On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-1324-99.
Before Judges Kestin, Fall and Weissbard.
The opinion of the court was delivered by: Weissbard, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Plaintiff, Cindylu Entrot, appeals from an order of summary judgment dismissing her complaint against defendant, her former employer, the BASF Corporation, alleging violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to - 42. The complaint was based upon a theory of hostile work environment resulting from sexual harassment by a co-worker, George Molinet. Molinet was originally named as a defendant but plaintiff's claim against him was settled. The trial court granted summary judgment to defendant on alternative grounds: 1) the co-worker was not plaintiff's "supervisor" and thus the employer could not be vicariously liable for the co-worker's harassing conduct; or 2) even if the co-worker was a "supervisor," plaintiff failed to establish sufficient fact questions regarding the employer's vicarious liability. For reasons which follow, we reach a contrary conclusion as to both questions in the context of summary judgment and therefore reverse and remand.
To resolve this appeal we are required to explore the parameters of the term "supervisor" as it is employed in LAD cases for the purpose of imposing vicarious liability on an employer and to determine the availability to an employer of the defense recognized by the United States Supreme Court in Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275, 141 L. Ed. 2d 662 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, 141 L. Ed. 2d 633 (1998), in cases where the employee is constructively discharged due to a hostile work environment.
Our disposition requires that we set out the facts in some detail. *fn1 Plaintiff, holder of a Master's degree in management, was hired by defendant in 1988 as a Group Information Systems manager of the Polymers Division. She reported to Carol Dechert-Lizzi and later to Steven Bishop. In February 1996, she asked to be and was assigned to a temporary project involving the implementation of a new business software called "SAP." She retained some of her former responsibilities until June 1996, when she began working full-time on the SAP project.
On the SAP project, plaintiff was one of five team leaders and the "project leader" was George Molinet, whose duties were to set priorities for the team, schedule implementation dates, and help make strategic decisions. According to plaintiff and disputed by defendant, Molinet also wrote her job description and "was responsible for directing and evaluating her job performance." Nonetheless, it was undisputed that "Molinet never completed a performance evaluation for plaintiff."
Defendant alleged, and plaintiff denied, that during the first half of 1997 the SAP project required plaintiff and others with the project to make numerous business trips, during which she and her colleagues socialized and drank more than usual, and plaintiff and Molinet began an intimate, sexual relationship, often spending time in each other's hotel rooms. During a trip to Charlotte, North Carolina in May 1997, Molinet gave plaintiff a bottle of perfume as a birthday gift. Plaintiff alleged that she at first refused the gift, but accepted it after Molinet "insisted." Plaintiff admitted that on May 13, 1997, the day plaintiff learned of her promotion to Manager, Division of Information Technology, Molinet came to her hotel room and had a bottle of champagne delivered to the room. Plaintiff also alleged that Molinet wrote love poems to her. Molinet told plaintiff that "he was in love with her and was considering divorcing his wife."
On June 10, 1997, plaintiff and Molinet were attending a conference in North Carolina when plaintiff's husband, Michael, called her, "crying" and asking her to come home because "someone had called him that morning and told him that plaintiff was having an affair with Molinet." According to plaintiff's friend, Lynn Pridmore, plaintiff called her before leaving the hotel, telling her that she might come to Pridmore's that night, but Pridmore said she could not accommodate plaintiff. Plaintiff told Pridmore that if she did not hear from plaintiff within a day, "she should call the police and assume she was dead." Molinet drove plaintiff to the airport.
According to Michael, on the next day, June 11, he left a message on Molinet's answering machine:
George, this is Mike Entrot, stay the fuck away from my wife. I don't want no contact with you through e-mail, voice-mail, anything else, just stay the fuck away from her if you understand what's good for you. Michael left a similar warning on June 23. He also claimed to have called Molinet's wife.
Between June 10 and early July 1997, defendant alleged that "plaintiff left a series of voice-mail messages for Molinet" telling him how much she missed him. Plaintiff admitted calling Molinet but had "no recall of any messages left."
