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Two Recent Decisions Render Unexpected Consequences for Employers' Unintended Actions
The following decisions emanating from New Jersey courts are important reminders to employers that they will be held accountable for their words and actions, even if the consequence is unintended. Donelson v. DuPont Chambers Works In Donelson v. DuPont Chambers Works, the New Jersey Supreme Court held that lost wages - both front pay and back pay - are recoverable in an action brought pursuant to the Conscientious Employee Protection Act (CEPA), even if the affected employee did not prove an actual or constructive discharge.
THE FACTS
Plaintiff John Seddon was employed by Defendant DuPont Chambers Works, a manufacturer of chemical products, for approximately thirty years. After filing complaints with the Occupational Safety and Health Administration (OSHA) and DuPont management regarding various safety concerns at the company, Seddon claims he was subject to adverse employment actions. Among other things, Seddon claims that he was falsely accused of misconduct, subjected to negative performance reviews and verbal abuse, issued an unwarranted suspension and forced to work 12 hour shifts in isolation. Seddon began seeing a therapist and psychologist and, ultimately, took a six month leave of absence. Upon its completion, DuPont gave Seddon a disability pension. Although Seddon was not terminated by DuPont, the trial court held that if Seddon could prove DuPont's retaliation caused him to suffer a mental breakdown that made him unfit to continue to work, then he would be entitled to lost wages. Ultimately the jury awarded Seddon $724,000 in lost wages, in addition to punitive damages. On appeal, the New Jersey Supreme Court stated that if an employer's retaliatory conduct is the proximate cause of the employee's mental unfitness for continued employment, then CEPA grants the employee all remedies available in the common law tort actions, which includes lost wages. THE TAKE AWAY This decision reinforces the necessity for employers to recognize they can be held responsible even for unintended consequences of adverse employment actions taken against an employee. Employers should remind their management that retaliatory conduct is illegal and exposes the company to significant liability. Any adverse employment action taken against employees engaged in protected activity should not only be warranted, but its basis well documented. Lapidoth v. Telcordia Technologies, Inc The Appellate Division's decision in Lapidoth v. Telcordia Technologies, Inc. warns employers they will be held accountable for statements that may reasonably be construed as promises, even if communicated in form documentation. THE FACTS Plaintiff Sara Lapidoth brought an action for breach of contract and interference with rights under the Family and Medical Leave Act (FMLA) and New Jersey Family Leave Act (NJFMLA). Her claims arose after she was terminated while out on a 12-month maternity leave for the birth of her tenth child. Throughout her employment, Lapidoth had requested and received leaves of absence for the births of her other nine children. Her leave was approved via a form letter that stated the employee had a "guarantee of reinstatement" to the same or comparable job, unless the position the employee filled was no longer required or if the employee requested to work different hours than when the leave commenced. While Lapidoth was out on leave, Telcordia reorganized and, due to budgetary constraints, could only maintain one position in the role formerly held by Lapidoth. When Lapidoth provided her intent to return to work following the 12-month leave, Telcordia compared her performance ratings with those of the employee who was covering for her, chose the covering employee for the job and terminated Lapidoth. The trial court granted Telcordia's motion for summary judgment on the grounds that:
- Lapidoth was an at-will employee, as clearly set forth in disclaimers in the employee manual and employment application that she signed.
- The FMLA and NJFLA did not apply to leaves of absence that exceed 12 weeks.
On appeal, the Appellate Division affirmed the portion of the decision that held that neither the FMLA nor the NJFLA applies to a one year leave. However, the Appellate Division reversed the dismissal on the breach of contract claim. It held that a reasonable employee could interpret the maternity policy (as set forth in the form letters approving the leave) as a promise of reinstatement. Further, Telcordia's past practice of granting Lapidoth nine prior maternity leaves and then reinstating her employment at their conclusion could be reasonably interpreted as promising reinstatement for future leaves. THE TAKE AWAY Employers are reminded to review all documents, including routine company "form" documents, before transmittal to the employee to ensure that they do not create inadvertent contracts, or make unintended promises, that the company does not intend to keep. Employers should be aware that a history of past practice may also be interpreted as creating a company policy or promise. If such an interpretation is not intended, the practice should be ceased, unless appropriate disclaimers regarding such conduct are clearly and consistently communicated. If you have any questions regarding how this decision will affect your business or would like us to review your database of form documents, please contact Katherin Nukk-Freeman (knukk@nfclegal.com) or the Nukk-Freeman & Cerra attorney with whom you normally work. Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency. | 
