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Scott Jones v. South Jersey Industries

August 30, 2011


On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-15354-06.

Per curiam.


Argued April 11, 2011

Before Judges Lisa, Sabatino and Alvarez.

Plaintiff Scott Jones filed suit against defendant South Jersey Industries, Inc. (SJI), doing business as South Jersey Gas Company, alleging wrongful termination from employment based on perceived disability and age discrimination in violation of the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to 5-49. The age discrimination claim was dismissed at the close of plaintiff's case; however, the disability claim resulted in a jury award of compensatory damages totaling $1,070,544 and punitive damages totaling $750,000. Plaintiff's attorneys were awarded counsel fees and costs of $660,081.37. We reverse and remand for a new trial.


The following facts were developed during depositions and the trial, and are necessary to an understanding of the significance of the alleged errors. Plaintiff began working at SJI as a retail marketing sales representative in May 1985. In 1993, he became a Marketing Support Specialist, Commercial/Industrial, and in 1996 was promoted to Major Accounts Manager (MAM). He remained in this position, handling large commercial sales in Cape May and Atlantic Counties, until his termination on March 21, 2005.

MAMs market and maintain gas service accounts for large industrial and commercial customers. Plaintiff in fact completed a certification as a Registered Commercial Gas Consultant. MAMs are also responsible for generating new customers from businesses using other types of fuel, or "conversions." MAMs were expected to meet or exceed specified sales targets and were paid a base salary in addition to bimonthly performance incentives.

In late 2001, Lawrence Lhulier became SJI's Director of Commercial, Major, and Residential Gas Sales. In January 2002, Victoria Molloy became SJI's Manager of Major Accounts and Commercial Sales, thus making her plaintiff's direct supervisor. Lhulier's compensation was tied in part to the sales achieved by the MAMs; Molloy's compensation was also contingent upon the sales performance of her group. Molloy, who reported directly to Lhulier, maintained routine contact with Human Resources (HR), copied HR on unfavorable employee reviews, and kept HR advised of performance issues.

South Jersey Gas Company is a subsidiary of SJI. Lhulier and Molloy were designated as "key management team members" in its gas sales management business segment. Lhulier ranked second behind the subsidiary's President and CEO. Molloy and two other sales division managers were third in rank in the corporate structure.

Commencing in early 2002, Molloy required MAMs in her group to submit their weekly call reports directly to her. She also increased the number of mandatory reports, requiring not only weekly call reports, but also monthly sales and project status reports.

Plaintiff considered the additional documents to be unnecessarily duplicative and time-consuming, detracting from time available for sales activities. He also believed that the company's software, installed in 2001 and designed to compile customer information, occasionally malfunctioned, resulting in late completion of his reports.

Molloy testified that, in 2002, her first year acting as plaintiff's direct supervisor, approximately seventy-five percent of her time was consumed by plaintiff's transactions. In large part, this was attributable to the construction of a sizeable hospital in his sales region, and the expectation that Molloy would assist plaintiff in acquiring the hospital as a customer. Her concerns about his performance developed almost immediately, as a hospital representative complained to Molloy in March of that year that the hospital was reconsidering its decision to use gas because of dissatisfaction with plaintiff's handling of the account. Molloy found herself "doing all the work," including holding meetings with the hospital and directing lengthy negotiations while plaintiff merely assisted. Eventually, the account was secured and plaintiff received a commission.

During the course of the hospital negotiations, plaintiff failed to respond to several of Molloy's e-mails or to attend meetings. Because plaintiff denied receiving the e-mails, Molloy began to track messages sent to him. None of Molloy's other sales representatives had difficulty in receiving her e-mails.

Although Molloy rated plaintiff as competent on his 2002 annual appraisal, she noted that he lacked knowledge in certain key areas and had issues with timeliness, initiative, and follow-through, observing that she had to "constantly remind [him] what need[ed] to be done."

On January 9, 2003, Molloy met with plaintiff to discuss problems in his job performance. She focused particularly upon his lack of initiative and follow-through, and the need for him to work on his conversions. Although she assured plaintiff that she would do whatever was necessary to ensure his success, she expected him to actively manage his time and employ his sales skills, while following through on commitments.

On April 8, 2003, Molloy e-mailed plaintiff requesting his end-of-the-month reports for March. She explained that his tardiness could affect his end-of-the-year incentives and reminded him that she should not have to request reports he was expected to generate as a matter of course. Molloy told plaintiff that henceforth she would not approve his expenses until all of his reports were received. She also noted he had not submitted a weekly call report since March 17.

On April 30, 2003, Molloy gave plaintiff both an oral and written warning regarding his performance, reiterating that she should not have to remind him of the need to follow through, and restating her concerns regarding his inattention to detail. She pointed out that she had invested seventy-five percent of her time on his accounts in 2002, and that she should not have to constantly "baby-sit him." Molloy described the email as a "verbal warning," and said "progressive discipline" would follow, including "reassignment or dismissal." At trial, plaintiff denied seeing this written warning, or receiving any verbal warning, claiming that Molloy only requested documentation on behalf of another MAM who was out on maternity leave.

