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O'Keefe v. State

July 10, 2007


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. MER-L-1687-02.

Per curiam.


Argued telephonically on May 22, 2007

Before Judges Cuff, Winkelstein and Baxter.

Plaintiff Arthur O'Keefe appeals from a May 17, 2006 order granting summary judgment to the State of New Jersey, Department of Labor (DOL) and several present and former employees of the DOL, and from the trial court's discovery orders of March 17, 2006 and April 12, 2006, denying his motion to compel depositions and extend discovery.

We agree with plaintiff's argument that he presented sufficient evidence to have withstood dismissal of his whistleblower claims under the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8. We also agree that because plaintiff's defamation cause of action is not a claim for pain and suffering, the trial court erred by subjecting that claim to the verbal threshold of the Tort Claims Act, N.J.S.A. 59:9-2(d). Because discovery was not completed, we are unable to determine if the dismissal of plaintiff's constructive discharge claim was error. We reverse the dismissal of that claim, and remand for completion of discovery, without prejudice to defendants' right to renew their summary judgment motion on the constructive discharge claim once discovery is complete. Finally, we agree with plaintiff's contention that the denial of his request to continue discovery constituted a mistaken exercise of the court's discretion. Accordingly, we reverse the grant of summary judgment on all three claims and remand for the completion of discovery.


Plaintiff began his employment with the DOL on April 10, 1981, when he was hired to work with disabled veterans. After four promotions, he became a Code Writer I in 1990. In 1993, defendant Leonard Katz, the Assistant Commissioner, asked plaintiff to serve as an unofficial liaison to labor unions that were complaining that DOL was not conducting timely investigation of their complaints. Plaintiff accepted that position, and for the next seven years, he continued to serve as unofficial liaison to those unions while also continuing his work as a Code Writer.

That arrangement continued until early 2000, at which time Katz and defendant Martin Gartzman, director of the Division of Wage and Hour Compliance, asked plaintiff to accept the position of assistant section chief of the pubic contracts section of the Wage and Hour Division, at a salary of $68,536. Plaintiff accepted that position. In order to become permanent in that title, plaintiff was required to take the civil service examination, and he registered to take the next one. Ultimately, plaintiff resigned before the exam was given.

Defendant Michael McCarthy, assistant director of the Division of Wage and Hour Compliance, evaluated plaintiff's job performance in September 2000, six months after plaintiff had assumed his responsibilities as assistant section chief. McCarthy rated plaintiff's work as "exceptional," adding that "[plaintiff] has done a remarkable job for someone with little previous supervisory or management experience, [and he demonstrates an] infectious enthusiasm for prevailing wage enforcement . . . ."

Friction began to develop between plaintiff and McCarthy in 2000, resulting from plaintiff's refusal to implement a computerized system to track and monitor public contract files because he believed WHATS (Wage and Hour Automatic Tracking System) was so flawed as to make it unusable. Only after McCarthy issued a direct order in January 2001 did plaintiff instruct his staff to start using WHATS.

In February and March 2001, McCarthy became concerned that plaintiff was not properly monitoring the work of his subordinates, and as a result, McCarthy "took it upon himself" to review all open public contract files to determine which ones were over six months old. McCarthy's March 2001 performance evaluation of plaintiff's work, unlike the September 2000 evaluation that had described plaintiff's work as "exceptional," resulted in a rating of "commendable." The evaluation described unsatisfactory performance in some areas of plaintiff's work including his inadequate supervision of his subordinates' productivity, which resulted in untimely completion of those subordinates' work assignments. Plaintiff's performance evaluation ended with the comment "[plaintiff] does a capable job despite little supervisory experience. He must find more time to ensure that his section supervisors and field staff follow established office policies and procedures."

Also in March 2001, defendant Harry Pappas was appointed confidential secretary to the Commissioner with the responsibility of bringing greater efficiency to the public contracts section of DOL, which put him in a supervisory position over plaintiff. McCarthy described Pappas's style of management as a "bludgeon and blow torch" approach. McCarthy recalled that everyone affected by Pappas's proposed changes to DOL policies and procedures complained about them.

On June 7, 2001, during a meeting with the public contracts staff, Pappas made statements that plaintiff believed violated the "New Jersey Policy Prohibiting Discrimination, Harassment or Hostile Environment in the Workplace." Pappas referred to Latino and female workers in offensive and derogatory terms. Plaintiff was present at the meeting and heard the remarks. Later that same day, in accordance with his responsibilities as a supervisor and in compliance with departmental directives requiring the reporting of such remarks, plaintiff reported Pappas's statements to McCarthy and Gartzman.

Plaintiff alleges that as a direct result of his filing of a report concerning Pappas's comments at the June 7 meeting, Pappas embarked upon a course of retaliation, reprisals and adverse employment actions. We will set them forth in some detail. The retaliatory actions included: Pappas's comment on June 20, 2001, to an employee on plaintiff's staff, James Valle, and in the presence of other employees, "this is your friend back there getting people to go after me and I'm going to cut his f[]ing head off"; Pappas forcing plaintiff to move his office into a file room where there was no telephone; Pappas and Gartzman prohibiting plaintiff's staff from discussing any public contract files with him, even though he was in charge of that unit; and Gartzman and Pappas forbidding plaintiff from being "privy to any information about public contracts."

