New Jersey Employment Lawyer Blog

Articles Posted in Wrongful Discharge / Wrongful Termination

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A constructive discharge occurs when an employer makes an employee’s working conditions so intolerable that she is forced to resign. This type of forced resignation is legally actionable if it caused by an illegal factor, such as unlawful discrimination or retaliation. Last week, New Jersey’s Appellate Division explained that when deciding if an employee has enough evidence to support this type of claim, a court has to view the evidence collectively rather than looking at each piece of evidence separately.

The woman who filed the case, Cheryl Smith, worked for New Jersey’s Department of Health and Senior Services (DHSS) as a Public Health Consultant II. Ms. Smith took on additional job duties, hoping she eventually would receive a promotion and raise. When it became clear that was not going to happen, Ms. Smith asked the New Jersey Department of Personnel (DOP) to determine if she either was entitled to a promotion, or was performing job duties above her salary grade.

Constructive Discharge Claims in New Jersey.jpgThe DOP concluded Ms. Smith was performing work outside of her job title and should be promoted to an Education Program Specialist II with a corresponding raise. However, it found she was ineligible for the promotion because she did not have the required educational background. Accordingly, Ms. Smith asked DHSS to take away her extra job duties. When the DHSS refused, Ms. Smith went back to the DOP, which instructed her employer to remove certain job duties.

In her lawsuit, Ms. Smith claims DHSS retaliated against her because of her complaints to the DOP by intimidating her when it reprimanded her and by assigning her a smaller workstation that, unlike her peers, did not have a privacy door.

Approximately 8 months later, Ms. Smith’s doctor diagnosed her with severe major depressive disorder caused in part by workplace stress. He doctor found she had “a 90 percent permanent of total psychiatric disability.” Shortly thereafter, Ms. Smith resigned.

The trial court dismissed Ms. Smith’s constructive discharge claim, finding the circumstances were not intolerable since she initially wanted the additional job duties to strengthen her resume, and the other alleged acts of retaliation were not so unbearable that a reasonable person who experienced them would have resigned.

But in Smith v. New Jersey Department of Health & Senior Services, the Appellate Division disagreed. It noted that receiving an intimidating reprimand from a supervisor and being assigned a smaller workstation might not be enough to support a constructive discharge claim on their own. But when those actions are considered together with the fact that DHSS required Ms. Smith to perform additional job duties for an extended period of time without promoting her or giving her a raise, and refused to remove her extra job duties even after the DOP found they were above her pay grade, the totality of the circumstances could support her claim. Accordingly, the Appellate Division permitted Ms. Smith to proceed with her wrongful termination claim.

Since the Appellate Division’s opinion is unpublished, it is not a binding precedent. Still, it is noteworthy because it seems to lower the bar on constructive discharge claims, which historically have been difficult to prove. At a minimum, it seems to set a relatively low threshold before an employee is entitled to have a jury decide her forced resignation claim.

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Erroneous NJ Wrongful Termination Decision.jpgLast week, I discussed Shipe v. Saker Shoprites, Inc. a gender discrimination case which recognizes Employers Can Be Held Liable For Discrimination Even if Decision-Maker Has No Bias. Unfortunately, the Appellate Division found another basis to reverse the jury’s verdict and take away Ms. Shipe’s nearly $900,000 judgment. However, it appears the Appellate Division made two serious errors that led to this unfortunate result.

When an employee brings a discrimination claim, the court first has to make sure there is enough evidence to support the basic element of a discrimination claim. This is called a “prima facie” case. Specifically, in a wrongful termination case an employee ordinarily has to show he or she (1) belongs to a protected class; (2) was employed by the company; (3) was performing her job before being fired, and (4) the employer sought to replace him or her. Alternatively, an employee can meet the fourth element by showing other circumstances that suggest the decision to fire the employee was discriminatory.

Usually, it is up to a judge, rather than a jury, to decide whether an employee has established a prima facie case. However, when there is a dispute about one of the elements it is sometimes necessary for a jury to decide it.

In the Shipe case it was disputed whether the employer sought to replace Ms. Shipe after it fired her. The Appellate Division concluded that the trial judge should have asked the jury whether Ms. Shipe either was replaced by a man, or fired under other circumstances that give rise to an inference of discrimination. In fact, it reversed the jury’s verdict and ordered a new trial because the jury was not asked this question.

I find this ruling perplexing. It is unquestionable the jury found Saker fired Ms. Shipe because of her gender. As I discussed last week, the Appellate Division found that conclusion was supported by sufficient evidence to withstand an appeal. But if the jury found Saker fired Ms. Shipe fired because she is a woman, then the jury had to have found she was fired under circumstances giving rise to an inference of discrimination. If that is true, then why would it be necessary to have a new trial to ask the jury to answer that question again?

