In two recent cases, the Appellate Division of the New Jersey Superior Court has continued to expand the ability of an aggrieved employee to hold his or her employer liable in sexual harassment, discrimination and hostile work environment actions brought under the New Jersey Law Against Discrimination (LAD).
In Cerdeira v. Martindale-Hubbell, A-5855-06T1 (App. Div., September 18, 2008), the Appellate Division allowed an employee subjected to sexual harassment by a coemployee to proceed on a cause of action against the employer based on the employer’s negligent failure to institute an effective policy for reporting discriminatory conduct. The case departs from prior actions brought under a negligence theory, which generally required the discriminatory conduct to have been perpetrated by a supervisor, and not merely a co-worker.
The Plaintiff in Cerdeira, Robin Cerdeira, began her employment with Martindale-Hubbell as a typist in 1983. She was promoted on several occasions throughout her career, eventually attaining the position of senior analyst. In 2001, Cerdeira became the subject of harassing conduct by the co defendant, Melvin Bowers, a programming analyst, who worked in a separate department from Cerdeira and who was not her supervisor, nor a supervisor in his own department.
For two years, Bowers continued to subject Cerdeira to harassment, which included sending sexually expli cit pornographic pictures and engaging in sexually explicit phone calls. Cerdeira, however, never reported Bowers’ conduct to her immediate supervisor or anyone else at Martindale except for a co-worker, who did not encourage Cerdeira to report Bowers’ behavior. Only when a fellow employee inadvertently observed one such pornographic picture on her computer did Cerdeira report Bowers’ conduct to her supervisor. Bowers was immediately suspended and subsequently fired two days later. Cerdeira was offered and took a lengthy paid leave of absence.
Martindale had in effect during the course of Bowers’ harassment a Code of Conduct that it distributed to every employee. The policy contained a section pertaining to harassment, which stated in relevant part:
The Company will make every reasonable effort to provide an environment free from harassment of any kind toward any individual... If any employee has questions about any section of these Standards of Conduct, he or she should direct all questions to his or her immediate supervisor, local Human Resources Representative, or the Reed Elsevier, Inc. Legal Department.
Cerdeira brought suit against Martindale and Bowers, alleging that Martindale fostered a hostile work environment which constituted sexual harassment in violation of the LAD. Martindale filed a Motion for Summary Judgment, arguing that because Bowers was merely a coworker and not a supervisor, it could not be liable under the LAD for his conduct about which it had no knowledge. The trial court granted the Motion; however, Cerdeira appealed, contending that the court erred in dismissing her case against Martindale in light of its negligence in failing to have an effective sexual harassment policy in place.
The New Jersey Supreme Court previously recognized, in Lehmann v. Toys ‘R’ Us, 132 N.J. 587 (1993), employer liability for a hostile work environment advanced on a negligence theory premised upon an employer’s failure to have in place an effective sexual harassment policy. According to the Supreme Court, an effective anti-harassment policy contains five elements: (1) a well-publicized policy; (2) complaint structures, including both formal and informal structures; (3) training, which must be mandatory for supervisors; (4) an effective means of sensing or monitoring the policy to ensure that it can be trusted; and (5) unequivocal commitment from the upper echelon of management that is backed-up with consistent practice. The policy at Martindale lacked several of these elements.
However, the ability to hold the employer liable for negligently failing to institute an effective reporting policy generally required discriminatory conduct perpetrated by a supervisor, not a mere co-employee. Because the conduct against Cedeira was committed by a coemployee, the trial court granted Martindale’s Motion for Summary Judgment.
The Appellate Division reversed. The Court determined that, while Lehmann involved supervisory sexual harassment, the opinion did not expressly reserve an action against an employer for failing to institute an effective sexual harassment policy to such factual circumstances. As a consequence, the Appellate Division declared that where an employee is subject to sexual harassment by a co-employee and the employer does not have an effective policy for reporting the harassment, the employee can hold the employer liable under the negligence theory espoused in Lehmann, despite the absence of supervisory discriminatory conduct.
