James Castelluccio v. International Business Machines Corp.: A Stamford man who claims that IBM dismissed him after 41 years because of his age stands to collect between $3.5 and $4 million following a federal court trial.

The drawn-out battle between what the plaintiff’s lawyer called “David and Goliath” had been in the courts since 2009. Of particular note was a pre-trial motion concerning an internal investigation by IBM that drew the attention of employment lawyers nationwide. A federal judge, who ruled the investigative report inadmissible as trial evidence, said the probe was too one-sided and needed to be more neutral, perhaps done by an independent third party.

The IBM internal investigator said he would have ceased the age discrimination probe had the employee signed a severance agreement. The judge said IBM should have been interested in uncovering the truth regardless of whether the employee, James Castelluccio, had taken the severance package or pursued his lawsuit.

“I’m certainly going to advise my clients that [internal] investigations have to be careful, they have to be thorough and they should be completed even if the underlying dispute is settled,” said Jonathan Orleans, of Pullman & Comley, who was not involved in this case. “You want to establish a record of unearthing problems within your workplace.”

Castelluccio began working for IBM in 1968 as a computer analyst and earned numerous promotions over four decades.

By 2005, he was named vice-president of public sector delivery for IBM’s Integrated Technology Division. His performance reviews were always positive, according to his lawyer, Mark Carta, of Carta, McAlister & Moore in Darien. Castelluccio, a Stamford resident, worked out of IBM’s Somers, N.Y., location in Westchester County. His career went smoothly until his supervisor retired in 2007 and Joanne Collins-Smee became the new general manager for IT delivery services for IBM locations in the U.S. and Canada and certain parts of Latin America.

A few weeks before 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 the human resources department saying she wanted to replace Castelluccio and that things were not going well between him and her, and that Castelluccio would agree with that point. Castelluccio never knew of this e-mail until the discovery phase of the subsequent lawsuit, Carta said.

Carta said Collins-Smee mentioned possible retirement to Castelluccio on two more occasions. Carta said his client thought the first mention might have been a simple lapse in protocol, but Castelluccio became very concerned after she brought it up twice more. After the third mention, Castelluccio reported the conversation, and IBM launched an internal investigation.

At that point, Collins-Smee had already moved Castelluccio into another position, one in which the prior employee had quit because, Carta said, the workload truly required working seven days a week. The job included overseeing all of IBM’s strategic outsourcing to other big companies, such as United Health Care.

Collins-Smee also wanted Castelluccio to continue with some of his previous vice-president tasks. “It was clearly a move calculated to have him quit because it was an impossible task,” said Carta. “But he did not quit. He hung in there.”

Carta said Collins-Smee eventually moved Castelluccio out of that difficult job and tried a new approach, which consisted of “benching” him. In other words, Castelluccio would go to work but had no actual tasks.

“It was a difficult time to be put out to pasture like that,” said Carta. “When you’re used to working, sometimes seven days a week, being isolated in an office with nothing to do is not a happy position to be in.”

Benching was reportedly an accepted practice at IBM. It was the company’s way of indicating that an employee would be let go if he couldn’t soon find another job within the company. A witness later testified about IBM’s protocols regarding benching, saying that Collins-Smee was supposed to assist Castellucio by informing him of job openings for upper management positions. But, according to Carta, she did not do so.

“We put in a lot of evidence about other younger employees that she promoted during the time period he was on the bench,” said Carta. “There was no evidence she had him considered for literally hundreds of positions.”

After the six-month benching, IBM let Castelluccio go in 2008. Castelluccio then hired Carta and they filed a human rights action in New York under a process similar to that used in Connecticut by the Commission on Human Rights and Opportunities.

“Typically, you have to go there to exhaust your administrative remedies,” said Carta, who added that most complainants abandon the state process following a mandated 120-day waiting period and then bring a federal lawsuit. The potential damage awards are greater in federal court.

So in 2009, Carta filed an age discrimination complaint against IBM in U.S. District Court in Connecticut. Both federal and New York State age discrimination claims were included in the complaint. The latter allowed for emotional distress damages whereas the federal complaint does not.

IBM was represented by Zachary Fasman, of Paul Hastings in New York City. He was assisted by Todd Duffield and an in-house counsel for IBM. Fasman did not return calls seeking comment for this article.

The defense strategy was simple. They claimed Castelluccio was no longer performing his job up to par and so he was benched. At that point, his boss could keep him only so long while he tried to find another job within the company and then he had to be let go.

IBM presented 10 witnesses at the two-week trial that took place in late January before U.S. Magistrate Judge Thomas P. Smith. Carta called four witnesses, as well as Collins-Smee, who was also a defense witness.

The jury deliberated for about a day and then returned a verdict in favor of Castelluccio.

“I think the case really turned on her credibility,” Carta said, referring to Collins-Smee. “I think the jurors drew the proper inference from the facts we presented, including repeated references to his age and retirement, as well as the fact that she treated him differently than other, younger employees.”

The jury awarded $1.3 million in lost wages and benefits, which was reduced by $300,000 because Castelluccio had been drawing pension payments. That left damages at just about $1 million even. Carta said because the jury concluded the discrimination was “willful” that amount was doubled.

Further, the jury awarded another half million for emotional distress under the New York age discrimination law. Castelluccio will also be entitled to attorney fees and costs, pre-judgment interest, and an additional sum to account for the tax ramifications of receiving the large sum all at once. “In the end, the judgment will be between $3.5 and 4 million,” said Carta.

An IBM spokesman said the company plans to appeal. “IBM thanks the jury for its service, but we strongly disagree with the verdict,” said spokesman Doug Shelton. “We believe IBM treated Mr. Castelluccio fairly and did not violate the law in any way.”