The Appellate Division’s ruling appears to be erroneous for a second reason. Specifically, in Zive v. Stanley Roberts Inc., a 2003 case, the New Jersey Supreme Court ruled that when analyzing the prima facie case only the plaintiff’s evidence should be considered. The Appellate Division in Shipe recognized that Ms. Shipe presented evidence that she was replaced by a man. As a result, under Zive the court should have found that Ms. Shipe met the fourth element of her prima facie case. Instead, it reversed the jury verdict and ordered a new trial.

Fortunately, the Shipe decision is unpublished, meaning it is not a binding precedent.

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Newark Police Officer Uniform.jpgThe Third Circuit Court of Appeals recently affirmed a Newark police officer’s $700,000 verdict in a wrongful termination case. The case was brought by Jose Montalvo, who was a police officer for the City of Newark from 1990 to 2006. On April 22, 2005, he filed an affirmative action complaint, claiming the police department started harassing him after he fired his weapon at a citizen in 2000. For example, despite Mr. Montalvo’s repeated requests, the department refused to return his fire arm, and instead kept him assigned to cell block duty for longer than it had assigned anyone else to it. According to testimony, Newark assigns police officers to the cell block as a form of punishment.

At the trial, Mr. Montalvo presented evidence that Newark began further harassing him after he filed his affirmative action complaint. For instance, the police department suspended him for 21 days relating to the shooting, even though it occurred five years earlier. Ultimately, Newark fired Mr. Montalvo for making false statements during a police department investigation and disclosing confidential information about the investigation. However, Mr. Montalvo presented evidence at the trial showing the department gave less severe discipline to other police officers who were brought up on similar disciplinary charges.

At the trial, the jury found Newark fired Mr. Montalvo in retaliation for filing his affirmative action complaint, in violation of the New Jersey Law Against Discrimination (LAD), and awarded him $700,000. The LAD prohibits employers from retaliating against an employee because he complained about workplace discrimination.

Newark appealed, arguing there was not enough evidence to connect its decision to fire Mr. Montalvo to his affirmative action complaint. However, the Third Circuit rejected this argument. In Montalvo v. City of Newark, it ruled the jury’s find that Newark fired Mr. Montalvo in retaliation for his affirmative action complaint was supported by the pattern of Newark antagonizing him after he filed it.

On appeal, Newark also asked the court to overturn the verdict on the basis that the Police Chief who made the decision to fire Mr. Montalvo testified that he did not even know about Mr. Montalvo’s affirmative action complaint. However, the court concluded that the jury was not required to believe the Police Chief’s testimony. It also explained that, even if the Chief did not know about Mr. Montalvo’s affirmative action complaint, his decision to fire Mr. Montalvo still could have been retaliatory since there was evidence he relied on a “tainted” retaliatory performance evaluation prepared by another employee who did know about his complaint. Accordingly, the court affirmed Mr. Montalvo’s $700,000 verdict.

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Earlier this year, New York’s Court of Appeals dismissed a wrongful termination lawsuit brought by a Compliance Officer who objected about an unethical stock transaction by the company’s President and Chief Executive Officer. In doing so, New York’s highest court refused to extend an exception to the employment at-will doctrine. Employment at-will is the general rule that a company can fire an employee for any reason, or even for no reason at all. Although there are many exceptions to employment at-will, such as anti-discrimination laws, New York does not have a whistleblower law that would have protected this employee.

bigstock-Employee-Termination-7877406.jpgSpecifically, in Sullivan v. William F. Harnisch, Joseph Sullivan was a partner in two related hedge fund companies, Peconic Partners LLC and Peconic Asset Managers LLC. He also held several other job titles, including Executive Vice President, Chief Operating Officer and Chief Compliance Officer. Mr. Sullivan objected about apparent improper and unethical stock sales by the company’s Chief Executive Officer and President, William Harnisch. Peconic fired Mr. Sullivan within days after he made this complaint. He then sued, claiming Peconic’s decision to fire him was retaliation in violation of the company’s Code of Ethics.

In an earlier case, Murphy v. American Home Prods. Corp., the New York Court of Appeals found an exception to employment at-will for a lawyer who objected about accounting improprieties at his law firm. The Court allowed the attorney to proceed with his wrongful discharge case. It found there is an implied agreement between attorneys and their law firms that they will each follow professional ethical standards, and that American home Products violated that agreement when it fired Mr. Murphy.

