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T.L. v. Toys ''R'' US Inc.

Decided: April 16, 1992.

T.L., PLAINTIFF-APPELLANT,
v.
TOYS 'R' US, INC., A CORPORATION, DON BAYLOUS, AND JEFFREY WELLS, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court of New Jersey, Law Division, Bergen County.

Shebell, Skillman and D'Annunzio, JJ. The opinion of the court was delivered by Shebell, J.A.D. D'Annunzio, J.A.D., Concurring. Skillman, J.A.D., Concurring in part, Dissenting in part.

Shebell

The opinion of the court was delivered by

SHEBELL, J.A.D.

In this appeal we are called on to determine whether the alleged unwelcome sexual conduct towards and harassment of this plaintiff by her male supervisor constituted sexual discrimination entitling her to compensatory and punitive damages. We must also decide whether the supervisor's employer should also be held liable. The Law Division Judge in a non-jury trial found that the supervisor's liability was limited to a single non-consensual touching of plaintiff that constituted a battery. The Judge awarded $5,000 in compensatory damages, but denied punitive damages "because there is no evidence that [the supervisor] acted with malice toward plaintiff." The Judge dismissed all claims against plaintiff's employer. We reverse and remand.

On August 27, 1987, plaintiff, T.L., commenced a civil action in the Law Division against her former employer, Toys 'R' Us,

Inc. (Toys 'R' Us), and Don Baylous, plaintiff's supervisor. She alleged injuries and damages resulting from defendants' violations of the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, and Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e to 2000e-17. She also claimed tortious violations of her "body and person" as a result of alleged assaults and improper conduct in the workplace during her employment by Toys 'R' Us. She further alleged intentional interference by Baylous with her contractual relationship with Toys 'R' Us, and negligence in defendants' conduct towards her while she was an employee. She asserted that sexual harassment perpetrated and condoned by the defendants caused her to suffer damages including loss of wages, pension benefits, anxiety, detriment to her health, medical expenses, humiliation, and pain and suffering, and also that she was required to expend attorneys' fees, and costs of suit.

Plaintiff filed an amended complaint on March 23, 1988, wherein she deleted reference to her claims being based in part on Title VII. She filed a second amended complaint on August 25, 1989, adding Jeffrey Wells as a party defendant. Plaintiff alleged that, as supervisor of the Human Resources Department of Toys 'R' Us, Wells directed that plaintiff participate in a face-to-face encounter with defendant, Baylous, causing her lasting psychological harm. She asserted that Toys 'R' Us ratified Wells' intentional and malicious wrongful acts all in violation of the LAD.

The trial, conducted over six days from June 6 through June 14, 1990, revealed that plaintiff began her employment with Toys 'R' Us in August 1981 as a file clerk in the Purchasing Department. Through various promotions she worked her way up to supervisory positions, including Data Entry Supervisor and then Purchase Order Management Supervisor. Plaintiff held this position in November 1985 when Baylous joined Toys 'R' Us as Director of Purchasing Administration. In that capacity Baylous supervised approximately thirty people, including plaintiff. Plaintiff received favorable evaluations and

promotions under his supervision. She was promoted to Systems Analyst for the Purchasing Department in September of 1986, and was in close contact with Baylous on a daily basis, and at least once a week met with him in his office.

Plaintiff, then twenty-seven years of age, noticed what she considered to be offensive sexual conduct by Baylous directed against other female employees in December 1986. However, the first incident complained of as personally involving plaintiff occurred around January 21, 1987. She testified:

Don told me that I should show the order to Frank Pissani. And I remarked that I knew how upset Frank could get when his orders reject especially a three-hundred page Mattel order.

And Don said, well, just lean over his desk and show him your tits, implying that that way Frank couldn't get upset at me.

When asked how she felt when he said this, she stated:

Well, I left the office and headed toward Frank, and all I kept thinking is how weird. That's disgusting that that man would say that to me.

Plaintiff stated that she did not say anything to Baylous for using that kind of language, adding, "I never said anything to Don. I was afraid that I could lose my job."

The next sexually offensive incident plaintiff allegedly witnessed was when she and two other female workers were in Baylous' office, and he noticed that one of the women had worn a dress to work in the morning and changed into jeans after lunch. She stated that "Don put his hands on [the woman's] waist and asked her if she had gone home for a quickie." She explained "[h]e put his hands on her waist and kind of squeezed as he said it, and we all left the office." Plaintiff testified that the woman did not say anything to Baylous.

