On certification to the Superior Court, Appellate Division, whose opinion is reported at 226 N.J. Super. 518 (1988).
For modification in part, reversal in part and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi, and Stein. Opposed -- None. The opinion of the Court was delivered by Handler, J.
[118 NJ Page 92] This case, brought under the New Jersey Law Against Discrimination, requires the Court to determine whether plaintiffs,
two females who were employed by defendants and who were paid less than male employees performing comparable work suffered unlawful gender discrimination. Plaintiffs filed their complaints in the Superior Court, Law Division. The trial court found in favor of defendants and determined that such gender bias had not been established. The Appellate Division, in a reported decision, 226 N.J. Super. 518, 545 A.2d 185 (1988), reversed and entered judgment in favor of plaintiffs. We granted defendants' petition for certification. 113 N.J. 640, 552 A.2d 165 (1988). Resolution of the major issue posed by this appeal requires an explication of the substantive and procedural standards that should govern gender-discrimination claims based on unequal pay for comparable work.
Plaintiffs, Mary Ann Grigoletti and Phyllis Impellizeri, were both employed by the defendant Ortho Pharmaceutical Corp. ("Ortho"). Grigoletti worked at Ortho from 1977 until 1985; during this time she received four promotions and corresponding pay increases. Most of her work was done in the area of purchasing. She possessed a high-school-equivalency diploma and had attained some college credits. When she left in 1985, her salary was $32,000.
Impellizeri started with Ortho as an executive secretary in 1972. During her career at Ortho she was promoted several times. At the urging of a supervisor at Ortho, she began college studies in the Rutgers evening program and received a B.A. degree in 1982. When she resigned from Ortho in December 1984, her salary was $38,300 as well as an executive bonus and stock awards.
In early 1983, Ortho decided to implement an "all-inclusive" computerized system encompassing every facet of its manufacturing operation, referred to as the Manufacturing Resource Planning Program or Manufacturing Resources Program ("MRP"). Ortho developed an MRP Project Team ("Team")
consisting of four employees and one leader. Defendant Hugh Connor served as the Team leader and was responsible for supervising the Team members and reporting to Ortho's Steering Committee, which included defendant David Williams. The Team originally consisted of the two plaintiffs as well as Ed Struzik and Alexis Jordan. After plaintiffs left Ortho, Michael Esposito was placed on the Team as a module leader. Each Team member was chosen because he or she had proven to be effective in a different area of corporate activity and each was given the title "MRP Project Manager." However, the assignment to the Team was considered a lateral move. The members' salaries were all "frozen" at their prior job levels for the duration of the project.*fn1 The members were committed to the project for two years.
Interpersonal problems plagued the project from the outset. In late 1983 and early 1984, plaintiffs complained to Williams about Connor's management style. Those complaints focused on Connor's obstinate demeanor and his favoritism of Jordan, as well as his continual highly personal criticisms of Grigoletti. Shortly after these discussions with Williams, Ortho brought in an outside consultant to conduct an investigation. The problems were not ameliorated, and Ortho retained another consulting firm to examine the situation. The difficulties persisted. In May 1984 Impellizeri drafted a report for Williams, enumerating the many problems she believed were affecting the project. After Impellizeri submitted this report, Ortho again
engaged the consulting firm. In June 1984, Ortho removed Connor from the Team and replaced him with Elizabeth Robinson, who held the position until the Team completed the project in December 1985.
In December 1984, after Impellizeri had already completed her module implementation, Robinson and Williams joined in a decision to remove Impellizeri from the project. Impellizeri received a performance evaluation of average with no potential and was transferred to the position of contract buyer in purchasing, a position she had held five years earlier. Shortly thereafter, she resigned. In February 1985, prompted by Impellizeri's demotion, Grigoletti decided to leave Ortho.
