On certification to the Superior Court, Appellate Division, whose opinion is reported at 269 N.J. Super. 11 (1993).
Justices O'hern and Stein join in Justice HANDLER's opinion in its entirety. Justice Pollock has filed a separate opinion, in which he joins all of Justice HANDLER's opinion except for Part III (Punitive Damages), from which he Dissents. Justices Clifford and Garibaldi join in Justice POLLOCK's opinion. Chief Justice Wilentz did not participate.
[138 NJ Page 409] The opinion of the Court was delivered by
In this case, a non-tenured public school industrial arts teacher claimed that his employer, the local board of education, through its supervisory employees, retaliated against him by not rehiring him as a tenured teacher because he complained about inadequate health and safety conditions in the school's metal shop. The teacher filed a complaint against the board of education alleging that its conduct violated the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -9 (CEPA). The board contended that it was not vicariously liable for the actions of its school officials.
The case is before the Court on our grant of the petition for certification filed by the board of education, and the appeal as of right filed by the teacher under Rule 2:2-1(a)(2), based on a Dissent in the Appellate Division, whose opinion is reported at 269 N.J. Super. 11 (1993).
The major issues presented on the appeal are whether a local board of education may be held vicariously liable for the retaliatory acts of its school officials in an action brought under CEPA and whether punitive damages are available in such an action.
In September 1985, plaintiff, Joseph P. Abbamont, Jr., was hired by defendant, Piscataway Township Board of Education (board), to teach industrial arts. Plaintiff was employed by defendant in Quibbletown Middle School for the 1985-86, 1986-87, and 1987-88 school years.
From the beginning of his employment, plaintiff expressed concern about the poor health and safety conditions of the metal shop, including broken machines, lack of air ventilation, inadequate lighting, and slippery floors. In either December 1985 or January 1986, plaintiff completed a required safety inspection checklist in which he listed a number of items as "unsatisfactory," including the air ventilation. That form was sent to Edward McGarigle, Principal of the Middle School, and the Industrial Arts
Supervisor for the District, Jerry Papariello. Later that month, plaintiff again raised health and safety concerns about the metal shop with McGarigle. In January 1986, Dr. John Coogan from the State Department of Education inspected plaintiff's shop as part of a State monitoring team; plaintiff informed him of the health and safety problems. 269 N.J. Super. at 16.
In February 1986, according to plaintiff, he and McGarigle met, at which time the two agreed that plaintiff would teach plastics instead of metals. However, plaintiff expressed concern about the lack of air ventilation because, like metal-shop machinery, plastics machinery creates fumes and requires separate ventilation hoods. Again, in June 1986 and June 1987, when plaintiff submitted his list of needs for the upcoming school year, he requested repair of the ventilation system. Id. at 17. The ventilation system, however, was not repaired in September 1987. Plaintiff complained to Papariello and McGarigle again.
On October 19, 1987, plaintiff and the wood shop teacher, Carl Schweitzer, sent a joint letter to Superintendent of Schools Burt Edelchik asserting that they had been having problems with repair and replacement of broken equipment in the shops and that they could not get responses from either McGarigle or Papariello. Edelchik responded by requesting more information, and plaintiff and Schweitzer responded to that request in an October 27, 1987 letter, which included all their requests to McGarigle and Papariello since plaintiff's hiring. Plaintiff sent copies of the Edelchik correspondence to McGarigle and Papariello. Ibid. Edelchik later informed plaintiff that "most of the things were taken care of" because he had met with McGarigle and Papariello. Ibid.
During the fall of 1987, plaintiff began to experience dizziness, nausea, headaches, coughing and trouble breathing. He was diagnosed as having a pulmonary condition. Ibid. Plaintiff continued to operate the shop machines until December 1987, when a student in plaintiff's plastics course collapsed, allegedly from the fumes in the shop.
On January 3, 1988, plaintiff wrote to Edelchik again, recounting his concerns about the health and safety conditions in the shop, reporting his and his student's health problems, and requesting that OSHA check the shop for air quality and other safety hazards. Id. at 18. A copy of that letter was sent to McGarigle along with a statement that plaintiff would no longer use the plastics machines until the ventilation problems had been addressed, and a suggestion that the plastics course be changed to technical drawing. Edelchik informed plaintiff that an air-quality check would be completed to determine whether the shop was safe, and that he should immediately shut down the plastics machines to avoid exposing the students to anything that plaintiff thought would be dangerous.