However, in Sullivan the Court of Appeals refused to expand that rule to protect Mr. Sullivan. It indicated that although Murphy is not necessarily limited to the relationship between lawyers and law firms, there needs to be a uniquely close connection between the employment relationship and an ethical obligation that makes the two “incapable of separation.” It found no such relationship between a Compliance Officer and the hedge fund for which he works. It also found there is nothing express or implied in Peconic’s Code of Conduct that prohibits the company from firing an employee for reporting an unethical stock transaction. Accordingly, it found Mr. Sullivan did not have a legal claim, and dismissed his case

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In a noteworthy unpublished employment law decision, earlier this month New Jersey’s Appellate Division upheld a jury award to an employee on a retaliation claim where the primary evidence of retaliation was the fact that the employee’s supervisors were unfriendly to him after he complained about discrimination.

Anthony Onuoha, who is African American, worked for Roche Molecular Systems. In 2006, he complained to Roche’s management because he believed the company discriminated against him by giving him unfair performance reviews and raises. The company’s human resources department investigated his claim, but concluded that his performance reviews and salary were fair.

Worried black businessman.jpgAfter Mr. Onuoha complained about discrimination, his supervisors became unfriendly toward him. For example, one supervisor stopped speaking to him. Mr. Onuoha also received an even worse performance review in 2007. Further, the company denied Mr. Onuoha’s request to take a two-week vacation after he took a 6-week medical leave, claiming there was too much work.

A few years later, in 2009, Roche chose to include Mr. Onuoha in a reduction-in-force and terminated his employment. He then sued, claiming the company discriminated against him because he is an African American, and fired him in retaliation for his complaint about race discrimination, in violation of the New Jersey Law Against Discrimination (LAD).

After a trial, a jury found that Roche had not discriminated against Mr. Onuoha based on his race. However, it found the company fired Mr. Onuoha in retaliation for the complaint he made about discrimination in 2006. He was awarded $512,000 in economic damages, $250,000 in emotional distress damages, plus $305,653.07 for his attorney’s fees and legal costs, for a total judgment of more than a million dollars.

On appeal, Roche argued it was improper for the jury to find Roche retaliated against Mr. Onuoha because of his complaint about discrimination since the jury found the company did not discriminate against him. In Onuoha v. Roche Molecular Systems, the Appellate Division rejected that argument since an employee does not have to win his discrimination claim to prove his employer fired him in retaliation for complaining about discrimination. Rather, an employee only has to prove he reasonably believed in his discrimination complaint, and the employer retaliated against him because he made the complaint.

The appellate court also found there was enough evidence of retaliation to support the jury’s verdict, despite the fact that there was a two year gap between his discrimination complaint and the company’s decision to fire Mr. Onuoha. It primarily focused on the evidence that Mr. Onuoha’s supervisors became unfriendly toward him after he complained about discrimination. The Court also relied on the fact that, although the company could have considered a broader group of employees for potential layoff, it insisted on firing someone from Mr. Onuoha’s group. Accordingly, the court affirmed the jury’s verdict in favor of Mr. Onuoha.

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Last week, in Walker v. Guiffre and Humphries v. Powder Mill Shopping Plaza, the New Jersey Supreme Court upheld the longstanding rule that a plaintiff can receive an enhanced attorney fee award under New Jersey laws that allow a prevailing plaintiff to recover his attorneys’ fees from the defendant. This applies to many New Jersey employment laws, including the New Jersey Law Against Discrimination (LAD), the Conscientious Employee Protection Act (CEPA), and the New Jersey Family Leave Act (FLA).

Legal Fees.jpgThis right to a contingency fee enhancement dates back to Rendine v. Pantzer, a 1995 New Jersey Supreme Court case which discusses an employee’s right to recover his reasonable attorney’s fees if he wins a case under the LAD. After the court calculates the attorneys’ reasonable fee, it must determine whether and how much of an enhancement he should receive. The fee enhancement is intended to make up for the risk a lawyer takes when taking a case on a contingency fee basis. Contingency fee enhancements generally should range between five and fifty percent, and typically range between twenty and thirty-five percent. The maximum possible fee enhancement under New Jersey law is 100 percent, but such a high enhancement is available only in a “rare and exceptional case.”