In April 1986,*fn2 plaintiffs filed separate complaints against the defendants charging unlawful discrimination under the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-12, and wrongful discharge. Grigoletti alleged that the fact that male employees in "equal positions" with "equal responsibilities" earned higher salaries constituted gender discrimination in violation of the LAD; she also asserted that she was sexually harassed, that Ortho's refusal to fairly compensate her and to remedy sexual harassment was a breach of an employment contract embodied in the Company personnel manual, that Ortho breached her employment contract by not paying her overtime, and that she was constructively discharged. Impellizeri contended that the lack of a reasonable merit increase violated the employment contract embodied in personnel manuals distributed to employees; that defendants took retaliatory action against her, in violation of the LAD, for objecting to the harassment of Grigoletti; that retaliatory action in the form of a poor performance rating was a breach of contract; and that she was the victim of age discrimination in violation of the LAD.
The Law Division consolidated the actions, and defendants filed an answer denying the allegations and moving for summary judgment on all issues. Impellizeri moved to amend her complaint to assert a wage-based sex-discrimination claim similar to that alleged by Grigoletti. The court denied the motion. The court then granted defendants' summary judgment motion on the wrongful-discharge claims as well as on Impellizeri's age-discrimination claim. Following a trial on the remaining counts involving gender discrimination, the court found against plaintiffs, reasoning that although the MRP team members performed essentially the same tasks for two years, there was no unlawful discrimination.
The Appellate Division disagreed with the trial court, ruling that the evidence demonstrated gender discrimination based on the payment of unequal salaries to plaintiffs for work that was substantially equal to that performed by others on the team. It ruled that there should be a remand to enable plaintiffs to prove damages and that plaintiffs were entitled to attempt to prove their claims relating to wrongful discharge.
The principal issue raised by this case is whether plaintiffs suffered unlawful discrimination when they received lower wages than male employees performing comparable work. We have before emphasized that discrimination based on gender "is peculiarly repugnant in a society which prides itself on judging each individual by his or her merits." Peper v. Princeton Univ., 77 N.J. 55, 80, 389 A.2d 465 (1978). We have also stressed in the context of gender-employment discrimination the principle that "the overarching goal of the [LAD] is nothing less than the eradication 'of the cancer of discrimination.'" Fuchilla v. Layman, 109 N.J. 319, 334, 537 A.2d 652 (1988) (quoting Jackson v. Concord Ins. Co., 54 N.J. 113, 124, 253 A.2d 793 (1969)); see Erickson v. Marsh & McLennon, 117 N.J. 539, 569 A.2d 793 (1990). Determination of the validity of
claims of wage-discrimination based on gender, as posed by this appeal, invokes not only these concerns, but requires a fresh examination of the substantive and procedural standards that ordinarily govern the resolution of discrimination claims under the LAD.
In a variety of contexts involving allegations of unlawful discrimination, this Court has looked to federal law as a key source of interpretive authority. The substantive and procedural standards that we have developed under the State's LAD have been markedly influenced by the federal experience. In outlining approaches and infusing discrimination claims under the LAD with substantive content, we have adopted the Supreme Court's analysis of unlawful discrimination claims brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 ("Title VII"), most cogently presented in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973). See, e.g., Erickson v. Marsh & McLennan, supra, 117 N.J. at 551, 569 A.2d 793 (applying Title VII analysis to LAD claim charging gender discrimination in failure to promote); Goodman v. London Metals Exch., 86 N.J. 19, 31, 429 A.2d 341 (1981) (applying Title VII analysis to LAD claim alleging sex discrimination in refusing to hire plaintiff); Peper v. Princeton Univ., supra, 77 N.J. at 82-83, 389 A.2d 465 (applying Title VII analysis to LAD claim alleging sex discrimination in discharging plaintiff); see also Shaner v. Horizon Bancorp., 116 N.J. 433, 437, 561 A.2d 1130 (1989) (approving of the use of "federal anti-discrimination statutes" in general, and Title VII in particular, when interpreting the LAD in an age-discrimination case); Clowes v. Terminex Int'l, 109 N.J. 575, 595-96, 538 A.2d 794 (1988) (applying Title VII to LAD claim alleging discriminatory termination of plaintiff because of alcoholism, a physical handicap); Andersen v. Exxon Co., 89 N.J. 483, 446 A.2d 486 (1982) (applying Title VII to LAD claim alleging failure to hire a physically handicapped plaintiff). The Supreme Court itself has also followed McDonnell Douglas in subsequent cases. See, e.g., Watson v. Fort Worth Bank
and Trust, 487 U.S. 977, 108 S. Ct. 2777, 101 L. Ed. 2d 827 (1988); Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981); Dothard v. Rawlinson, 433 U.S. 321, 97 S. Ct. 2720, 53 L. Ed. 2d 786 (1977).
