April 23, 2010
WILLIAM SHLALA, PLAINTIFF-APPELLANT,
CATHOLIC HEALTH AND HUMAN SERVICES, CATHOLIC COMMUNITY SERVICES, AND PHILLIP FRESE, PH.D., DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-3488-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 1, 2010
Before Judges Carchman, Lihotz and Ashrafi.
Plaintiff William Shlala, the Superintendent of the special education schools operated by defendant Catholic Community Services (CCS), appeals from a July 17, 2008 order of the Law Division dismissing his amended complaint alleging, among other things, that his dismissal from his position as Superintendent was in violation of the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (CEPA)*fn1. While other issues are implicated on this appeal, our primary focus is whether the trial judge erred in dismissing the CEPA claim against CCS and another organizational defendant, Catholic Health and Human Services (CHHS), because plaintiff failed to show that defendants' stated reasons for terminating his employment were a pretext for retaliation. We conclude that Judge Cifelli did not err in dismissing the complaint against CCS and CHHS, as well as the individual defendant Phillip Frese, Ph.D. Accordingly, we affirm.
Our consideration of the issues on appeal requires an expansive recitation of the relevant facts presented to the judge on the motion for summary judgment. CCS is one of several organizations "controlled by" CHHS. CCS is "primarily a social service agency." However, it also has a "schools component," consisting of five special education schools for "neurologically impaired and/or emotionally disturbed" children. Additionally, CCS operates a non-special education preschool program as well as a "diagnostic program" for the "independent evaluation" of students where there is disagreement about their abilities.
The New Jersey Department of Education (DOE), approved the five CCS special education schools as "private schools for the disabled." This designation allows these schools "to accept public school children who need to be placed out of district and in public or private settings." Based on that approval, CCS schools may "accept children from any school district in the state"; a school district then pays a set amount of tuition to CCS.
CCS deposited the monies it received as special education tuition payments into a common account with monies it received from "[g]rants, health, [and] Medicaid." In the early 2000s, CCS was investigated by the State, which determined that there were criminal irregularities concerning Medicaid payments made to CCS by the State as CCS was overbilling Medicaid and using Medicaid monies to fund its other activities. As a result, CCS's controller was charged and found guilty of a criminal offense, and CCS entered into a settlement, agreeing to reimburse approximately $34,000,000 to the State. Because of this Medicaid reimbursement matter, CCS was experiencing significant cash flow problems when plaintiff began his employment with CCS.
At that time and for the entire period that plaintiff was employed, CCS continued to deposit the special education tuition funds into a common account with other funds received by CCS. CCS would utilize the special education funds for the payment of non-school-related CCS expenses. At his deposition, CCS's former chief operating officer, Richard Suszek, testified that CCS "borrowed temporarily" from one funding source in order to pay expenses in CCS operational areas not related to that funding source, issuing "sort of an IOU" that would be accurately accounted for by CCS and against which the amount borrowed would be later repaid by CCS. Describing this temporary borrowing procedure, Suszek stated that, "from the outside looking in... one would think they [CCS] were diverting these funds elsewhere purposely for... some other reason and... not ever getting it back whole to the school system," but Suszek added that any such perception was incorrect.
In August 2001, plaintiff began his employment with CCS as the Superintendent of CCS's schools; alternatively, his job title was that of Director of the Division of Education at CCS. At his deposition, plaintiff testified that, beginning in the first year of his employment and continuing thereafter, he complained repeatedly to various members of CCS's upper-management, both about CCS's inappropriate commingling of CCS's special education tuition funds with funds from other sources and about the diversion of such tuition funds for the payment of CCS's non-school expenses. He asserted that these accounting and spending irregularities were contrary to controlling State regulations. These repeated complaints to his superiors at CCS provided the basis for his later CEPA-based claims for retaliation.
Complaints against plaintiff were also forthcoming. From August 2001 until April 28, 2004, plaintiff's employment was marked by multiple complaints by CCS employees concerning his management style and conduct. Taken as a whole, those complaints were later set forth by CCS as a basis for its termination of plaintiff's employment. Joseph Turco, who was CCS's Director of Human Resources from July 1997 to October 2003, claimed that plaintiff's general behavior toward other employees "was not consistent with CCS respect concepts" in "the way that he talked to people or didn't talk to people." According to Turco, plaintiff would "ignore" other employees or "treat you as if you're not there," and he projected an attitude that said "I'm a director and you're not important to me and he would do that pretty frequently with people."
Turco observed that if plaintiff thought that "you were not important to his outcome or goal, [then] you were not somebody he had any intention of even just being courteous to," and in fact, Turco's staff considered plaintiff to be "rude." Turco's efforts to have plaintiff project a more civil or friendly demeanor toward his fellow employees were unavailing; plaintiff "would continue to do the same things" despite Turco's remonstrations.
In December 2001 and January 2002, Turco met with the principals of the CCS schools regarding a telephone complaint that had been made on CCS's "confidential hotline."*fn2 The complaint concerned plaintiff's "management style," and Turco advised the principals that an effort had to be made by everyone to "understand each other's style," "to understand each other" by "[u]nderstanding the relationship between Superintendent and Principals" and to change certain long-standing operations and procedures.
On August 14, 2002, an anonymous complaint was lodged on the hotline, asserting that a memorandum from plaintiff to school employees concerning "new work standards" had "created a hostile work environment" and displayed plaintiff's "dictatorial" demeanor. The complaint asserted that plaintiff made significant changes unilaterally, without school staff input, and it attacked plaintiff's work habits and commitment to CCS's overall mission. The complainant further threatened to disclose to the media "the horrendous methods that Mr. Shala [sic] has employed with the school staff with the approval of CCS agency management."
The CCS hotline committee investigated the complaint and issued a September 6, 2002 report recommending that Turco meet with plaintiff "regarding his style" and tell plaintiff to include staff input when making decisions. The report further recommended that plaintiff account for his work time more closely and visit the schools regularly. The report said that "[p]art of the duty of the Division Director [Superintendent] is [to] manage staff issues effectively. Mr. Shlala should be put on notice that if complaints continue, even if they only have a mild validity to them, a change in leadership is recommended."
According to Turco, the committee meant that plaintiff was unable to "communicate effectively with his staff." The committee believed that this was "slowing down the leadership... of the department" and that things "just couldn't continue that way. It was draining resources and creating a bad environment."