On January 15, 1988, plaintiff wrote to Dr. Virginia Brinson, the Middlesex County Superintendent of Schools, "telling her who I was and what my problems were and how much trouble I was having." Ibid. After an inspection, of which plaintiff was not informed, McGarigle met with plaintiff and Schweitzer. The inspection report listed only minor safety changes; it did not mention ventilation. According to plaintiff, McGarigle discovered at that meeting that the inspector had not been qualified to check air quality. McGarigle also stated that he was aware that a part needed for the proper ventilation of the shop had not been installed for one-and-one-half years.
In February 1988, plaintiff's doctor determined that he should not return to the metal shop until the air had been tested, and wrote a letter describing plaintiff's condition. Id. at 19. Plaintiff was permitted to take a temporary leave of absence. Around that time he filed two workers' compensation claims for his work-related illnesses.
After plaintiff stopped teaching, an air-quality test was performed. The report, which the board received on March 10, 1988, stated that the classroom was safe from all nuisance particles. Plaintiff, however, was not informed of the favorable air-quality report.
On April 18, 1988, plaintiff received a letter from the board notifying him that he would not be rehired. Ibid. Plaintiff appealed the board's decision. In January 1989, the board affirmed its decision to terminate plaintiff. Plaintiff then filed a complaint against the board under CEPA, seeking reinstatement and back pay, attorneys' fees, punitive damages, and costs.
The trial court, ruling that a Judge and not a jury should determine the issue of punitive damages, severed that claim from the jury trial. On the remaining claims, the jury returned a verdict in favor of the plaintiff, and awarded compensatory damages of $60,000. The trial court, however, granted the board of education's motion to dismiss the complaint, upon which it had earlier reserved decision, concluding that plaintiff had not established vicarious liability of the board based on the actions of its supervisory school officials.
On appeal, the Appellate Division reversed the trial court, reinstated the jury verdict, and remanded the case for a jury trial on punitive damages. 269 N.J. Super. at 33. One Judge Dissented, reasoning that punitive damages could not be awarded under CEPA. Id. at 34 (Petrella, J.A.D., Dissenting).
The primary issue is whether defendant, the local board of education, may be held vicariously liable as a public employer under CEPA for its decision, based on the recommendations of its principal and superintendent, not to rehire plaintiff with tenure because of complaints plaintiff had made concerning health and safety conditions in the school. The derivative issue is whether the evidence supports the determination that the conduct of the supervisory officials and the board constituted "retaliatory action" under CEPA.
Plaintiff claims that defendant's decision not to rehire him as a tenured teacher constituted "retaliatory action" under CEPA. He
contends that he was fired for his "objections to and refusal to participate in an activity he reasonably believed to be incompatible with a clear mandate of public policy concerning the public, health, safety or welfare," and for "disclosing and/or threatening to disclose to defendant's supervisors a policy or practice of defendant that he reasonably believes was in violation of a law, rule or regulation promulgated pursuant to law."
CEPA defines "retaliatory action" as "the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment." N.J.S.A. 34:19-2e. Plaintiff additionally asserts that as an "employer," the board of education was liable under CEPA for that retaliatory action of its officials, the superintendent and principal. Under CEPA, "employer" is defined as
any individual, partnership, association, corporation or any person or group of persons acting directly or indirectly on behalf of or in the interest of an employer with the employer's consent and shall include all branches of State Government, or the several counties and municipalities thereof, or any other political subdivision of the State, or a school district, or any special district, or any authority, commission, or board or any other agency or instrumentality thereof.
[N.J.S.A. 34:19-2a (emphasis added).]
Further, plaintiff claims that the superintendent and principal acted in supervisory capacities. The statute defines "supervisor" as
any individual with an employer's organization who has the authority to direct and control the work performance of the affected employee, who has authority to take corrective action regarding the violation of the law, rule or regulation of which the employee complains, or who has been designated by the employer on the notice required under . . . this act.
