New Jersey Employment Law Blog

JT's Tire Service v. United Rentals is not, strictly, speaking, an employment law case.  But it affords us an interesting look at an unusual issue under New Jersey's Law Against Discrimination, the linchpin of employment discrimination litigation in the great Garden State.  As you will see, this opinion merits the attention of every business in New Jersey.

The facts are simple.  JT's Tire Service is owned by Eileen Tortorello.  JT's sold industrial tires to the United Rental branch in Piscataway starting in 1998.  In 2005 Hinckes, who managed the Piscataway branch, began to pressure Tortorello for a sexual relationship.  She refused and United stopped buying tires from JT's.  Tortorello got United's work back when she agreed to have lunch with Hinckes, but he continued to threaten her with the loss of business.  His advances became physical.  Payments due to JT's from United were delayed, and eventually ceased altogether.

JT's sued under a section of the LAD which makes it unlawful to discriminatorily refuse to do business with another on the basis of sex (among other things).  

The trial court dismissed the complaint on the theory that United's refusal to do business with JT's was not "on the basis of sex."

The Appellate Division reversed and reinstated the complaint.  The court noted that sexual harassment is a form of sex discrimination and rejected the defendant's argument that Tortorello, as the owner of a business separate from United Rentals, did not need protection from sexual harassment.  The court found that quid pro quo sexual harassment violates the LAD even when the victim is not an employee but someone who is doing business with the harasser.

So the next time you get the idea that you can safely make advances to a supplier --- and threaten to withhold business if you don't get what you want --- think again.  At least in New Jersey, it's against the law.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

Cases brought under the New Jersey Law Against Discrimination [LAD] are known as "fee-shifting"  cases.  This means that --- contrary to the usual rule that each party pays her own attorney's fees --- the prevailing party can ask the court to order that the losing party pay the winner's legal expenses.  Thus, the responsibility for legal fees "shifts" from the winner to the loser.

We usually think of fee shifting awards as requiring that the unsuccessful defendant pay the attorney's fees of a successful plaintiff.  But the law is broader than that and is written in such a way as allow a successful defendant to attempt to shift responsibility for its fees to an unsuccessful plaintiff.  As a practical matter this seldom happens for policy reasons that are beyond the scope of this post.  In the right case, however, fees can be awarded in favor of a defendant that has been put to the expense of defending a case that has been brought in bad faith, that is, with "a reckless disregard or purposeful oliviousness of known facts."

Michael v. Robert Wood Johnson University Hospital was such a case.  The plaintiff claimed that she was a victim of age discrimination and a hostile work environment.  Apparently her proofs were lacking, however.  The trial court dismissed the case, and the Appellate Division affirmed on appeal.  The defendant then sought an award of counsel fees, which the trial court set at $130,000.

In reviewing the fee award, the Appellate Division noted that the unsuccessful plaintiff's ability (or lack of ability) to pay should have been taken into account.  The court noted the strong policy in New Jersey against unduly inhibiting the ability of plaintiff's to file civil rights actions because of their importance.  The court was concerned that plaintiffs not be deterred by the threat of fee awards from bringing valid claims.

The defendant has promised an appeal to the Supreme Court.  The message for now, however, seems clear.  The courts will continue the policy of allowing fee awards against losing LAD plaintiffs only in the most compelling circumstances.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

Yesterday we posted on Sarnowski v. Air Brooke Limousine for its important impact on notice requirements under the FMLA. 

Sarnowski also contains an important reminder about how plaintiff's can establish that they are disabled for purposes of the New Jersey Law Against Discrimination. 

The trial court had dismissed Sarnowski's disability claim because he had not offered testimony from an independent expert witness to establish that he was disabled within the meaning of the statute.  The Court of Appeals made short work of that decision, noting that in New Jersey disability can be established through the testimony of treating physicians and other competent medical evidence.  Sarnowski had presented plenty of evidence to establish that he was disabled, so the appeals court reinstated his disability claim.

