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Palmieri v. Federal Express


October 15, 2007


On appeal from the Division of Civil Rights, Department of Law and Public Safety, EA19JB-49392-E.

Per curiam.


Argued October 1, 2007

Before Judges Lintner and Sabatino.

Vincent Palmieri appeals a May 11, 2006 final decision of the Director of the Division on Civil Rights ("the Division") dismissing his complaint that he had been wrongfully discharged by respondent, Federal Express Corporation ("FedEx"), in violation of the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-1 to -49. We affirm.

Palmieri worked for FedEx out of its Atlantic City facility as a package courier. At the time of the events in question, Palmieri's direct supervisor was Mary Kish. His job functions included driving a delivery truck and transporting packages to customers.

Palmieri was discharged by FedEx in March 2003 after receiving, within a one-year period, three warning letters from Kish, citing him for improper conduct as an employee. It is undisputed that FedEx has a general, company-wide policy to terminate employees who have received three warning letters within a twelve-month period. The warning letters arose out of three separate incidents.

The first warning letter was prompted by observations that Palmieri had been operating his FedEx truck with the driver's side door open, contrary to company safety policies. In June 2002 a co-worker observed Palmieri driving with his door open. The co-worker reported that to Kish, who then met with Palmieri and admonished him. About three weeks later, Kish personally observed Palmieri again driving the company truck on a busy street with the door open. This led Kish to present Palmieri with a formal warning letter the following day.

When Kish met with Palmieri to give him the first warning letter, the record reflects that Palmieri became agitated. He refused to countersign the letter, and, according to Kish, exclaimed, "there we[re] two lesbian manhaters [sic] . . . out to get him because he was a man." By this remark, Palmieri was referring to the co-worker who had first reported his open-door driving and the office's senior manager, both of whom were known to be homosexual. Palmieri regarded the women as hostile to his self-described "macho" personality.

Following this outburst, Kish directed Palmieri to remain on the premises so that she could summon another manager to witness his refusal to countersign the first warning letter. Instead, Palmieri left the building, contending that he had to go pick up his son. Several days later, on July 23, 2002, Kish served Palmieri with a second warning letter, chastising Palmieri for exhibiting "blatant disrespect toward a co-worker as well as another manager."

The third and final warning letter concerned Palmieri's leaving a COD (Cash on Delivery) package in March 2003 at a customer's residence without having the customer sign a receipt acknowledging the delivery. The customer had provided a note requesting that the package be left inside the door, with a check for the presumed amount of the delivery charges. This also violated company policies, as stated in the FedEx employee manual and reinforced with a memo on the subject that had been recently distributed in the Atlantic City office and discussed with staff, including Palmieri. When Palmieri accidentally "keyed in" the incorrect amount for the delivery, Kish and other supervisors at FedEx were alerted. After discussing the matter with upper management, Kish decided to issue a warning letter to Palmieri for this additional deviation from company protocol. Consequently, Palmieri was terminated on March 31, 2003.

Palmieri believed that Kish was motivated by discriminatory reasons in issuing the warning letters to him. He perceived that Kish was retaliating against him because he did not have a good relationship with his lesbian co-workers. Based on those perceptions, Kish filed two internal grievances with FedEx, one after the second warning letter and another after his discharge. These grievances were investigated by FedEx representatives, including personnel dispatched from its company headquarters in Tennessee, but resulted in no findings of discrimination or retaliation against Palmieri. His internal claims were thus denied.

In June 2003, Palmieri filed a complaint under the LAD with the Division. The complaint alleged that he had been the subject of gender-based retaliatory discrimination, and that the reasons given for his written reprimands and eventual discharge were pretextual. After FedEx denied these allegations of discrimination, the Division referred Palmieri's complaint to the Office of Administrative Law for a hearing before an Administrative Law Judge ("ALJ").

The ALJ conducted hearings over three days in August and November 2005. Palmieri and Kish both testified at the hearing, as well as several other FedEx employees, including the senior manager of the Atlantic City office who Palmieri had described as a lesbian. In the course of his testimony, Palmieri admitted calling the senior manager and another co-worker "lesbians" during his June 2002 meeting with Kish, but contended that his choice of words was merely descriptive and not pejorative.

After considering all of the testimony and various exhibits, the ALJ rendered a written decision on February 9, 2006. The ALJ concluded that Palmieri "failed to carry forward his burden to establish a causal relationship between his engagement in protected activity and his termination." Based on this factual determination, the ALJ recommended to the Division that Palmieri's claims under the LAD be dismissed. Palmieri then filed exceptions to the ALJ's findings, which were duly considered by the Director of the Division.