On January 15, 2003, a complaint was lodged on the hotline, alleging "three incidents" involving a male school vice principal; one "relate[d] to sexual harassment of staff" by the vice principal. Plaintiff took some action concerning the complaint, and, on April 15, 2003, CCS's chief operating officer, Suszek, issued a "Warning Letter" to plaintiff, criticizing his "decision to unilaterally resolve this issue." That decision was "not in line with the Agencies [sic] policy and practice[,]" and plaintiff's "decision not to use progressive discipline also fails to follow Agency policy." On May 28, 2003, plaintiff issued a memorandum, disputing the basis for Suszek's criticism of his actions.
In approximately May 2003, Suszek met with Ann Boyd Hinton, who headed one of the CCS schools. According to Suszek, Hinton complained about plaintiff's "management style," asserting that "he was rude. He wasn't professional. He didn't communicate, [he] talked down to them, [and he] didn't adhere to the spirit or to the principles of what Catholic Community Services was all about." Because Hinton was the only principal to complain privately to him about plaintiff, Suszek attributed Hinton's complaint to her negative view of the control, oversight and accountability that plaintiff was establishing for CCS schools, all of which meant that "she didn't have that autonomous freedom that she may have enjoyed befor[e]."
CCS's human resources manager James Farrelly offered that, during or after May 2003, Suszek's replacement, Phillip Frese, received an anonymous handwritten letter, addressed to "Dr. Friece" [sic], complaining that plaintiff "has a negative and prejudice [sic] attitude toward minorities," reflected in his "nasty disrespect and racist treatment" of them.*fn3
On June 5, 2003, an anonymous complaint was lodged on the hotline, alleging that, at a "workshop" attended by "all employees, including secretaries" of a school, plaintiff was "threatening," "verbally abusive," and "very hostile," telling employees that he would have their licenses revoked if they left their employment without providing sufficient notice, and that "[h]e was gonna makes [sic] changes and if anyone didn't like it, they could leave." The complaint further said that plaintiff made threats to "people who might have spoken to higher-ups about him," telling the group that he did not care if persons contacted his superiors or complained on the hotline because "he was gonna do what he wanted to do." Plaintiff "was just verbally abusive and very rude[,]" and his behavior "upset our entire staff."
According to the complaint, plaintiff must have later realized that he had exceeded some bounds because, at lunch at the workshop, he "came up with a complete opposite speech" that stressed "everybody working together." Although there is no written report of the incident or response, neither party raises any factual question as to the incident or its aftermath.
On June 15, 2003, yet another anonymous complaint was lodged on the hotline against plaintiff and another CCS staffer, alleging both that the staffer was unqualified for the position to which plaintiff had assigned her, and that plaintiff "lacks tact... and is very disrespectful to employees and runs the school likes [sic] it's a dictatorship." The complaint further alleged that plaintiff did not take employee claims of sexual harassment and racism seriously, treating them rather as a "joke" and a "waste of his time." The complaint also asserted that plaintiff's "tactics have caused us not to get any school referrals [of special-education students] this school year and it has been the worst school year that Catholic Communities has ever had."
On August 20, 2003, two more anonymous complaints were lodged on the hotline, setting out job security concerns by employees who worked in CCS's pre-school program and who were told that the "school will be closing." The complaint alleged that plaintiff would not return telephone calls made to him either by employees or by parents of schoolchildren, who were "upset" about the prospective closing. As with the more recent hotline calls, no report followed, but neither plaintiff nor defendants deny the accuracy or content of the fact that there was such a complaint.
Plaintiff's secretary, Patty Arroyo, began her employment with CCS on April 7, 2003, and very shortly thereafter began keeping notes describing her concerns about working for plaintiff. In those notes, Arroyo described her experience at an employee orientation meeting, where she asked the presenter "a question pertaining to sexual harassment"; plaintiff "made [a] statement saying I need something new in my life." Arroyo wrote that she explained to the presenter that her question pertained to something that "happened on a previous job," but she was "embarrassed" by plaintiff's remark and "scared of losing my job."
Arroyo's notes also complained about plaintiff's comment in her presence that he "is ready to be someone's sugar daddy" as well as his comments that he disliked "disloyalty" and would be "vindictive" to a disloyal person, which "she perceived as a threat of retaliation if she complained about him." Her notes also included an entry indicating that plaintiff said that he has "connections with the 'mob.'"
At some point, plaintiff asked Arroyo "to adjust his computer, while he was [seated] at his desk, and he would not get up from the chair while she worked [on the computer,] so that she was 'leaning over him' while 'closing out a stuck file' on the computer."
On September 1, 2003, Arroyo filed a written complaint for workplace harassment against plaintiff with CCS's Human Resources department, based on plaintiff's alleged comments and the computer-adjustment incident, as well as on other "inappropriate remarks," "yelling" and "cursing" that she alleged had occurred in the office. An investigation ensued, following which Arroyo was determined to have been "hypersensitive" in the face of plaintiff's "boisterous" and loud "communication style." Insofar as the computer-adjustment allegation was concerned, any fault was determined to have been mutual, in that plaintiff should have moved out of Arroyo's way while she made the adjustment, and Arroyo should not have leaned over plaintiff but requested him to move before making the adjustment.
As a result of the investigation, Human Resources Director Turco was supposed to issue to plaintiff "a written warning stressing the importance of [a] non-threatening work environment." At his deposition, Turco remarked that he did not "recall that coming about," and the record does not include such a written warning.
On October 28, 2003, Assistant Principal Virgilio M. Alomar sent a letter to CCS's Human Resources Department, complaining that he had been "discriminated against, due to my National Origin (Puerto Rican) and have been exposed to a hostile work environment," as a result of plaintiff's promotion of a Caucasian woman, rather than him, to a position as a principal. However, plaintiff did not make the promotion unilaterally; it was made based upon the recommendation of an interviewing committee.
A series of hotline complaints quickly followed. On December 4, 2003, an anonymous complaint was lodged on the hotline, asserting that there were "serious and severe racial tensions going on in my workplace... amongst the general staff working in the building as well as the staff in the administrative offices."
On December 5, 2003, an anonymous complaint was lodged on the hotline concerning "the use of Agency [CCS] vehicles for personal use," chiefly by a school principal and with plaintiff's approval. The matter was resolved after an exchange of emails between plaintiff and hotline audit director Alice Blount-Fenney. On December 10, 2003, Blount-Fenney issued a confidential report concerning her investigation of an earlier hotline complaint about working conditions at a CCS school. Included in the report were the school's staff's perceptions of "potential biased treatment" by plaintiff because of his alleged favoring of certain employees over others.