Sarnowski v. Air Brooke reminds us that the NJ courts take a common sense approach on issues of disability and entitlement to medical leave.  Businesses that want to avoid problems in these areas will be sensitive to the judicial approach and will tailor their policies and procedures to accommodate them, rather than trying to to force upon their employees rigid and restrictive policies that are designed to reduce rights granted by law (or if if not designed to, have the effect of doing so).   

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

A common issue in employment discrimination litigation is the importance that should attach to comments made by representatives of the employer as evidence of discriminatory intent. Employers often argue that comments that might otherwise be seen as discriminatory should be disregarded as "stray remarks." Courts have struggled to find a coherent definition of stray remarks that fairly balances an employer's interest in being held liable only where it is proven to have a discriminatory intent against an ex-employee's interest in being allowed to prove discriminatory intent through the words of the employer's agents.

The Court of Appeals for the Second Circuit recently addressed the stray remarks issue in a helpful way.  The case is Tomassi v. Insignia Financial Group, Inc.  When Patricia Tomassi was 60 she was hired as Supervisor of Resident Services for a large apartment complex.  Soon thereafter, her supervisor, Mr. Stadmeyer, began to refer to her age.

Stadmeyer would begin sentences with “In your day and age. . . and suggest that Tomassi related well to and "could understand the mentality" of PCV/ST's senior residents.  Stadmeyer also repeatedly asked Tomassi whether she would be better off retiring so she could "take time off to rest."  According to Tomassi's deposition testimony,  "[H]e would ask me if I ever thought about retiring. He would ask me if I thought I could keep up with some of the work. He asked me if I was tired of working. . . [W]asn’t it time to retire, did I ever think about retiring. Tired of the commute."  Tomassi asserted that Stadmayer made such age-related comments to her “once a month, [or] once every couple [of] months."

Over the next couple of years Tomassi received raises and a promotion.  Her performance evaluations were good, although there was a criticism of the quantity of work that she produced.  Insignia, however, wanted a younger workforce for business reasons.

Tomassi was fired at age 63 and was replaced by a 25 year old.  Stadmeyer falsely told her that he had hired someone with website experience to take over her responsibilities.  He later testified that she was not doing her job effectively and efficiently.  More, Stadmeyer  told Tomassi that he terminated her because she didn't want to work long hours any more and would be better off with a part-time job, perhaps working with seniors.

The trial court entered summary judgment in favor of the defendants on Tomassi's age discrimination.  It held that Stadmeyer's statements were stray remarks that were insufficient to support the age discrimination claim.

The court of appeals reversed and sent the case back for a trial.  For example, Stadmeyer’s assertion to the effect that Tomassi was well suited to work with seniors was not offensive. Nonetheless, it had a strong tendency in the circumstances to show that Stadmeyer believed that, because of Tomassi’s age, she was not well suited to deal with the younger tenants Stadmeyer was hoping to attract.

The relevance of discrimination-related remarks does not depend on their offensiveness, but rather on their tendency to show that the decision-maker was motivated by assumptions or attitudes relating to the protected class. Inoffensive remarks may strongly suggest that discrimination motivated a particular employment action.

Because a jury could reasonably construe Stadmeyer's remarks to be evidence of age discrimination, the Second Circuit held that a trial was required.

Managers and HR professionals should not be lulled into a false sense of security by the stray remarks doctrine.  While the doctrine itself remains in effect, the Tomassi case makes clear that it will be applied by the courts on the facts of the particular case.  In short, there is no bright-line rule that managers can use to determine when their comments will be considered to be stray, and therefore harmless, and when they will be considered as evidence of discrimination.

Posted In Age Discrimination , Law Against Discrimination (LAD) | Comments (0) | Permalink |

Our last post discussed the enhanced proof that plaintiffs must present to win a claim for retaliation.  This post deals with the tax treatment of the award when plaintiffs win.  The U.S. Tax Court recently decided the question in Green v. Commissioner of Internal Revenue. 

The court began with the proposition that all income is considered to be taxable unless specifically excluded.

