Before Judges Keefe, Steinberg and Weissbard. On appeal from Superior Court of New Jersey, Law Division, Atlantic County, ATL-L-1687-94.
The opinion of the court was delivered by: Steinberg, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Defendants Frank Budd, June Peterson and Paul Alexander appeal from a judgment entered against them after a jury trial in an action brought by plaintiffs Frank and Antoinette Hill*fn1 alleging, inter alia, conspiracy, tortious interference with economic advantage, and intentional infliction of emotional distress. Plaintiffs cross-appeal, contending that the trial judge erred in dismissing their claim brought pursuant to the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to-8, and in otherwise dismissing the claims brought against defendants State of New Jersey, New Jersey Department of Corrections, and Communications Workers' of America Local 1038 (Local 1038).
Plaintiffs' eleven-count complaint alleged: violation of the Conscientious Employee Protection Act (count one); retaliatory discharge (count two); breach of employee handbook (count three); breach of the covenant of good faith and fair dealing (count four); conspiracy to file false sexual harassment charges (count five); sexual harassment (count six); tortious interference with business, economic and contractual relations (count seven); intentional infliction of emotional distress (count eight); negligent hiring and retention (count nine); entitlement to punitive damages (count ten); and a per quod claim (count eleven). Named as defendants were Frank Budd, June Peterson, Paul Alexander, Jacqueline Owens,*fn2 the State of New Jersey, the New Jersey Department of Corrections, Department of Corrections Commissioner William C. Fauver, the Communications Workers' of America (CWA), and Local 1038.
As a result of either the grant of summary judgment on certain counts, or the voluntary dismissal by plaintiff of other counts, the case proceeded to trial against Peterson, Owens, Budd and Alexander on counts five, seven, eight and eleven. The jury found in favor of plaintiffs, and apportioned liability as follows: Owens, twenty-five percent; Peterson, thirty-five percent; Budd, twenty percent, and Alexander, twenty percent. The jury awarded plaintiff monetary damages of $137,436 for economic loss, and $150,000 for physical and emotional injury, and also awarded $15,000 to Antoinette Hill on her per quod claim. In addition, the jury awarded punitive damages of $4,000 against Peterson, $8,000 against Owens, and $18,000 against Alexander. The jury did not impose punitive damages against Budd.
The facts critical to the resolution of the legal issues raised by the appeal and cross-appeal are the following. At trial, Manor Woods was described as an institution maintained by the Department of Corrections to house juveniles who had been sent there as a result of an adjudication of a delinquency. Most of the juveniles came from broken homes, were emotionally disturbed, suffered from learning disabilities, and had prior records. It was considered an alternative to incarceration in a juvenile penal institution. The juveniles were given group counseling and vocational training. Group meetings were conducted in which the juveniles were encouraged to say what was on their mind. The purpose of the house meetings was to teach the juvenile residents that they should learn to speak out and discuss issues of dispute, rather than resort to violence.
In August 1976, following the death of his son in a fire that had been intentionally set by several juveniles, plaintiff Frank Hill, a Vietnam veteran, decided to pursue a career in social work. He obtained his degree in 1981 at age thirty-one, and began working as a youth counselor at Manor Woods. In September 1987, he became superintendent of the facility. During his tenure, the staff at Manor Woods utilized a concept known as guided group intervention, which he described as a "peer concept." Regular house meetings were conducted to establish daily agendas, discuss disciplinary actions, and allow the inmates to voice any concerns.
In August 1989, plaintiff hired defendant Jacqueline Owens as a teaching assistant. She was twenty-four years old. In February 1990, he hired forty-two-year-old defendant June Peterson to teach basic skills, mathematics and science. Plaintiff said that Peterson explained during her interview that she had left her tenured job as a school teacher in Bridgeton after over twenty years of service because she wanted to relocate after a divorce.
Unfortunately, the addition of Peterson and Owens to the Manor Woods staff had a disruptive effect upon the inmate population. Both Owens and Peterson elected to dress provocatively in tight and revealing clothing, often without underwear. Joan Carter-El, plaintiff's secretary, observed Peterson on different occasions sitting on a desk in front of a room of inmates in a short skirt, with her legs apart. Moreover, on occasion, she observed Peterson massaging inmates' shoulders in an inappropriate manner, and demonstrating pelvic thrust exercises during gym class while lying on the floor in a skirt. On one occasion, Carter-El claimed she interrupted Owens and some inmates who appeared to be masturbating.
Plaintiff began to suspect that Owens and Peterson had become involved with two inmates. He heard that Owens had exposed her breasts to an inmate. Other inmates began to complain about the time Peterson spent with V.P., and the time Owens spent with C.L. In addition, on one occasion, Anne Webb, the cook at Manor Woods, observed Owens engaged in a passionate kiss with C.L. in front of other residents.
