DEFENDING EMPLOYMENT CLAIMS IN NEW JERSEY

I. DEFENDING AGAINST CLAIMS UNDER THE NEW JERSEY LAW AGAINST

DISCRIMINATION ("NJLAD"), N.J.S.A. 10:5-1, ET SEQ.

A. Workplace Harassment:

1. Hostile Work Environment Based on Gender and/or Sexual Harassment. See Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587 (1993) (establishing standards for sexual harassment and hostile environment liability under NJLAD); Blakey v. Continental Airlines, Inc., 164 N.J. 38 (2000)(employers' duty to take effective measures to stop co-employee harassment extends to electronic bulletin board).

2. Racially Hostile Work Environment. See Taylor v. Metzger, 152 N.J. 490 (1998) (even one racial epithet, depending on circumstances, may be sufficiently severe or pervasive to state claim of hostile work environment).

3. Work Environment Hostile to Particular Religion. See Blume v. Denville Tp. Bd. of Educ., 334 N.J. Super. 13, 34-36 (App. Div. 2000) (claim of anti-Jewish discrimination); Heitzman v. Monmouth County Reclamation Ctr., 321 N.J. Super. 133 (App. Div. 1999) (claim of anti-Jewish discrimination).

B. Defenses:

1. The Alleged Conduct Did Not Occur.

2. The Conduct Did Not Constitute Unlawful Harassment.

a. Conduct Did Not Occur "Because Of" the Plaintiff's Gender, Race, Religion, etc.

b. Conduct Was Not Sufficiently Severe or Pervasive to Make a "Reasonable" Person Believe His/Her Working Conditions Were Altered and the Working Environment Was Hostile.

3. The Employer Should Not Be Held Responsible For the Conduct.

a. Employer Did Not Fail to Take Remedial Action: Plaintiff Cannot Prove that Upper Management Employees Knew of or Should Have Known of the Harassment and Failed to Take Effective Remedial Measures to Stop It.

b. Employer Did Not Delegate Authority: Plaintiff Cannot Prove that Employer Delegated to the Alleged Harasser the Authority to Control the Working Environment and the Alleged Harasser Abused that Authority by Creating a Hostile Work Environment.

c. Employer Was Not Negligent: Plaintiff Cannot Prove that Employer Was Negligent by Failing to Take Reasonable Steps to Prevent the Harassment from Occurring.

Whether employer had in place well-publicized and enforced anti-harassment policies;

Whether employer had effective formal and informal complaint structures;

Whether employer had in place anti-harassment training programs; and

Whether employer had in place mechanisms to monitor harassment.

B. Discriminatory Termination:

1. Race Discrimination in Termination. See Jason v. Showboat Hotel & Casino, 329 N.J. Super. 295, 303 (App. Div. 2000).

a. Defenses:

1. Legitimate, nondiscriminatory reasons for employer’s decision to terminate or other adverse action.

2. Time-barred by Statute of Limitations (2 years under NJLAD). See Montells v. Haynes, 133 N.J. 282 (1993). But see Ali v. Rutgers, The State University of New Jersey, ___ N.J. ___ (2000) (In cases in which the operative facts arose both before and after the date of the decision in Montells v. Haynes, aggrieved party must file NJLAD claim before expiration of prior 6-year limitations period or within two years from date of this opinion, whichever was earlier).

2. Gender Discrimination in Termination.

3. Age Discrimination in Termination. See Bergen Commercial Bank v. Sisler, 157 N.J. 188 (1999) (reaffirming breadth of anti-age discrimination provisions of NJLAD).

4. National Origin Discrimination. See Rosario v. Cacace, 337 N.J. Super. 578 (App. Div. 2001) (claim of national-origin discrimination based on workplace rule that only English language may be used.

5. Disability/Handicap Discrimination. See Blume v. Denville Tp. Bd. of Educ., 334 N.J. Super. at 37-42 (plaintiff suffering from cancer); Leonard v. Metropolitan Life Ins. Co., 318 N.J. Super 337 (App. Div. 1999) (alleged hostile environment based on supervisor’s derogatory remarks about employee’s diabetic condition); Svarnas v. AT&T Communication, 326 N.J. Super. 59 (App. Div. 1999) (claiming discrimination based on asthma condition).

a. Defenses:

1. Reasonable Accommodation of Disability.

2. Plaintiff is Unable to Perform the Essential Functions of His/Her Job.

C. Wrongful Discharge/Breach of Implied Contract Based on Employee Handbooks or Employer Policies. Woolley v. Hoffmann-LaRoche, Inc., 99N.J. 284, modified, 101 N.J. 10 (1985) (establishing cause of action). See Mita v. Chubb Computer Services, Inc., 337 N.J. Super. 517 (App. Div. 2001) (enforcing provisions of employee manual defining the nature of the employment relationship).

a. Defenses:

1. Language is not reasonably susceptible to an interpretation of providing a contractually-enforceable right or term of employment.

