Caruso v. Peat, Marwick, Mitchell & Company

Conrad Caruso (plaintiff) was a partner at Peat, Marwick, Mitchell & Company (Peat Marwick) (defendant), an accounting firm. Caruso was deemed underperforming at his 1983 annual performance review. Partner performance at Peat Marwick was judged based on two categories: accountancy income and chargeability. Accountancy income was the amount a partner billed to clients, with a goal of $800,000 annually. Caruso billed only $300,000 in 1983. Chargeability was the percentage of a partner’s time that was billed to clients, with a goal between 40 and 60 percent. Caruso’s chargeability was only 34 percent. Caruso’s manager, William Hasler, set a performance-improvement goal for 1984. At Caruso’s 1984 performance review, he was still found to be underperforming, but Hasler stated Caruso had made good progress and was expected to continue improving. Shortly after, Peat Marwick introduced the Enhanced Early Retirement Program (EERP), under which two categories of older, underperforming partners would be encouraged to retire early with enhanced benefits but without first receiving performance-improvement opportunities: (1) partners whose combined age and years of service exceeded 72; and (2) partners whose combined age and years of service exceeded 63. Younger underperforming partners did not qualify for EERC but would receive performance-enhancement opportunities before being encouraged to resign. Caruso was 50 years old, qualified under the second EERC category, and was pushed to retire early without additional performance-improvement counseling. Caruso sued Peat Marwick for age discrimination in firing, arguing that (a) he did not retire voluntarily; and (b) because of his age, he was forced to retire under EERC rather than getting the chance to continue improving his performance. Peat Marwick moved for summary judgment, arguing that Caruso was terminated through early retirement because of his underperformance, not his age.