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Gerety v. Atlantic City Hilton Casino Resort

July 25, 2005

CHRISTINA M. GERETY AND JOHN GERETY, HUS AND WIFE, PLAINTIFFS-RESPONDENTS,
v.
ATLANTIC CITY HILTON CASINO RESORT, DEFENDANT-APPELLANT, AND MARY BURUSS, RACHEL BOGATIN, AND JOHN DOES 1 THROUGH 50, INCLUSIVE, FICTITIOUS NAMED DEFENDANTS, JOINTLY, SEVERALLY, AND IN THE ALTERNATIVE, DEFENDANTS.



On appeal from the Superior Court, Law Division, Atlantic County.

SYLLABUS BY THE COURT

(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).

In this case, an employee of Atlantic City Hilton Casino Resort exceeded her maximum of twenty-six weeks medical leave due to a difficult pregnancy and was terminated pursuant to Hilton's policy. The issue here is whether Hilton's policy violated the New Jersey Law Against Discrimination (LAD).

Christina and John Gerety were employed by Hilton when Christina became pregnant. Christina learned that she was expecting in September of 1997. In October, illness associated with the pregnancy forced her absence from work. On the advice of her physician, Christina requested a leave of absence from work starting October 5, 1997, and later extended her leave request through February 1998. Hilton approved both requests. However, Hilton's extension policy provided that under no circumstances would requests for medical leaves of absence which totaled in excess of twenty-six weeks in a twelve month cycle be granted. Bona fide medical concerns required Christina to request that her leave be extended for the duration of her pregnancy. Hilton informed Christina that as of April 1, 1998, she would reach the maximum allowable amount of medical leave and that her employment would be terminated if she did not return to work after that date. Her employment was terminated, effective April 2, 1998, when she did not return to work.

The Geretys filed a civil complaint in Superior Court, naming Hilton and two of its employees as defendants. The complaint alleged gender discrimination in violation of the LAD, wrongful termination in violation of public policy, and intentional infliction of emotional distress as to Christina. It also alleged that Hilton took retaliatory action against John. The court denied Hilton's motion for summary judgment. The court found Hilton's leave policy to be per se discriminatory and declined to dismiss John's retaliation claim. The court dismissed the public policy and intentional infliction of emotional distress claims and granted summary judgment to the individual defendants.

Hilton filed a motion for leave to appeal and for a stay with the Appellate Division. Both were denied. This Court granted Hilton's motion for leave to appeal nunc pro tunc.

HELD: An employer's even-handed adherence to a gender-neutral medical leave policy that provides more leave than any relevant federal or state statute requires does not constitute per se gender discrimination.

1. In determining whether members of the classes protected by the LAD have been subjected to unlawful discrimination in an employment setting, this Court has looked to the substantive and procedural standards established under federal law for general guidance. The United States Supreme Court recognizes two theories of relief under Title VII -- disparate treatment and disparate impact -- and this Court acknowledges both as cognizable under the LAD. Disparate treatment is the most easily understood type of discrimination. The employer treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical. Claims of disparate treatment may be distinguished from claims that stress disparate impact. The latter involves employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive is not required under a disparate impact theory. (pp. 8-9)

2. To prove a prima facie case of discrimination, the plaintiff must demonstrate that he or she: (a) belongs to a protected class; (b) applied for or held a position for which he or she was objectively qualified; (c) was not hired or was terminated from that position; and (d) the employer sought to, or did fill the position with a similarly-qualified person. The burden then shifts to the employer to prove a legitimate, non-discriminatory reason for the employment action. Plaintiff can respond by showing the employer's proffered reason was merely pretext for the discrimination. A disparate impact claim does not require the plaintiff to demonstrate proof of the employer's discriminatory motive. A plaintiff must show that a facially neutral policy resulted in a significantly disproportionate or adverse impact on members of the affected class. (pp. 10-11)

3. As far as this record shows, Christina was treated no differently than other non-pregnant employees of Hilton whose leave had expired and were terminated for not returning to work notwithstanding a valid medical inability to do so. Employers may not discriminate against a female employee because she becomes pregnant. That does not mean, however, that an employer discriminates per se simply by adopting and adhering to a leave policy that evenhandedly provides male and female employees alike with periods of medical leave that may not cover completely the period of time that an employee's health needs may require. The telling point is that, whatever the cause of the medical condition, Hilton's policy impacts men and women equally and specifically prohibits any exceptions to its maximum limit for medical leave, a prohibition to which Hilton has adhered without exception. (pp. 12-18)

