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Joseph A. Donelson v. Dupont Chambers Works

June 9, 2011

JOSEPH A. DONELSON, PLAINTIFF, AND JOHN SEDDON, PLAINTIFF-APPELLANT,
v.
DUPONT CHAMBERS WORKS, DEFENDANT-RESPONDENT, AND PAUL KAISER, DEFENDANT.



The opinion of the court was delivered by: Justice Albin

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Joseph A. Donelson v. DuPont Chambers Works (A-112-09) (065628)

Argued December 1, 2010 --Decided June 9, 2011

ALBIN, J., writing for a majority of the Court.

The question presented in this case is whether, under the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8, an employee who becomes the victim of employer retaliation for engaging in statutorily protected whistle-blowing activities and who becomes psychologically disabled due to that retaliation can pursue a lost-wage claim without having to prove a constructive discharge.

Defendant DuPont Chambers Works (DuPont), which manufactures chemical products, employed plaintiff John Seddon for approximately thirty years. In December 2002, Seddon was an operator technician in the phosgene building at one of DuPont's facilities. Phosgene is a "highly toxic" and "very reactive chemical." Among Seddon's duties was to ensure the safe operation of equipment and the safe handling of dangerous chemicals in the building. He was also responsible for the safety of those who worked there and those who lived in the surrounding area. In December 2002, Seddon expressed to a shift manager his concern about the dangerous manner in which DuPont's security guards were conducting random searches of employees' cars at nighttime. Drivers were made to exit from their cars at the front gate and stand unprotected in the dark while passing traffic, including trucks, whizzed by. Because DuPont did nothing to ameliorate the safety hazards caused by these stops, Seddon filed a complaint with the federal Occupational Safety and Health Administration (OSHA). After DuPont became aware of the OSHA complaint, it appointed Paul Kaiser to serve as Seddon's direct shift supervisor. Kaiser began imposing sick- and vacation-day-reporting requirements specific to Seddon, who previously did not report to a shift supervisor.

In October 2003, Seddon filed complaints with DuPont's management about unsafe conditions in the operation of the phosgene reactor. In response, the DuPont Guardian Manual, to which Seddon referred in detailing safety violations, was removed from the phosgene control area where Seddon worked. According to Seddon, Kaiser falsely accused him of forging his timecards and DuPont's management falsely accused him of failing to take a proper reading of a caustic chemical and of making a fictitious entry in a log. There followed a negative performance review of Seddon and the institution of performance reviews every three months. During this time period, Kaiser subjected Seddon to constant verbal abuse. Seddon reported to DuPont's corporate headquarters that he had become the target of harassment for merely voicing safety concerns.

Seddon was placed on short-term disability with pay and lost the considerable overtime that he had been earning. As a condition of his reinstatement, DuPont required that Seddon be examined by three mental-health experts and undergo a fit-for-duty evaluation. Seddon was then cleared to return to work. Significantly, however, one of the mental-health experts diagnosed Seddon as exhibiting "features of significant dysphoria and vulnerability to depression." The suspension, which lasted fifty-three days, made Seddon feel "worthless" and "beaten" and he suffered anxiety attacks. Moreover, DuPont required Seddon to work twelve-hour shifts in isolation. Seddon began seeing a therapist and psychiatrist and took a six-month leave of absence. After completing that leave of absence, DuPont gave Seddon a disability pension. Seddon never returned to DuPont.

In February 2005, Seddon filed a civil complaint under CEPA. Seddon also asserted the common-law claim of intentional/negligent infliction of emotional distress. Seddon sought compensatory damages for "loss of earnings and other employment benefits" and for suffering mental anguish, humiliation, and injury to his reputation. At the beginning of the trial in January 2008, DuPont moved to bar Seddon's economic-damages claim for front and back pay because he had not pled constructive discharge and DuPont had not terminated him. The trial court denied the motion. Following a several-week trial, the trial court charged the jury that a recovery of lost wages was not dependent on proving a constructive discharge. The jury returned a verdict in favor of Seddon and awarded him $724,000 for the "economic losses he ha[d] suffered as a proximate result of DuPont's violations of [CEPA]" and $500,000 in punitive damages. Additionally, the trial court awarded Seddon $523,289 in counsel fees.

