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Damon Williams v. Costco Wholesale Corp. and Dennis Dingivan

March 12, 2012


On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-551-08.

Per curiam.


Submitted November 9, 2011

Before Judges Payne, Simonelli and Hayden.

Plaintiff, Damon Williams, an African-American, sued his employer, Costco Wholesale Corporation, and supervisor, Dennis Dingivan, seeking damages for the alleged creation of a hostile work environment, failure to promote and discriminatory demotion due to race, in violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and breach of contract.*fn1 Summary judgment was granted to Costco on all claims except hostile work environment, and summary judgment was granted to Dingivan on all claims. Following trial on the hostile work environment claim, the jury found that the complained-of conduct had occurred, and that it occurred because of plaintiff's race, but plaintiff had failed to prove that the conduct was severe and pervasive enough to make a reasonable person believe that a hostile work environment existed. Plaintiff has appealed, claiming that summary judgment was improperly entered and that the court abused its discretion and misapplied the law when barring certain evidence, thereby resulting in a manifest denial of justice. We affirm.


The following facts were submitted to the court in connection with defendants' motion for summary judgment. Plaintiff commenced his employment at Costco's New Rochelle, New York, warehouse in 1995 and transferred to its Union, New Jersey, warehouse in April 2005, where he remained at the time suit was filed in January 2008. While in New Rochelle, plaintiff held a number of positions, commencing as a Freezer Stocker and, in 2001, attaining the position of Fresh Foods Supervisor.

Dingivan became Costco's New Rochelle Warehouse Manager on February 18, 2002, and remained in that position until June 2006, when he was transferred to the Union warehouse as Warehouse Manager, a position that he held until November 2008. In 2002, plaintiff asked Dingivan to be transferred to the night shift as the result of child care issues. Dingivan accommodated plaintiff's request, and at that time, promoted him from an hourly to a salaried position as Night Manager. Thereafter, plaintiff requested a transfer to Costco's Chantilly, Virginia, warehouse, but he withdrew his application after the manager there told him he would be better off remaining in New Rochelle. Between June 2003 and May 2004, plaintiff requested two lateral transfers, which were granted.

In May 2004, plaintiff alleges that he submitted a letter of intent to Dingivan regarding an Assistant Merchandise Manager position. However, he did not receive the position, and he alleges that Dingivan told him it "wasn't [his] time." The position was given to Preston Sterling, an employee who transferred from an Arizona Costco warehouse. Although plaintiff believes that he was more qualified for the position than Sterling because he had held a variety of positions at Costco, he admitted that he did not know what positions Sterling had occupied before transferring to New Jersey. Moreover, plaintiff admitted that because of the level of the position, Dingivan was not the sole person determining who would fill it.

On April 25, 2005, plaintiff transferred to the Union warehouse, working there initially as a Foods Manager. Although the transfer required Dingivan's approval, plaintiff believes without evidence that Dingivan did not support the move.

A few months after coming to Union, plaintiff transferred laterally into the Center Merchandise Manager position. While in that position, in January 2006, "Thor," a meat department manager, referred to plaintiff, who was dark skinned, as "Midnight." Plaintiff claims that Kevin Stoms, an Assistant General Manager at the warehouse, overheard the remark, and later that day, stated: "That's you' name, Midnight." Plaintiff alleges further that on February 10, 2006, Stoms stated to him: "Midnight you have your day then there's night." Plaintiff complained to Warehouse Manager Skip Leonhard about the use of the nickname by the two Costco employees, and he allegedly responded: "People say the dumbest things." Plaintiff was asked to submit a written statement regarding the incidents. Whether Costco adequately investigated plaintiff's complaint or properly responded to it is contested. Plaintiff notes, and Dingivan confirms that when, on November 29, 2006, plaintiff sought to see documents from his personnel file on the matter, none could be located.