2. Document contains a clear and prominent disclaimer of any contractual undertaking.

Clear language

Prominent position

D. Implied Covenant of Good Faith and Fair Dealing.

a. Defenses:

1. Does not exist in the absence of an expressed or implied contract to which it could attach.

E. Wrongful Discharge in Violation of Clear Mandate of Public Policy. Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58 (1980) (establishing cause of action).

F. Wrongful Discharge of "Whistle-Blower" in Violation of Conscientious Employee Protection Act ("CEPA"), N.J.S.A. 34:19-1, et seq. See Mehlman v. Mobil Oil Corp., 153 N.J. 163 (1998) (examining far-reaching scope of CEPA); Roach v. TRW, Inc., 164 N.J. 598 (2000) (sustaining jury verdict for plaintiff terminated after complaining about co-employees’ improprieties); DeLisa v. Bergen County, 165 N.J. 140 (2000) (CEPA’s protection against employer retaliation extends to employees who communicate information to either their employers or public bodies concerning co-employee misconduct covered by CEPA); Fleming v. Correctional Healthcare Solutions, 164 N.J. 90 (2000) (plaintiff not required to follow chain of command in order for complaints to be protected by CEPA).

a. Defenses:

1. Time-barred by One-Year Statute of Limitations, N.J.S.A. 34:19-5. Suit must be filed within one year of the alleged retaliatory or adverse action.

2. Lack of plaintiff’s reasonable belief that his/her employer’s conduct which he/she opposed or threatened to disclose violated an identified law, regulation or public policy. See Falco v. Community Med. Ctr., 296 N.J. Super. 298, 310, 313-14 (App. Div. 1997), certif. denied, 153 N.J. 405 (1998).

3. Legitimate, non-retaliatory reason for the employee’s discharge or other adverse action.

G. Workplace Torts: Intentional Infliction of Emotional Distress; Defamation; Others. See Griffin v. Tops Appliance City, Inc., 337 N.J. Super 15 (App. Div. 2001) (examining standards for cause of action).

II. ATTORNEYS' FEES FOR PREVAILING PLAINTIFFS.

A. Prevailing Plaintiff Is Awarded Counsel Fees,

Under N.J.S.A. 10:5-27.1.

1. Starting point is "lodestar" amount, which is the number of hours reasonably necessary to successfully prosecute the claim, times a reasonable hourly rate. Rendine v. Pantzer, 141 N.J. 292, 337 (1995).

2. Courts may award contingency enhancement of fees to reflect risk of unsuccessful outcome, including the novelty and difficulty of the claims presented, and the significance of the result achieved. Rendine, 141 N.J. at 337. See Baker v. National State Bank, 312 N.J. Super. 268 (App. Div. 1998), aff'd on other grounds, 161 N.J. 220 (1999)(upholding 50% enhancement where prevailing plaintiffs' result was extremely successful, noting it was the high end under Rendine).

B. Prevailing Defendant Employer is Not Awarded Fees Unless It Shows Plaintiff's Claim Was Brought in Subjective Bad Faith (Requires More Than Finding Complaint Was Frivolous or Meritless). See Brown v. Fairleigh Dickinson Univ., 560 F.Supp. 391, 406-07 (D.N.J. 1983).

III. PUNITIVE DAMAGES.

A. To be Awarded Only in "Exceptional" Cases Where Employer's Conduct is "Especially Egregious." Rendine v. Pantzer, 141 N.J. 292, 313-14 (1995).

1. Trial court properly refuses to submit issue of punitive damages to jury where employer's conduct is not especially egregious. Blume v. Denville Tp. Bd. of Educ., 334 N.J. Super. 13, 42 (App. Div. 2000).

B. Award of Punitive Damages Also Requires Finding of "Actual Participation in or Willful Indifference to the Wrongful Conduct on the Part of Upper Management." Rendine, 141 N.J. at 314, Lehmann, 132 N.J. at 625.

1. "Upper Management" consists of: (a) those responsible to formulate the employer's anti-discrimination policies, provide compliance programs and insist on performance (its governing body, its executive officers), and (b) those to whom the employer has delegated the responsibility to execute its policies in the workplace, who set the atmosphere or control the day-to-day operations of the unit (such as heads of departments, regional managers, or compliance officers). Cavuoti v. New Jersey Transit Corp., 161 N.J. 107, 128-29 (1999).

C. Courts reviewing punitive damages awards in NJLAD cases should apply the general requirements of the Punitive Damages Act, N.J.S.A. 2A:15-5.9, et seq., for procedural and substantive fairness, as well as substantive due process considerations to ensure that any award of punitive damages bears "some reasonable relation" to the injury inflicted and thus is not excessive. Baker v. National State Bank, 161 N.J. 220, 228-31 (1999)(issue of punitive damages was remanded to trial court for reconsideration); Mogull v. CB Commercial Real Estate, 162 N.J. 449, 473-74 (2000)(plain error for trial court not to give the "upper-management" charge; issue of punitive damages was remanded).