The hotline investigations prompted complaints by plaintiff. On December 17, 2003, plaintiff filed a complaint with CCS's Director of Human Relations against Blount-Fenney, alleging that she failed both to communicate with him and to maintain her impartiality during hotline investigations, and that she attempted to "personally manage" CCS's Division of Education. Plaintiff's complaint against Bount-Fenney was not resolved before his employment with CCS was terminated. The chief operating officer Frese met with plaintiff in February 2004 and discussed with him his "inappropriate treatment of internal auditor Alice Fenney."
On February 11, 2004, plaintiff allegedly said aloud in the presence of Arroyo, that he "hasn't had an affair for a while." Arroyo later reported this comment when CCS personnel were conducting an investigation two months later, following plaintiff's suspension from his employment. Frese also noted that, on April 7, 2004, plaintiff said to his secretary, Arroyo, that plaintiff was a "dirty old dog." Arroyo thought that plaintiff's comment was made "in a sexual way," and she reported it to plaintiff's superiors. The ensuing investigation found no evidence that plaintiff made the "dirty dog" comment.
In addition to employee complaints about plaintiff's management style and conduct, plaintiff's employment as Superintendent of the CCS schools was marked by other problems.
First, total student enrollment in the CCS schools fell by approximately twenty-five percent during the two-and-one-half years when plaintiff was in charge. The total enrollment at CCS's special education schools fell from 209 students at the beginning of the September 2001 school year to 147 students in March 2004. Plaintiff recognized that one of his job functions was to "keep an eye" on the number of students enrolled in the schools and to increase the enrollment. CCS's school "budget was always postulated on the dollar amount of tuition [expected to be paid by the school districts sending children to CCS schools], which was dependent on the population of students[,]" and plaintiff would look at the schools' enrollment numbers to determine whether the schools had "made their... target number to support the budget."
A consequence of the declining enrollment was that CCS's "deficit," which totaled $724,084 on July 1, 2001, when plaintiff began his employment, climbed to $1,614,112 by March 4, 2004, near the time that plaintiff's employment ended. Plaintiff recognized that CCS had a sizable deficit in 2004, but he attributed it to losses brought on by difficulty concerning the State certification of school personnel.
CCS had hired teachers, administrators, social workers and nurses who may have met the educational requirements for their positions, but who did not have the necessary State certifications for those positions. Plaintiff was made aware of this certification problem in the fall of 2003, was informed that CCS would have to return certain monies it had already received if the certification issue was not addressed and resolved, and was charged by his superiors at CCS with solving the problem.
At a meeting with the CCS principals, plaintiff indicated his awareness that he and the principals were responsible for solving the certification problem: we still are coming up with [a] few people who aren't appropriately certified and I even said [to the principals] look folks, this is coming down through [CCS's chief financial officer] John Westervelt from [chief operating officer] Dr. Frese. If this continues, people are going to be terminated, your administrators on line [sic]. I said I can assure you my head will be rolling down the street and when you see it it's because you will be rolling along with me, we got to straighten this out.
As a result of the deficient certifications, CCS was not getting reimbursed by the State and, as a consequence, incurred between a one million and a two million dollar shortfall during the 2003-2004 school year.
A final problem early in plaintiff's tenure concerned his purchase of computers from a local Apple Store. CCS had budgeted $450,000 for the purchase of computers in the 2001-2002 and 2002-2003 school years. Also, CCS had a known, though unwritten, purchasing policy that required Board or upper-management approval for purchases in excess of $100,000.
In early 2002, plaintiff ordered computers valued at $229,879 from an Apple Store. He did so without obtaining the approval of CCS's upper management and was in violation of CCS's purchasing policy.
CCS did not initially approve of plaintiff's purchase of the computers, but later approved payment for them, because they had already been delivered and set up. Though not clear in the record, apparently plaintiff placed another order for Apple computers on March 7, 2003, again without purchase approval, though CCS again later paid for the computers.
In the beginning of April 2004, plaintiff's secretary, Arroyo, met with personnel from CCS's Human Resources department, complaining to them about plaintiff's "dirty old dog" remark. The matter eventually made its way to Frese, who later indicated that the "issue with Patty Arroyo was a culmination of negative reports that I had with... [plaintiff's] performance[.]" According to Frese, those "negative reports" included both the loss of more than a million dollars because of the staff-certification problem and the growing school deficit resulting from "the inability of... [plaintiff] to turn the schools into a break-even versus a loss situation."
Based both on Arroyo's complaint and on Frese's general unhappiness with plaintiff's job performance, Frese decided to suspend plaintiff without pay. Frese did so in order to move plaintiff "away from the situation where Patty Arroyo was feeling unsafe, feeling threatened," so that an investigation could be conducted into the matter. The suspension was made without pay because the complaint leveled by Arroyo was severe.
On April 12, 2004, plaintiff met with personnel from CCS's Human Resources department and was informed that he was being suspended without pay pending an investigation of the Arroyo complaint and other matters. On the next day, April 13, 2004, plaintiff's counsel sent a letter to Frese, objecting that the suspension was in derogation of policies set out in CCS's employee manual.
CCS conducted an investigation that ranged beyond the Arroyo complaint and touched upon issues concerning plaintiff's job performance. As a result of that investigation, Frese decided to terminate plaintiff's employment. On April 28, 2004, the head of CCS's Human Resources department sent a letter to plaintiff, informing him that "your employment is terminated effectively [sic] immediately." The letter recited that plaintiff had initially been suspended both because of complaints involving "inappropriate remarks" made by him, including the "dirty old dog" comment, and because of assertions that he had "acted inappropriately" toward racial minorities and was "adverse to management." The letter continued:
[t]hese and other unacceptable comments and actions led management to review your performance generally. We are, to say the least, enormously disappointed. Enrollment in the schools has fallen substantially. Our deficit, which totaled $724,084 prior to your hire in [sic] July 1, 2001, has ballooned to $1,614,112 from then through March 4, 2004. You have committed or condoned violations of our purchasing policy (i.e., computer purchases totaling $450,000) and hiring policy.
The list could go on for pages. Suffice to say that based upon our review of all the circumstances we have reached the conclusion that we must discharge you.
Following plaintiff's termination, his workplace computer was taken from his office and placed in CCS's information technology (IT) department. By November 2005, plaintiff's computer was stored with approximately seventy-five other unusable computers in the basement of the IT department. Between November 2005 and February or April 2006, those computers were "stripped" and "gutted" for usable parts, and the remnants were sold to a recycler. Defendants' inability to produce the hard drive of plaintiff's computer later during discovery forms the basis for plaintiff's fraudulent-concealment claim.