In March and April 2004, plaintiff exceeded his sales goal by sixty-nine percent and his conversion goal by twenty percent. In May and June, plaintiff again exceeded his goals, by eighty-two percent for sales, and 190 percent generating leads for conversions. In August, Molloy pointed out that the actual connected load, or flow of gas being consumed by plaintiff's customers, did not match the number plaintiff claimed. That error was never corrected, and plaintiff had the same discrepancy each month thereafter.

On September 13, 2004, Molloy informed plaintiff that his sales results for July and August were unsatisfactory, under the fifty percent threshold, and he was therefore not entitled to any incentive pay for that time. In September and October 2004, plaintiff's performance improved: he achieved 191 percent of his sales goals, and seventy percent of his conversion goals.

On October 27, 2004, Molloy provided plaintiff with a mid-year performance assessment, with a copy to Lhulier. Overall, she reported he was an "[a]verage performer that display[ed] a desire and willingness to succeed," but needed to improve his organizational and time management skills and hold himself more accountable. She also noted that he needed to improve his connected load targets, having achieved only five percent of them, and improve his timeliness and his critical thinking.

The following day, Molloy forwarded an e-mail to plaintiff advising that his failure to supply a weekly call report in two months was in "blatant disregard for the [office] reporting procedures" and that these delays would "no longer be tolerated." The following day, plaintiff testified, he provided her with three reports, although Molloy denied receiving them.

On November 18, 2004, Molloy met with plaintiff and reprimanded him for, among other things, falling behind with his weekly call reports. Plaintiff claimed that, until this meeting, he had never been told that he was perceived as a poor performer as a result of his late submission of reports. Molloy told plaintiff that she was frustrated by "his performance, time management, follow-up," and inclusion of improper information in reports.

Plaintiff responded that he did not feel like himself and had problems at home that were interfering with his job. He had trouble focusing and thinking clearly, and lacked energy, feeling like he was continuously "in a fog."

That same date, Molloy gave plaintiff a summary intended to act as a written warning, reflecting that he had submitted only twenty-four of forty-five weekly reports, and had not updated his key account or other reports since August 2004. Plaintiff told Molloy that the software was not working properly, but assured her that he would improve. He disputed many of her other complaints, however, claiming that he had personal issues and had recently told his wife that things had to change at home, particularly with child care, or that otherwise his job was at risk.*fn1 Nonetheless, he promised Molloy that he would address these issues and stressed that his lack of performance was not intended to be disrespectful. Molloy reiterated that unless plaintiff's performance improved, she would have to recommend either a transfer or dismissal.

Following the November 18 meeting, Lhulier contacted the HR department in an attempt to devise a performance improvement plan for plaintiff. The Director of HR, Sharon Pennington, assigned oversight of the situation to William Oxenford, the Employee Labor Relations Manager.

On November 30, 2004, Molloy noted plaintiff never received a commitment from a potential major customer, Snows-Doxsee, whose service order he commenced handling in September. Although no contracts with the customer were executed in that time period, plaintiff claimed them on his sales report.

On December 2, 2004, Molloy told plaintiff to revise certain reports which contained errors and discrepancies before he left the following day on a family vacation. Those corrections were never made.

On December 7, Lhulier requested that Molloy provide him with any documentation she had on plaintiff. Plaintiff's performance had not improved by the end of that month. In fact, his poor sales results caused the overall team performance to be an unacceptable forty-one percent. On December 29, 2004, Oxenford memorialized a proposal with respect to plaintiff, which involved providing him with a "60-day Get Well Plan" during his year-end evaluation.

Also on that date, plaintiff signed the written summary of the November 18, 2004 meeting, although at trial he only recalled that the meeting related to late call reports and no other issues. Molloy warned plaintiff that improvement had to be shown within one month and continue for twelve months, otherwise, "progressive discipline [would] be imposed with a recommendation for dismissal."

In a separate memo, Molloy noted that plaintiff's performance had worsened in key areas since his mid-year review in September. She complained that she had to have this same conversation with him every four to six months, which always resulted in a temporary improvement, but effectuated no long-term changes.

On January 3, 2005, Molloy discovered that plaintiff had requested vacation time for December 31, 2004, in contravention of an email sent on October 27 advising that last-minute holiday vacation requests would not be approved. Lhulier testified that Molloy perceived this as plaintiff challenging her authority and that the incident, effectively, was the last straw. The incident was minor, but plaintiff believed it caused Molloy to descend into a tirade.

In fact, plaintiff's recollection was that when confronted he apologized, told Molloy that he thought he was suffering from a loss of concentration, and said that he needed help. Intending to see a psychologist his wife had found for him, plaintiff begged her for ninety days, promising that he would get better. He claimed that Molloy said she would discuss this request with Lhulier and get back to him.

In any event, Molloy discussed plaintiff's situation with Lhulier, who contacted Thomas Worrell, the head of SJI's Employee Assistance Program (EAP). Worrell, a guidance counselor, not a psychologist, operated the EAP as an outside contractor.

Lhulier then called plaintiff, telling him that he was worried as he did not sound like himself. Plaintiff claimed that at this point he assumed Lhulier and others understood he was not entirely well, but admitted at trial that Lhulier said only that he did not sound like himself. Initially, even plaintiff did not consider depression as the explanation of his ...

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