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Fernandez v. Costco Wholesale Corp.

January 8, 2009

LIGIA FERNANDEZ, ALEX TASAMA, ANGELICA BEDOYA, MARIA RESTREPO, IVONNE RAMIREZ, ANGELA BERMUDEZ, ANITA IDICA, RUENA TIONGCO, RUTH ZAMBRANO, SHARON SCARBOROUGH, MARIA VARGAS, NORALBA GONZALEZ,*FN1 PLAINTIFFS-APPELLANTS,
v.
COSTCO WHOLESALE CORPORATION AND DAN CALLAGHAN, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Hudson County, L-4188-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 22, 2008

Before Judges Stern, A. A. Rodríguez and Payne.

Plaintiffs, former employees of defendant Costco Wholesale Corporation of various races and national origins, appeal from an order of summary judgment dismissing their action against Costco and its Hackensack store's Warehouse Manager, A. Daniel Callaghan, charging violations of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -34, and defamation. On appeal, plaintiffs raise the following arguments:

POINT ONE THE TRIAL COURT ERRED IN FAILING TO APPLY THE PRICE WATERHOUSE ANALYSIS IN LIGHT OF THE RACIST REMARKS UTTERED BY A DECISION-MAKER DURING THE ADVERSE EMPLOYMENT DECISION.

POINT TWO THE TRIAL COURT ERRED AS A MATTER OF LAW IN IGNORING DISCRIMINATORY REMARKS MADE BY SOMEONE WHO PARTICIPATED IN THE DECISION MAKING PROCESS TO SATISFY THE PRICE [WATERHOUSE] TEST.

POINT THREE THE TRIAL COURT ERRED AS A MATTER OF LAW IN IGNORING CALLAGHAN'S RACIST REMARKS AS DIRECT [EVIDENCE] OF THE CORPORATE CULTURE OR THE INFORMAL MANAGERIAL ATTITUDE AT THE TIME OF THE ADVERSE EMPLOYMENT ACTION.

POINT FOUR THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT SINCE THERE WERE GENUINE ISSUES OF MATERIAL FACT IN DISPUTE REGARDING DEFENDANTS' REASONS FOR PLAINTIFFS' TERMINATION.

POINT FIVE THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT REGARDING PLAINTIFFS' DEFAMATORY CLAIMS ON THE GROUND THAT WHETHER THE CONDITIONAL PRIVILEGE WAS ABUSED IS A QUESTION FOR THE JURY, NOT THE COURT.

I.

The following facts are relevant to our consideration of the issues raised. In the early part of 2005, Costco ran a promotion with Whirlpool Corporation and Huish Chemical Company in which Costco members who purchased a Whirlpool appliance and an additional one-year warranty received two coupons for free Kirkland liquid fabric softener and dryer sheets in the mail directly from Huish. The promotion was different from all others offered by Costco because it provided free product, not product at a discounted price or two products for the price of one.

On March 19, 2005, a customer presented two coupons for fabric softener and dryer sheets to cashier Angela Bermudez, stating that they had been received in the mail. After validating the coupons and completing the transaction, Bermudez did not place the coupons in the register's drawer with other redeemable items, but instead, kept them, offering them to customers and employees in five transactions on March 19, six on March 21 and eight on March 22. Among the store employees who thus received free products were plaintiffs Ligia Fernandez, Angelica Bedoya, Maria Vargas, and Anita Idica. In addition to obtaining free product for herself, on March 19, Bedoya, the warehouse's Membership Manager, performed a manager's override on Bermudez's register so that plaintiff Ruth Zambrano could utilize the coupons. Zambrano obtained additional fabric softener and dryer sheets, with Bermudez as cashier, on March 21.

Having obtained the coupons from Bermudez, plaintiff Alex Tasama, a part-time cashier, utilized them himself to obtain two bottles of fabric softener and two boxes of dryer sheets on March 19. On this occasion, Tasama permitted his assistant cashier, plaintiff Noralba Grajales, to utilize Tasama's register to process the transactions but did not follow store procedures when changing cashiers. Tasama additionally obtained for himself three bottles of fabric softener and three boxes of dryer sheets in two transactions on March 21, utilizing plaintiff Ivonne Ramirez as cashier, and plaintiff Maria Restrepo obtained two bottles of fabric softener and two boxes of dryer sheets in the same fashion. Tasama was the cashier for two other transactions on March 19, including one involving Grajales, who utilized the member card of employee Euro Armijos, and six transactions on March 22. Among those utilizing Tasama to obtain fabric softener and dryer sheets on March 22 were plaintiffs Ivonne Ramirez, Ruena Tiongco, and Sharon Scarborough. In total, forty-three bottles of fabric softener and thirty-five boxes of dryer sheets were obtained by use of the coupons during the four-day period from March 19 to 22.

On March 21, 2005, Sami Nasr, the manager checking the receipts of employees leaving the building when the store closed, noted that a number of employees had register returns disclosing the receipt of free fabric softener and dryer sheets. Suspicious, he advised Assistant Warehouse Manager Paul Pelusio of his findings. Their subsequent investigation of computer records suggested misuse of coupons by a number of store employees. The evidence was left in a file for Warehouse Manager Callaghan to review on March 22.

Upon reviewing the material presented, Callaghan called his superior, Rob Leuck, Vice-President for the Northeast Region. Leuck, in turn, advised Callaghan to contact Regional Loss Prevention Manager Kevin Goulet. Thereafter, Callaghan, Goulet and sales auditor Jenny Garcia reviewed every transaction in which the subject coupons had been utilized, determining from that review that fifteen Costco employees had misused the coupons, including the twelve plaintiffs in the present action. None had purchased a Whirlpool appliance. The information was forwarded to Leuck, who directed Callaghan to interview the employees and, if warranted, suspend them pending termination. During the course of the interviews, which took place between March 24 and 26, it was learned that Armijos had not misused the coupons, but had only loaned his membership card to ...


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