The Appellate Division reversed and entered judgment in favor of DuPont, concluding that Seddon could not prevail on a lost-wage claim under CEPA unless he proved an actual or constructive discharge. In justifying that decision, the panel relied, in part, on Appellate Division cases construing the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. In addition, the panel vacated the punitive-damages award and the award of attorneys' fees.

The Supreme Court granted Seddon's petition for certification, "limited to the issue whether recovery for economic losses associated with back and front pay requires proof of actual or constructive discharge under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8."

HELD: Given the facts before the Court, lost wages are recoverable in a Conscientious Employee Protection Act (CEPA) case, even in the absence of a constructive discharge.

1. CEPA prohibits an employer from taking "any retaliatory action against an employee" who engages in certain protected activity. N.J.S.A. 34:19-3 (emphasis added). "'Retaliatory action'" is defined as "the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment." N.J.S.A. 34:19-2(e) (emphasis added). An employee who suffers "retaliatory action" may file a civil suit and, if he prevails, is entitled to "[a]ll remedies available in common law tort actions." See N.J.S.A. 34:19-5. The statute further provides that "[t]he court shall also order, where appropriate and to the fullest extent possible[,] . . . compensation for all lost wages, benefits and other remuneration." Ibid. A discharge encompasses not just an actual termination from an employment, but a constructive discharge. A constructive discharge occurs when an employer's conduct "is so intolerable that a reasonable person would be forced to resign rather than continue to endure it." (citation omitted). But the universe of possible retaliatory actions under CEPA is greater than discharge, suspension, and demotion; it includes "other adverse employment action taken against an employee in the terms and conditions of employment." N.J.S.A. 34:19-2(e). Cast in that light, an "adverse employment action" is taken against an employee engaged in protected activity when an employer targets him for reprisals -- making false accusations of misconduct, giving negative performance reviews, issuing an unwarranted suspension, and requiring pretextual mental-health evaluations --- causing the employee to suffer a mental breakdown and rendering him unfit for continued employment. See N.J.S.A. 34:19-2(e). To the extent that DuPont, by its retaliatory action, proximately caused Seddon to suffer a mental injury incapacitating him from his former employment, he has "the right to recover damages for diminished-earning capacity." (citation omitted). The Court rejects DuPont's assertion that the legislative history of CEPA or the constructive-discharge jurisprudence under LAD suggests a contrary result. (Pp. 15-20)

2. Since its creation, CEPA's overall structure has remained essentially unaltered, but the scope of its protections and the breadth of its remedies have expanded considerably. The definition of "[r]etaliatory action" remains in its original form, but the scope of protected activities has been expanded, and CEPA's remedy provision, N.J.S.A. 34:19-5, has been strengthened twice since its enactment. The remedy provision does not intimate that a constructive discharge is the only basis for a lost-wage claim in the circumstances before the Court. Moreover, this Court has never concluded in a LAD retaliation case that front and back pay can be awarded only in cases of actual or constructive discharge. CEPA and LAD are statutes that have their own distinct purposes and are worded differently to achieve those purposes. The trial court properly charged the jury that Seddon could only receive "economic damages related to his psychiatric disability" if he proved that DuPont "proximately caused his disability, and that his disability rendered him unable to perform work for [the company]." With that charge, and based on the record before it, the jury had the authority to find that DuPont's retaliation rendered Seddon unfit for work and that Seddon was entitled to front and back pay for lost wages. (Pp. 20-26)

The judgment of the Appellate Division is REVERSED andthe jury's verdict and award of damages is REINSTATED. In addition,because the Appellate Division did not decide Seddon's challenge to the sufficiency of the attorneys' fees awarded to him or DuPont's challenge to the punitive-damages award, the case is REMANDED to the trial court for consideration of these and any other unaddressed issues.

JUSTICE LaVECCHIA filed a separate, DISSENTING opinion, in which JUSTICE HOENS joins, stating that while she has no disagreement with the majority that the Legislature created an important and necessary remedy for whistle-blowers through the enactment of CEPA, the majority errs in allowing plaintiff to camouflage his constructive discharge allegation as a nondescript CEPA violation, thereby permitting him to reap the benefit of the more generous scope of relief available for constructive discharge claims without enduring the more onerous burden of proof associated with that cause of action.

