New Jersey Employment Lawyer Blog

In January, the United States District Court for the Southern District of New York ("SDNY") began requiring early mediation in all employment discrimination cases other than cases brought under the Fair Labor Standards Act ("FLSA"). Mediation is a form of Alternative Dispute Resolution ("ADR") in which a lawyer, retired judge, or other trained mediator tries to help the parties settle their case.

Mediation offers the parties to a lawsuit a way to resolve their cases before they spend too much time, money, or mental energy trying to prove their cases. A study has shown that Settling Is Better Than Going to Trial for both employers and employees. As a result, it makes perfect sense that the SDNY would require early mediation in employment discrimination cases, which often can be very time consuming, costly, and emotional for everyone involved.

The SDNY is a federal court which is located in downtown Manhattan, White Plains and Middletown, New York. It covers the Bronx, New York, Westchester Rockland, Putnam, Orange, Dutchess, and Sullivan Counties. The SDNY's mediation program is free, since the mediators donate their time.

Like the SDNY, New Jersey's state courts require early mediation in most employment law cases. However, currently the United States District Court for the District of New Jersey ("DNJ") does not require mediation in every employment discrimination case, but instead leaves it up to individual judges to decide if and when to send the parties to mediation.

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Earlier this month, New Jersey's Appellate Division reduced a punitive damages award in an age discrimination case in which the jury had awarded $10 million, to slightly less than $2.5 million. Punitive damages are awarded to punish a defendant when its actions are especially egregious.

The Evidence of Age Discrimination

Nicholas Saffos worked for Avaya, Inc. and its predecessors, AT&T and Lucent Technologies, for more than 20 years. In 2002, Avaya hired M. Foster Werner, Jr., as the head of Mr. Saffos' department. Mr. Saffos quickly noticed that Mr. Werner was firing employees who were over 40 years old, and replacing them with younger workers. He also noticed that Mr. Werner was favoring the younger employees in his department.

In 2003, Mr. Werner suddenly began criticizing Mr. Saffos' job performance and examining his work, even though he had received positive performance reviews in the past. In August 2003, Mr. Werner placed Mr. Saffos on a Performance Improvement Plan ("PIP"). Avaya fired him 30 days later. At the time, Mr. Saffos was 49 years old. Avaya hired a 33-year-old to replace him. Mr. Saffoshas other evidence of age discrimination, including the fact that the average age of an employee in the department decreased by 10 years during the first two years that Mr. Werner was in charge.

The Jury Award

After a trial, a jury found in Mr. Saffos' favor and awarded him $250,000 for emotional distress, $325,500 for past lost wages ("back pay"), $167,500 for future lost wages ("front pay"), and $10 million on punitive damages. However, the trial judge reduced the punitive damages to a little over $3.7 million, which was five times the other damages the jury had awarded because he believed the jury's award was unreasonably high. Both sides appealed.

The Appellate Court Reduced the Punitive Damages Award

On appeal, in Saffos v. Avaya Inc., the Appellate Division reduced the punitive damages even further. It stated that although courts are not required to limit punitive damages to 5 times the actual damages, the trial judge acted properly when he used that as a guideline to find the punitive damages award was disproportionate to the harm Mr. Saffos experienced and disproportionate to the damages he recovered.

However, it ruled that emotional distress damages often include a punitive element, and the $250,000 the jury awarded to Mr. Saffos for emotional distress already included a punitive element since Mr. Saffos did not suffer any physical harm as a result of the emotional distress, and he did not need any psychiatric treatment. As a result, it concluded that the emotional distress damages should not have be included when calculating the punitive damages as 5 times the jury's award. The Appellate Division therefore reduced the punitive damages award to just under $2.5 million, which is 5 times the economic damages the jury awarded.

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On February 28, 2011, New Jersey's Appellate Division issued an unpublished opinion ruling that a jury should decide whether the New Jersey Department of Corrections ("DOC") retaliated against one of its employees, Bienvenido Montalvo.