A legal award may be excluded from income if two conditions are met. A legal award may be excluded if the underlying cause of action is based upon tort or tort-type rights, and if the proceeds were for damages received on account of personal physical injury or physical sickness. Emotional distress is not a personal physical injury or physical sickness.

 The first condition --- vindication of tort-type rights --- was met.  The second --- personal physical injury or sickness --- was not.  The court reviewed the jury award and found it to consist primarily of compensation for loss of earnings and loss of employment opportunities.  A portion of the award was to compensate for non-economic injuries such as damage to reputation and emotional distress.  There was no evidence of actual medical injury. 

Thus, the court found that the entire award was subject to income tax. 

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

The NJ Supreme Court recently established a new and more difficult standard for plaintiffs to prove claims of retaliation or reprisal under the Law Against Discrimination [LAD]. The case is Carmona v. Resorts International Hotel, Inc.

The LAD contains an anti-retaliation provision, which makes it an unlawful employment practice to  "take reprisals against any person because . . . that person has filed a complaint, testified or assisted in any proceeding under this act . . .."  Notice that the language of the statute does not refer to the reasonableness or viability of the complaint.  The plain language of the statute suggests that the mere fact of making a complaint under the LAD can insulate an employee from retaliation by his employer, and it is probably fair to say that this is how the law was understood by most New Jersey employment lawyers.

That changed with the Carmona decision.  Drawing upon federal caselaw, and the anti-retaliation provision of CEPA --- New Jersey's whistleblower law --- the Court held that employees who sue their employers for retaliation now must prove that their underlying complaint of discrimination was reasonable and made in good faith.  The Court recognized that it was adding a new requirement to the statute.

We recognize this requirement as an element of plaintiff’s required proofs in a LAD-retaliation claim because its absence may well lead to abuse. Common sense tells us that the Legislature could not have intended that the LAD provide a safe harbor to one who files a baseless, meretricious complaint. It also tells us that the LAD cannot protect one who preemptively files a complaint solely in anticipation of an adverse employment action by the employer. The LAD was and is intended as a shield to protect employees from the wrongful acts of their employers, and not as a sword to be wielded by a savvy employee against his employer.

This decision provides additional protection from liability for employers, while making it more difficult for employees to avail themselves of the protection of the LAD.  Since discriminatory intent often cannot be discerned conclusively without the benefit of discovery and a trial, it will be interesting to see how plaintiffs' attorneys cope with the enhanced standard of proof that they must meet to prove their clients' claims for retaliation. 

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

Tarr v. Ciasulli is a sexual harassment case between a female employee and her ex-employer, an automobile dealership.  This long-running drama has spawned two published opinions, the more recent one having come down on February 26.

The new opinion deals with the circumstances in which punitive damages can be awarded.  In short, the court held that under the Punitive Damages Act, punitive damages cannot be enhanced based upon an argument that awarding punitives against a particular defendant (Ciasulli) will deter other employers from engaging in similar unlawful behavior.

Punitive damages retain their deterrent nature.  An employer can look at the award against Ciasulli, for instance, and conclude that he should not make the same mistake.  However, it is now improper for a court to charge a jury that the punitive damages award against Ciasulli should be enhanced in order to increase its deterrent effect.

There was a dissenting opinion by Judge Sapp-Peterson, which gives a right of appeal to the Supreme Court.  We shall see whether the case makes its second trip to New Jersey's highest court.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

The Newark Star-Ledger reports today that the New Jersey Law Against Discrimination has been amended to protect from discrimination transgender persons.

"The bill (S-362) defines transgendered individuals as having or perceived as having a different gender-related identity or expression than the one typically associated with a person's sex at birth."

We haven't seen the full bill yet, but will report more when we do.

In the meantime, since the LAD is among the primary laws that affect the employment relationship in New Jersey, employers need to know that there is another protected class of persons of which to be aware in making personnel decisions. 