JUSTICE RIVERA-SOTO filed a separate, ABSTAINING opinion, for the reasons previously expressed in Hopewell Valley Citizens' Group, Inc. v. Berwind Property Group Development Co., L.P., 204 N.J. 569, 585-587 (2010) (Rivera-Soto, J., dissenting).

CHIEF JUSTICE RABNER and JUSTICE LONG and JUDGE STERN (temporarily assigned) join in JUSTICE ALBIN's opinion. JUSTICE LaVECCHIA filed a separate, dissenting opinion, in which JUSTICE HOENS joins. JUSTICE RIVERA-SOTO filed a separate, abstaining opinion.

Argued December 1, 2010

On certification to the Superior Court, Appellate Division whose opinion is reported at 412 N.J. Super. 17 (2010).

JUSTICE ALBIN delivered the opinion of the Court.

A jury determined that DuPont Chambers Works*fn1 (DuPont) violated the Conscientious Employee Protection Act (also referred to as CEPA), N.J.S.A. 34:19-1 to -8, by retaliating against one of its employees, plaintiff John Seddon, for reporting safety concerns about the company's operation. The retaliatory acts caused Seddon to suffer, in effect, a mental breakdown rendering him unfit for continued employment at DuPont. The jury found that Seddon's lost wages were the proximate result of DuPont's retaliation and awarded him both economic and punitive damages.

The Appellate Division overturned the verdict and damages award, reasoning that the trial judge erred by not instructing the jury that Seddon could be awarded lost wages only if he was constructively discharged. According to the Appellate Division, Seddon was not entitled to lost wages unless "[t]he employer's conduct [was] 'so intolerable that a reasonable person would be forced to resign rather than continue to endure it.'" Donelson v. DuPont Chambers Works, 412 N.J. Super. 17, 31 (App. Div. 2010) (citation and quotation omitted).

We now reverse the Appellate Division. Constructive discharge is but one ground for recovery of lost wages under CEPA. CEPA does not permit an employer to take an "adverse employment action" against an employee for reporting workplace-safety violations. N.J.S.A. 34:19-2(e), -3. If an employer engages in unlawful retaliation, then it is accountable for the damages proximately caused to the employee. Here, the trial judge properly instructed the jury on both the elements of a CEPA claim and the common-law principles of damages that apply to such a claim. Seddon introduced medical testimony that the reprisals against him for his whistle-blowing activities mentally disabled him from continued employment at DuPont. That was a sufficient basis for the award of lost wages. Seddon was not required to show that a "reasonable person" -- one not psychologically injured -- would have left DuPont because of the intolerable conditions of his employment.

We therefore reinstate the jury's verdict and award of damages.

I.

Defendant DuPont, which manufactures chemical products, employed plaintiff John Seddon for approximately thirty years.*fn2

In December 2002, Seddon was an operator technician in the phosgene building at one of DuPont's facilities. Phosgene is a "highly toxic" and "very reactive chemical."*fn3 Among Seddon's duties was to ensure the safe operation of equipment and the safe handling of dangerous chemicals in the building. He was also responsible for the safety of those who worked there and those who lived in the surrounding area.

In December 2002, Seddon expressed to a shift manager his concern about the dangerous manner in which DuPont's security guards were conducting random searches of employees' cars at nighttime. Drivers were made to exit from their cars at the front gate and stand unprotected in the dark while passing traffic, including trucks, whizzed by.*fn4 Because DuPont did nothing to ameliorate the safety hazards caused by these stops, Seddon filed a complaint with the federal Occupational Safety and Health Administration (OSHA).

After DuPont became aware of the OSHA complaint, it appointed Paul Kaiser to serve as Seddon's direct shift supervisor. Kaiser began imposing sick- and vacation-day-reporting requirements specific to Seddon, who previously did not report to a shift supervisor.

