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Michael Farrell v. Toys R' Us and Cary Regnenye

September 18, 2012


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2619-08.

Per curiam.


Argued February 1, 2012

Before Judges Axelrad, Sapp-Peterson and Ostrer.

In this appeal, plaintiff, Michael Farrell, challenges the trial court's order granting summary judgment to his former employer, defendant Toys R' Us (TRU), and individual supervisor, defendant Cary Regnenye. Plaintiff's complaint alleged hostile work environment, disparate treatment, and wrongful retaliation, contrary to the New Jersey Law Against Discrimination, (LAD) N.J.S.A. 10:5-1 to -49, and a common-law claim for intentional infliction of emotional distress. We reverse that part of the trial court's order granting summary judgment dismissing Farrell's hostile work environment and disparate treatment claims, but otherwise affirm.


Because Farrell's complaint was dismissed at the summary judgment stage, we view the facts in the light most favorable to him as the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Farrell began working for (TRU) as a manager-in-training in September 2005. His employment was at-will, and upon commencement of his employment, he received a copy of TRU's rules and regulations. TRU has an equal employment opportunity policy which includes an anti-discrimination policy. Farrell also received a copy of TRU's anti-harassment policy during his orientation. A portion of the that policy states that an employee must immediately report claims of harassment and that TRU will investigate all complaints and take appropriate corrective action upon receiving a complaint.

Farrell's position was changed from manager-in-training to assistant store manager in September 2006. In July 2007, he was assigned to a TRU store in Livingston, where he served as acting manager of the store. According to TRU District Manager Daniel Hannay's evaluations of September 12, 2007 and February 8, 2008, Farrell performed his job exceptionally well from the commencement of his employment until early 2008.

Regnenye became Farrell's immediate supervisor in late 2007 and immediately exhibited his dislike of Farrell. Farrell was forty-six years old at that time. Regnenye and other store employees often referred to him as "the old man." On one occasion, Regnenye made fun of "the old man's crackers" and threatened to crush them.*fn2 Regnenye referred to him as the "old man on the truck" approximately nine to ten times between March 1 and March 14, 2008.

On March 14, in particular, while unloading a trailer with a co-worker, House Supervisor Stephen Preziosi, in the back of the store, Regnenye approached Farrell. After scolding him for filing an Item Discrepancy Report to a TRU district manager and operations manager, Regnenye repeatedly threatened to punch Farrell in the face and "kick his ass." During these verbal threats, Regnenye shook a clipboard at Farrell and blocked him from retreating from the truck he was unloading. At no point, however, did Regnenye actually physically touch him. Farrell reported Regnenye's conduct to TRU's upper management and human resources department.

On March 15, Farrell met with TRU Human Resources (HR) Manager Patricia Mulcahy (Mulcahy). He briefly advised her about the incident the previous day, and Mulcahy launched an investigation. On March 19, at Mulcahy's direction, Farrell prepared a statement concerning the incident. He reiterated that Regnenye physically threatened him and taunted him by repeatedly calling him the "old man on the truck." Preziosi provided his own statement corroborating Farrell's accusations that Regnenye verbally abused employees. He stated that Regnenye unjustifiably threatened to fire him and Farrell multiple times.

Also on March 19, while Mulcahy's investigation was still pending, Regnenye wrote a Performance Corrective Action Complaint against Farrell purportedly based upon discussions he had with Farrell on February 28, 2008. As a result of those discussions, Farrell was directed to put a particular plan in process by March 3, 2008. The report further indicated:

I have had several conversations with Mike regarding his leadership and creating plans for his team each day. The purpose of this is to not only communicate to me what his plan is but also to provide me with the ability to follow up on his plan and support him. I have asked for daily plans for his vacation[,] which was 3/6 - 3/12[,] as well as for 3/15 - 3/18[,] which was a span of time that Mike and I did not share a scheduled work day. I did not receive either.