Subsequently, the Director issued a twenty-one page final agency decision on May 11, 2006. The Director adopted the ALJ's conclusion that Palmieri had failed to substantiate that he had been the victim of wrongful discrimination in the workplace, or that his firing was a retaliation for his filing of an internal complaint. Although the Director modified the ALJ's subsidiary findings in some limited respects, he shared the ALJ's ultimate determination that FedEx had legitimate business reasons for terminating Palmieri, that those reasons were not pretexts for gender discrimination, and that the company had not improperly retaliated against him. Among other things, the Director also concluded that FedEx had not substantially relied upon discriminatory factors in deciding to take adverse action against him. See McDevitt v. Bill Good Builders, Inc., 175 N.J. 519, 527 (2003).

Palmieri now appeals. He contends that (1) the Division erred in adopting the ALJ's determination, which was predicated in part upon a mistaken finding by the ALJ that Palmieri had admitted that he had been "angry" when he met with Kish in June 2002; (2) the record lacks evidentiary support for the conclusion that Palmieri's actions were not protected by the LAD; and (3) the Director erred in concluding that Palmieri's firing was not pretextual.

Our scope of review of the Director's final decision is limited. "An administrative agency's final quasi-judicial decision will be sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." In re Herrmann, 192 N.J. 19, 27-28 (2007) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)).

As the Supreme Court recently observed in Herrmann, a case in which the Court reinstated an administrative agency's final decision that initially had been vacated on appeal, "[t]hree channels of inquiry inform the appellate review function." Id. at 28. First, the reviewing court must consider "'whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law[.]'" Ibid. (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)). Second, the court must assess "'whether the record contains substantial evidence to support the findings on which the agency based its action[.]'" Ibid. (quoting Mazza, supra, 143 N.J. at 25). Third, the court should evaluate "'whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.'" Ibid. (quoting Mazza, supra, 143 N.J. at 25).

"When an agency's decision meets [these] criteria, then a court owes substantial deference to the agency's expertise and superior knowledge of a particular field." Ibid. (citing In re License Issued to Zahl, 186 N.J. 341 (2006); Brady v. Bd. of Review, 152 N.J. 197, 210 (1997); Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). Moreover, "[d]eference controls even if the court would have reached a different result in the first instance." Ibid. (citing In re Taylor, 158 N.J. 644, 657 (1999)).

As the state administrative agency charged with the enforcement of New Jersey's anti-discrimination laws, see N.J.S.A. 10:5-6, the Division on Civil Rights has long-recognized expertise to resolve disputes within its statutory purview. See Balsley v. N. Hunterdon Reg'l Sch. Dist. Bd. of Educ., 117 N.J. 434, 441 (1990) (noting the "extensive" remedial powers of the Division Director); Terry v. Mercer County Bd. of Chosen Freeholders, 86 N.J. 141, 157 (1981) (noting the "unique discretion and expertise" of the Division Director to effectuate the policies underlying the Law Against Discrimination); Lige v. Town of Montclair, 134 N.J. Super. 277, 280 (App. Div. 1975) (noting the "broad powers" of the Division to carry out its legislative mandates), aff'd, 72 N.J. 5 (1976); Evans v. Ross, 57 N.J. Super. 223 (App. Div.) (liberally construing the statutory authority of the Division's predecessor agency, the Division Against Discrimination), certif. denied, 31 N.J. 292 (1959). We are mindful of that well-established agency expertise in reviewing the Director's final decision in this case.

With respect to Palmieri's first point on appeal, FedEx stipulates that Palmieri did not acknowledge in his testimony that he had been "angry" when he met with Kish in June 2002. The ALJ was mistaken about this supposed admission. However, that misapprehension by the ALJ is inconsequential. There is substantial credible evidence in the record, apart from Palmieri's own testimony, that he was "belligerent and obnoxious" when Kish presented him with his first warning letter. The Director's final decision aptly summarizes the proofs in this regard:

Here, the ALJ found that Complainant [Palmieri] behaved in a belligerent and obnoxious manner toward Kish, and defied her authority as his supervisor. To maintain control of the workplace, Respondent [FedEx] had an interest in formally warning Complainant that such insubordinate behavior would not be tolerated. This is entirely reasonable and appropriate, and it is a rule with which Complainant agreed to abide by accepting the job with Respondent.

