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Norenius v. Multaler

September 11, 2008

SINEAD NORENIUS, AN INDIVIDUAL, AND THOMAS SCOTT HANNAWAY, AN INDIVIDUAL, PLAINTIFFS-APPELLANTS,
v.
MULTALER, INC., D/B/A YON-KA USA,*FN1 A CORPORATION, AND HERVE PONTACQ, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-449-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 5, 2008

Before Judges Axelrad, Payne and Sapp-Peterson.

In this appeal, plaintiffs, Sinead Norenius and Thomas Scott Hannaway, appeal the dismissal of their complaint against defendants Multaler, Inc., d/b/a Yon-Ka USA (Multaler) and Herve Pontacq (Pontacq). The original complaint alleged violations of the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49; the California Fair Employment and Housing Act (FEHA), Cal. Gov't Code 12900 to -12996; and common law claims asserted under both New Jersey and California laws. The proposed second amended complaint alleged violations of FEHA and common law claims asserted under California laws, and violations of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. We affirm the dismissal of plaintiffs' New Jersey LAD and common law claims and the dismissal of Hannaway's discrimination, retaliation, and wrongful discharge claims brought under FEHA. We reverse the dismissal of Hannaway's CEPA claims and Norenius' statutory claims brought under FEHA and her common law claims asserted under California law.

Multaler is a cosmetics company headquartered in Rockaway, New Jersey, with offices in Colorado and California. Norenius worked in the California office from March 2000 until September 2005. Hannaway worked out of Colorado for two years between 2004 and 2006. Norenius claims that during the five and one half years that she worked for Multaler, Pontacq, its chief operating officer, who was based in New Jersey, regularly subjected her to sexual harassment by making sexual statements, "comments, insinuations and descriptions" in the workplace, and despite her complaints, the hostile work environment continued. Multaler's response to her complaints about Pontacq's behavior was "not bad for him." Additionally, she contends that Pontacq's sexually harassing conduct was not limited to offensive conduct specifically directed towards her but it also pervaded the workplace. In June 2005, Norenius claims Pontacq took several of her accounts from her. As a result, her income was drastically reduced. Norenius contends she was forced to resign in September 2005 due to Pontacq's sexually harassing and retaliatory conduct.

Hannaway alleges that in October 2005, he notified the New Jersey Attorney General's Office (AG) that Multaler was engaged in insurance fraud and improper solicitation of charitable donations under false pretenses. Hannaway claims that after Pontacq learned that he raised allegations about its activities to the AG and that he had also agreed to be a witness in connection with any action Norenius took against the company, Pontacq reduced his sales territory.

On November 3, 2005, Hannaway's attorney sent a letter to Multaler advising that he had been retained "to protect [Hannaway's] legal rights in connection with, among other things, a potential cause of action for retaliatory termination (for his anticipatory testimony in the Norenius legal proceedings), defamation of character and a hostile work environment." In November 2005, Pontacq reassigned some of Hannaway's accounts, including some of his higher quality accounts, to another zone leader. Multaler also set new, higher sales goals for Hannaway, goals that Hannaway contends were almost impossible to meet given his reduced territory. Additionally, Hannaway claims that Pontacq defamed him by proclaiming that he "is a male prostitute and/or adulterer." Hannaway contends that he resigned in January 2006 due to the hostile work environment created by Pontacq.

Plaintiffs filed a twelve-count complaint against Multaler and Pontacq in early 2006. Plaintiffs alleged sexual harassment and hostile work environment (Count One); failure to maintain an environment free from sexual harassment (Count Two); sexual discrimination retaliation (Count Three); wrongful termination in violation of public policy (Count Four); breach of contract (Count Six); retaliation (Count Seven); failure to prevent discrimination in violation of the LAD and FEHA (Count Eight); wrongful retaliation resulting in constructive termination in violation of public policy (Count Nine); free speech retaliation (Count Ten); slander (Count Eleven); and libel (Count Twelve).

In lieu of answering, defendants moved to dismiss the complaint pursuant to Rule 4:6-2(e), failure to state a claim upon which relief may be granted. Defendants contended that plaintiffs' complaint must be dismissed because they were not employed in New Jersey and that even plaintiffs' occasional contact with New Jersey through business trips was insufficient to subject defendants to the substantive laws of New Jersey as to their discrimination claims. Next, defendants argued that plaintiffs' common law claims of wrongful termination were supplanted by the LAD. Finally, defendants contended that Hannaway failed to "allege the facts necessary to support a claim for constructive termination" and failed to plead his defamation claims with specificity.

During oral argument before the court conducted on August 4, 2006, plaintiffs' counsel expressed his view that defendants' motion was "a time for us to really figure out which law is going to be applied[,]" and that if the court accepted defendant's arguments, then "New Jersey corporations can effectively usurp any kind of New Jersey courts from dealing with sexual harassment if they have satellite offices and just have everything out of state and they can never be prosecuted in the State of New Jersey for sexual harassment[.]" Ultimately, plaintiffs' counsel suggested that "a lot of this is much to do about nothing because looking at California FEHA and New Jersey. . . it's identical in terms of what Your Honor would be applying if we applied California law versus New Jersey law."

