On certification to the Superior Court, Appellate Division, whose opinion is reported at 368 N.J. Super. 443 (2004).
(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).
The question in this appeal is whether preclusion principles should apply to an employee's Law Against Discrimination (LAD) claim when the employee abandoned her right to take an appeal to the Merit System Board (MSB) following only a departmental hearing on her employer's charges.
Donna Hennessey was employed as a clerk/typist in the records department of the Winslow Township (Township) police department when she was injured at work. After returning briefly to work, she was placed on disability leave status beginning July 28, 1998. Pursuant to Township ordinance and the collective negotiations agreement applicable for Hennessey's position, she was entitled to one year of disability leave. A month prior to the expiration of her disability leave entitlement, Hennessey's supervisor, Captain Valerio, notified her that her leave would expire on July 28, 1999, and that if she was unable to return to work by that date, her employment would be terminated. Hennessey notified Valerio that she had medical clearance to resume working as of July 8, 1999, subject to limited duty restrictions. She included a report from her treating physician indicating that she could not lift more than five pounds nor could she sit for prolonged periods. The Township administrator sent a job analysis form to Hennessey's physician for completion. Based on information provided on that form, the Township notified Hennessey that it regarded her as unable to return to work and on July 29, 1999, Hennessey was sent a Preliminary Notice of Disciplinary Action stating that she was to be terminated for not returning to her duties at the conclusion of her authorized leave of absence. As was her right, Hennessey requested a departmental hearing on the charges. N.J.S.A. 11A:2-13.
The departmental hearing was held on February 25, 2000. Neither party presented any medical experts, nor does Hennessey recall being questioned about her medical condition. The hearing officer found that Hennessey could return to work only on light duty status, with limitations on the amount that she could push/pull, lift/carry, twist/turn, and bend. Further, the hearing officer credited the Township's evidence that there was no light duty position to which Hennessey could be assigned. Accordingly, the hearing officer concluded that Hennessey could be terminated because she was unable to return to duty. A Final Notice of Disciplinary Action was issued, discharging Hennessey from employment effective July 29, 1999.
Although Hennessey had a right to appeal her termination to the Merit System Board (MSB), N.J.S.A. 11A:2-14 and -15, she did not exercise that right. Instead, she filed a sex and disability discrimination claim against the Township with the Equal Employment Opportunity Commission (EEOC). The EEOC determined that Hennessey had demonstrated that she could meet most of the physical requirements of her position and that the Township had failed to attempt to identify an appropriate accommodation for her, thus violating the American with Disabilities Act (ADA), 42 U.S.C.A. §§ 12101 to 12213.
Hennessey subsequently filed a complaint in the Superior Court alleging that the Township had violated the LAD in terminating her employment. Defendants filed a motion for summary judgment, arguing that collateral estoppel barred Hennessey from pursuing her claim. The trial court granted the motion. The court ruled in favor of the claim preclusion because it found that Hennessey, in fact, did receive a hearing on her claim of discrimination. The Appellate Division reversed the trial court's judgment. The panel found it to be incongruous to countenance a result that permits relitigation of plaintiff's LAD claim on a record created before the Administrative Law Judge and the Merit System Board, but that does not permit relitigation of the same claim before the Superior Court. The Appellate Division determined, therefore, that Hennessey was not collaterally estopped from litigating her discrimination claim in Superior Court.
Following the Appellate Division's reinstatement of Hennessey's complaint, we granted the employer's petition for certification.
HELD: Issue preclusion was determined appropriately by the Appellate Division not to apply in this setting, and for the correct reason. Preclusion is not warranted in these circumstances because of the stage at which plaintiff shifted gears from the administrative channels of review available to her, to the judicial forum that she preferred.
1. The doctrine of collateral estoppel operates to foreclose relitigation of an issue when: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. It is generally recognized that the judicial principles underlying collateral estoppel, and other doctrines of issue preclusion, such as res judicata, serve important policy goals that have currency in both administrative law and judicial settings. As administrative law procedures have matured in this State, courts have recognized that administrative tribunals can and do provide a full and fair opportunity for litigation of an issue for various purposes. Moreover, through careful application of collateral estoppel and other issue preclusion principles, duplicative and potentially inconsistent agency decisions have been avoided when administrative tribunals have overlapping jurisdiction over like claims, such as between the Merit System Board and the Division of Civil Rights (DCR). Agency conflicts are minimized by adherence to this Court's instructions on administrative comity, when appropriate, as well as by such developments as the establishment of the Office of Administrative Law (OAL). (Pp. 8-13)
2. To decide this matter, we need not plumb the depths of issue preclusion questions that might arise in the various administrative law settings in which a LAD claim may be raised. We reach only the question whether preclusion principles should apply to Hennessey's LAD claim when she abandoned her right to take an appeal to the MSB following only a departmental hearing on her employer's charges. We conclude that preclusion should not apply in this setting. A departmental hearing is designed to give the employee a fair and efficient opportunity to change the employer's mind about the appropriateness of the disciplinary action. It may serve that purpose well, but it does not afford other important procedural protections that are available on appeal to the Merit System Board. The MSB is the agency charged with responsibility for creating a disciplinary system of fair and consistent application to protect civil service employees at the State and local level. For a preclusive bar to be raised to judicial relitigation of a LAD claim, this Court has commented that there must have been an agency determination on the merits. In light of our prior decisions recognizing agency overlap in discretionary authority, we would be loath to suggest that only a Division of Civil Rights final adjudication would justify issue preclusion on a LAD claim and, indeed, courts have not applied our case law and N.J.S.A. 10:5-13 so narrowly. In this matter there was no adjudication by an agency with jurisdiction concurrent with the Division of Civil Rights. Hennessey chose to file a LAD claim in Superior Court and that was her right. Preclusion is not warranted in these circumstances because of the stage at which plaintiff shifted gears from the administrative channels of review available to her, to the judicial forum that she preferred. (Pp. 13-17)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES LONG, ZAZZALI, ALBIN, WALLACE, and RIVERASOTO join in ...