Moreover, in addition to Kish viewing Complainant as being insubordinate, it is clear that she viewed his statements regarding [the co-workers'] lesbian status and their motives with respect to Complainant as disrespectful and inappropriate. Even if Complainant did not use the more inflammatory phrase "man-hating lesbians" when referring to [the co-workers], it is apparent that Kish viewed Complainant as making a biased-based slur against a supervisor and another employee, which she found to be a disrespectful offense. It is also apparent that it was Kish's perception of Complainant's comments as a disrespectful offense that led to her issuing the warning letter. While employers cannot in a wholesale manner prevent their employees from expressing their feelings regarding possible discriminatory treatment on the job, they may impose and enforce rules regarding the respectful treatment of co-workers in the workplace. As Kish viewed the aggressive manner and context of Complainant's comments as a matter of "blatant disrespect," Complainant was subject to discipline for the comments.

Complainant states that he did not identify [the co-workers] as lesbians for inappropriate reasons, but merely tried to make "a complaint that their sexual preference motivated their gender discrimination." Although Complainant contends that this made his motives appropriate, the Director concludes to the contrary, that Respondent had a legitimate interest in keeping workplace free of bias-based outbursts. In light of this finding and the finding that Complainant behaved in an obnoxious and belligerent manner, the Director concludes that Respondent had a reasonable basis to discipline Complainant for non-protected activity.

To the extent that Complainant charged [the co-workers] with sex discrimination, he had a right to have his allegations investigated by Respondent and not ignored.

However, the issue here is not whether Respondent properly addressed Complainant's sex discrimination claim. The issue is whether, given Respondent's perception of the insubordinate and disrespectful manner in which Complainant made his charge, his utterance of a sex discrimination claim immunized him from discipline for all of his actions associated with his claim. The Director concludes that it does not. After weighing the interests of the parties, and especially since Respondent did nothing to dissuade Complainant from pursuing his internal sex discrimination claim, the Director concludes that Respondent's interest in preventing insubordination and eliminating hostile, bias-based statements from the workplace permitted discipline in this case. [Emphasis added; citations and footnote omitted.]

We concur that there is ample direct and circumstantial proof that, notwithstanding his failure to admit it, Palmieri exhibited anger at the June 2002 meeting with his supervisor. He did so in a manner unacceptable to any workplace. His insensitive tirade also suggested a lack of tolerance for his co-workers' sexual orientation, which is itself contrary to the policies of the LAD to eliminate such bias in the workplace. See N.J.S.A. 10:5-12a.

Palmieri's internal complaints of gender discrimination were found to be baseless after they were investigated by FedEx. The ALJ and the Director likewise had sufficient proof to find that Palmieri had not been the victim of retaliation for any alleged protected activity.

The Director also had ample reason to reject Palmieri's claim that the third warning letter, arising out of the COD package incident, was pretextual and too minor to warrant discipline. As the Director noted:

In this case, the rule which Complainant [Palmieri] believes was a mere "technical" violation served a legitimate business need. Kish's testimony demonstrates that Respondent [FedEx] faces a real risk of loss when a courier fails to follow the COD policy. As Kish explained, the shipper could bring court action against Respondent if a recipient claimed he or she didn't receive a COD package left in his or her absence, and the courier's signature would provide Respondent with no protection. Thus, even if Complainant's violation caused no loss to either the customer or Respondent for that particular delivery, Complainant's decision to fashion his own rules for deliveries is more than a failure to follow the technical letter of Respondent's policies. According to Kish, Respondent's requirements that COD packages be delivered directly to the customer, with the delivery documented by the customer's signature, is designed to prevent loss of the package and potentially substantial financial loss to Respondent. Without the customer's signature, the fact that Respondent received the necessary payment would not absolve it of responsibility if the package were damaged or stolen. In this context, Respondent had a logical basis for concluding that a warning was necessary to dissuade Complainant from continuing to make his own rules rather than following the procedures Respondent established to avoid financial loss. [Emphasis added; citation omitted.]

We similarly agree that it was legitimate and non-pretextual for FedEx to reprimand Palmieri for driving a delivery truck with an open door, in patent violation of company policies. Palmieri attempted to justify his two observed violations of this prohibition by asserting that they occurred on hot days. However, such physical discomfort does not excuse his clear deviation from FedEx safety protocols.

Having considered the record as a whole, we are satisfied that the Director's final decision in this case was supported by substantial evidence, consistent with the law, and neither arbitrary nor capricious. See In re Herrmann, supra, 192 N.J. at 27-28.



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