On April 27, 2005, plaintiff*fn4 filed a complaint in the Law Division against CCS, CHHS and Frese, alleging that he had been unlawfully retaliated against, in violation of CEPA, and subjected to unlawful discrimination in the form of disparate treatment, in violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -49 (LAD). Plaintiff subsequently amended the complaint and then filed a second amended complaint, reasserting his prior claims and adding a claim for the fraudulent concealment or spoliation of evidence based on defendant's destruction of the hard drive of the computer that plaintiff had used during his employment.
Defendants thereafter moved for summary judgment and Judge Alfonse J. Cifelli issued an extensive 72 page oral opinion dismissing the complaint in its entirety.
Plaintiff appealed from that part of the judgment dismissing his CEPA cause of action, including the CEPA-based claim against Frese, individually, as well as his claim for punitive damages under CEPA. He then amended his notice of appeal to include the spoliation claim.
On appeal, plaintiff asserts that the motion judge erred by making factual and credibility determinations as well as applying an improper standard in dismissing the CEPA claim; by concluding that CEPA did not apply to plaintiff's supervisor, Frese; and by dismissing the fraudulent concealment, spoliation and punitive damage claims.
We address the issues seriatim.
As we noted at the outset, the thrust of asserted error is that the judge erred in concluding that plaintiff had failed to establish that CCS and CHHS's stated reasons for terminating his employment were a pretext for unlawful retaliation. Specifically, plaintiff contends that the trial judge erred by disregarding his evidence of pretext, by viewing the evidence in the light least favorable to him, by making factual and credibility determinations adverse to him and by applying an incorrect summary judgment standard to dismiss his CEPA claim.
Before addressing plaintiff's specific arguments, we review the analysis considered by the judge in granting defendants' motion.
"[T]he purpose of CEPA is 'to protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct.'" Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998) (quoting Abbamont v. Piscataway Bd. of Educ., 138 N.J. 405, 431 (1994)); Donelson v. Diehart Chamber Ward, ___ N.J. Super. ___, ___ (App. Div. 2010) (slip op. at 14).
CEPA prohibits an employer from taking any retaliatory action against an employee who either discloses to a supervisor any activity or practice that the employee reasonably believes is a violation of a law or regulation or who objects to such an activity or practice. See N.J.S.A. 34:19-3a and c. Prohibited retaliatory action includes an employee's suspension from or termination of his or her employment. N.J.S.A. 34:19-2e. Donelson, supra, ___ N.J. Super. at ___ (slip op. at 14).
Plaintiff pursued his CEPA action under a "pretext" theory. See Zappasodi v. N.J. Dep't of Corr., 335 N.J. Super. 83, 89 (App. Div. 2000) (recognizing New Jersey case law indicating that "the pretext theory and the burden shifting analysis under the LAD should be applied to CEPA cases"); Kolb v. Burns, 320 N.J. Super. 467, 476-79 (App. Div. 1999) (discussing the pretext theory and its application in a CEPA case). That is, plaintiff asserted that defendants' stated reasons for suspending him and terminating his employment were a pretext for the actual reason, which was to retaliate against him for disclosing to CCS's upper management both the inappropriate commingling of CCS's special education tuition funds with funds from other sources and the diversion of such tuition funds for the payment of CCS's non-school expenses.
Proof of suspension from or termination of employment for a wrongful reason under a pretext theory in a CEPA case "involves a three-step process." Id. at 478. First, a plaintiff must establish a prima facie case by showing that an adverse employment action taken against him or her was, in fact, a wrongful retaliatory action prohibited by CEPA. Next, once plaintiff has established a prima facie case, the burden of production is shifted to the employer to rebut the presumption that the adverse employment action was wrongful and retaliatory by articulating legitimate reasons for the adverse action.
Ibid. Finally, upon such a showing by the employer, the burden of production is shifted back to the plaintiff to prove that the employer's proffered legitimate reasons were, instead, a pretext for retaliatory action taken by the employer. Ibid.
The trial judge determined, and defendants concede, that plaintiff had satisfied the first step of the three-step process and a prima facie case under CEPA by presenting proofs that, when viewed in the light most favorable to plaintiff, tended to show that defendants may have retaliated against him for objecting to and informing CCS's upper management about the diversion of special education tuition funds for the payment of CCS's non-school expenses.
Judge Cifelli then moved to the second step of the pretext theory, which shifted the burden of production to defendants by requiring them to articulate legitimate non-retaliatory reasons for the adverse employment actions (suspension from and termination of plaintiff's employment) they took against him. Ibid.; see Jansen v. Food Circus Supermarkets, Inc., 110 N.J. 363, 382 (1988) (noting that, under this second step, the "burden of production -- not the burden of proof or persuasion -- shifts to the employer").
As the judge recognized, defendants' burden under the second step was "light," in that they merely had to present legitimate non-retaliatory reasons for plaintiff's suspension and termination, no matter whether those reasons proved ultimately persuasive or not. See Maiorino v. Schering-Plough Corp., 302 N.J. Super. 323, 347 (App. Div.) ("The defendant employer need not prove that its proffered reason actually motivated its behavior because throughout this burden shifting model, the burden of proving intentional discrimination [in a LAD case or retaliatory action in a CEPA case] always remains with the plaintiff employee."), certif. denied, 152 N.J. 189 (1997).
The judge determined that defendants had satisfied the second step by setting forth legitimate non-retaliatory reasons for plaintiff's suspension and termination in the April 28, 2004 termination letter, including the complaints by Arroyo and numerous other CCS employees concerning plaintiff's management style, the loss of monies due CCS because of the staff certification problem, the decrease in student enrollment at the CCS schools and the corresponding increase in the amount of the schools' deficit during plaintiff's tenure as Superintendent, and plaintiff's violation of the purchasing policy through his purchase of the Apple computers.
The judge then considered the third step in the analysis, which shifted the burden of production back to plaintiff to prove that defendants' "proffered reason [for the adverse employment action] is merely a pretext, i.e. that it was not the true reason for the employment decision." Id. at 347; Kolb, supra, 320 N.J. Super. at 478.
To defeat a defendant-employer's motion for summary judgment at this third step, where the employer has proffered legitimate non-retaliatory reasons for the adverse employment action, a plaintiff-employee:
'need only point to sufficient evidence to support an inference that the employer did not act for its proffered non-discriminatory [or non-retaliatory] reasons.' In other words, the plaintiff, as the nonmoving party, 'must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them 'unworthy of credence,' and hence infer 'that the employer did not act for [the asserted] non-discriminatory [or non-retaliatory] reasons.'