Regnenye responded to Farrell's allegations in an incident report, in which he stated, "I may have used the term "kick your ass" from a motivational point of view which[,] in hindsight[,] may have been inappropriate. At no point in time was I ever threatening Mike or any other employee. I have never been involved in a physical altercation in my life." Mulcahy recommended that Regnenye be transferred out of the Livingston store and be given a "letter of education"*fn3 regarding his inappropriate comments. She also recommended transferring Farrell out of the Livingston store due to poor performance. Farrell was transferred to TRU's store in Union March 31, 2008.

Marc Fardin was the manager of the Union store when Farrell was transferred there. On July 8, 2008, he issued a memorandum detailing issues with Farrell's performance since his transfer to the Union store. One month later, he placed Farrell on a performance improvement plan, which outlined the areas in which Farrell needed to improve, the required actions for improvement he identified, and the timeline for achieving improvement. Among the areas were (1) reading and reacting to instructions provided in emails, (2) ensuring the "store [was] recovered 100% to standard every closing shift[,]" and (3) ensuring "the truck crew operates at a minimum standard of 125 boxes per man hour." Farrell acknowledged in his deposition that all of these tasks were his responsibility as assistant manager.

TRU terminated Fardin in early May 2009. Jeremy Grunin replaced him as manager of the Union store. Grunin issued Farrell a Level 1 Corrective Action Report for "[f]ailure to carry out duties" on August 21, 2009. Grunin stated that "Mr. Farrell continues to struggle with his inabilities to effectively plan, delegate and hold accountable his [t]eam."

On November 1, 2009, Curtis Hurst replaced Grunin as manager of the Union store. He issued a Corrective Action Report to Farrell on December 15, claiming that on December 10, and December 14, 2009, when Farrell "was the closing

[m]anager[,] . . . a $24,000 deposit and $37,000 deposit, respectively, were not dropped in the safe, securing these funds in the safe for the evening, as per Company Standard Operating Procedures." Hurst also noted:

Mr. Farrell [has] been previously place[d] on Corrective Action for Overall Job Performance, specifically a Level 1 in August 2009[,] and a Level 3 in December 2009. Once again, Mr. Farrell[']s overall attitude and [demeanor are] not positive and motivating. He speaks openly about his frustrations regarding the Company, Store and job responsibilities. He is negatively impacting morale in the store, which will not be tolerated by the Company.

Hurst placed Farrell on Level 3 "Corrective Action for Overall Job Performance" and advised: "If there are any further issues with Mr. Farrell's Overall Job Performance or with his ability to perform the essential functions of his job, it will result in immediate termination." In March 2010, TRU provided Farrell with his annual review for 2009. Farrell received a rating of "below expectations" in eleven out of thirteen categories, including all categories relating to position competencies.

In early 2010, TRU began planning a nationwide reduction in force (RIF). As part of the RIF, TRU decided to "terminate assistant store managers who had received 'below expectations' ratings for the previous year[.]" Farrell was an assistant manager whose ratings fell below expectations in 2009 and he was therefore terminated on March 28, 2010. Seventy-four other TRU assistant managers throughout the United States were also terminated.

Farrell originally filed his complaint in Superior Court on March 31, 2008, asserting that he experienced a hostile work environment while employed by TRU. He amended the complaint on January 8, 2009, to include an allegation that his transfer to another TRU store in Union constituted retaliation, in violation of the LAD's anti-retaliation section, N.J.S.A. 10:5-12(d). He amended the complaint again on March 12, 2010, and for a third and final time on May 11, 2010, to include an additional claim for disparate treatment, as well as a claim for retaliation asserted on behalf of three witnesses with information relevant to his claims, who TRU terminated.

Following oral argument, the trial court issued a letter opinion later that day, granting defendants' motion for summary judgment and dismissing the complaint in its entirety. The court found that Farrell did not establish (1) the severe or pervasive requirement for a hostile work environment, (2) that Regnenye's words were discriminatory, (3) that the use of the phrase "old man" by Regnenye and other employees represented age bias, (4) that Regnenye knowingly and substantially assisted co-employees' use of the phrase "old man" in reference to Farrell, (5) that the termination of three of his four corroborating witnesses constituted LAD-prohibited retaliation, (6) that TRU's offered reasons ...

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