Plaintiff further points to Pappas's comment made during a meeting of assistant section chiefs, when Pappas referred to "these so-called supervisors" as incompetent while looking directly at plaintiff. Plaintiff also contrasts DOL's failure to thoroughly investigate his workplace violence complaint against Pappas after Pappas threatened to "cut [plaintiff's] f[]ing head off," with the swift and thorough investigation of complaints made by Teresa Marin, Pappas's assistant and protégé, against plaintiff, all of which were later found to be unsubstantiated and were dismissed. Plaintiff also characterizes as retaliatory Marin's confronting him on an almost daily basis with "unanswerable" questions about WHATS; Pappas and Gartzman undermining his authority with one of his subordinates, Ray Smid, by directing Smid to undertake a project but instructing him not to tell plaintiff what he was doing; and Pappas attempting to have a valued and experienced member of plaintiff's staff fired, with the employee ultimately resigning from DOL because of Pappas's behavior.

Another act of reprisal, retaliation or harassment was Pappas's refusal on July 28, 2001, to permit plaintiff to rescind his request to be returned to his original Code Writer I position and the concurrent demotion of plaintiff. That sequence of events started on June 29, 2001, when Gartzman prepared documents requesting the Department of Personnel to remove plaintiff from his provisional appointment as Assistant Section Chief of the Wage and Hour Division and return him to his permanent title as Code Writer I based upon plaintiff's alleged performance deficiencies.

Unaware of Gartzman's pending request to demote him, but concerned about the way he had been treated, plaintiff wrote to McCarthy on July 6, 2001. He explained to McCarthy that he wanted to return to his former position of Code Writer "given the current climate of harassment, intimidation and innuendoes." After learning of plaintiff's July 6, 2001 request to return to his original title, the Commissioner called plaintiff into his office and asked him why he had sought the demotion. In response, plaintiff described Pappas's course of conduct. After considering what plaintiff had told him, the Commissioner urged plaintiff to remain as assistant section chief. On July 12, 2001, three days after his meeting with the Commissioner, plaintiff wrote to McCarthy, stating "after consultation with Commissioner Boyd, I have decided to rescind my resignation dated July 6, 2001."

On either July 12 or 13, 2001, an employee in the Human Resources section called plaintiff to inform him "that [he] was out of the position" of assistant section chief as of July 28. When plaintiff protested that he had met with the Commissioner and rescinded his request to return to his Code Writer I title, the personnel representative responded that a decision had been made to "remove[] [him] from the position." Fifteen minutes later, plaintiff was told that Pappas wanted him to vacate his office that day.

Upon learning that Pappas had insisted that he immediately "clear his office out" and return to his Code Writer I position, plaintiff attempted to call the Commissioner, but was unable to reach him, because the Commissioner had just begun a sabbatical leave. Gartzman informed plaintiff of his demotion in a memorandum dated July 13, 2001. Upon receiving it, plaintiff approached Gartzman, who commented that "[i]t's out of my hands," and that Pappas had unilaterally made the decision to demote plaintiff.

When plaintiff returned to the position of Code Writer I on July 28, 2001, his salary was $66,867, rather than the $68,536 that he was earning as assistant section chief. After the demotion, plaintiff was forced to sit in his office and "make flyers for handouts."

Finally, on August 20, 2001, plaintiff wrote to Katz resigning from his position of Code Writer I as of August 30, 2001, and retiring from his employment with DOL. He explained in his letter that "due to the current climate of continued harassment, intimidation, retaliation and slanderous and libelous allegations which are currently affecting both my mental and physical well-being, I no longer wish to be employed by an organization which allows this type of treatment of its employees to occur." That August 20, 2001 letter of resignation ended plaintiff's twenty-year employment with DOL.

On May 22, 2002, plaintiff filed suit against DOL, Commissioner Boyd, Pappas, Assistant Commissioner Katz, Gartzman and McCarthy alleging that as a result of having reported Pappas's comments at the June 7, 2001 meeting, he had suffered reprisals and adverse employment actions in violation of CEPA. Plaintiff also alleged that he was constructively discharged from his employment with DOL because the harassment and reprisals he suffered at the hands of defendants left him with no alternative to quitting. Other counts in the complaint alleged defamation by Pappas. Plaintiff's complaint was consolidated by the Law Division with similar complaints filed by three other DOL employees, who had also heard and reported Pappas's unlawful comments during the June 7, 2001 meeting. Those three plaintiffs settled their claims in June and October 2004.

While plaintiff's case was proceeding, Pappas requested that the Department of Law and Public Safety provide him with a defense, pursuant to N.J.S.A. 59:10A-2. After the Attorney General denied Pappas's request, the Law Division granted Pappas's motion to compel the Attorney General to defend him, and the Appellate Division affirmed. Prado v. State, 376 N.J. Super. 231 (App. Div. 2005), rev'd, 186 N.J. 413 (2006) (Prado I). After the Supreme Court established the standard for the Attorney General's provision of a defense, and reversed and remanded to the Appellate Division, an appellate panel remanded the matter to the Attorney General, who again denied ...

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