[Ibid. (quoting Kelly v. Bally's Grand, Inc., 285 N.J. Super. 422, 432 (App. Div. 1985); Fuentes v. Perskie, 32 F.3d 759, 765 (3rd Cir. 1994)) (internal citations omitted).]
The judge examined the evidence of pretext presented by plaintiff and determined that he had failed to demonstrate any significant weaknesses, implausibilities, inconsistencies, incoherencies or contradictions in defendants' stated reasons for first suspending and thereafter terminating his employment; the judge then dismissed the CEPA claim.
Rule 4:46-2(c) provides that a summary judgment motion must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law."
A trial judge's determination of whether a genuine issue of material fact exists that precludes summary judgment "requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520, 540 (1995). In considering a summary judgment motion, the trial judge must not make credibility determinations, but should leave such matters to the fact-finder. Ibid.
However, while the motion judge does not engage in the typical weighing of evidence that a factfinder would, the judge does not abstain from all balancing of evidence. Instead, the judge is required to analyze and sift through evidential materials and "determine the range of permissible conclusion that may be drawn", id. at 531 (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 596, 106 S.Ct. 1348, 1357-58, 89 L.Ed. 2d 538, 553-55 (1986)), to determine whether a genuine issue of material fact exists. See Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 167 (1985) (requiring a motion judge to make a "discriminating search" of the evidence); Tomeo v. Thomas Whitesell Constr. Co., 176 N.J. 366, 370 (2003) (stating that summary judgment necessitates some weighing of the evidence).
If a party opposes summary judgment by merely drawing attention to issues of fact that are "of an insubstantial nature," there is no such issue and summary judgment is appropriate. Brill, supra, 142 N.J. at 529 (quoting Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75 (1954)). "Substantial means [h]aving substance; not imaginary, unreal, or apparent only; true, solid, real,... firmly based, a substantial argument." Ibid. (quoting The Compact Oxford English Dictionary 1947 (2d ed. 1993)) (internal quotation marks omitted).
Determining what is substantial requires an analytical process, where the motion judge is "guided by the same evidentiary standard of proof... that would apply at the trial on the matters when deciding whether there exists a genuine issue of material fact." Id. at 533-34 (citation omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56, 106 S.Ct. 2505, 2513, 91 L.Ed. 2d 202, 215-16 (1986).
Inevitably, the judge must consider not just the quantum of proof, but the quality of evidence as well. Brill, supra, 142 N.J. at 534; Schiavone Constr. Co. v. Time, Inc., 847 F.2d 1069, 1089 (3d Cir. 1988); Costello v. Ocean County Observer, 136 N.J. 594, 614 (1994).
Applying this summary judgment standard to the third step of the three-step process underlying plaintiff's pretext theory, a trial judge is required to determine, without making credibility assessments, whether the competent evidential materials show that defendants' stated reasons for suspending and firing plaintiff were a pretext masking unlawful retaliation.
Here, in determining whether plaintiff made the requisite showing of pretext to defeat the summary judgment motion, the trial judge divided defendants' stated reasons for terminating him into four general categories: (1) employee complaints about plaintiff's management style and conduct, (2) the staff certification problem, (3) the declining school enrollment and increasing school deficit problem, and (4) the purchasing policy problem.
Concerning the employee complaints, the judge noted that it was "undisputed that a multitude of complaints were lodged against the plaintiff" on the hotline or through contact with upper management, "including complaints regarding management, style, negative and/or prejudicial attitude towards minorities, acts of sexual harassment, etc." as well as the two complaints by Arroyo. As the judge noted, the "volume of complaints received on the hotline" and the "ongoing stream of complaints against plaintiff[,] whether justified or not" created "internal conflict and disruption" at CCS.
He concluded that such conflict and disruption reflected "plaintiff's apparent inability to effectively communicate [with] and/or supervise subordinates" and indicated that his "somewhat aggressive [and] dictatorial management style created a disruptive and/or unproductive atmosphere" at CCS. In light of those circumstances, the judge correctly observed that the numerous employee complaints, standing alone, "would appear to be a sufficient basis for [the] termination of [plaintiff's] employment" by CCS.
Fuentes v. Perskie, supra, 32 F.3d 759, is particularly helpful in exploring the impact of employee complaints in the Kolb analysis. In Fuentes, supra, an upper-manager at the New Jersey Casino Control Commission (Papp) relied upon complaints from State licensing-division workers about the conduct and manner of the plaintiff (Fuentes), as well as similar complaints from members of Fuentes's staff, as a basis for awarding a senior Commission position to another employee, rather than to Fuentes. 32 F.3d at 761-63, 766-67. Fuentes thereafter brought an action for "national origin employment discrimination," which was dismissed pursuant to the defendants' summary judgment motion. Id. at 761-62.
On appeal, the Third Circuit rejected Fuentes's attack on Papp's reliance on the employee complaints as a basis for his employment decision, reasoning that:
Fuentes also attacks Papp's testimony that he received complaints from five to ten members of the Division of Licensing critical of Fuentes because Papp did not remember their names almost three years after the events in question transpired. Additionally, he discounts two of the four complaints Papp received from members of Fuentes' staff... because two of those members were allegedly biased against him and hence not credible (we note that Fuentes has not contended that those staff members were biased against him because of his national origin). These criticisms amount to little more than the school ground retort, "Not so," an approach which... does not create a material issue of fact.
In the context at hand, the issue is not whether the staff members' criticisms of Fuentes were substantiated or valid, or whether Papp was remiss to rely upon feedback received from members of Fuentes' staff who might be (non-discriminatorily) biased against him. Instead, since Papp, not the staff members, was the relevant decision-maker, the question is whether Papp believed those criticisms to be accurate and actually relied upon them, since only if Fuentes can ultimately prove that Papp in fact did not rely upon them can Fuentes show "pretext." We conclude that a factfinder could not reasonably find that Fuentes' cross-examination impeached Papp's statement to the point of rendering them weak, implausible, or incredible. [Id. at 766-67 (citation omitted).]
In the present case, Frese made the decisions first to suspend plaintiff and later to terminate his employment with CCS. Frese testified that, in making those decisions, he relied, in part, on the numerous employee complaints lodged against plaintiff. The rationale of Fuentes provides a sound basis for Frese's decisions in relying on the numerous employee complaints.