The court responded to plaintiffs' position by suggesting that the issues before it may involve the choice of forum. However, the court dismissed the LAD claims embodied in the first ten counts because neither Norenius nor Hannaway were "inhabitants" of New Jersey, noting that that "New Jersey [c]courts have limited the LAD to New Jersey residents who actually work in New Jersey." The court also dismissed the claims asserted under FEHA, as the court found there was nothing in the record demonstrating that in advance of instituting the New Jersey action, plaintiffs "filed with the [Department of Fair Employment and Housing] DFE[H] or received a right to sue letter." The court rejected plaintiffs' argument that dismissal of their LAD and FEHA claims would leave them without a remedy, noting that it was also undisputed that remedies were available to them under both California and Colorado law and "[t]heir decision not to pursue those remedies[] does not mandate the application of the LAD."

Turning to their claims asserted under the FEHA, the court observed:

FEHA requires an aggrieved person to file a timely and sufficient administrative complaint with the Department of Fair Employment and Housing and receive a right to sue notice from the Department of Fair Employment and Housing before pursuing a claim in court. The government code of California, Section 12960, 12965, the case of RoJo v[.] Kliger, [52 Cal. 3d 65, 83 (Cal. 1990)].

This administrative remedy is a jurisdictional prerequisite to resort to the Court, Johnson v[.] City of Loma Linda, [24 Cal. 4th 61, 70 (Cal. 2000)].

Failure to file an administrative charge for a violation of FEHA before commencing a suit is a grounds for dismissal. Okoli v[.] Lockheed Technical Operations, Co., [36 Cal. App. 4th 1607, 1613, (Cal. App. 1995)]. [See also], Martin v[.] Lockheed Missiles and Space Company, [29 Cal. App. 4th, 1718, 1724 (Cal. App. 1994)].

California courts rigorously enforce the administrative prerequisite. They have expressly prohibited suit from being brought under the FEHA against any party not named in a verified administrative complaint, and have forbidden plaintiffs from raising new claims in their civil suit that were not contained in an administrative complaint. See Valdez v[.] City of Los Angeles, [231 Cal. App. 3d 1043 (Cal. App. 1990)].

In their complaint, plaintiffs do not allege that they have filed with the DFE[H] or received a right to sue letter. Further, in their opposition, plaintiffs do not mention that an administrative complaint has been filed. Therefore, these claims under FEHA must be dismissed for failure to exhaust their administrative remedies.

As to Hannaway's claim under FEHA, Hannaway cannot bring a claim under the FEHA because a nonresident of California cannot bring such a claim unless he alleges the allegedly tortious conduct occurred in California.

In Campbell v[.] Arco Marine, Inc., [42 Cal. App. 4th 1850 (Cal. App. 1996)], the Appellate Court concluded that the FEHA should not be construed to apply to nonresidents employed outside the state when the tortious conduct did not occur in California. Here, Hannaway does not allege a single tortious activity occurred in California and admits that he resided in Colorado. Plaintiffs offer no opposition to Campbell in their papers; therefore, Hannaway cannot bring a claim under the FEHA.

Likewise, the court dismissed the breach of contract action, concluding that the cause of action was not cognizable under New Jersey law "because general language in an employee handbook that the company complies with all applicable laws regarding equal employment opportunities without regard to age does not create a binding contractual obligation not to discriminate." The court observed that the facts underlying the breach of contract claim were contrary to the LAD and that therefore the claim added nothing to plaintiffs' statutory claims.

Next, the court, relying upon Jones v. Aluminum Shapes Inc., 339 N.J. Super. 412, 428 (App. Div. 2001), dismissed the constructive discharge claims. In reviewing the allegations in the complaint, the court concluded that Hannaway failed to allege any conduct "he experienced [that] was so intolerable that a reasonable person would be forced to resign." Rather, the court found the allegations were limited to Hannaway's "disagreement with defendant over reconfiguration of his sales territory."

The court also dismissed plaintiffs' common law claims alleging hostile work environment, retaliation, and wrongful termination, finding that these claims were supplanted by the LAD. Finally, Counts Eleven and Twelve of the complaint addressed Hannaway's defamation claims. The court granted leave to Hannaway to amend those counts to plead them "with more specificity."

Plaintiffs filed a motion for leave permitting Hannaway to file an amended complaint and to vacate the August 4 order dismissing the complaint pursuant Rule 4:50-1 because the court had dismissed the complaint with prejudice, a fact plaintiffs' counsel had overlooked because of mistake, inadvertence or excusable neglect.*fn2 Rather than provide more specific facts in the proposed amended complaint on the defamation claims as the court had directed, Hannaway filed a four-count complaint alleging CEPA violations. Defendants moved to dismiss Hannaway's amended complaint and opposed the motion for relief from judgment. Prior to the return date for these motions, plaintiffs filed a letter brief in further support of their motion for leave to amend and in opposition to defendants' cross-motion to dismiss. Plaintiffs also submitted a proposed second amended complaint dated December 16, 2006,*fn3 in which Norenius renewed her causes of action for sexual harassment, hostile work environment, retaliation, and constructive discharge. Her claims were all asserted under FEHA and California's common law. Hannaway continued to assert his CEPA claims.

The court conducted oral argument on the motions on January 12, 2007 and, one week later, entered an order denying Norenius' motion to vacate the August 4 order, denying Hannaway's motion for leave to file an amended complaint as to Counts Eleven and Twelve, and granting defendants' cross-motion dismissing plaintiffs' ...


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