Defendant alleged that it had a Sexual Harassment Policy that it distributed to all employees, which declared a no-tolerance policy for sexual harassment. The policy set forth a complaint procedure:
If you are subjected to any form of sexual harassment in connection with your employment, you should report it to the appropriate level of supervision or the Human Resources Department immediately. Individuals who violate this policy will be subject to disciplinary action up to and including termination of employment. Plaintiff admitted that she "was vaguely aware . . . that BASF had a policy," and also that she had attended a training session about the policy. It was undisputed that plaintiff never used the complaint procedure or any other means to report Molinet's alleged harassment.
Plaintiff was on vacation with Michael during the first two weeks of July 1997, and she was scheduled to return to work on July 14. But on that day Michael called plaintiff's supervisor, Dechert-Lizzi, to report that plaintiff "was being stalked" by Molinet. Plaintiff then took the phone and told Dechert-Lizzi that "she could not return to work with Molinet." While plaintiff told Dechert-Lizzi about Molinet stalking her, she never mentioned "the sexual conduct between her and Molinet."
A corporate security officer called plaintiff in response to her conversation with Dechert-Lizzi; while plaintiff reiterated her allegations, she did not mention any sexual conduct and insisted that the company not contact Molinet about her allegations. In fact, she expressly denied that Molinet had "made [any] overt sexual or suggestive comments [or] asked her out or anything of that nature." Plaintiff explained that "she was afraid to report Molinet for fear of retaliation and because she was told not to by the police."
Also on July 17, 1997, plaintiff and Michael filed a complaint with the police that Molinet had been harassing her after plaintiff told Molinet that she wanted to end the intimate relationship that had developed while the two were together on business trips.
Notwithstanding plaintiff's request, on July 24, 1997, Dechert-Lizzi and a company security officer met with Molinet, who admitted that "he and plaintiff had shared a 'more than professional relationship,' but only 'after hours while they were traveling.'" Molinet promised that in the future he would relate to plaintiff on a professional basis only.
Plaintiff last came to work on July 22, 1997, beginning a disability leave the next day; she never returned to work.
She had been under psychiatric treatment by Dr. Robert Parinello since July 1997. Parinello diagnosed her with Bipolar Disorder, a disease for which plaintiff had a "genetic predisposition," and which had come "'to the fore' in April 1997 because of a number of stressors, including plaintiff's frequent business trips, her heavy work load, and the larger-than-usual amount of drinking on her business trips." And he "agreed that plaintiff's husband's discovery of her relationship with Molinet was 'a powerful stressor.'"
Parinello deposed that plaintiff's relationship with Molinet "made her feel 'like a teenager,' as if she were involved with her 'first love.'" Parinello reported that she told him that she hated her mother and her husband, and that she was "infatuated" with Molinet, who was "madly in love" with her. Parinello opined that Molinet "exploited" her, which he was able to do because plaintiff's "manic" state made her "easy prey."
In April 1999, plaintiff filed a Law Division complaint against defendant and Molinet, alleging:
Count one: sexual harassment, hostile work environment, and constructive discharge, as prohibited by the LAD;
Count two: intentional infliction of emotional distress;
Count three: assault and battery by Molinet.
In its answer, defendant denied the key allegations and asserted various defenses. Molinet filed a separate answer that included a counterclaim against plaintiff and a third- party complaint against plaintiff's husband, Michael Entrot. By stipulation the third-party complaint was dismissed with prejudice.
After extensive discovery, in July 2001 both defendant and Molinet filed separate motions for summary judgment, which were opposed by plaintiff. By letter opinion of October 4, 2001, the judge granted summary judgment to defendant on all counts on the grounds that: 1) plaintiff had failed to show that Molinet was a "supervisor" for whose conduct defendant could be vicariously liable; or 2) even if Molinet were a "supervisor," plaintiff had failed to meet the proof standard for an employer's liability for sexual harassment by a supervisor. As to Molinet as an individual, the judge granted summary judgment to him on count one (LAD) and denied it on counts two (intentional tort) and three (assault and battery).