As in Fuentes, plaintiff's arguments addressing the employee complaints amount only to the "Not so" retort rejected in Fuentes. Similar to Fuentes, plaintiff produced nothing to demonstrate that Frese disbelieved the negative criticism at the core of those complaints or that he did not actually rely on those complaints in making the employment decisions that were adverse to plaintiff. In sum, plaintiff failed to present "competent evidential materials" showing that Frese's stated reliance on the employee complaints, whether those complaints were valid or not, was merely a pretext for a retaliatory motive. Brill, supra, 142 N.J. at 540.
CCS's second cited reason for terminating plaintiff's employment concerned the staff certification problem. Here the judge noted that the evidence showed that, "as a result of an audit finding unqualified teachers [and other school-staff members]... the defendants [CCS] were required to forfeit a substantial amount of money, approximately two million dollars."
In response, plaintiff asserts that he was not responsible for hiring CCS staff members or for assuring that CCS staff members had the appropriate certifications. Plaintiff also claims that the "alleged loss of $2.0 million in connection with the certification issue" is overstated, in that CCS only lost "about a million dollar[s]" because of the certification problem. We cannot accept the rationale that the loss of one million dollars as opposed to two million creates a factual issue when a significant loss is conceded and such loss is attributable to the certification issue.
Plaintiff denies responsibility for addressing and resolving the certification problem; however, his own words confirm his recognition that he shouldered that responsibility. At a meeting with the schools' principals, plaintiff stated that he and the principals had been charged by CCS's upper management with the task of solving the certification problem and that school administrators, principals and even plaintiff could have their employment terminated if the problem was not resolved. As plaintiff explained, "I can assure my head will be rolling down the street and when you [the principals] see it it's because you will be rolling along with me, we got to straighten this [certification problem] out."
In his decision, the judge alluded to that comment noting that it "indicate[d] contrary to plaintiff's contention his knowledge as well as the severity of the certification problem, as well as his acknowledgment as to his responsibilities and [sic] curing the aforementioned problem." The judge concluded that the sizable loss of monies brought on by plaintiff's failure to solve the certification problem provided a sound basis, by itself, for the termination of plaintiff's employment.
The judge analyzed the issue correctly. Plaintiff presented nothing to demonstrate that he did not have at least some responsibility for the certification problem and the monetary loss resulting from it. He failed to demonstrate through the presentation of "competent evidential materials" that summary judgment should be denied because Frese's reliance on the staff certification problem as a basis for his suspension and termination decisions was a mere pretext that concealed a retaliatory motive proscribed by CEPA. Brill, supra, 142 N.J. at 540.
CCS's third stated reason for terminating plaintiff concerned the declining school enrollment and increasing school deficit problem. The judge noted that the evidence showed that, as Superintendent, plaintiff had a responsibility to increase school enrollment, that "enrollment at the special education schools substantially decreased to the tune of approximately 25%" when he was Superintendent, and that the decrease in enrollment contributed to an increase in the schools' deficit from "approximately 700,000 to 1.6 million" dollars. Plaintiff disputes whether school enrollment actually decreased during his tenure as Superintendent and whether he had any "responsibility for any budget deficit from student enrollment."
The undisputed evidence demonstrated that total enrollment at CCS special education schools fell by about twenty-five percent during plaintiff's term as Superintendent, from 209 students at the beginning of the September 2001 school year to 147 students in March 2004. Also, contrary to plaintiff's assertion that he had no "responsibility for any budget deficit [arising] from [a decline in] student enrollment," he testified that one of his job responsibilities was to "attempt to increase the enrollment at the schools," as well as acknowledging that he "would try to keep an eye on their [the schools'] numbers, the numbers of students they had versus the approved budget."
Plaintiff asserts that "there is no evidence of any such deficit" attributable to a decline in student enrollment. Yet, he testified that he was not surprised that the ending deficit was around "1.6" million dollars because he was aware that it would be a "sizable dollar amount." Plaintiff, however, attributed the sizable deficit to the staff certification problem, rather than to the decline in student enrollment.
Frese testified in support of the termination letter's statement that the "deficit, which totaled $724,084 prior to your hire in July 1, 1001, has ballooned to $1,644,112 from then through March 4, 2004." According to Frese, those deficit figures were supported by documentation from CCS's "Financial Department."
Considering the spectrum of proofs, there was ample evidence in the record to support the contention that the schools' deficit had increased steeply, while student enrollment had declined precipitously, during the period that plaintiff was Superintendent. Because the schools' budget depended, at least in part, upon student enrollment, there was a logical connection in the evidence between the two; a decline in student enrollment would tend to produce an increase in the schools' deficit because there would be fewer dollars available to fund the budget.
In opposing defendants' summary judgment motion, plaintiff failed to challenge any of the elements of the enrollment and budget rationale for plaintiff's termination. Plaintiff failed to present evidence demonstrating: (1) that there had been no decline in student enrollment during his term as Superintendent, (2) that he had no responsibility for maintaining or increasing student enrollment in order to meet targeted school budget numbers during that term, and (3) that the schools' deficit did not increase during that period, at least in part, as a logical result of the decline in student enrollment. The judge did not err in concluding that the evidence showing a decline in school enrollment and the increase in the deficit provided a sound basis for CCS's termination of plaintiff's employment.
CCS's last stated reason for terminating plaintiff's employment involved "violations of our purchasing policy (i.e., computer purchases totaling $450,000)." Plaintiff disputes the legitimacy of that reason, arguing both that there was no proof presented of such a purchasing policy and that he presented evidence showing that he "received the proper approvals for the computer purchase." Plaintiff also asserts that CCS "destroyed documents saved on his [workplace] computer evidencing [CCS's chief financial officer John] Westerveldt's involvement in purchasing the Apple computers."
Plaintiff actually presents two positions. He first challenges whether there was any proof of a purchasing policy. The proofs reveal that there was such a policy but it was not reduced to writing. He then argues that he followed the policy and had the approval of upper managers to make the purchase.
Plaintiff is also incorrect when he contends that he received the proper approvals for the computer purchase. Plaintiff relies upon testimony from CCS's associate controller, Thomas Strano, asserting that Strano admitted that he, chief operating officer Suszek and Westerveldt "executed multiple, separate documents approving the Apple computer purchase."
The documents reveal that plaintiff initially purchased the first lot of computers in the first half of 2002 but do not show any involvement by Strano, Suszek or Westerveldt with the purchase until September 2002 at the earliest. This conforms to the testimony from the three men and Frese, that plaintiff did not obtain approval for the computer purchase prior to making the purchase, and that CCS later approved payment for the computers only because some of them had already been delivered and set up.