Plaintiff related that the next incident she remembered, also apparently occurring in January 1987, was when she had a meeting with Baylous. She testified that after the meeting was concluded:

Don stood up walked around his desk and stood by the door. I rose and went to my right a little, and I noticed something out of the corner of my eye out of the

window, and I said, what's going on out there? At this, Don lifted the back of my shirt up over my shoulders. I know my bra strap was exposed, and said, give them a show. And I pulled my shirt down, ran out of the office crying, and I remember running to M.P.

Plaintiff indicated that although she saw scaffolding outside the window and assumed window washers were present, she failed to actually see anyone. Plaintiff worked until the end of the day, although she indicated that she was crying and quite upset. Plaintiff produced other witnesses who testified about her condition immediately following the incident. Plaintiff did not report the incident to any superior or manager at Toys 'R' Us.

The next occurrence was within a short time thereafter. Plaintiff and Baylous were discussing the fact that Baylous was going to get a new boss reputed to have a quick temper. Plaintiff recounted that she said: "[T]hat's all we need, is somebody else with a quick temper, because that makes me nervous." She asserted that Baylous replied: "[W]ell, just stick your tits out at him as if you're brave and act as if you're brave." She described her reaction thus: "Once again, I just got upset, and I don't remember anything except leaving the office." Despite Baylous' comments, plaintiff did not express her distaste, nor did she tell him to stop using that language, explaining: "I was really afraid of Don. I didn't know what would happen if I said something."

She further recounted that around the same time while in her cubicle she saw defendant squeezing a female co-employee's knee. She remembered that the woman pushed his hand away, and that afterwards the woman told her that "she really hated for Don to touch her and especially there because she hated to be touched on the knee."

On January 21, 1987, according to plaintiff's testimony, she and a co-worker were with Baylous at a meeting, when he told plaintiff "[t]o write a memo to cover [her] ass, and then he added because you have such a cute little ass." She said nothing to Baylous about the comment, but the following day

plaintiff went to talk to Baylous' immediate boss, Bill Frankfort, about the incident. Plaintiff was disappointed with the meeting, however, because Frankfort told her not to tell Howard Moore, the Executive Vice President in charge of Purchasing, as he was very straight-laced and a family man and "[h]e also told me to handle it myself." Plaintiff remembered telling Frankfort that she would try, but she really did not think that she could because she had not been able to tell Baylous how she felt up to that time. On January 26, 1987, plaintiff wrote a letter to Frankfort concerning her complaints of sexual harassment. She handed the letter to him in an envelope that same day. However, it appears that Frankfort did not open the letter until after plaintiff left the employ of Toys 'R' Us in April 1987.

Plaintiff, on January 26, 1987, received a call to report to Eric Jonas, Manager of Employee Relations for Toys 'R' Us. At the meeting, plaintiff and a female co-worker, who was present when plaintiff arrived, told Jonas "about the trouble we were having with Don." Plaintiff stated, "I told him the specific incidents of what had happened with me with Don." She stated, "we gave him a list of names of other women who had either themselves said something -- you know, had come to us talking about Don also." She recalled at trial approximately six or seven names that she had given to Jonas as women who were offended by Baylous' touchings or remarks since the department Christmas party in 1986.

Plaintiff told Jonas that she did not want Baylous fired, but just "wanted it stopped." Jonas informed plaintiff that the problem would be more difficult to handle because plaintiff did not want Baylous to know that she had complained. Jonas assured plaintiff, however, that "he could handle it by saying that someone had complained, and that should be enough to make him stop." A few days later, plaintiff met Frankfort in the hall. He told her that Baylous had been spoken to. Plaintiff felt relieved and "figured, good, this is going to be the end of this and that's it."

Plaintiff testified that to her amazement around February 3 or 5, 1987, she was in the office with Baylous having a meeting and

I wasn't feeling very well. And I looked pretty horrible, and I had said to Don -- he had asked me what was the matter. I said I feel like I'm going to pass out. If I pass out, would you kick me into the hall. Something to that effect. And he said --

He said if I passed out, he would take advantage of me.

Plaintiff said that she became upset because she thought if this man was spoken to "[w]hy is he saying this to me?" The next day plaintiff again went to see Jonas and told him of Baylous' remark. She stated that Jonas told her to keep a journal of anything else that happened. She testified that she also told Jonas of a remark Baylous made to her female co-worker that 0 the co-worker had a cute "rump" or "bump." She testified that after her meeting with Jonas she was out sick for approximately one week but that her sister, who also worked at Toys 'R' Us, informed her that "Don came up behind her and rubbed her shoulders while she was on the phone."