4. Neither Congress nor the State Legislature requires employees to provide pregnant women with up to nine months of medical leave for high risk pregnancies. Congress enacted the Pregnancy Discrimination Act (PDA). The PDA emphasizes a policy of equal treatment for women on the basis of pregnancy or related medical conditions. The theme of equal, not preferential, treatment under the PDA has been underscored by the courts. Policy arguments may be advanced for mandating statutorily that employers provide for the possibility that pregnant employees may require enhanced leave to cover the panoply of medical needs that may arise during pregnancy. That does not justify this Court's imposition of such a requirement on employers under the mantle of the LAD. It is not for this Court to legislate its preference in respect of leave policy for pregnant employees. (pp. 18-21).

5. If an employer treats its pregnant employees no differently than comparable non-pregnant employees in need of extended medical leave, then the LAD is not transgressed. An employer's failure to provide enhanced leave allotments for its pregnant employees, who may require more time off than the employer's policy permits, does not constitute discrimination interdicted by the LAD. The LAD, like the PDA, prevents an employer from discriminating against an employee based on pregnancy. The LAD does not require an employer to deviate for pregnant employees from the even-handed application of a medical leave policy that already provides more leave than any relevant federal or state statute requires. An employer's adherence to such a medical leave policy does not constitute per se gender discrimination (pp. 21-22)

6. We respectfully disagree with our dissenting colleagues' characterization of all pregnancy-related health needs as, essentially, a gender-based classification that requires special accommodations to avoid the label of gender discrimination. The need for extended medical leave also can arise for men, due to illnesses that are unique to their gender and also may exceed the limits of an employer's leave policy. Policy preferences are for the Legislature which has expressed its leave requirements for family and pregnancy-related needs in the New Jersey Family Leave Act. We discern no requirement in the LAD that preferential leave treatment for pregnant employees is necessary for an employer to avoid the accusation that it is impacting women as a class unequally. (pp.22-23)

The finding of the trial court that the Hilton policy is discriminatory per se is REVERSED and the matter is REMANDED to the Law Division for further proceedings consistent with this opinion.

CHIEF JUSTICE PORITZ, filing a separate DISSENTING opinion in which JUSTICES LONG and ZAZZALI join, is of the view that Hilton's leave policy results in disparate impact such that gender discrimination must be found.

JUSTICES ALBIN, WALLACE and RIVERA-SOTO join in JUSTICE LaVECCHIA's opinion. CHIEF JUSTICE PORITZ filed a separate dissenting opinion, in which JUSTICES LONG and ZAZZALI join.

The opinion of the court was delivered by: Justice LaVECCHIA

Argued January 18, 2005

Both state law, N.J.S.A. 34:11B-1 to -16, and federal law, 29 U.S.C.A. § 2612, require that a qualifying employer must provide its employees with twelve weeks of unpaid leave for certain family and medical reasons during a consecutive twelve month period. Defendant Atlantic City Hilton Casino Resort provides its employees with twenty-six weeks of unpaid family and medical leave during a consecutive twelve month period, or more than twice as much as required by law. In the implementation of its leave policy, defendant maintains a strict, no-exceptions standard: family and medical leave during a twelve consecutive month period cannot exceed twenty-six weeks; and if an employee takes more than the maximum twenty-six-weeks of leave, that employee is terminated from employment but is eligible for re-hire.

In this case, an employee exceeded her maximum twenty-six-weeks leave due to a difficult pregnancy and was terminated pursuant to defendant's policy. We must determine whether defendant's leave policy violated the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, because it did not provide more than twenty-six weeks leave to the employee.

Plaintiff essentially asks us to carve out a special exception for pregnancy under the LAD, treating it differently from other medical conditions and illnesses. We hold that, because defendant's leave policy was applied non-discriminatorily and not subject to exception, application of that policy to this employee does not create a violation of the LAD.

I.

