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Lally v. Copygraphics

Decided: March 13, 1980.


On appeal from the Department of Labor and Industry.

Lora, Antell and Pressler. The opinion of the court was delivered by Pressler, J.A.D. Antell, J.A.D. (dissenting).


This appeal raises novel and significant questions as to the nature of the remedies available to an employee who has been discharged or otherwise discriminated against by his employer in retaliation for his pursuit of workers' compensation benefits. More particularly, we are here called upon to interpret N.J.S.A. 34:15-39.1 et seq. , which speaks to employer retaliation and to determine the remedial scope of that legislation, the manner in which it was intended to be implemented, and whether or not a judicially cognizable cause of action for compensatory and punitive damages based upon such retaliation is created by or exists independently of that enactment.

The problems with which we are now confronted have reached us by way of a circuitous and markedly unproductive procedural route which is symptomatic of the substantive and procedural

uncertainties engendered by the less than definitive manner in which the legislation has been drafted. Accordingly, these problems are most readily appreciated against the backdrop of the statutory enactment. Adopted in 1966 and heretofore unconstrued, the legislative scheme provides as follows:

34:15-39.1 Unlawful discharge of, or discrimination against, employee claiming compensation benefits; penalty

It shall be unlawful for any employer or his duly authorized agent to discharge or in any other manner discriminate against an employee as to his employment because such employee has claimed or attempted to claim workmen's compensation benefits from such employer, or because he has testified, or is about to testify, in any proceeding under the chapter to which this act is a supplement. For any violation of this act, the employer or agent shall be punished by a fine of not less than $100.00 nor more than $1,000.00 or imprisonment for not more than 60 days or both. Any employee so discriminated against shall be restored to his employment and shall be compensated by his employer for any loss of wages arising out of such discrimination; provided, if such employee shall cease to be qualified to perform the duties of his employment he shall not be entitled to such restoration and compensation.

34:15-39.2 Additional penalty; summary recovery

As an alternative to any other sanctions herein or otherwise provided by law, the Commissioner of Labor and Industry may impose a penalty not exceeding $1,000.00 for any violation of this act. He may proceed in a summary manner for the recovery of such penalty, for the use of the State in any court of competent jurisdiction.

34:15-39.3 Liability of employer for penalty

The employer alone and not his insurance carrier shall be liable for any penalty under this act.

Plaintiff Jo Ann Lally was, in 1975, an employee of defendant Copygraphics, a division of United States Printing Ink Corporation. She alleges that in March of that year she sustained minor injuries of her right eye and left foot in a work-connected accident. It is her further allegation that when she presented to her employer her bills for her medical treatment, she was advised that if she persisted in making "this kind of trouble" by attempting to obtain workers' compensation benefits, she would

be discharged. She persisted, she claims, and she was discharged. She accordingly brought an action against Copygraphics in the Superior Court, Law Division, by way of a complaint expressly relying upon N.J.S.A. 34:15-39.1 and seeking both compensatory and punitive damages.

Shortly before the scheduled trial of the action defendant moved for dismissal of the complaint on the ground that it failed to state a claim upon which relief could be granted. R. 4:6-2(e). The trial judge, in considering the motion, noted that the New Jersey Administrative Code sets forth a procedure for the processing of discrimination complaints, providing for the filing, in prescribed form, of a complaint pursuant N.J.S.A. 34:15-39.1 with the Director of the Division of Workers' Compensation, N.J.A.C. 12:235-11.1 to 11.3; an investigation thereof by the Division, N.J.A.C. 12:235-11.4, and an authorization to the Commissioner of the Department of Labor and Industry, upon receipt of the complaint and investigation results, to "take such action pursuant to N.J.S.A. 34:15-39.1, and so forth, as he deems necessary," N.J.A.C. 12:235-11.5.

Relying on these Code provisions, the trial judge concluded that N.J.S.A. 34:15-39.1 et seq. and its implementing rules were both substantively and procedurally preemptive and that exclusive jurisdiction to deal with plaintiff's grievance accordingly resided in the Director of the Division of Workers' Compensation, Department of Labor and Industry. He accordingly transferred plaintiff's claim to the Director "for appropriate action under the administrative code" and expressly limited her right to damages to those prescribed by N.J.S.A. 34:15-39.1.*fn1 Plaintiff's

motion for leave to appeal the transfer order was denied by this court*fn2 and plaintiff submitted her complaint to the Division of Workers' Compensation.

Some months following her submission plaintiff received a letter over the signature of the designee of the Commissioner of Labor and Industry, purporting in this cryptic fashion, to dispose of her complaint:

I have considered your complaint and the report of the representative who was assigned by the Division of Workers' Compensation to investigate the matter, and I have decided not to impose the alternative penalty permitted under N.J.S. 34:15-39.2.

My decision relates only to the discrimination complaint filed by you with this Department; and not to any other proceeding that you may deem appropriate under N.J.S. 34:15-39.1 et seq., or to the merits of any petition filed or to be filed for workers' compensation.

Confronted with the anomaly of the court regarding the agency as exclusively empowered to grant compensatory relief and the agency regarding the court as exclusively empowered to do so, plaintiff's attorney sought further clarification from the Commissioner. The response of his designee left no doubt that under his construction of the statute, compensatory relief could, despite the remedial tenor and jurisdictional implications of the afore-cited regulations, come only from a court. His letter of clarification offered this explanation:

N.J.S. 34:15-39.2 permits the Commissioner of Labor and Industry to impose an " alternative " sanction of a penalty not in excess of $1,000, but such alternative remedy does not empower the Commissioner to restore a worker to a job or give the worker back pay resulting from any discrimination if the Commissioner

determines that an employee has been discriminated against by an employer for participating in a Workers' Compensation proceeding. Please note that if the Commissioner imposes the penalty permitted by N.J.S. 34:15-39.2, there are no back pay or job restoration rights available for the worker under N.J.S. 34:15-39.1, containing sanctions of fines, imprisonment, back pay, job restoration, etc., that can only be imposed by a Court.

Accordingly, I decided for the Commissioner not to consider Mrs. Lally's complaint under the "alternative" sanction provision of N.J.S.A. 34:15-39.2 and to leave you and your client, Jo Ann Lally, free to resolve her individual rights under N.J.S.A. 34:15-39.1. This letter relates solely to the discrimination complaint filed by Mrs. Lally and not to any other proceedings that you or she may deem appropriate or to the merits of any petition filed or to be filed on her behalf under the Workers' Compensation Law.

Having been left without the recourse of pursuing a remedy by the jurisdictional deference of the court and the agency to each other, plaintiff appealed both from the court's order of transfer and from the Commissioner's refusal to proceed with the merits of her complaint. We have concluded, for the reasons hereafter set forth, that the most rational solution to this impasse consistent with apparent legislative intent and the public policy sought to be advanced by the anti-retaliatory statute is to hold that an employee has a judicially cognizable cause of action for compensatory and punitive damages against his employer for retaliatory discrimination and that such action is not preempted by any primary or exclusive agency jurisdiction or by any other provision of the statutory complex.

Articulation of our reasons for so concluding requires a brief foray into historical overview. The evil to which N.J.S.A. 34:15-39.1 et seq. is addressed surfaced, at least as a matter of judicial attention, relatively late in the development of the law of workers' compensation, and the proliferation of decisional law dealing with the remedial ...

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