Finally, plaintiff contends that CCS destroyed important documents on his workplace computer that would demonstrate "Westerveldt's involvement in purchasing the Apple Computers." We discuss the issue of the destruction of documents, infra; however, we note that plaintiff does not state that the missing documents showed that Westerveldt or others approved of the computer purchase at, or prior to, the time that plaintiff made the purchase.
In sum, as in the prior instances, plaintiff failed to present competent evidence demonstrating that CCS's reliance on his violation of its purchasing policy was merely a pretext for retaliatory action proscribed by CEPA. Brill, supra, 142 N.J. at 540. The trial court did not err in concluding that the evidence showing such a policy violation provided yet another sound basis for CCS's termination of plaintiff's employment.
Finally, we reject plaintiff's argument that the judge failed to consider other instances of "pretext" although, as we view the contention, they are more appropriately characterized as retaliation. He cites his suspension, his termination, CCS's "disregard" of his complaint against Blount-Fenney and CCS's "disregard of his attorney's April 13, 2004 written objection." Plaintiff asserts that the trial court's "pretext conclusion failed to consider these retaliatory acts in the pretext analysis".
The difficulty in this argument is that plaintiff has prevailed on the first prong of retaliation, the first step in the analysis. There was no need for the judge to consider these additional elements on the issue of pretext.
Plaintiff failed to present competent evidential materials to show pretext. Brill, supra, 142 N.J. at 540. A rational jury could not find that plaintiff discredited the legitimate, non-retaliatory reasons for plaintiff's suspension and dismissal posited by defendants, and summary judgment was appropriate. Ibid. The evidence supporting those non-retaliatory reasons for suspension and dismissal was so one-sided, the trial judge correctly determined that CCS and CHHS should prevail as a matter of law on their motion for summary judgment on plaintiff's CEPA claim. Ibid.
Plaintiff next argues that the trial judge erred in dismissing his CEPA claim against the individual defendant, Frese, concluding that "there is no individual liability" under CEPA. Frese was CCS's chief operating officer, and he made the decision first to suspend plaintiff and later to terminate his employment with CCS. In granting the motion, the trial judge relied on both the statute as well as the Supreme Court's decision in Higgins v. Pascock Valley Hosp., 158 N.J. 404, 425 (1999).
While we agree with plaintiff that personal liability is not precluded, we conclude that plaintiff has not established a basis for individual liability against Frese. We reach this result by reiterating that plaintiff failed to demonstrate that the reasons set out by defendants in the termination letter for first suspending and later terminating him from his employment were a pretext for retaliatory action prohibited by CEPA. Frese's actions were premised on the reasons established by CCS and CHHS for plaintiff's dismissal.
In sum, the absence of a viable action under CEPA against the employer here bars any similar action against Frese. Nothing presented by plaintiff establishes additional facts or an independent cause of action that can survive dismissal of the underlying claim against CCS or CHHS.
Plaintiff next argues that the trial judge erred in granting summary judgment dismissing his claim for the fraudulent concealment of evidence involving the hard drive on his workplace computer.
The relevant facts supporting this claim are that plaintiff certified that he wrote and received "many e-mails from Defendants' upper managers about the schools' activities." He said that those e-mails included documents "relevant to my CEPA claim" and pertaining to staff-certification and purchase-policy reasons cited by defendants as legitimate non-retaliatory reasons for his termination. According to plaintiff, "[a]ll of the documentation I wrote during my employment was saved on my workplace computer," which he did not have any access to following his suspension on April 12, 2004.
On April 13, 2004, plaintiff's counsel sent a letter to defendant Frese, objecting to plaintiff's suspension. In the letter, counsel requested that copies of plaintiff's "personnel file" be sent to her. Counsel did not, however, request any information from plaintiff's workplace computer.
On April 20, 2004, plaintiff filed a complaint with the Division on Civil Rights, alleging reverse discrimination. Along with his complaint, he filed a "Document Request" and an "Information Request," neither of which requested information from plaintiff's workplace computer, and on April 28, 2004, plaintiff's employment with CCS was terminated. Plaintiff then withdrew his civil rights complaint. One year later, on April 27, 2005, plaintiff filed his first complaint alleging violation of CEPA.
The first request for production of documents was made on August 1, 2005. Significantly, the production-request's definition of the term "documents" did not specifically include the information contained on computers generally or on the hard drive of plaintiff's workplace computer specifically.
One day later, in his first set of interrogatories, which was served on defendants on August 2, 2005, plaintiff defined the term "Documents" to include "computer cards and disks, tapes, printouts, memory cores or similar data sources," a definition that would appear to include information contained on plaintiff's computer. Responses to discovery by both plaintiff and defendants did not occur for approximately eighteen months.*fn5
Defendants responded to plaintiff's first request for the production of documents in January 2007 and to his interrogatories on May 16, 2007. On May 17, 2007, plaintiff's new counsel sent a letter to defendants, asserting that there were "serious deficiencies" in defendants' response to plaintiff's first request to produce documents. Significantly, however, plaintiff's counsel did not assert that these deficiencies involved information contained on the hard drive of plaintiff's computer.
On July 9, 2007, more than three years after he was terminated, plaintiff sent a second request for the production of documents to defendants, this time explicitly defining the term "documents" to mean "all data stored in any computer or word processing equipment" and expressly requesting all documents "saved and/or otherwise existing in the hard drive, memory device, and/or other similar repository located in Plaintiff William Shlala's workplace computer used during his employment by you."
Defendants responded in late August 2007, with a certification from CCS's IT department director, Edward Blair, informing plaintiff that his workplace computer had been recycled and the hard drive reformatted. The computer had been removed from plaintiff's office following his termination in April 2004, stored with approximately seventy-five other computers in the IT department's basement, and, between November 2005 and April 2006, stripped of usable parts and recycled along with the other computers. As Bair certified, there was no "remnant" of plaintiff's computer in the IT department, as of the time he gave his certification.
On October 25, 2007, plaintiff amended his complaint to include a claim for the fraudulent concealment of evidence based upon the missing workplace computer hard drive.
Subsequently, the trial judge granted defendants' summary judgment motion and dismissed plaintiff's fraudulent concealment claim. He based his decision on plaintiff's failure to request the information contained on his workplace computer earlier in the litigation and on his failure to establish the elements of a prima facie case of fraudulent concealment.