In contrast, in April 2010, in Perdue v. Kenny A., the United States Supreme Court recognized that, under federal law, an attorney fee enhancement is permitted only in “rare” and “exceptional” circumstances. Fortunately, in Walker and Humphries the New Jersey Supreme Court decided not to follow Perdue, and instead continued to follow Rendine. As a result, employees who bring claims under New Jersey fee-shifting statutes such as the LAD, CEPA and the FLA are entitled to seek enhanced attorney fees. However, employees bringing claims under federal employment laws such as the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Family & Medical Leave Act (FMLA), are rarely entitled to fee enhancements.

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I often read status updates on sites like Facebook, LinkedIn and Twitter reflecting my friends’ feeling about their work, bosses, and co-workers. It is worth a reminder that such postings potentially can be used against you in an employment law case, such as a discrimination, harassment, or retaliation lawsuit. If your profile is public, or if one of your supervisors is your “friend,” your employer will have easy access to that information. But your employer might be able to obtain the information in a lawsuit even if it was originally visible only to individuals who you have accepted as “contacts” or “friends.”

For example, one of my clients recently received the following request from a large law firm that represents employers:

Produce a copy of the contents of Plaintiff’s account on any social media websites, such as Facebook, MySpace, Twitter, LinkedIn, etc.

I intend to object to this request because it is nothing more than a fishing expedition, and the employer is seeking information that is not relevant to the case. But there are many ways in which your posts may be relevant to an employment law matter. For example, if you are having a good day at work and post “I love my job,” that could be used against you to prove you did not experience a hostile work environment, and therefore harm your harassment claim. On the other hand, if you express negative feelings about your boss, co-workers, clients, or customers, then you could be accused of disparaging your employer, which could violate an internal company policy, your employment contract, or your duty of loyalty to your employer.

It is important to realize that, unless you delete it, all of the data you have posted on Facebook, including wall posts, photos with comments, videos, private messages, friend lists and other user profile content, remains accessible in an archive that is fairly easy to retrieve. You can download it from the Account Settings menu. Thus, even very old posts could hurt you if the employment relationship goes bad. Be very careful about what information you post about your job on social networking websites. At the very least, you should not post anything about your current or former employer that you would not want the employer to read.

However, once you are considering filing a lawsuit, you cannot erase your archive because you would be destroying potential evidence in your case, and you could be penalized. For example, in Lester v. Allied Concrete, a plaintiff who prevailed in a wrongful death case was ordered to pay a $180,000 fine for deleting his Facebook profile.

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Under the “cat’s paw” theory, a company can be held liable for discrimination based on the discriminatory intent of an employee who influenced an employment decision, even if the person who actually made the decision did not discriminate. Last month, the United States Court of Appeals for the Third Court Circuit applied the cat’s paw theory and ruled a decision to fire an employee was retaliatory even though it was made by a disciplinary review board that did not intend to retaliate against the employee since the review process began as a result of retaliation. The Third Circuit is the federal appellate court that handles appeals from New Jersey. As I discussed in previous articles, earlier this year the United States Supreme Court adopted the “cat’s paw” theory in federal cases, and the New Jersey Appellate Division adopted the cat’s paw theory in November 2008.

In McKenna v. City of Philadelphia, three police officers sued the Philadelphia Police Department for retaliating against them because they objected to the fact that the Department was discriminating against African-American police officers. One of those Officers, Raymond Carnation, claimed he was assigned to work alone in dangerous neighborhoods in the rain and cold in retaliation for his objections to the race discrimination, and that Police Captain William Colarulo threatened to make his life “a living nightmare” if he filed a complaint with the United States Equal Employment Opportunity Commission (“EEOC”). Eventually, the Department brought disciplinary charges of insubordination against Officer Carnation, supposedly based on verbal altercation with Captain Colarulo. The disciplinary charges were referred to the Police Board of Inquiry (“PBI”), a board that investigates disciplinary charges against members of the Police Department and recommends the appropriate discipline.

The PBI found Officer Carnation guilty of the charges against him, and recommended that the City should fire him. The Police Commissioner agreed with that recommendation, and the City fired Officer Carnation.

After a trial in the civil lawsuit, a jury found in favor of all three of the police officers, including Officer Carnation, concluding the City had retaliated against them in violation of Title VII of the Civil Rights Act of 1964. Specifically, the jury found that Officer Carnation’s objections to race discrimination was a factor that motivated the Department’s decision to fire him.

One of the primary issues on the appeal to the Third Circuit was whether the City could be held liable for retaliating against Officer Carnation even though the decision to fire him was made by the PBI and the Police Commissioner, neither of which had any intention of retaliating against him. The Court explained that an employer can be held liable for retaliation if there is a direct and substantial relation between the retaliatory action and the harm it caused the employee, as long as the link is not “too remote or indirect.” Based on the facts, it concluded that it was reasonable for the jury to conclude that Captain Colarulo’s retaliatory intent had a direct and substantial relation to Officer Carnation being fired, since his actions led to the PBI’s investigation. As a result, it upheld the jury’s verdict in favor of Officer Carnation.