We explained our understanding of the McDonnell Douglas test in Andersen v. Exxon Co., supra:
[t]he McDonnell Douglas approach established the elements of a prima facie case of unlawful discrimination. The plaintiff must demonstrate by a preponderance of the evidence that he or she (1) belongs to a protected class, (2) applied and was qualified for a position for which the employer was seeking applicants, (3) was rejected despite adequate qualifications, and (4) after rejection the position remained open and the employer continued to seek applications for persons of plaintiff's qualifications. Establishment of the prima facie case gives rise to a presumption that the employer unlawfully discriminated against the applicant. The burden of going forward then shifts to the employer to rebut the presumption of undue discrimination by articulating some legitimate, nondiscriminatory reason for the employee's rejection. The plaintiff then has the opportunity to prove by a preponderance of the evidence that the legitimate nondiscriminatory reason articulated by the defendant was not the true reason for the employment decision but was merely a pretext for discrimination. In such cases the ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff; only the burden of going forward shifts.
However, the Court has never embraced the McDonnell Douglas test literally, invariably, or inflexibly. We have recognized that the McDonnell Douglas criteria "provide only a general framework for analyzing unlawful discrimination claims and must be modified where appropriate." Erickson v. Marsh & McLennan, supra, 117 N.J. at 550, 569 A.2d 793; see also Dixon v. Rutgers, 110 N.J. 432, 442, 541 A.2d 1046 (1988) (Title VII standards "can be applied where 'useful and fair' to the state law context in determining whether an unlawful discriminatory purpose is present." (quoting Peper, supra, 77 N.J. at 81, 389 A.2d 465)); Clowes v. Terminex Int'l, supra, 109 N.J. at 595, 538 A.2d 794 (McDonnell Douglas test is usually invoked -- at least as "'as a starting point' for analysis in actions brought under the [LAD]." (quoting Andersen v. Exxon, supra, 89 N.J. at 492, 446 A.2d 486)); Peper v. Princeton Univ., supra, 77 N.J. at 83, 389 A.2d 465 (the McDonnell
Douglas "tests are to be used only where and to the extent that their application is appropriate."). Indeed, in McDonnell Douglas itself, the Supreme Court expressed the need for malleable applications of the standard: "The facts necessarily will vary in Title VII cases, and the . . . prima facie proof required from respondent is not necessarily applicable in every respect to differing factual situations." 411 U.S. at 802 n. 13, 93 S. Ct. at 1824 n. 13, 36 L. Ed. 2d at 677 n. 13.
Our Court has generally applied the McDonnell Douglas test under Title VII to gender-discrimination claims under the LAD, but has never considered the application of that test to a claim alleging gender discrimination consisting of unequal pay for comparable work. The federal experience indicates that this form of unlawful discrimination has, historically, been considered distinctive because remedial measures are available under laws other than Title VII. Specifically, that kind of discrimination can be vindicated under provisions of the federal Equal Pay Act, 29 U.S.C. § 206(d) ("EPA"), the standards and methodology of which differ from those of Title VII.
The difference in the statutory approaches to this form of discrimination can be explained in part by the history and development of the respective federal legislative schemes. Title VII was enacted as part of the comprehensive Civil Rights Act of 1964. 42 U.S.C. § 2000e-2. Its focus was and is on a broad range of discriminatory behavior. It generally proscribes all forms of discriminatory employment practices, both overt and those discriminatory in impact. Title VII sweepingly prohibits employers from "fail[ing] or refus[ing] to hire or to discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment." Id.; see Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S. Ct. 849, 853, 28 L. Ed. 2d 158, ...