Articles Posted in Wrongful Discharge / Wrongful Termination

I was quoted in New Jersey Business Magazine’s September 2017 edition in an article about mass layoffs.  You can read the article, Handling Business Closings and Layoffs, online.

In the article, I discuss the fact that employers often use mass layoffs to hide discrimination or retaliation.  Specifically, it is common for companies to wait until they are having a reduction in force or layoff before they fire individuals who may have legal claims.  They do this in an effort to disguise the real reasons they chose to terminate the employment of those workers.

But while including an employee in a reduction in force might disguise the company’s real motive for firing them, it remains unlawful for an employer to select an employee due to his or her age, gender, race, disability, pregnancy, or another unlawful factor.

The United States Supreme Court recently ruled that in constructive discharge cases the 45-day deadline for federal employees to contact the United States Equal Employment Opportunity Commission (“EEOC”) begins on the day the employee resigned.  A constructive discharge occurs when an employee resigns after the “working conditions become so intolerable that a reasonable person in the employee’s position would have felt compelled to resign.”

Title VII is a federal law that prohibits employers from discriminating based on race, color, religion, sex and national origin.  It also prohibits employers from retaliating against employees because they complained about one of those forms of discrimination.

One of the requirements for a federal employee to bring a claim under Title VII is that he has to contact an EEOC counselor within 45 days after the “matter alleged to be discriminatory.”  Notably, for employees who work for private companies or the state or local government in New York or New Jersey there is a longer 300 day deadline to file a Title VII claims with the EEOC.  Likewise, there is a 2 year statute of limitations to file claims under the New Jersey Law Against Discrimination and a three year statute of limitation under the New York State Human Rights Law.

I am pleased to report that I recently settled an employment law case against the Borough of Bogota, New Jersey for $2.25 million on behalf of my client, Police Officer Regina Tasca. I handled the case with my co-counsel, Catherine M. Elston, Esq.

Our client was the first and only female police officer in the history of the Bogota Police Department. She began working for Bogota in January 2001. Until April 2011 she had a virtually unblemished record.

In May 2011, Bogota suspended her, claiming she was unfit for duty based on an unspecified psychological disability. Bogota subsequently brought disciplinary charges against her, claiming she was not fit for duty and had engaged in misconduct during two incidents in April 2011. Following a 12 day internal disciplinary hearing, the Borough Council voted to terminate her employment, effective October 18, 2012.

There is no one way to predict the precise value of an employment law case before a trial. Among other things, juries do not necessarily use any particular formula, and verdicts often represent compromises. However, it is possible to estimate what you might receive if you win your case at a trial.

Economic Damages

To estimate your economic damages in a wrongful termination case, you need to calculate your total annual compensation (salary, bonus, commissions and benefits) from the job you lost. Unless you use an expert, this is likely to require you to estimate the value of some of your lost benefits, and to make assumptions about future raises, discretionary bonuses and commissions.

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.

The 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.

Last 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.

Continue reading

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.

Specifically, 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

Continue reading

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).

This 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.

Continue reading