart & Ben-Asher in Upper Montclair, N.J.
Breuninger says Avaya paid Werner money to resolve his claim but declines to say how much, adding that Superior Court Judge Stephen Smith Jr. barred mention of the amount at trial.
During Werner's deposition, she read him the letter and elicited an admission that his own boss, Amar Pai, had a practice of firing older people and replacing them with younger people, Breuninger says. She says she read that testimony into the record at trial but did not introduce the letter into evidence because it contained irrelevant matter.
Saffos' case got a boost from the trial testimony of former Avaya employees Eileen Grippo and Nancy Glynn.
Grippo, a 33-year-old brought in to replace a fired older worker, quit after she "saw what was happening and didn't like it," and testified at trial about the hostility toward older employees, says Breuninger. Glynn, one of those fired, at age 47, had been there 22 years and was a company "superstar," says Breuninger.
Both women had moved out of state, Grippo to Ohio and Glynn to Florida, and had to be tracked down with the help of an investigator.
For purposes of assessing punitive damages, the parties stipulated that the jury would be told Avaya was worth $4 billion. Avaya, based in Basking Ridge, N.J., is a privately owned telecommunications company that employs about 16,000 people worldwide. It was spun off from Lucent Technologies in 2000.
The punitive award was solely against Avaya. Its lawyer, Kevin Donovan, referred a request for comment to company spokeswoman Lynn Newman, who says "we do not believe there is any basis for this type of award" and that Avaya is considering its options, including an appeal.
Donovan, of Newark, N.J.'s Wilson Elser Moskowitz Edelman & Dicker, also represented Werner in defense of the case.
The compensatory damages, awarded against both Avaya and Werner, consist of $325,500 in back pay, $167,500 in front pay and $250,000 for emotional distress. Saffos was earning about $87,000 a year when he was fired. Avaya offered $80,000 to settle before trial, says Breuninger.
Lawyers on both sides of the aisle say they are unaware of a higher punitive damages award in an employment case.
They include Nancy Erika Smith and Neil Mullin of Smith Mullin in Montclair, N.J., who last year won $4.5 million in punitives in a sex-discrimination case in Essex County, Quinlan v. Curtiss-Wright.
Steven Adler, of Cole Schotz Meisel Forman & Leonard in Hackensack, N.J., who represents employers, similarly says the punitives are the highest he has seen. He says Avaya may be able to raise a substantive due process argument based on the need for a reasonable relationship between compensatory and punitive damages.
Alan Schorr, immediate past president of the New Jersey affiliate of the National Employment Lawyers Association, says of the verdict, "When something like this happens, whether or not it sticks, it still raises the bar." He adds, "The jury must have been angry." Last month, Schorr, of Cherry Hill, N.J., won punitive damages of $1.063 million in a Camden County whistleblower case, Still v. Orkin Inc.
Though the N.J. Punitive Damages Act generally limits punitive damages to no more than five times the compensatory damages or $350,000, whichever is greater, the cap does not apply to discrimination or whistleblower claims.