IV. NJLAD LIABILITY OF INDIVIDUAL MANAGERS AND SUPERVISORS.

A. NJLAD imposes individual liability upon managers or supervisors who "aid and abet" employer's unlawful discrimination, N.J.S.A. 10:5-12(e).

B. Individual manager or supervisor may be held liable for "aiding and abetting" an employer's NJLAD violation only when he knowingly gives substantial assistance or encouragement to the unlawful conduct of his employer. Britman v. Gatesy, ___N.J. Super. ___, No. A-4913-98T2 (App. Div., Nov. 14, 2000)(affirmed trial court's ruling that evidence was not sufficient to establish individual officer's "substantial assistance" in employer's conduct). Factors to be considered are:

1. Nature of the act encouraged;

2. Amount of assistance given by the supervisor;

3. His presence or absence at the time of the conduct;

4. His relation to the employer;

5. His state of mind; and

6. Duration of the assistance given.

Gardenhire v. New Jersey Mfrs. Ins. Co., 333 N.J. Super. 219, 229 (Law Div. 2000).

C. Claims against individuals must be dismissed where there is no particular evidence of "aider and abettor" liability apart from the employer's liability. Mogull v. CB Commercial Real Estate, 162 N.J. at 475.

V. ENFORCEMENT OF AGREEMENTS TO ARBITRATE EMPLOYMENT CLAIMS.

A. U.S. Supreme Court has reaffirmed strong federal policy in favor of enforcing agreements to arbitrate disputes. Circuit City Stores, Inc. v. Adams, ___U.S.___, No. 99-1379 (Mar. 21, 2001)(narrowly construed exemption from coverage of Federal Arbitration Act, 9 U.S.C. §2, to apply only to employment contracts of seamen, railroad employees and other transportation workers).

1. Consistent with prior holdings of Third Circuit in Great Western Mortgage Corp. v. Peacock, 110 F.3d 222 (3d Cir.), cert. den., 522 U.S. 915 (1997), and Tenney Engineering, Inc. v. United Elec. & Mach. Workers, 207 F.2d 450 (3d Cir. 1953), that FAA covers most agreements to arbitrate employment disputes.

B. New Jersey appellate courts have continued to uphold parties' agreements to arbitrate employment disputes. See Littman v. Morgan Stanley Dean Witter, 337 N.J. Super. 134 (App. Div. 2001)(enforcing Form U-4 agreement to arbitrate employment claims in securities industry under NASD rules); Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 333 N.J. Super. 291 (App. Div. 2000), certif. granted, ___N.J.___ (2001)(enforcing arbitration provisions of employment agreement).

1. As policy matter, New Jersey courts will enforce arbitration provisions in employment agreements, even as to statutory claims of discrimination under the NJLAD, which otherwise would give the employee the right to a jury trial. See Littman, supra; Singer v. Commodities Corp., 292 N.J. Super. 391 (App. Div. 1996).

a. New Jersey's public policy against employment discrimination reflected in NJLAD does not conflict with its strong policy in favor of arbitration and enforcing parties' agreements to arbitrate disputes. Quigley v. KPMG Peat Marwick, LLP, 330 N.J. Super. 252 (App. Div.), certif. denied, 165 N.J. 527 (2000).

b. Any change in that policy must come from the Supreme Court or the Legislature, unless preempted by federal law. Littman, 337 N.J. Super. at 149.

c. Courts have rejected employees' claims of economic duress, determining that the economic coercion of obtaining or keeping a job, without more, is insufficient to overcome an agreement to arbitrate. Manin v. Design Benefit Plans, Inc., __N.J. Super. __, No. A-3064-99T5 (App. Div., March 21, 2001); Quigley v. KPMG Peat Marwick, 330 N.J. Super. at 264.

2. As matter of contract interpretation, courts will require employee's waiver of his or her right to pursue NJLAD claims in court suit to be "clear and unmistakable," and a "knowing and voluntary" waiver of employee's right to sue on statutory claims. See Alamo Rent A Car, Inc. v. Galarza, 306 N.J. Super. 384, 389 (App. Div. 1997).

a. Courts will not broadly construe such waivers; their language must be clear on its face, reflecting a mutual agreement to arbitrate statutory claims. Language must be both:

1. Broad enough to cover "all disputes" or "any disputes" concerning the employee's employment, and

2. Specific and clear enough to state unmistakably that the employee knowingly is waiving his or her rights to pursue NJLAD claims in court suit.

b. To ensure their enforceability, such agreements should be reasonable, providing for the same remedies as are available under the statutes, but merely in a different forum (arbitration).