Mr. Montalvo Filed a National Origin Discrimination Complaint With the EEOC

Mr. Montalvo worked for DOC as a senior corrections officer at Northern State Prison ("NSP"). On October 5, 2004,he filed a complaint with the United States Equal Employment Opportunity Commission ("EEOC") in Newark, New Jersey. He claimed several superior officers harassed and retaliated against him because of his national origin, Hispanic/Puerto Rican. The EEOC sent Mr. Montalvo's Charge of Discrimination to DOC in Trenton on October 7. It is unclear exactly when NSP received a copy of Mr. Montalvo's Notice of Charge of Discrimination, but the evidence seems to indicate that DOC received it sometime in October 2004.DOC Unfairly Disciplined Mr. Montalvo After He Complained About Discrimination

On November 4, 2004, Mr. Montalvo received a notice of disciplinary action charging him with conduct unbecoming and other sufficient causes for allegedly assaulting a prisoner on October 28. DOC suspended him without pay pending a hearing, and told him he was subject to potentially being fired. However, after a hearing in December 2004, the charges against Mr. Montalvo were dismissed because DOC failed to present any evidence to support them. Mr. Montalvo was then reinstated to his job with full back pay.

The Trial Court Dismissed Mr. Montalvo's Retaliation Claim

Mr. Montalvo sued DOC and six of its employees alleging national origin discrimination and retaliation in violation of the New Jersey Law Against Discrimination ("LAD"), among other claims. However, the trial court dismissed his retaliation claim, finding he did not have enough evidence to support it.

The Appellate Division Reinstated Mr. Montalvo's Retaliation Claim

The Appellate Division disagreed, and instead ruled that Mr. Montalvo is entitled to a trial. It concluded that he suffered an "adverse employment action" because a reasonable employee might not file a discrimination claim if he knew his employer would respond by falsely accusing him of committing an assault, suspending him without pay, and forcing him to defend himself at a disciplinary hearing. It further found it is possible for a jury to find from the evidence that DOC knew about Mr. Montalvo's EEOC complaint when it disciplined him. The Court concluded that a reasonable jury could believe the discipline was retaliatory, based on evidence including the fact that (1) DOC suspended him less than a month after he filed his Charge of Discrimination with the EEOC; (2) the officers who brought the disciplinary charges against him told him he had a target on his back and they wanted to fire him in October 2004; and (3) DOC sought to discipline him despite a videotape and several reports from the day of the alleged assault which confirmed he had done nothing wrong. Accordingly, the Appellate Division sent Mr. Montalvo's case back to the trial court for a jury trial.

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Yesterday, the United Supreme Court decided an important employment law case. Specifically, in Staub v. Proctor Hospital, the Supreme Court ruled that companies can be held liable for an adverse employment decision, even if the employee who actually made the decision did not discriminate, when another supervisor's discriminatory actions or beliefs influenced the decision. As the Supreme Court explained, cases in which a supervisor uses a discriminatory factor to influence someone else to discipline or fire an employee are commonly referred to as "cat's paw" cases. Staub is similar to Kwiatkowski v. Merrill Lynch, an April 2008 decision in which the New Jersey Appellate Division adopted the cat's paw theory under the New Jersey Law Against Discrimination ("LAD").

Staub involves an employee, Vincent Staub, who worked for Proctor Hospital as an angiography technician. Proctor fired Mr. Staub, who was a member of the United States Army Reserve, in April 2004. Mr. Staub brought a wrongful termination lawsuit under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), a federal law that prohibits discrimination against members of the United States Armed Forces. After a trial, a jury found in Mr. Staub's favor, concluding that his military status was a factor in Proctor's decision to fire him. The jury awarded Mr. Staub $57,640 in damages.

Mr. Staub did not claim that the employee who made the decision to fire him, Proctor's Vice President of Human Resources, Linda Buck, had any animosity toward him because he was a member of the Army Reserves. Rather, he claimed his immediate supervisor, Janice Mulally, and Ms. Mullally's supervisor, Michael Korenchuck, were hostile toward him because of his military obligations, and influenced Ms. Buck's decision to fire him. Specifically, Mr. Staub claims that when Ms. Buck decided to fire him, she relied on a discriminatory "Corrective Action" disciplinary warning that Ms. Mulally and Mr. Korenchuk placed in his personnel record in an attempt to get him fired. The Supreme Court ruled that these facts were enough for a jury to hold Proctor liable for discriminating against Mr. Staub in violation of USERRA.

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