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Barratt v. Cushman & Wakefield of New Jersey

May 13, 1996


On certification to Superior Court, Appellate Division.

The opinion of the Court was delivered by Pollock, J. Chief Justice Wilentz and Justices Handler, O'hern, Garibaldi, Stein, and Coleman join in Justice POLLOCK's opinion.

The opinion of the court was delivered by: Pollock

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Robert N. Barratt v. Cushman & Wakefield of New Jersey. Inc. (A-128-95)

Argued March 26, 1996 -- Decided May 13, 1996

POLLOCK,J., writing for a unanimous Court.

In 1978, Robert Barratt signed a broker-salesperson employment contract with Cushman & Wakefield, a commercial real estate brokerage. Cushman's employment manual provided that its employees should not discuss company business with agencies such as the Real Estate Commission without prior approval from Cushman's legal department.

In 1982, Cushman & Wakefield signed a contract with Connell Rice and Sugar Co., Inc., to act as Connell's exclusive broker. Barratt actively sought to lease a property on behalf of Cushman. Through William Schaffel, a competing broker, and others, Connell signed a ten-year lease with AT&T Technologies for over $70,000,000.

Cushman brought suit against Schaffel and others. It won a judgment of $3,821,469.42 in compensatory damages and $1,250,000 in punitive damages. The jury found that Schaffel had tortiously interfered with the exclusive contract between Cushman and Council and with Cushman's prospective economic advantage.

The Appellate Division affirmed the judgment and both sides petitioned for certification, which the Court denied on October 10, 1990. While the petitions were pending in the Supreme Court, Barratt drafted a letter to the Real Estate Commission to inform it of the Appellate Division's decision as it related to Schaffel's conduct.

Pursuant to his employment contract, Barratt submitted the proposed letter to the attorney for Cushman & Wakefield. Concerned that the letter would jeopardize Cushman's role as the exclusive leasing agent for a partnership known as Exchange Place Urban Renewal Associates, which owned a commercial building in Jersey City, the attorney directed Barratt not to send it. The attorney's concern was based on the fact that Schaffel was a minority owner in the Exchange Place partnership.

Barratt, who was about to undergo heart surgery, gave a copy of his letter to his attorney with directions to send it if he did not survive the surgery. Barratt survived the surgery. Subsequently, the letter was sent to the Real Estate Commission, which acknowledged receipt to Barratt. Barratt took the position that the letter was either sent erroneously by his secretary or that he might have inadvertently mailed it to the Commission.

Schaffel learned of the letter from the Commission. He complained to Cushman. On August 2, 1990, Cushman wrote the Commission seeking the withdrawal of the complaint. The Commission refused to do that.

On August 17, 1990, Cushman wrote Barratt to inform him that sending the letter amounted to "gross insubordination." Cushman discharged Barratt on September 27, 1990.

In response to a January 25, 1991 letter from the Commission, Schaffel, without admitting his guilt, paid a $1,000 administrative penalty to the Commission.

Barratt subsequently sued Cushman & Wakefield, alleging that it had violated the Conscientious Employee Protection Act (CEPA), the Law Against Discrimination (LAD), the common law, and Barratt's employment contract. The trial court granted Cushman's motion for summary judgment on Barratt's claims of retaliatory discharge under CEPA and the common law. A jury found that Cushman had good cause for discharging Barratt and that the dismissal did not constitute a violation of the LAD.

Cushman & Wakefield applied for counsel fees. The trial court granted the application. On appeal, the Appellate Division determined that the award of counsel fees had to await the outcome of the CEPA claim. That aspect of the case was remanded for further proceedings.

The Supreme Court granted Cushman & Wakefield's petition for certification.

HELD : The Conscientious Employee Protect Act protects an employee who reports an illegal act of a partner in a partnership that has a business relationship with the employee's employer. Plaintiff has presented enough evidence of the business relationship to withstand a motion for summary judgment.

1. The Conscientious Employee Protection Act (CEPA)(N.J.S.A. 34:19-1 to -8) is a codification of the Court's 1980 decision in Pierce v. Ortho Pharmaceutical Corp. The purpose of CEPA is to protect employees who report illegal or unethical work-place activities. As such, it is remedial legislation that should be construed liberally. (p.9)

2. CEPA was expanded in 1989 to protect employees from retaliation for the disclosure of an improper act of "another employer" with whom the employee's employer has a business relationship. The exclusive leasing agreement between Cushman and Exchange Place, with Schaffel serving as a minority partner, was a "business relationship" within the meaning of CEPA. (pp. 10-12)

3. Cushman & Wakefield is not foreclosed from introducing evidence of the precise amount of Schaffel's interest in Exchange Place. In addition, the Court does not hold that the facts conclusively establish that Schaffel was "another employer." At this stage in the proceedings, all that can be said is that the Court ...

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