The judge noted that plaintiff at no point sent a "preservation letter" to defendants, asking them to protect the information on his computer. Nor did he avail himself of the opportunity to file a petition, pursuant to R. 4:11-1(a), to compel defendants to preserve the computer. See Gilleski v. Cmty. Med. Ctr., 336 N.J. Super. 646, 655 (App. Div. 2001) (describing the availability of such a petition to litigants who move in a timely manner to preserve evidence). Nor did plaintiff plainly request that defendants produce such information from his computer hard drive in his first request for the production of documents. Rather, as the trial court correctly determined, the first request for documents on plaintiff's workplace computer was made by plaintiff on July 9, 2007, which was more than three years after his employment had been terminated.
"New Jersey has recognized the tort of fraudulent concealment of evidence" as a remedy for the spoliation of such evidence. Id. at 651. In Rosenblit v. Zimmerman, 166 N.J. 391, 406-07 (2001), the Supreme Court identified the "elements that must be established by a plaintiff in such a fraudulent concealment action[,]" as:
(1) That defendant in the fraudulent concealment action had a legal obligation to disclose evidence in connection with an existing or pending litigation;
(2) That the evidence was material to the action;
(3) That plaintiff could not reasonably have obtained access to the evidence from another source;
(4) That defendant intentionally withheld, altered or destroyed the evidence with purpose to disrupt the litigation; [and]
(5) That plaintiff was damaged in the underlying action by having to rely on an evidential record that did not contain the evidence defendant concealed.
As to the first element, plaintiff asserts that, because defendants were on notice as early as the time that he filed his civil rights complaint that he would litigate his termination, there arose an obligation on their part to preserve all documents that might be used in such litigation, including any documents on his computer. Plaintiff grounds this obligation on Tartaglia v. UBS PaineWebber Inc., 197 N.J. 81, 113-14 (2008), where the plaintiff asserted that, when she told her employer "that her attorney would contact the company" about her termination, the employer "was on notice of her potential claim and under a duty to retain any and all documents that might be used in her threatened litigation." Similarly, plaintiff asserts that defendants had a legal obligation to preserve the information on his computer hard drive as soon as they learned that he would litigate. The difficulty here is that the first request for information from plaintiff's computer came three years after the litigation commenced. Numerous other requests were made for documentation without reference to the computer. Although plaintiff asserts that he made a specific request for this documentation in his first request for document production, we find no such reference. Plaintiff did not meet the first prong of the Gilleski case.
Plaintiff fares no better on the second prong (the materiality of the information on the computer hard drive) and the fifth element (the damage suffered by plaintiff in having to rely upon other information sources). As set out by the trial court, plaintiff's evidence shows only his general recall of the material on his workplace computer. He did not describe specific documents that were on his computer that were material to his case. He did not satisfy the second and fifth elements of the fraudulent-concealment claim.
Concerning the third prong, whether plaintiff could have reasonably obtained access to the evidence on the workplace computer from another source, the trial judge was correct when he held that plaintiff made no showing of his inability to do so. The record simply does not describe any efforts by plaintiff in this regard.
As to the fourth prong, whether defendants intentionally destroyed the computer hard drive in order to disrupt the litigation, the trial judge correctly concluded that the evidence showed that the hard drive was disposed of "in the normal course of business." The record is devoid of proof that defendants intentionally destroyed the computer in order to thwart plaintiff's legal action against them. At most, the evidence shows that, when defendants disposed of plaintiff's workplace computer, no one considered that computer to be material or significant to this litigation.
The trial court was correct in concluding that plaintiff failed to establish a prima facie case of failure to preserve the computer hard drive evidence and properly dismissed that cause of action.
Finally, plaintiff asserts that the trial judge erred in dismissing his claim for punitive damages. We disagree.
In granting summary judgment and dismissing plaintiff's CEPA-based claim, including his claim for punitive damages, the judge reasoned that since plaintiff had failed to provide sufficient proof of pretext to support a viable CEPA claim grounded on defendants' retaliation, the evidence could not support plaintiff's claim for punitive damages grounded on egregious retaliatory misconduct by defendants in violation of CEPA.
"Punitive or exemplary damages are sums awarded apart from compensatory damages and are assessed when the wrongdoer's conduct is especially egregious. They are awarded upon a theory of punishment to the offender for aggravated misconduct and to deter such conduct in the future." Leimgruber v. Claridge Assocs., Ltd., 73 N.J. 450, 454 (1977).
Here, the misconduct would have arisen out of defendants' alleged retaliatory actions, which were the subject of plaintiff's underlying CEPA claim. However, the CEPA claim was dismissed because of plaintiff's failure to provide proof of pretext that would necessarily show retaliation. Instead, the proofs demonstrated that defendants had legitimate and non-retaliatory reasons for first suspending and later terminating plaintiff's employment. There was no proven retaliatory misconduct upon which to base an award of punitive damages.
Plaintiff argues that punitive damage claims may only be addressed and disposed of by a jury, citing case law holding that "the punitive damage claim should have been submitted to the jury[,]" Hernandez v. Montville Twp., 354 N.J. Super. 467, 476 (App. Div. 2002), aff'd, 179 N.J. 81 (2004), and that "punitive damages, which are available under CEPA..., should be determined by a jury as the trier of fact." Abbamont, supra, 138 N.J. at 432.
Neither case supports his position. In Hernandez, the jury returned a verdict in the plaintiff's favor on the CEPA claim, but the trial judge granted judgment notwithstanding the verdict, dismissing that claim. Hernandez, supra, 354 N.J. Super. at 471-72. Earlier, the trial court had "denied plaintiff's request to send the issue of punitive damages to the jury, concluding [that] the facts did not support the imposition of such damages." Id. at 471.
We remanded the punitive-damage claim for a jury trial because the plaintiff had already succeeded on his underlying CEPA claim and retaliatory conduct had already been proven. The open question was whether that retaliatory conduct was so egregious that it invited an award of punitive damages. Contrary to plaintiff's argument, we did not indicate in Hernandez that only a jury could address and dispose of punitive-damages claims. Rather, we determined that, under the circumstances of that case, a jury trial on the punitive damages issue was necessary.
Similarly, in Abbamont, the Supreme Court remanded the punitive-damages claim for a jury trial where the plaintiff had already succeeded on his underlying CEPA claim and where the remaining question was whether the retaliatory conduct that had already been proven was so egregious that it could support an award of punitive damages. Again, contrary to plaintiff's argument, the Abbamont Court did not determine that only a jury could decide a punitive-damages claim. Rather, the Court determined that, under the circumstances presented by that case, a jury trial was required.
Here, there was no successful underlying CEPA claim showing actionable retaliatory conduct by defendants upon which to base plaintiff's punitive damages claim.