During the first week of March, 1987, plaintiff went to Frankfort to tell him that she did not believe that Baylous "had stopped." Plaintiff again reported to Jonas on March 9 and informed him that she was still very uncomfortable because "I felt like if Don had been warned, why did he continue this, why did he make a comment about [co-worker] and why did he say he'd take advantage of me if I passed out." She stated that Jonas told her that she was paranoid and "that it would be worse for me in another job . . . ."

Plaintiff also told Jonas that her husband and father were very upset about how concerned she was and had recommended that she resign. Jonas allegedly advised plaintiff not to resign until she received her bonus check. Jonas also offered to transfer her within the company. She informed Jonas that she did not feel she should have to be transferred because she

worked hard in her department 1 for the past six years and loved her job. She told him that she had not done anything, and, therefore, was not the one who should be transferred. Plaintiff pointed out to Jonas that another employee who had transferred had to wait a long time, and stated, "I don't think that I could physically or emotionally stay in the department much longer."

Plaintiff testified that on March 11, 1987 she was standing in the data-entry office when Baylous walked down the hall, leaned over a low wall, and grabbed a female employee on the arm. She said the woman just pulled away, but "I remember it bothered me." Then, "[t]he next day, Don grabbed me on the arm." She recounted that later on in the afternoon she saw Don "put his hand on [a female employee's] shoulders and squeezed, and then at the same time, let go of [her arm] and grabbed [another woman's] arm and he was saying, oh, you're not going home yet." Plaintiff related that on March 27, 1987, she and Baylous were meeting with another supervisor, and Baylous began the meeting by saying "that the reason [he] and [the other woman] had colds was not because they had been cohorting or cohabitating . . . ."

Plaintiff stated that on April 6 she went 2 to Howard Moore, an Executive Vice-President of Toys 'R' Us, because she was upset that Jonas had called her paranoid and Frankfort was talking to others about her. She told Moore that she felt she "was being forced to leave the company." She stated that she told him everything and that he was upset that this was going on without him knowing about it. She recounted that Moore attempted to contact defendant Jeffrey Wells, head of personnel, but that Wells was at a conference in Florida.

According to plaintiff's testimony, she was called to the Personnel Department later that day to meet with Laurie Lambert. She proceeded to tell Lambert everything that had occurred. Lambert told her that she could have a transfer, but plaintiff again questioned "why should I have to transfer when

I worked so hard for this job that I love after six years of being in this company?" On the morning of April 7, plaintiff gave two-weeks notice to Baylous that she was leaving. He wanted to know why she was leaving. Plaintiff told him it was for personal reasons because she wanted to leave peacefully without having to deal with him knowing it was her.

Later that afternoon plaintiff was summoned again 3 to Lambert's office and was informed that Howard Moore had demanded an investigation and that "he thought [plaintiff] should confront [Baylous] with the problem." Plaintiff was also told that she was summoned because Lambert wanted to offer her a transfer. The personnel employee in charge of transfers was also present in the room.

Plaintiff recounted that a few minutes later there was a knock on the door, and it was Baylous. She felt trapped and became very upset. She told Baylous everything that she had been complaining about "for this period of time from December until April of 87." She testified: "[H]e apologized in the beginning. Then he started to deny things, but I do remember him saying that he would try to keep his hands in his pockets." She said he denied the sweater incident, and she remembers him becoming more and more angry, and she became hysterical.

Plaintiff maintained in her testimony that she could not return to work after the confrontation. She declared "that they took a hostile work environment and made it even worse." Plaintiff claimed that she felt she could not work at Toys 'R' Us anymore because of the confrontation forced upon her. Following her departure 4 from Toys 'R' Us, plaintiff collected unemployment benefits despite the objection of her former employer. Plaintiff remained unemployed until February 1988, when she began to work for a business owned by her neighbor where she was the only employee.

Although plaintiff had no psychiatric care, she was sent to a psychologist by her attorney for evaluation in 1989. The psychologist diagnosed her condition as "a simple phobia" that

could be cured through psychotherapy. He attributed her problem to conditions in the workplace that he concluded amounted to sexual harassment. The psychologist further explained that her "phobia" resulted not only from the direct involvement or touchings of plaintiff by Baylous, but also from her seeing similar events involving her co-workers. He testified:

It may not be that it was herself that was being touched and violated at that point, but after she experienced the personal invasion, after she was either touched or remarks were made against her, hearing about those remarks, hearing that they are continuing, seeing other people being touched, hearing about other people being touched, certainly contributes to the continued feeling of being uncomfortable 5 in that atmosphere.

