Federal Court Awards Ex-IBM Employee $3.71 Million

James Castelluccio v. International Business Machines Corp. A federal magistrate judge in Connecticut has awarded $3.71 million to a former IBM executive who claims he was wrongly terminated because of his age, with the total including nearly $1 million in attorney fees. IBM had asked the judge to toss out a jury’s decision from January 2014 and grant a new trial; both requests were denied.

“He feels vindicated,” attorney Mark Carta said of his client, James Castelluccio. “A jury unanimously decided in his favor and now we’ve had a very highly respected and seasoned magistrate judge who also found his evidence compelling.”

But the closely watched employment law case isn’t over. IBM plans to appeal the verdict to the U.S. Court of Appeals for the Second Circuit, said Carta. Traci Lovitt, of Jones Day in Boston, will handle that appeal. Lovitt did not respond to an interview request by press time.

As reported by the Law Tribune earlier this year, Castelluccio began working for IBM in 1968 as a computer analyst. His performance resulted in numerous promotions over the span of four decades with the company. By 2005, Castelluccio had been named vice president of public sector delivery for IBM’s Integrated Technology Division. His reviews were always positive and above average, said Carta.

The Stamford resident worked out of IBM’s Westchester County, N.Y., location. His career went smoothly with the company until his supervisor retired in 2007 and Joanne Collins-Smee became the new IBM general manager for IT delivery services in the U.S. and Canada and parts of Latin America.

Just a couple weeks prior to Castelluccio’s 60th birthday, Collins-Smee, in her very first meeting with Castelluccio, asked him his age and if he was interested in retiring. He said he had no interest. The next day, Collins-Smee sent an e-mail to human resources saying she wanted to replace Castelluccio; she said things were not going well between him and her and that Castelluccio would agree with her on that point. Castelluccio never knew of this e-mail until the discovery phase of the subsequent lawsuit, said Carta, of Carta, McAlister & Moore, in Darien.

Carta said Collins-Smee hinted to Castelluccio about retirement on two more occasions. Carta said his client thought the first time his supervisor mentioned the topic, it might have simply been a lapse in protocol on her part. But, said the attorney Castelluccio became very concerned after she brought it up again. After the third time, Castelluccio reported the conversation, launching an internal investigation.

Eventually Castelluccio was “benched.” In the IBM corporate culture, benching meant going to work but had no actual tasks. It was the company’s way of saying Castelluccio would be let go if he couldn’t soon find another job within the company. After the six month benching, Castelluccio let him go in 2008. Castelluccio then hired Carta and they filed a human rights action in New York that is similar to complaints filed with the Commission on Human Rights and Opportunities in Connecticut.

In 2009, Carta filed an age discrimination complaint in U.S. District Court in Connecticut containing both federal and New York state age discrimination claims. The New York complaint opened the door for emotional distress damages.

IBM argued that the benching was due to Castelluccio not performing his job adequately enough.

The jury awarded $1.3 million in lost wages and benefits, which was reduced by $300,000 because Castelluccio has been receiving his pension, which left the damages at $999,891. Carta said because the jury concluded the discrimination was “willful” that amount was doubled.

Further, he said the jury awarded another half-million dollars for emotional distress under the New York age discrimination law.

IBM sought to at least reduce the verdict amount in their post-trial motions but U.S. Magistrate Judge Thomas Smith upheld the jury’s verdict in a 35-page decision in late July. In a separate 23-page ruling, Smith awarded attorney fees of more than $996,000. He also added $209,488 to offset the tax consequences of Castelluccio receiving the lump sum payment for back pay.

“We sought recovery for the tax impact on Castelluccio from getting paid basically five years of wages all in one year,” said Carta. “Interestingly, IBM did not challenge that calculation that added over $200,000 to our claim.”

The attorney fees and tax interests raised the jury’s verdict from around $2.6 million to $3.71 million, Carta said.

Carta said it’s rare for a plaintiff to get as much as $500,000 for emotional distress in federal court. He said $25,000 to $125,000 was more common.

Judge Smith, however, said Castelluccio’s “heartfelt” testimony demonstrated his emotional distress and the judge attributed much of that to Collins-Smee.

“Collins-Smee did more than simply terminate Castelluccio’s employment; she shattered the very foundation of his identity as an IBMer,” wrote Smith. “The jury bore witness to a man who was utterly devastated by the termination of his employment from a company at which he spent over 40 years, who was reduced to pleading for work during his final months on the bench, and who, at 61 years of age, struggled in vain to secure employment after he had been finally ousted from the company. The jury’s award reflects an understanding of the magnitude of Castelluccio’s emotional distress.”•

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