In October 2003, Seddon filed complaints with DuPont's management about unsafe conditions in the operation of the phosgene reactor. Seddon warned that deficiencies in the operation of the reactor could cause an explosion and the release of deadly gasses into the atmosphere, killing and seriously injuring nearby residents. Seddon compared the safety violations relating to the phosgene reactor to those that led to the infamous chemical disaster in Bhopal, India.*fn5 In response, the DuPont Guardian Manual, to which Seddon referred in detailing safety violations, was removed from the phosgene control area where Seddon worked.

A few months later, according to Seddon, Kaiser falsely accused him of forging his timecards. Seddon also stated that, in March 2004, DuPont's management falsely accused him of failing to take a proper reading of a caustic chemical and of making a fictitious entry in a log. There followed a negative performance review of Seddon and the institution of performance reviews every three months. During this time period, Kaiser subjected Seddon to constant verbal abuse. Seddon reported to DuPont's corporate headquarters that he had become the target of harassment for merely voicing safety concerns.

Although DuPont's investigators questioned Seddon about his safety complaints and the ensuing harassment, their attention focused on allegations that Seddon had threatened DuPont employees, including Kaiser -- allegations that Seddon categorically denied. In April 2004, based on a recommendation by DuPont's employee-assistance counselor, Seddon was placed on short-term disability with pay. During that time, Seddon lost the considerable overtime that he had been earning. As a condition of his reinstatement, DuPont required that Seddon be examined by three mental-health experts and undergo a fit-for-duty evaluation. Three independent evaluators, a psychiatrist and two psychologists, examined Seddon and cleared him to return to work. Significantly, one of the mental-health experts diagnosed Seddon as exhibiting "features of significant dysphoria and vulnerability to depression."*fn6

The suspension, which lasted fifty-three days, made Seddon feel "worthless" and "beaten." Moreover, DuPont placed Seddon on "probation" subject to performance reviews every three months. Seddon maintained that Kaiser continued to make false accusations that Seddon had threatened him and other employees. Interactions with Kaiser caused Seddon to suffer anxiety attacks, and Seddon lived in constant fear that he would become the target of continued false charges of misconduct.

In September 2006, DuPont required Seddon to work twelve-hour shifts in isolation. For Seddon, working a twelve-hour shift alone was "torture." One month later, Seddon began seeing a therapist and psychiatrist.

In January 2007, Seddon took a six-month leave of absence. After completing that leave of absence, DuPont gave Seddon a disability pension. Seddon never returned to DuPont.

II.

In February 2005, Seddon filed a civil complaint alleging that defendants DuPont and Kaiser retaliated against him for objecting to activity that he reasonably believed violated New Jersey's law and public policy.*fn7 Seddon asserted that the reprisals against him contravened the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8. Seddon also asserted the common-law claim of intentional/negligent infliction of emotional distress against both defendants.*fn8 Seddon sought compensatory damages for "loss of earnings and other employment benefits" and for suffering mental anguish, humiliation, and injury to his reputation.

Seddon's complaint was filed while he still worked for DuPont. His case did not come to trial until January 2008, after he left the company's employ with a disability pension. Seddon did not amend his complaint to allege a constructive discharge.

At the beginning of the trial in January 2008, DuPont moved to bar Seddon's economic-damages claim for front and back pay because he had not pled constructive discharge and DuPont had not terminated him.*fn9 The trial court denied DuPont's in limine motion.*fn10 The court held that if Seddon could prove that DuPont's retaliation caused him to suffer a psychological breakdown that led to his acceptance of an early disability retirement, then he would be entitled to the difference between the wages he would have earned had he worked and retired in the ordinary course and the disability pension he was receiving.

During a several-week trial, numerous witnesses testified, including Seddon's psychological experts, who concluded that Seddon was mentally disabled as a result of DuPont's retaliatory conduct. Louise Cressman-Watral, a therapist, counseled Seddon for approximately sixteen months. She testified that Seddon was suffering from "a major depressive disorder" caused by DuPont's reprisals and general mistreatment of him. Seddon exhibited "fear of DuPont as an employer," and was suffering from "insomnia, loss of appetite," "anxiety," and feelings of "hopelessness." She further noted that the retaliation forced Seddon to take psychotropic ...


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