However, plaintiff admits that, after the incident, Stoms never used the nickname again or made any other racial remark regarding him. In deposition, plaintiff admitted that these were the only racial remarks ever directed at him during his time at Costco. Although plaintiff faults Dingivan for not investigating the incident, Dingivan had not transferred from New Rochelle to Union at the time of the incidents or plaintiff's complaint regarding them, arriving there only in June 2006. Plaintiff has also admitted that he first informed Dingivan about the incident after his suit had been filed.

Plaintiff admits that in July 2006, he requested a demotion from the Center Merchandise Manager position in order to reduce his hours, and at that time, he accepted a non-supervisory Inventory Auditor position. He held that lesser position for approximately two months, before being given a Front End Supervisor position by Dingivan.

Defendants claim that on September 22, 2006, Karen Villahermosa, Costco's payroll clerk, received an e-mail stating that the bank routing number used to directly deposit plaintiff's paycheck was invalid, and therefore he would not receive a "live check" for the September 22 pay period. Plaintiff claims no knowledge of this fact. Defendants claim additionally that Villahermosa informed plaintiff of the problem, gave him a copy of the e-mail, and instructed him to find out from his bank what had caused the difficulty.

Plaintiff admits that, on October 3, 2006, he wrote a check to Costco for $100, which was returned for insufficient funds on October 22. Upon learning of that fact, Dingivan issued plaintiff an Employee Counseling Notice (ECN) for "Presenting the Company with a personal check for insufficient funds, closed account, etc." An additional check, written by plaintiff on October 8, 2006, was also returned for insufficient funds, leading to the issuance of a second ECN. In a written statement, plaintiff contended that the checks bounced because Costco lost the bank routing number, and that he was not informed of that fact. Plaintiff did not inform Dingivan at the time his first check bounced that he had written a second check for cash on his account. Additionally, plaintiff stated that assistant warehouse manager Cynthia Burton had authorized him to write the checks, but she denied giving such authorization.

Defendants claim additionally that in November 2006, Dingivan received a report that a flower vendor, who was not a Costco employee, claimed to have witnessed plaintiff taking five bottles of men's cologne from a store shelf and returning them for cash. As the result of plaintiff's failure to reimburse Costco for the bounced checks, the refund transaction was blocked. The Refund Clerk then notified the Front End Supervisor, who also declined to complete the transaction. However, the Membership Supervisor determined to ignore the block and to provide plaintiff with cash, not a cash card, which would have been standard for refunds without receipts.

When plaintiff was confronted with the allegations of theft, he stated that he had been given the cologne while employed in New Rochelle. In a handwritten statement, dated November 16, 2006, he asserted:

On Nov. 8, 2006 I returned 5 bottles of cologne to the Membership Dept. I received these items while working in New Rochelle.

Before returning these items I asked Mary to get a higher authority involved due to the fact the items were used and old. She then asked the supervisor for his approval and the transaction was then taken care of.

I've been employed by Costco for 10 yrs. and I never was dishonest.

Plaintiff has also claimed that the vendor, Roger Nutter, had denied that he had seen plaintiff taking anything. In support of that contention, plaintiff produced a letter from Nutter. However, in the letter, Nutter only denies meeting with store personnel. The letter states:

On August 8, 2007, Damon Williams called me and informed me that there was a statement in his employee file with my name on it.

The statement stated that during the meeting with myself, Terrence, Tom and Dennis that I, Roger Nutter, saw Damon remove fragrances and take it from the sales floor and return it to the service desk.

At no time did I have any meeting with Terrence, Tom or Dennis about Mr. Damon Williams concerning this issue.

On November 17, 2006, plaintiff was demoted from Front End Supervisor to a cashier position, and he was not permitted to write any personal checks to Costco for six months. Defendants produced in connection with their motion for summary judgment a memorandum, dated December 7, 2006, written by Dingivan to Richard Wilcox, Costco's Vice President and Regional Operational Manager for North East Region District 4, that details the check cashing and cologne refund incidents. The letter states that plaintiff was demoted with the authorization of Wilcox, and that the employment decision ...

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