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Santosuosso v. Novacare Rehabilitation

November 22, 2006


The opinion of the court was delivered by: Irenas, Senior District Judge


This case was removed by Defendants from the Superior Court of New Jersey pursuant to 28 U.S.C. § 1441.*fn1 Plaintiff claims Defendants are liable under the Family and Medical Leave Act (the "FMLA"), 29 U.S.C. §§ 2601 et seq., New Jersey Family Leave Act (the "NJFLA"), New Jersey Law Against Discrimination (the "NJLAD"), and New Jersey common law. Before the Court are the Motion for Summary Judgment and Motion to Strike Punitive Damages*fn2 by Defendants. For the reasons stated below, both Motions will be granted in part and denied in part.


Plaintiff, Karen Santosuosso, was employed by Defendant NovaCare Rehabilitation ("NovaCare") in 1996. Plaintiff became an employee of Defendant Select Medical Corporation ("Select") in 1999, when Select acquired NovaCare. (Santosuosso Dep. at 45:9-13). Defendant Joseph Derella was Plaintiff's immediate supervisor. He serves as the Clinical Operations Director, and reports to Ed Malloy, an area vice president.

In September of 2000, Plaintiff was promoted from a Center Manager ("CM") to a Manager of Clinical Operations ("MCO") for the Ventnor facility, as well as the facilities in Brigantine and Atlantic City, New Jersey. (Santosuosso Dep. at 45:14-20, 45:17, 46:19-21).

In or about June 2002, Plaintiff informed Derella that she would take a maternity leave. (Santosuosso Dep. at 79:7-13). Plaintiff began her leave on October 11, 2002. (Id. at 78:11- 23). After Plaintiff's 12-week leave under the FLMA and NJFLA expired in February 2003, she received additional leave under Select's Extended Illness Days ("EID") program, with Derella's permission. (Santosuosso Dep. at 89:19-90:9). Plaintiff's leave was extended to March 3, 2003.

Shortly before she returned to work, Plaintiff requested that she be allowed to work at the Ventnor facility Monday through Thursday, and to bring all administrative and marketing work home to perform on Friday. (Santosuosso Dep. at 85:4-9). She hoped to have a work week of 35 hours, but promised to keep the center "running full speed ahead." She also promised that she would work 40 hours "in special circumstances." (Df. Appx. at p. 241). Prior to her leave, Plaintiff worked 40 to 60 hours per week as a MCO. (Santosuosso Dep. at 87:18-24). HR informed Derella that no MCO worked less than 40 hours per week, but a CM was permitted to work less than 40 hours per week. (Derella Dep. at 79:14-81:4). Thus Derella informed Plaintiff that the reduced schedule could be accommodated if she would return to Ventnor as the CM, with no reduction in her salary. (Id. at 81:5-15). Plaintiff agreed to this arrangement.

In March 2003, Plaintiff met with Derella and Frank McBride. Mr. McBride became the MCO responsible for the Ventnor facility when Plaintiff returned to work as a CM. The Ventnor facility experienced financial losses and did not meet patient visit targets between February and August 2003. Plaintiff claims that Derella controlled the Ventnor facility during her leave, and that the financial performance of the facility suffered. Plaintiff also claims that the financial losses at the Ventnor facility were partially the result of limited air conditioning in July of 2003, which led to a very high number of cancellations during the month.

In her annual Performance Review dated March 19, 2003, Plaintiff received evaluations indicating that her job performance consistently exceeded Defendants' requirements and expectations in quality and outcome. (Def. Ex. D-13). The report stated that "with her absence from October 2002 through February of 2003 the center has tended in a negative direction." (Id.).

On August 5, 2003, Robin Smith,*fn3 an employee at the Ventnor facility who was seeking to transfer out of the facility, told Derella that she was upset with the amount of responsibility that Plaintiff was delegating to her. (Smith Dep. at 12:19-13:6). Ms. Smith also claimed that Plaintiff was not keeping to her scheduled hours and sometimes would leave early. (Id. at 12:3-13). In addition, Ms. Smith voiced suspicion that Plaintiff might have committed forgery on some medical forms. (Id. at 12:3-8, 14:20-16:18). However, Ms. Smith also testified that she did not complain about her observations. She stated that the reason she requested a transfer was to be closer to her home and school. (Id. at 43:9-15).

In late July to early August 2003, Plaintiff became pregnant again. She told Ms. Smith as soon as she found out, and informed the entire Ventnor staff two or three weeks later.

Defendants claim that the complaints from Ms. Smith, the absences, and the poor financial performance for five months caused Derella to recommend to Mr. Malloy, on August 27, 2003, that Plaintiff be transferred to the Marmora facility and demoted to staff physical therapist, (Derella Dep. at 177:11-178:6), that her salary be reduced by 3%, (Id. at 77:8-16), and that Mr. McBride move from the Marmora facility to the Ventnor facility as the interim CM/MCO. (Id. at 108:22-109:15). Due to vacations and the Labor Day holiday, these plans were not implemented until September 4, 2003. (Id.). On September 4, Plaintiff was officially transferred and demoted.

Plaintiff sent an email to Derella on September 2, 2003, informing him of her second pregnancy. (Def. Ex. D-17, Def. Appx. at p. 250). Plaintiff again requested FMLA leave after the scheduled childbirth on March 17, 2004. Plaintiff acknowledged that the September 2, 2003, email was the first time she directly informed Derella that she was pregnant. (Id.). After receiving Plaintiff's email, Derella asked HR whether the staffing plan could proceed and was instructed to proceed with the plan. (Def. Appx. at p. 303).

On September 8, 2003, Mr. McBride became the CM for the Ventnor facility. He began an investigation of Plaintiff's alleged forgery immediately. Mr. McBride claims that he discovered patient forms which he believed had been altered. (McBride Dep. at 122:19-124:2). When he asked Ms. Smith about the forms, she informed him that it had been cut and pasted by Plaintiff. (Id. at 124:15-24). Plaintiff claims that all of the physical therapists and the front desk staff at the Ventnor facility had access to the patient's files and the Medicare forms. Any of them could have altered the patient's form. (Santosuosso Dep. at 240-248). In addition, Ms. Smith had numerous opportunities to report Plaintiff's alleged forgery to Select's Ethics Hotline, but she never reported any such incident.

On September 12, 2003, Derella met with Plaintiff and McBride. At the meeting, Derella terminated Plaintiff for violations of Select's policy regarding falsification of documents. (Santosuosso Dep. at 190:11-191:4).

Prior to her first FMLA leave, Plaintiff was the MCO with oversight responsibilities for three facilities and was earning $66,830 as of March 2002. Mr. McBride, who was the MCO for four facilities, was paid $64,000 per year as of July 2002. In March 2003, Plaintiff's salary was increased to $68,827. Mr. McBride received a raise in July 2003, increasing his salary to $70,000. At this time, he was ...

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