The psychologist related that the Personnel Department contributed to plaintiff's mental condition because it failed to effectively deal with the problem. The psychologist testified that "[i]n addition to the immediate threat that she felt from Mr. Baylous she felt the threat, she felt the let down, she felt the abandonment of the personnel department, of the personnel office, Mr. Jonas." He opined that the experience of not being supported was an additional insult or second injury and that the confrontation with Baylous was another contributing factor. He acknowledged that plaintiff "is overly sensitive," but asserted she is "[n]ot a hypersensitive person."

Defendant, Baylous, testified that he never lifted plaintiff's sweater or told her to show her breasts to anyone either on that occasion or any other. He "admitted being a very touchy person" but only in a social and not in a sexual way.

Defendant, Toys 'R' Us, presented evidence that Jonas, following the January 26, 1987 meeting with plaintiff, discussed plaintiff's concerns with Baylous' supervisor, Frankfort. Thereafter, Frankfort met with Baylous and advised him that an employee under his supervision 6 had made allegations of sexual harassment; however, as requested, Frankfort did not identify plaintiff or reveal any of her specific allegations. Baylous told Frankfort that he had never been accused of sexual harassment, and no one had ever complained to him about his

conduct. Baylous denied any sexual intent. Frankfort advised him that the complaint involved touching and to be more cautious in his physical contact with the employees he supervised. Jonas also spoke with Baylous and directed him to be careful in the way he approached people. Jonas also refrained from identifying plaintiff or any of her specific complaints. Plaintiff was thereafter advised that Baylous had been spoken to.

Jonas also informed the Director of Employee Relations of plaintiff's accusations against Baylous. In light of plaintiff's assertion that window washers had been outside of Baylous' window during the alleged sweater-lifting incident, the director contacted the company's building maintenance personnel to determine whether work had been done in or about January, 1987. He was advised that the exterior windows of Toys 'R' Us had not been washed during that time period. The director also contacted 7 an outside company that performed window washing services for Toys 'R' Us. He was advised that no work had been undertaken on the exterior windows at that time of year. The director relayed his findings to Wells. Wells testified at trial that no scaffolding of any kind had been used on the exterior of the facility in question during the winter of 1986-1987.

Jonas also testified that after he spoke with plaintiff in January, 1987, he monitored Baylous' interactions with co-workers by making unannounced visits to plaintiff's department. In addition, he met with plaintiff and a number of other parties during February and March, 1987. Plaintiff met with Jonas on March 9, 1987 and stated that nothing had happened to her since the last time they had met. On March 30, 1987, plaintiff met with Jonas and again advised that Baylous had not touched her or said anything offensive to her since their previous meeting. She added, however, that she had a feeling that something was going to happen. Jonas replied that he thought she was "being paranoid," but because of her concern, he offered a transfer to another department. Plaintiff suggested

the possibility of transferring to the Accounts 8 Payable Department and working for her former supervisor; however, she subsequently rejected all transfer offers.

Jonas also contacted at least four of the women who plaintiff identified as being able to corroborate her allegations. These women, according to Jonas, could not confirm that Baylous had done anything that they found inappropriate or objectionable.

Toys 'R' Us alleged that, following plaintiff's departure, it continued its investigation, but that after reviewing all of the information obtained it was concluded that Baylous had not subjected plaintiff or any other employee at Toys 'R' Us to a sexually hostile work environment. Wells asserted he believed that Baylous had occasionally touched female co-workers in an asexual manner and had made a number of joking remarks, but he did not believe that Baylous had ever used the word "tits" in plaintiff's presence, or had lifted her sweater.

In May, 1987, plaintiff's counsel sent Toys 'R' Us a letter requesting an opportunity to discuss the circumstances surrounding plaintiff's resignation. It replied to plaintiff's counsel letters by twice offering to reinstate plaintiff to her former position, or to reemploy her in a comparable 9 position in another department, with no loss of salary or benefits. These offers apparently were not conditioned on plaintiff discontinuing her legal proceedings against defendants. The company's offers were rejected.

The trial Judge, on September 6, 1990, issued a written opinion in which he acknowledged that "the validity of a plaintiff's claim of sexual discrimination requires an extremely fact sensitive analysis." He made what he described as "the following detailed factual statement":

Plaintiff, [T.L.], commenced employment at Toys "R" Us, as a file clerk, in August of 1981. From 1981 through April of 1987, when plaintiff resigned from Toys "R" Us, plaintiff held numerous positions and received several promotions. In November of 1985, Toys "R" Us hired defendant, Mr. Baylous, as the Director of Purchasing Administration. In his capacity as Purchasing Administration Director, defendant, Baylous directly supervised the work of

approximately 30 employees, including plaintiff. In September of 1986, defendant, Baylous promoted [T.L.] from Data Entry Supervisor to Systems Analyst.