In charging the jury, the trial court declared that the board would not be vicariously liable for any illegal retaliatory acts attributed to its superintendent and principal unless the jury found that the board had known, or should have known, of those acts and had ratified or agreed to them. In later granting defendant's motion to dismiss plaintiff's complaint, the trial court ruled that plaintiff had not established a prima facie case of vicarious liability because McGarigle did not have the authority to
take corrective action due to his limited budget powers and his inability to contract for outside services and consequently was not a "supervisor" under N.J.S.A. 34:19-2d. The trial court also ruled that under CEPA a public body may not be vicariously liable for the wrongful or illegal acts of its employees unless it specifically "consents" to those acts. N.J.S.A. 34:19-2a. The court further determined that plaintiff had failed to make his disclosure "to someone beyond . . . a supervisor within the meaning of the statute" as required by N.J.S.A. 34:19-3a.
The Appellate Division unanimously ruled that the trial court had erred in holding that plaintiff had not established a prima facie CEPA case. It concluded that (1) McGarigle was a "supervisor" under N.J.S.A. 34:19-2d, 269 N.J. Super. at 21-23; (2) the statute does not require plaintiff to disclose to "someone beyond . . . a supervisor," but requires disclosure only "to a supervisor or to a public body," id. at 23; and (3) CEPA does not require the "specific consent" of the employer to the unlawful retaliatory acts, id. at 25-27. The Appellate Division reversed the trial court, finding that defendant was vicariously liable for the improper actions of its employees, Superintendent Edelchik and Principal McGarigle. Id. at 28.
Under CEPA an employer can be "any person or group of persons acting directly or indirectly on behalf of or in the interest of an employer with the employer's consent." N.J.S.A. 34:19-2a. Further, such an employer can be a governmental entity, that is, one of the "branches of State Government, or the several counties and municipalities thereof, or any other political subdivision of the State, or a school district, or any special district." Ibid. The courts below differ over whether that provision of CEPA imports the traditional principles of respondeat superior for determining whether an employer may be deemed vicariously liable for the wrongful actions of its employees.
Under the doctrine of respondeat superior, an employer is liable to a third party for the torts of one of its employees if that employee is acting within the scope of his or her employment. Di Cosala v. Kay, 91 N.J. 159, 168-69, 450 A.2d 508 (1982); Gilborges v. Wallace, 78 N.J. 342, 351, 396 A.2d 338 (1978). An employee is acting within the scope of employment if the action is "'of the kind [that the servant] is employed to perform; it occurs substantially within the authorized time and space limits; [and] it is actuated, at least in part, by a purpose to serve the master.'" Di Cosala, supra, 91 N.J. at 169 (citing Restatement (Second) of Agency § 228 (1957) (alteration in original)); see 1 J.D. Lee & Barry A. Lindahl, Modern Tort Law: Liability and Litigation § 7.01, at 186 (rev. ed. 1993); W. Page Keeton et al., Prosser and Keeton on Torts § 70, at 505 (5th ed. 1984).
Recently, in Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587, 626 A.2d 445 (1993), the Court considered the standard for imposing liability on a private employer for its supervisor's sexual harassment of an employee under the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42. The Court ruled that agency law should govern employer liability for compensatory damages. Id. at 617. It was "satisfied that agency principles are sufficiently well-established to provide employers with notice of their potential liability and also sufficiently flexible to provide just results in the great variety of factual circumstances presented by sexual harassment cases and to accomplish the purposes of the LAD." Id. at 619. The Court noted that "the Legislature, in amending the LAD to allow 'all remedies available in common law tort actions,' implied that 'common law rules of liability, including general principles of agency law' should apply." Ibid. (quoting from the Appellate Division, 255 N.J. Super. 616, 660 (1992) (Skillman, J.A.D., Concurring in part and Dissenting in part)).
The Court was concerned in Lehmann with defining standards for liability that would achieve the statutory objectives and effectuate the legislative purpose of LAD. It characterized the "crucial
issue" to be determining which standard of liability provided the "most effective intervention and prevention of employment discrimination." Lehmann, supra, 132 N.J. at 625. Resolving that issue, the Court structured a ...