Firing Based on Age, Ex-Mitsubishi Manager Says : Courts: But plummeting computer sales caused the man, now 58, to be laid off in 1990 along with 38 others, an attorney for the Cypress-based U.S. subsidiary claims in opening arguments of trial.
Blaming its ill-fated venture of selling complete computer systems, Mitsubishi Electronics America Inc. on Tuesday defended itself against a fired manager who sued the Cypress-based company for $700,000, claiming age discrimination.
George O’Mary, 58, accused Japanese-owned Mitsubishi of singling out older managers when it terminated him and 38 other people as it cut back its U.S. computer business in November, 1990, after massive losses.
The former technical support manager is suing for $700,000 in lost wages and compensation for emotional distress. Attorneys for the company denied the allegations in the opening arguments of a trial that began Tuesday in Superior Court in Santa Ana.
Dirk Bruinsma, O’Mary’s lawyer, said that company managers held two meetings in early 1990 in which Japanese executives reportedly told employees that the company planned to eliminate managers over 40 and replace them with “younger, more aggressive managers.”
“While it may happen often, it is not often said,” Bruinsma said. “I suppose someone made a critical mistake. . . . Mr. O’Mary started over and built himself up again while someone else did his job.”
Despite what O’Mary described as promises of lifetime employment at Mitsubishi, the terminations occurred six months later.
Of 14 managers fired, 13 were over 40, Bruinsma said. O’Mary, a 10-year employee whose salary was $100,000 a year, was allegedly replaced by a 29-year-old manager.
O’Mary, a Sierra Madre resident who received a $78,000 severance check, said he hunted for a job for 18 months. He was reduced to selling cemetery plots for $100 a month before landing a job as a software engineering trainer for McDonnell Douglas in Huntington Beach for half his pay at Mitsubishi Electronics.
But O’Mary’s story regarding the staff cuts, while sympathetic, isn’t true, said Barclay Edmundson, outside counsel for Mitsubishi Electronics America, a subsidiary of electronics and auto giant Mitsubishi Electric Corp. in Tokyo.
He said that although lifetime employment has been a common practice in Japan among young hires, it was never more than a hope for the company’s workers in America and therefore was never included in any employment contracts, including O’Mary’s.
Also, Edmundson said, the alleged statements of senior executives was hearsay--the statements were either never made or were misinterpreted. Instead, Edmundson said that Michael Foster, a senior vice president of the company, would testify that business reasons were used to determine each person to be let go.
Edmundson said Foster had to cut 30% of his 144 employees in the Information Systems Division subsidiary because Mitsubishi had decided to abandon its computer systems business after accumulating years of losses that totaled $65 million.
Mitsubishi, which entered the personal computer market in the United States in 1981, reached a sales peak of $175 million by 1986, according to Edmundson.
During that period, O’Mary received raises every year and steady promotions to the point where he managed a crew of four traveling technicians who helped customers deal with computers and supervised a manager with five technicians.
But in 1987 the division lost two major contracts to supply computers to other manufacturers, including Leading Edge Computers, which placed their own brand names on the PCs and resold them. In 1990, Mitsubishi lost $17.5 million on lower sales of about $25 million, Edmundson disclosed.
Pointing to a chart with red bars representing losses, he told jurors, “No, this bar chart is not upside down. The losses on these computers were staggering for this company. (Mitsubishi Electronics) had to decide to get out, and that resulted in layoffs.”
Mitsubishi’s computers were consistently inferior in technology and price, Edmundson said. It pulled the plug on computer system sales in 1990, deciding instead to focus on manufacturing components, such as monitors.
Foster decided to cut O’Mary’s traveling technical support staff because complete computer systems would no longer be sold, Edmundson said, adding that the technical staff occupied about two-thirds of O’Mary’s work time.
He chose to retain another manager, Kathy Woods, over O’Mary because she had hands-on experience managing the in-house technical support staff and, though supervised by O’Mary, had two years more seniority.
Woods then began reporting to Ray Roque, 29, who supervised three other groups of engineers that O’Mary was not qualified to manage, Edmundson said.
He told jurors that 29.5% of the company’s staff is 40 or older, compared to 30.4% before the staff cuts.
“That does not suggest a grand scheme for discrimination,” Edmundson said.