After denial of her motion for reconsideration, plaintiff filed this appeal.
Plaintiff and Molinet subsequently entered into a confidential settlement agreement. Accordingly, Molinet is no longer in the case.
Plaintiff argues that the motion judge erred in ruling as a matter of law that Molinet was not plaintiff's "supervisor" within the meaning of the case law imposing vicarious liability on an employer for sexual harassment by one of its supervisors. She divides her argument into two points: 1) the judge ignored or undervalued evidence from plaintiff that raised disputed fact questions as to whether Molinet was her "supervisor"; and 2) the judge too narrowly construed the meaning of "supervisor" as developed by the case law.
The LAD expressly forbids employment discrimination on the basis of gender. N.J.S.A. 10:5-12a. Claims of sexual harassment under the LAD normally fall into two categories: 1) "quid pro quo," involving express or implied threats by the employer that the employee will suffer adverse employment consequences if he or she refuses to submit to the employer's sexual demands; or 2) hostile work environment, in which the employer or other employees harass an employee because of his or her gender to such an extent that the workplace becomes hostile. Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587, 601 (1993); Herman v. Coastal Corp., 348 N.J. Super. 1, 18 (App. Div.), certif. denied, 174 N.J. 363 (2002). In this case plaintiff relied on the latter theory, alleging that Molinet's sexual advances were unwelcome and rendered the workplace intimidating, hostile and offensive, such that she became emotionally disabled and was constructively discharged.
In order to state a claim for the hostile-work- environment form of sexual harassment, a plaintiff must establish four elements:
[T]he complained-of conduct (1) would not have occurred but for the employee's gender; and it was (2) severe or pervasive enough to make a (3) reasonable [employee] believe that (4) the conditions of employment are altered and the working environment is hostile or abusive. [Lehmann, supra, 132 N.J. at 603-04.]
The motion judge assumed, for the purposes of the summary judgment motion, that plaintiff had sufficiently stated a claim for hostile work environment. But the judge acknowledged that, in order to hold an employer like defendant vicariously liable for that hostile environment, plaintiff had to show that the harassment was done by a "supervisor" who was acting as defendant's agent under traditional agency principles. Lehmann, supra, 132 N.J. at 619-20; Herman, supra, 348 N.J. Super. at 25; Shepherd v. Hunterdon Developmental Ctr., 336 N.J. Super. 395, 422-23 (App. Div. 2001), rev'd in part on other grounds, 174 N.J. 1 (2002). The reason for demanding that the harassing employee be a supervisor, as opposed to a non-supervisory co-worker, is that employers normally do not invest the latter class of employee with any authority that might be used to harass another employee. Heitzman v. Monmouth County, 321 N.J. Super. 133, 145-46 (App. Div. 1999).
Lehmann, supra, 132 N.J. 587, is the seminal case. There, the Court promulgated an analytical framework for gauging an employer's responsibility for an employee's sexual harassment of another employee, under a hostile environment theory. The Court fashioned two levels of employer liability, depending on the kind of relief demanded. When the issue is equitable relief - such as promotion, reinstatement, back pay, or other action needed to remediate a hostile environment - the employer is strictly liable for a supervisor's sexual harassment, as only the employer has the power to take steps to correct the harm caused by the harassment. Id. at 616-17. But when a court is asked to assess compensatory and punitive damages as a result of the harassing conduct, an employer's liability for a supervisor's conduct must be gauged under common-law principles of agency, id. at 617, as reflected in Restatement (Second) of Agency § 219 (1958):
(1) A master is subject to liability for the torts of his servants committed while acting in the scope of their employment. (2) A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless:
(a) the master intended the conduct or the consequences, or (b) the master was negligent or reckless, or (c) the conduct violated a non-delegable duty of the master, or (d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he ...