On February 14, 1992, Assistant Superintendent Christopher M. Martin conducted a house meeting with the inmates. Peterson and Hill were not in attendance. At this meeting, a number of inmates again complained about the extra attention and gifts Owens and Peterson had been giving to C.L. and V.P. They alleged that there was sexual activity going on between the women and the two inmates. After listening to the complaints, Martin adjourned the meeting because he felt Owens and Peterson should be given an opportunity to be present and respond to the allegations.
After speaking with Martin, plaintiff scheduled a follow-up meeting for February 18, 1992. Plaintiff felt it was appropriate to address the allegations at a house meeting because that was how the program was run. At the follow-up meeting, some of the inmates produced a teddy bear and cards given by Owens to C.L., as well as jewelry given to V.P. by Peterson, and several incriminating pages from Peterson's journal.
At one point during the meeting, Owens began cursing at some of the inmates, and Anne Webb confronted Owens with observations she had made of Owens kissing C.L. Owens responded by calling Webb a "f ---liar," and a number of other inmates began to defend Webb. Plaintiff asked everyone, including Owens, to sit down. According to plaintiff, the inmates referred to sexual activity between Peterson, Owens and the inmates. Although Peterson sat in the back of the room, with her head down, crying, plaintiff said she never denied the allegations.
After the meeting, plaintiff spoke to Owens and Peterson and advised them that he had checked with the Personnel Department about instituting disciplinary action against them. He stated that he was recommending that Owens be fired and that Peterson receive a fifteen-day suspension. He said Owens uttered a profanity, and left the room. Peterson was crying, begged plaintiff not to fire her, stating that she did not want to lose this job as she did in Bridgeton, because it would be difficult for her to find another job.
While the disciplinary charges against Owens and Peterson were pending, both continued to work at Manor Woods. They filed a grievance alleging that the February 18, 1992 meeting was conducted in a demeaning, unprofessional manner. Although Peterson and Owens did not prevail on their grievance, plaintiff and Martin were advised to modify the house meeting practice so that employee performance or other behavior would be discussed in private meetings between the supervisor and the employee.
Meanwhile, Peterson and Owens contested the disciplinary charges that had been filed against them. They were assisted in their efforts by defendant Paul Alexander, the President of their union, Local 1038, who met with them at a local restaurant on at least five separate occasions between March and August 1992. During these meetings, Peterson and Owens informed Alexander that, in addition to the house meeting, plaintiff had been sexually harassing them ever since they began working at Manor Woods.
At Alexander's request, Peterson and Owens prepared statements detailing the harassment they claimed to have suffered at the hands of plaintiff. From the wording of their statements, he felt each had reviewed the other's statement before submitting it to him.
Thereafter, Alexander was contacted by defendant Frank Budd, the Temporary Director of the Equal Employee Opportunity Office within DOC. Budd had learned of the house meeting as well as the allegations of sexual harassment, and wanted to meet with Owens and Peterson. Accordingly, he joined Alexander, Owens and Peterson at some of their meetings.
Budd also met with plaintiff. According to plaintiff, during his initial conversation with Budd regarding the allegations, he was given the impression that he did not need a lawyer since Budd would represent him. Plaintiff suggested that Budd interview several inmates, but, according to plaintiff, he never did.
Meanwhile, the disciplinary hearing against Peterson and Owens was held on August 7, 1992. Although plaintiff had requested assistance in preparing and presenting his case, he claimed he received no help and was unsuccessful in establishing the charges against Owens and Peterson.
Shortly thereafter, plaintiff called Budd to discuss his own situation, and Budd advised him that he had determined that there was probable cause to sustain the allegations against him. Budd told plaintiff that he could not speak to him further since he would be representing Owens and Peterson. In October 1992, plaintiff received formal notice that a disciplinary action had been instituted against him seeking his termination for conduct unbecoming a State employee based upon the complaints of Owens and Peterson. These charges were subsequently made public by Alexander in a November 1992 CWA newsletter. After a hearing, the charges against plaintiff were dismissed.
Thereafter, plaintiff decided to use two months of accumulated sick time. He also obtained counseling to deal with the anxiety and depression he was experiencing as a result of the charges and hearing. Shortly thereafter he requested a transfer, and ultimately accepted a position as court liaison officer. Plaintiff maintained he would never return to, and had, in fact, turned down, a position involving supervisory responsibilities because he was afraid of again being charged with sexual harassment. While he suffered no loss of income as a result of the transfer, plaintiff stated that, unlike his former job, there was no room for advancement in his current position.
Plaintiff further testified that, as a result of the charges, he became withdrawn, experienced continuous headaches, frequent upset stomach, insomnia, and felt stressed all of the time. Dr. Robert Pasahow, a psychologist, evaluated plaintiff and concluded that he suffered clinical depression and post-traumatic stress disorder caused by the false accusation of sexual harassment. He opined that plaintiff would "experience permanent, anxious and depressed symptoms, and be uncomfortable in dealing with female co-workers."
Carter-El testified she had never seen plaintiff sexually harass anyone at Manor Woods. In addition, according to Carter-El, Peterson had told her that she had not wanted to file charges against plaintiff and that it had been Alexander's idea. Martin also ...