On or about December 1986, plaintiff began feeling uncomfortable in the company of defendant, 0 Baylous. Plaintiff alleges that while at a Christmas Party she saw Baylous touch a female employee, [D.A.], on the back. Also, plaintiff heard, during the same party, another female employee, [B.C.], tell Baylous to get his "F__ing" hands off of her. Plaintiff testified that these incidents made her "uncomfortable" in the presence of Baylous.

Plaintiff further testified that in January of 1987 she observed defendant, Baylous, grab the waist of a co-worker, [M.L.], and ask her if she went home for a "quickie" during her lunch break. Defendant, Baylous, did not recall the particular incident but explained that he had made comments to [M.L.] regarding going home for a "quickie" on various occasions. [M.L.] testified that she could not recall the particular incident plaintiff complained of but indicated that such an incident would not offend her. Another Toys "R" Us employee, [J.M.], corroborated plaintiff's testimony and explained that she had observed the "quickie" incident.

During January and February of 1987, the relationship between plaintiff and defendant, Baylous, continued to deteriorate. Plaintiff alleges that during a meeting in Baylous's office, in January of 1987, Baylous 1 lifted the plaintiff's sweater above her bra strap in front of window washers who were on scaffolding outside of Baylous's office. Plaintiff testified that, as Baylous lifted her shirt, he said "give them (the window washers) a show". None of the individuals who testified at trial observed the incident. However, some co-workers recalled seeing plaintiff upset and crying after the incident occurred. Defendant, Baylous, denied the entire event. The defendant, Jeffrey Wells, Toys "R" Us' Vice President of Human Resources, and Richard Cudrin, the Director of Employee Relations at Toys "R" Us, testified that after investigating the situation they discovered that no window washers and no other scaffolding devices were employed by Toys "R" Us in January of 1987.

In addition to the previously mentioned incidents, plaintiff complains that defendant, Baylous, made various inappropriate comments to plaintiff and other female co-workers. On one occasion plaintiff alleges that Baylous told plaintiff she had a "cute little a]". Plaintiff further contends that she heard Baylous tell a co-worker that she had a cute "bump" or "rump". Also, plaintiff complains that Baylous told her to handle difficult 2 male employees by "showing them her t]ts".

Plaintiff further testified that defendant, Baylous, offended her because he touched other female employees, as well as plaintiff, on the arms and the back. Also, plaintiff observed Baylous grab her sister's shoulders. (Plaintiff's sister was, at the time of the touching, a Toys "R" Us employee.)

Plaintiff testified that in January of 1987 she complained that she felt sexually harassed by defendant, Baylous. Plaintiff voiced her complaints to Eric Jonas, the Employee Relations Manager and on a separate occasion plaintiff spoke to William Frankfort, the Director of Merchandise Control and defendant Baylous' immediate supervisor. Plaintiff insisted that no one tell Baylous that she complained about his behavior. Mr. Jonas testified that he

investigated the allegations and found no violations of Toys "R" Us' sexual harassment policy. Nevertheless, Mr. Frankfort spoke to Baylous and told him to be very careful about the manner in which he approached employees. Additionally, Mr. Jonas' testimony indicates that, in March of 1987, Mr. Jonas offered plaintiff a transfer from her department to a comparable position in another department with 3 no change in salary or benefits. Plaintiff declined the offer.

On or about April 6, 1987 plaintiff informed Howard Moore, Executive Vice President, that she intended to resign and give the company two weeks notice. Mr. Moore contacted defendant Wells, who in turn, contacted Ms. Lambert, the Manager of Recruitment and Placement. Ms. Lambert interviewed the plaintiff to further ascertain exactly what plaintiff's complaints were. Ms. Lambert offered plaintiff, for the second time, a transfer from her department to a comparable position in another department with no loss of salary or benefits. Again, plaintiff rejected the offer.

On April 7, 1987, pursuant to Mr. Well's direction, Ms. Lambert arranged a meeting between defendant, Baylous, plaintiff and Ms. Lambert. During the meeting plaintiff confronted defendant, Baylous, for the first time, with the allegations that Baylous sexually harassed plaintiff. Baylous denied the allegations, apologized to plaintiff for any misunderstanding and attempted to convince plaintiff not to resign. After the meeting, plaintiff left Toys "R" Us and ...


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