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

We had the question arise recently whether nepotism in hiring into a public sector job violates the Law Against Discrimination. The New Jersey Supreme Court decided the issue in the negative in 2005. The case is Bumbaca v. Township of Edison, and the court held that the LAD's prohibition against discrimination on the basis of "familial status" does not prohibit nepotism. The court noted that federal courts have reached the same result under Title VII of the Civil Rights Act. The basis of the decision was simple statutory interpretation. In effect, the court held, if the Legislature had meant to address nepotism, it would have said so.

The court did "not endorse nepotism to the extent that it promotes hiring on a basis other than merit, [but] the practice is clearly not prohibited by the LAD . . .."

Similarly, the court found that there is no public policy against nepotism in NJ.

Maybe this is a decision that the Legislature should re-think.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

In early June the New Jersey Supreme Court decided Potente v. County of Hudson, in which the plaintiff sued his employer for handicap discrimination under the LAD. Among the holdings of this case: (1) prejudgment interest is a remedy that is available to plaintiffs in LAD cases; (2) prejudgment interest is available against public entity defendants in LAD cases.

Of interest primarily to lawyers, the Supreme Court reversed a directed verdict for the defendant in this case. It did so by finding that reasonable minds could differ about whether the defendant engaged in a discussion with plaintiff on the subject of reasonable accommodation. In a "he said, she said" dispute over the facts, the Court found that the plaintiff's denial that such a conversation took place raised a question of fact that had to be resolved by a jury.

What's the impact on business? First, the stakes in LAD cases just got higher, since prejudgment interest over time can add up to a lot of money. Second, public entities no longer can argue that they are exempt from prejudgment interest. Third, cases just got a little easier for plaintiffs to prove. All of these are things that should be considered early on when businesses decide whether and how to defend against LAD cases.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |

A recent article in Lawyers USA notes that the EEOC is falling way behind in its processing of cases. The EEOC's own numbers project a backlog of 48,000 cases in 2007. Budget reductions and a hiring freeze are the apparent culprits.

The situation has implications for the victims of discrimination, since federal anti-discrimination laws typically require that administrative remedies (that means an administrative complaint with EEOC or a coordinate state agency) be used before a complaint can be filed in federal court.

The problem is not as serious for plaintiffs in New Jersey as elsewhere since the New Jersey Law Against Discrimination does not require an initial visit to an agency before going to court. And the LAD is generally more favorable to plaintiffs than the federal laws, especially in the availability of damages, so most NJ plaintiff lawyers usually choose to file in state court under the LAD.

Posted In Employment Law News , Law Against Discrimination (LAD) | Comments (0) | Permalink |

In an unpublished opinion, the Appellate Division has rejected the appeal of Judge Francine Schott, a Superior Court trial judge. Judge Schott, who sits in Essex County, claimed that the court discriminated against her on the basis of gender and retaliated against her when she complained, allegedly in violation of the New Jersey Law Against Discrimination [LAD]. The New Jersey courts have a policy of occasionally transferring judges among the court's various divisions: civil, criminal, and family. Transfers are made by the Chief Justice of the Supreme Court, with input from the Administrative Office of the Courts and local assignment judges. They can be made for a variety of reasons, including the manpower needs of the court at a particular point in time.

Judge Schott's interest was in being a respected jurist who handled civil cases; her complaint stemmed from a reassignment to what she perceived as the less desirable criminal division. Upon transfer, she also lost the largely ceremonial title of Executive Judge. Male judges, she claimed, were treated better, and other female judges from Essex County filed affidavits supporting Judge Schott's charges.

As might be expected, the parties were represented by experienced and capable employment counsel.

The trial judge dismissed Judge Schott's complaint, finding that she had not alleged an "adverse employment action" as is required to prove a LAD claim. The Appellate Division affirmed, finding that her transfer to the Criminal Division was a lateral move, not a demotion. The court also found that her loss of the Executive Judge title "had no impact on tangible benefits or opportunities available to her and thus could not objectively be considered materially adverse."

This may not be the end of the story. Judge Schott's attorney has said that she will appeal to the New Jersey Supreme Court.

Posted In Law Against Discrimination (LAD) | Comments (0) | Permalink |