Articles Posted in Wrongful Discharge / Wrongful Termination

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.

Today, a new employment law, the New Jersey “Emergency Responders Employment Protection Act,” goes into effect. The new law makes it illegal for employers to fire or suspend an employee who fails to report for work because (1) the employee is actively engaged in responding to an emergency alarm, or (2) the employee is serving as a volunteer emergency responder during a state of emergency declared by the President of the United States or the Governor of New Jersey. The law defines volunteer emergency responder as members of volunteer fire companies, first aid squads, rescue squads, ambulance squads, and county or municipal Office of Emergency Management, whose official duties include responding to fires or other emergency calls.

A volunteer emergency responder must meet two additional requirements to be protected by this law:

(1) at least one hour before they are scheduled for work, they must provide notice to their employers that they are providing emergency services in response to an emergency alarm or a state of emergency; and

When an employee wins a wrongful termination lawsuit, the judge or jury is supposed to award economic and emotional distress damages that compensate the employee for his or her losses. In particular, damages for past and future lost wages and benefits are supposed to compensate the employee for the economic losses caused by the illegal discrimination or retaliation. Courts often refer to this as making the employee whole.

However, because higher incomes are taxed at higher rates, an employee who receives an award for lost wages can end up paying much more in taxes than she would have paid if she had not experienced the discrimination or retaliation. In those cases, employees are not made whole for their economic losses. Rather, they end up with less money in their pockets after taxes than if the unlawful employment practice had not occurred.

For example, if an employee making $100,000 per year is illegally fired, a jury might award her $400,000 for past and future lost income. That individual would receive the $400,000 in one lump sum, rather than the $100,000 per year she would have received if she had remained employed. But because the income tax rate increases as your total annual income increases, that individual would pay significantly more in taxes than if she had remained employed and received $100,000 each year. The higher the total lost wages award, the greater the impact of this problem.

On December 16, 2008, in the case of Tartaglia v. UBS PaineWebber, the New Jersey Supreme Court expanded the scope of the claim of wrongful discharge in violation of public policy.

Before explaining the significance of the Tartaglia decision, it is important to understand the claim of wrongful discharge in violation of public policy. The New Jersey Supreme Court first recognized that claim in 1980, when it ruled that it is unlawful to fire a New Jersey employee in if the termination violates a clear mandate of public policy. Specifically, that prohibits a company from firing an employee for objecting to an illegal corporate policy or practice, or for refusing to engage in an illegal activity. It also prohibits companies from firing an employee for blowing the whistle on, or refusing to engage in, acts that are not illegal but violate a clear mandate of public.

A few years later, in 1986, the New Jersey legislature passed the Conscientious Employee Protection Act (CEPA). CEPA prohibits a broad range of retaliatory employment actions, such as making it unlawful to fire an employee for objecting to or refusing to participate in an activity he or she reasonably believed was fraudulent, criminal, violated the law, or was incompatible with a clear mandate of public policy concerning public health, safety or welfare, or the protection of the environment.

What Does it Mean to Mitigate Your Damages?

In a discrimination, retaliation, or other wrongful termination case, the largest component of your damages is often your lost wages. The starting point to calculate those damages is to figure out how much you would have received from your former employer if you had not been fired.

However, the law requires you to mitigate your economic losses, meaning you must make reasonable efforts to replace your lost salary and benefits. Accordingly, your economic damages will be reduced by what you earn from a new job you find to replace the job you lost, as well as any additional amount you could have earned if you had made a reasonable (or more reasonable) effort to find another job.

Employee Rights Laws
Part 4: Overview of New York Employment Law Statutes

In most states, including New York, unless you have a written employment contract, are a member of a labor union, or are a civil service employee, you are probably an employee at will. Employment at will is the general principal that your company can fire you for any reason, or even for no reason at all. It also means you can quit your job for any reason.

Fortunately, federal, state, and local laws create many exceptions to employment at will that give employees significant protection from an unfair or arbitrary termination. This, the fourth and final part of a four part series, looks at employee rights under New York State and New York City law. The first part of the series discusses some of the most important federal anti-discrimination laws. The second part describes many other important federal employment laws. Part three addresses many important exceptions to employment at will under New Jersey law.

Employee Rights Laws Part 2: Overview of Other Federal “Wrongful Termination” Employment Laws

In most states, including New York and New Jersey, unless you have a written employment contract, are a member of a labor union, or are a civil service employee, you are probably an employee at will. Employment at will is the general principal that your company can fire you for any reason, or even for no reason at all. It also means you can quit your job for any reason.

Fortunately, federal, state, and local laws create many exceptions to employment at will that give employees significant protection from an unfair or arbitrary termination. This, the second part of a four part series, discusses many other important federal wrongful termination” laws. The first part of the series discusses some of the most important federal anti-discrimination laws. Part three addresses some of the most important exceptions to employment at will under New Jersey law. Part four reviews employee rights laws under New York State and New York City law.