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Earlier today, the New Jersey Supreme Court ruled that employees who are forced to resign as a result of retaliation by their employers in violation of the Conscientious Employee Protection Act (CEPA) may be able to recover lost past and future wages even if they were not fired or constructively discharged. CEPA is New Jersey’s whistleblower law. Among other things, it prohibits employers from retaliating against employees who object to or refuse to participate in activities they reasonably believe are illegal, fraudulent, or violate a clear mandate of public policy regarding public health, safety, welfare, or the environment.

John Seddon, an employee who worked as an operator technician for DuPont, reported numerous workplace safety concerns, and eventually filed a complaint with the United States Occupational Safety and Health Administration (OSHA). DuPont retaliated against him in numerous ways, including verbal abuse, negative performance reviews, putting him on probation, forcing him to take a disability leave, suspending him for 53 days, making false accusations about him, and requiring him to work 12-hour shifts in isolation. The harassment eventually caused Mr. Seddon to suffer a mental breakdown. Unable to work for DuPont any longer, he took a 6-month disability leave of absence, and then began receiving a disability pension.

After a trial, a jury awarded Mr. Seddon $724,000 in economic damages and $500,000 in punitive damages. The trial court also awarded him $523,289 in attorney’s fees, for a total of nearly $1.75 million. However, the New Jersey Appellate Division reversed the verdict, ruling that Mr. Seddon could not recover lost wages under CEPA because he was neither fired nor constructively discharged. A constructive discharge is when an employee is forced to quit because his work environment is so intolerable that any reasonable person in his situation would feel compelled to resign.

But, the New Jersey Supreme Court disagreed that an actual firing or constructive discharge is required for an employee to recover lost wages under CEPA. Rather, the Court ruled that an employee can recover lost wages if his employer’s illegal retaliation caused him to be unable to work. As a result, in Donelson v. DuPont Chambers Works, it restored Mr. Seddon’s judgment.

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Many employment law cases involve employees who are fired in violation of their legal rights. However, companies are often too smart to fire an employee for an illegal reason, and instead try to force them to quit.

Courts understand this reality, and have a name for it: a “constructive discharge.” A constructive discharge is when, instead of firing an employee, a company makes her job so miserable that she is forced to quit.

The Third Circuit recently discussed how an employee can prove a constructive discharge in Colwell v. Rite Aid Corporation. In that case, Ms. Colwell claimed Rite Aid forced her to resign because of her disability, in violation of the Americans with Disabilities Act (ADA), and because of her age, in violation of the Age Discrimination in Employment Act (ADEA). The facts of Colwell are explained in a previous article which discusses a different legal issue — that employers can be required to change an employee’s work shift to accommodate the employee’s disability.

As the Third Circuit explains in Colwell, to prove a constructive discharge an employee must show that the conditions at work were so unpleasant or difficult that a reasonable person would have felt compelled to resign. It then lists relevant factors to determine whether an employee has proved she suffered a constructive discharge. Those factors include whether the employer:

  1. threatened to fire the employee, or suggested she should resign or retire;
  2. demoted the employee;
  3. reduced the employee’s salary or benefits;
  4. transferred the employee to a less desirable position;
  5. changed the employee’s job responsibilities; or
  6. gave the employee an unsatisfactory job evaluation.

The Third Circuit found Ms. Colwell could not prove any of those factors. Rather, she claimed Rite Aid had isolated her from other employees, called her “slow,” and would not allow her to work on the store floor like other employees. The Third Circuit found those facts did not make Ms. Colwell’s workplace so unbearable that a reasonable person would have felt compelled to resign. As a result, it dismissed her constructive discharge claim.

It is important to understand that not every constructive discharge is legally actionable. Rather, an employee has to prove the constructive discharge was because of an illegal reason. For example, a constructive discharge could be actionable if a company forces an employee to resign because of her gender, age, race, pregnancy, or religion, or in retaliation for the employee doing something that is legally protected.

Constructive discharge cases can be challenging to prove because it can be difficult to prove that any reasonable person would have felt they had no choice other than to resign. However, employees whose cases do not meet the constructive discharge standard often have hostile work environment harassment cases. For example, although the Third Circuit found Ms. Colwell could not prove she was constructively discharge, it might have ruled differently if she had instead claimed Rite Aid had harassed her because of her disability and her age.

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