Plaintiffs, Christina and John Gerety,*fn1 were employed by the Atlantic City Hilton Casino Resort (formerly Bally's Grand, currently GNOC Corp. t/a The Atlantic City Hilton) when Christina became pregnant with twins in 1997. Both had worked for years for Bally's Grand and their employment continued under Hilton. Christina learned that she was expecting in September 1997. Although she planned to work during her pregnancy, she was unable to do so for medical reasons. On October 2 and 3, illness associated with the pregnancy forced her absence from work. Hilton paid her for that absence and charged the days as leave available pursuant to the Family and Medical Leave Act (FMLA), 29 U.S.C.A. § 2612(a)(1)(D). Because of medical concerns related to her pregnancy and on the advice of her physician, Dr. Bredin, Christina requested a leave of absence from work starting October 5, 1997, and continuing through December 1, 1997. Christina later extended her leave request through February 1, 1998, again on Dr. Bredin's advice.

Hilton approved both periods of leave, classifying Christina's absence through December 26, 1997, as FMLA leave and the remainder as leave available through its medical leave policy. Different classifications were used because Christina had exhausted her allotted amount of FMLA leave during December. As it turned out, Christina required hospitalization during her leave. A perinatologist attending to her discovered a health problem in respect of one of the twins she was carrying. There is no dispute that bona fide medical concerns required Christina to request that her leave be extended for the duration of her pregnancy. Her anticipated due date was in May.

This appeal focuses on Hilton's denial of Christina's request that her leave be extended beyond the limits of Hilton's policy so as to accommodate the entirety of her pregnancy. According to Hilton, Christina was entitled to a total of six months medical leave, which she exhausted on April 1, 1998, and there was no other category of leave available to her after that date. Thus, citing its policy, Hilton informed Christina that as of April 1, 1998, she would reach the "maximum allowable" amount of medical leave and that her employment would be terminated if she did not return to work after that date. Consistent with that policy, she would remain eligible for rehire despite the termination of her employment. If rehired, however, she would no longer have the seniority that she had accrued prior to her termination.

In total, Christina was on medical leave for 182 days (26 weeks), the maximum allowable for any comparable Hilton employee. Her employment was terminated effective April 2, 1998, when, consistent with her doctor's instruction, she did not return to work. On April 14, 1998, Christina went into labor five-weeks prematurely and the next day delivered twin daughters by emergency C-section. Thirteen days elapsed between the exhaustion of Christina's medical leave and the twins' birth on April 15, at which time she would have been entitled to leave to care for the infants pursuant to the New Jersey Family Leave Act (NJFLA), N.J.S.A. 34:11B-1 to -16.

In September, Christina and John filed a complaint with the Equal Employment Opportunity Commission (EEOC) and the New Jersey Division of Civil Rights (DCR) alleging gender discrimination. The EEOC closed its file in February, 1999, having concluded that Hilton had not committed any violation of law. Plaintiffs then filed a civil complaint in Superior Court, naming Hilton and two of its employees as defendants. Plaintiffs alleged gender discrimination in violation of the LAD, wrongful termination in violation of public policy, and intentional infliction of emotional distress as to Christina.

The complaint also alleged that Hilton took retaliatory action against John, depriving him of promotions and taking other adverse employment action against him.*fn2

Hilton's motion for summary judgment, asserting that it merely adhered to its facially neutral leave policy, was denied. The motion court found Hilton's policy to be discriminatory.

The court also declined to dismiss John's retaliation claim.

The court did dismiss plaintiffs' public policy claim on the basis that it was encompassed within the LAD claim and, therefore, was pre-empted. Plaintiffs' intentional infliction of emotional distress claim and per quod claims also were dismissed. Finally, the court granted summary judgment to the individual defendants as to whom plaintiffs had not opposed the entry of summary judgment. With only the LAD claims remaining, Hilton moved for reconsideration, which was denied. Hilton filed a motion for leave to appeal and for a stay with the Appellate Division. Both were denied. We then granted Hilton's motion for leave to appeal nunc pro tunc. Gerety v. Atlantic City Hilton Casino Resort, 181 N.J. 541 (2004).

II.

The LAD was enacted in 1945 as an exercise of the State's police powers. See N.J.S.A. 10:5-2; David v. Vesta Co., 45 N.J. 301 (1965). In N.J.S.A. 10:5-3, the statute's findings and declarations section, the Legislature set forth its opposition to the practice of ...


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