The New Jersey Supreme Court Makes Important Rulings Regarding Discrimination Claims Under the Law Against Discrimination

In Tarr v. Bob Ciasulli and Bob Ciasulli Mack Auto Mall, Inc., 2004 WL 1765499 (Aug. 9, 2004), the New Jersey Supreme Court for the first time addressed two important issues that frequently arise in the litigation of employment discrimination claims under the New Jersey law against discrimination, NJSA ?10:5.1 et seq. (“the LAD”). The Court first addressed the issue of what burden of proof applies to claims for emotional distress resulting from unlawful harassment. The Court held that a plaintiff has a far lighter burden of proof to obtain an award for emotional distress damages than the burden of proof that applies generally to claims of intentional infliction of emotional distress. The Court next turned to the issue of individual liability under the LAD. Here, the Court ruled that supervisory personnel are not liable as aiders and abettors under the LAD merely for the negligent supervision of other employees who engaged in unlawful discrimination. In addition, the Court returned to the issue of attorney fee awards under the LAD. The Court clarified the circumstances under which such awards are appropriate.

The Facts

Plaintiff began working at Mack Auto Mall in 1994 but quit a year later because of alleged sexual harassment. In need of work, she returned to her job shortly thereafter but quit once more after about 8 months, again because of alleged harassment. According to plaintiff, the harassment from certain male employees was extensive and pervasive, consisting of demeaning references to women, the display of pornographic material, offensive physical gestures, and discussions of sexual exploits, as well as sexual propositions. Plaintiff testified “that she was constantly embarrassed by the disgusting comments and conduct of the male employees. She explained that she often wanted to “crawl under her desk.” Her frustration with the abusive work environment reached a point where she regularly “cried on her way home from work.” The evidence that plaintiff presented against the individual defendant, Bob Ciasulli, the owner of Mack Auto Mall was, in essence, limited to allegations that he had supervisory authority over the harassers and was negligent in his supervision of them.

At the close of the evidence, the trial court dismissed plaintiff’s claim for emotional distress damages, ruling that the elements of emotional distress under the LAD are identical to the elements of a tort claim for intentional infliction of emotional distress and that evidence that plaintiff “was temporarily upset” did not satisfy those elements. The trial court also dismissed the claim against Ciasulli individually. The jury concluded that the plaintiff was the victim of sexual harassment but suffered no economic loss. Thus, the plaintiff recovered no damages because, as noted, the trial court had previously dismissed the emotional distress claim. Nevertheless, because the jury had found in plaintiff’s favor on the sexual harassment issue, the court awarded plaintiff her attorneys fees under the LAD provision authorizing fees to the “prevailing party.”

Emotional Distress Damages

In Buckley v. Trenton Saving Fund Soc’y, 111 N.J. 355, 356 (1988), the Court held that to recover on a tort claim for emotional distress the defendant’s conduct “‘must be so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society'” and that “the emotional distress suffered by the plaintiff must be ‘so severe that no reasonable man could be expected to endure it.'” In Tarr, the Court acknowledged that its holding in Buckley applied to tort claims generally but held that claims for emotional distress under the LAD require a far less showing of the severity of the emotional distress allegedly suffered by the plaintiff. After analyzing the legislative history of the LAD, the Court concluded that “the legislature intended victims of discrimination to obtain redress for mental anguish, embarrassment, and the like, without limitation to severe emotional or physical ailments.” (Emphasis added.) In this regard, the Court adopted the reasoning of the Appellate Division, which had reversed the trial court’s dismissal of the emotional distress claim. Judge Pressler, writing for the Appellate Division, had ruled: “To suffer humiliation, embarrassment and indignity is by definition to suffer emotional distress. Emotional distress actually suffered in that manner by the victim of proscribed discrimination is compensable without corroborative proof, permanency of response, or other physical or psychological symptoms rendering the emotional distress severe or substantial.” (Emphasis added.)

It is thus clear that a claim for emotional distress under the LAD is viable upon the assertion by the plaintiff that she was embarrassed or humiliated even if only for a short period of time. The amount of compensation that the jury may award may be small or large, depending on the nature and duration of the offensive conduct and may be enhanced by proof of resulting physical symptoms or expert testimony. It is equally clear that in virtually every sexual harassment claim that goes to a jury, the jury will be given the opportunity to award emotional distress damages in some amount upon finding that sexual harassment occurred.

Individual Liability

While the Court ruled in the plaintiff’s favor on the issue of emotional distress damages, it ruled against her on the issue of Casiulli’s individual liability for alleged negligent supervision. The Court began its analysis by noting that while an individual supervisor is not an “employer” within the meaning of the LAD, supervisors may be liable under Section 12(e), which makes it unlawful for any person “to aid, abet, incite, compel or coerce” a violation of the statute. Adopting the definition of “aiding and abetting” of the Restatement (Second) of Torts Section 876(b), the Court held that, to hold an employee liable under the LAD as an avider and abettor, the plaintiff must show not only that the party whom the employee aids or abets performed a wrongful act that causes injury but also that the alleged aider and abettor was generally aware of his role “as part of an overall illegal or tortious activity at the time that he provides the assistance” and that he “knowingly and substantially” assisted in the principal violation. In assessing whether an individual employee is liable as an aider and abettor, the factors to be considered are (1) the nature of the act encouraged, (2) the amount of assistance provided by the alleged aider and abettor, (3) whether the alleged aider and abettor was present at the time of the harassment, (4) the alleged aider and abettor’s relations to the others involved, and (5) the alleged aider and abettor’s state of mind. Applying these factors to the case before it, the Court held that there was insufficient evidence that Ciasulli acted as an aider and abettor of plaintiff’s sexual harassment. The Court noted there was no evidence that he encouraged any of the wrongful conduct or assisted any of the wrongdoers in carrying it out. At best, the record showed that Ciasulli negligently supervised his employees, but this was insufficient to concluded that he provided “substantial assistance to the wrongdoers.”

Attorneys Fees

In Szczepanski v. Newcomb Med. Cetr<., 141 N.J.346, 355 (1995), the Court had held that under the LAD provision authorizing attorney fee awards to “prevailing parties,” a prevailing party is one who succeeds “on any significant issue in the litigation that achieves some of the benefit the parties sought in bringing suit.” In Tarr, the Court ruled this means that a plaintiff who is awarded “some affirmative relief by way of an enforceable judgment against defendant or other comparable relief through a settlement or consent decree is a ‘prevailing party'” for purposes of the LAD’s attorney fee provision. (Emphasis added.) The Court further ruled that “some affirmative relief” includes an award of only nominal damages, although the trial court will have the discretion in such an instance to award minimal attorney’s fees or no fees at all. In the Tarr case itself, had the jury verdict of no damages been sustained on appeal, the plaintiff would not have been entitled to attorney’s fees even thought the jury found in her favor on the sexual harassment issue. As the case was remanded for a determination of damages on the emotional distress issue, however, a finding in plaintiff’s favor on that issue will entitle her to an award of attorney’s fees.

The Court’s reference to settlements and consent decrees should not be forgotten. A settlement or consent decree which does not resolve the issue of attorney’s fees will leave the defendant exposed to an application for fees under the LAD’s attorney fee provision. Thus practitioners must take care to resolve the issue as part of a settlement or consent decree and thus preclude further exposure for their clients.