Continuing a trend of cases that began with the seminal New Jersey Supreme Court opinion of Taylor v. Metzger, 152 N.J. 490 (1998), the Appellate Division in Kwiatkowski v. Merrill Lynch, A 2270-06T1 (App. Div., August 13, 2008), again reaffirmed its intolerance of bigoted comments in the workplace by holding that a single, derogatory homosexual comment was sufficient to render a work environment hostile.
In Kwiatkowski v. Merrill Lynch, the Plaintiff, Darren Kwiatkowski, was hired by Merrill Lynch on January 15, 2001, and worked in the Hopewell, New Jersey office as a client services representative. Kwiatkowski, who was an openly gay man, was characterized as an exemplary employee in his position, although he was criticized on several occasions for excessive tardiness and absenteeism.
On December 29, 2003, the Merrill Lynch office in which Kwiatkowski worked experienced a heavy volume of calls, an event Merrill Lynch dubbed a “Code Red.” During a “Code Red,” Merrill Lynch call representatives are required to sit at their desks and take phone calls in lieu of completing any other tasks. While the “Code Red” was ongoing, Kwiatkowski received a call from a particular client regarding an account. The call was specifically routed to Kwiatkowski because he had previously performed work on the account. Kwiatkowski requested permission to deviate from the “Code Red” procedure so he could obtain the client’s account statements. Kwiatkowski’s request was granted by his immediate supervisor, Theresa Wonder; however, with the stipulation that he attend to the client the following day.
Instead of waiting, Kwiatkowski immediately helped the client for approximately twenty-five minutes. Wonder, infuriated by Kwiatkowski’s actions, complained to the Vice President of Financial Relationship Services, Sandra Givas. Givas decided that the Plaintiff should be terminated for insubordination, but wished to wait until she reviewed his performance evaluations.
Two days after the “Code Red,” but before he was officially fired, the Plaintiff claimed that he was called a “stupid fag” by Wonder as she passed him in the hallway. Although other employees were in the area, no one else heard the comment. On January 6, 2004, Kwiatkowski was terminated.
Kwiatkowski brought suit against Merrill Lynch and Wonder under the LAD. The trial court granted Merrill Lynch’s Motion for Summary Judgment, reasoning that the single remark, which was not heard by another employee, was not sufficiently severe and pervasive so as to render the working environment hostile.
Kwiatkowski appealed and the Appellate Division reversed, finding the factual circumstances present comparable to those in Taylor v. Metzger. In Taylor, the highest-ranking supervisor of the Burlington County Sheriff’s Department called a sheriff’s officer a “jungle bunny” in the presence of another supervisor. Given the inescapable racial meaning of the comment, com pounded by the fact that it was uttered by a supervisor to another supervisor, the New Jersey Supreme Court held that the single comment was sufficiently severe to create a hostile work environment.
Like in Taylor, the Appellate Division found the comment “stupid fag” to be patently offensive and akin to a “slap in the face” because “the injury was instantaneous.” The severity of the remark was compounded by the fact that it was uttered by his immediate supervisor. While there was no evidence that the comment was heard by anyone other than Kwiatkowski, that fact was of no moment to the Appellate Division. The single comment alone, uttered by a supervisor, was therefore sufficiently severe to render Kwiatkowski’s working environment hostile.
The Cerdeira and Kwiatkowski decisions have effectively expanded an aggrieved employee’s ability to seek redress against his or her employer under the LAD. As a result, the number of cases premised on an ineffective reporting policy or a single derogatory epithet will likely increase. Employers and insurance carriers providing coverage for employment practices should take note of these decisions and work to ensure the institution of effective discrimination policies including a clear means of reporting harassment, as well as a means to inform their employees of acceptable and impermissible workplace conduct. Otherwise, employers and their insurance providers could be faced with an unprecedented stream of expensive LAD claims.
Daniel B. McMeen
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