WILLIAM T. BABCOCK v. SEARS, ROEBUCK & CO.

(NOTE: The status of this decision is .)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1305-04T21305-04T2

WILLIAM T. BABCOCK,

Plaintiff-Appellant,

vs.

SEARS, ROEBUCK & CO.,

Defendant-Respondent,

and

JOANNE KOCH, formerly JOANNE

HALLIGAN, SANDY MCGUINESS,

DEBBIE SMITH, WILLIAM COLLETT,

TOM ILLIG, JOSEPH OLSON, and

MARGE COOK,

Defendants.

__________________________________

 

Argued: December 5, 2005 - Decided:

Before Judges Cuff, Parrillo and Holston, Jr.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4881-01.

Richard A. Dunne argued the cause for appellant.

Steven W. Suflas argued the cause for respondent (Ballard, Spahr, Andrews & Ingersoll, attorneys; Mr. Suflas and Jennifer L. Sova, on the brief).

PER CURIAM

Plaintiff, William Babcock, while an employee of defendant Sears, Roebuck & Co. (Sears) at its Newburgh, New York store, complained that he was sexually harassed by a female supervisor. Soon after he complained, his employment was terminated. He filed a complaint asserting that he was the victim of sexual harassment and retaliatory discharge. A jury found that he had been sexually harassed and awarded him $50,000. In this appeal, plaintiff asserts that the law of New Jersey rather than New York should have applied to his claims and that the trial judge erred by excluding testimony about the treatment of a former employee at the same store. We affirm.

In 1997, plaintiff was hired by Sears to work in their Rockaway, New Jersey store. Plaintiff resided in this state at the time. Approximately fifteen months later, plaintiff was transferred to the Newburgh, New York store to work as an Asset Protection Associate. The transfer was initially considered temporary; however, plaintiff applied for and eventually received a promotion to a position at the Newburgh store. Plaintiff remained a resident of New Jersey.

After finding his desk shrink-wrapped and covered in condoms on one occasion and a woman's vibrator on his desk on another occasion, plaintiff informed management at the store that he intended to file a formal complaint. His manager provided the necessary form two days later. When the manager, Joanne Koch, gave him the form, she warned him about consequences. Sandra McGuiness, the supervisor who plaintiff alleged harassed him, was terminated following a formal investigation of plaintiff's harassment claim. Plaintiff was terminated the same day. Sears contended that it terminated plaintiff because he removed a watch from the jewelry department and kept it in a box on his desk. Plaintiff asserted that he always intended to purchase the watch and was waiting information about the price.

Plaintiff's complaint asserted violations of the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, and the common law of this State. Sears filed a motion for summary judgment in which it asserted that the complaint was governed by New York law. Judge Pincus determined that there was a conflict between the laws of New Jersey and New York and that the law of New York governed plaintiff's claims. Soon thereafter, plaintiff filed a second amended complaint alleging that he suffered harassment and retaliatory discharge in violation of the New York Human Rights Law (NYHRL), N.Y. Exec. Law 290-300. A jury found that McGuiness sexually harassed plaintiff from February 1999 to May 1999. In accordance with New York law, the jury was not instructed to consider punitive damages and plaintiff was not able to recover attorneys' fees. On appeal, plaintiff contends that his complaint is governed by New Jersey law.

The issue before this court is whether New Jersey or New York law governs plaintiff's sexual harassment and retaliatory discharge claims. The action was brought in New Jersey, therefore, the issue is determined in accordance with this State's choice-of-law rule. Gantes v. Kason Corp., 145 N.J. 478, 484 (1996). "New Jersey's rule applies a flexible 'governmental-interest' standard, which requires application of the law of the state with the greatest interest in resolving the particular issue that is raised in the underlying litigation." Ibid. (citations omitted). The governmental-interest analysis is two pronged. Ibid. First, we must determine whether there is an actual conflict between the laws of the interested states. Ibid. Second, we examine the interest of each state in resolution of the disputed issue. Id. at 485.

As to the first prong, we determine that there is an actual conflict between the law of New Jersey and the law of New York governing plaintiff's claims. As to plaintiff's common law claims, both New York and New Jersey recognize that generally, in the absence of a contract stating otherwise, an employee is an at-will employee and may be fired for any reason. See, Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 290 (1985) and Rooney v. Tyson, 91 N.Y.2d 685, 689 (1998) (defining "at-will" employment). In New Jersey, an implied employment contract may be created by an employee manual regardless of whether an employee read the manual, or relied upon it in accepting employment. Woolley, supra, 99 N.J. at 297-98. In New York, the determination of whether an employment contract was breached based upon language in an employee handbook requires the plaintiff to demonstrate that the employer made him aware of an express, written policy that limited his right of discharge and the employee detrimentally relied on the policy in accepting employment. Lobosco v. N.Y. Tel. Co./NYNEX, 96 N.Y.2d 312, 316 (2001).

This State's statutory law addressing discrimination also differs. The LAD allows an award of attorney fees to the prevailing party, N.J.S.A. 10:5-27.1, and punitive damages, N.J.S.A. 10:5-3. The NYHRL does not allow either. N.Y. Exec. Law 296. Thus, there is a conflict of laws.

The second prong of the analysis requires this court "to determine which state has the most significant relationship to the occurrence and the parties with respect to the issue of" the remedies for sexual harassment. Fu v. Fu, 160 N.J. 108, 119 (1999) (citing Veazey v. Doremus, 103 N.J. 244, 248 (1986)). To do this, "we must 'identify the governmental polices underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties.'" Ibid. (citing Veazey, supra, 103 N.J. at 248). This task is informed by the factors set forth in sections 6, 145 and 174 of the Restatement (Second) of Conflicts of Laws (1971). Fu, supra, 160 N.J. at 119.

Notably, section 6 of the Restatement identifies the following factors:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability, and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

In the present case, both the conduct and injury occurred in New York. Babcock was harassed in New York and was terminated in New York. Babcock was also employed in New York. Although he claims that he was employed in New Jersey and only temporarily assigned to the New York store, he was promoted to a management-level position in the New York store a month before filing his harassment complaint. Even if Babcock's transfer to New York was initially temporary, the fact that Babcock became a manager in the New York store indicates that the assignment was transformed from a temporary to a permanent position.

The New Jersey contacts are more limited. Plaintiff was hired initially in New Jersey and was a New Jersey resident at the time of the events.

The interests of each state are similar although differently phrased. The LAD is meant to protect "the economic prosperity and general welfare of the inhabitants" of New Jersey. N.J.S.A. 10:5-3. The NYHRL was enacted to allow equal participation in economic, cultural and intellectual affairs and to eliminate and prevent discrimination. N.Y. Exec. Law 290.

New York has a strong interest in applying its law to employment contracts involving work in the state, particularly when the site of the employment is in close proximity to several states and draws employees from those neighboring states. Shamley v. ITT Corp., 869 F.2d 167, 172 (2d Cir. 1989). In Shamley, the court explained that interest as follows:

New York has an unusually strong interest in applying its own law to employment contracts involving work in New York State. Because workers who reside in several states work side by side in New York State, New York has a very practical reason for maintaining a uniform approach to employer/employee relations.

[Id. at 172.]

Indeed, this court relied on this statement of interest in Buccilli v. Timby, Brown & Timby, 283 N.J. Super. 6, 11 (App. Div. 1995).

In Buccilli, the plaintiff, a New Jersey resident, was terminated from a Pennsylvania law firm. Id. at 9. Claiming that she was entitled to damages, the plaintiff filed a complaint in the New Jersey Superior Court. Ibid. The plaintiff, however, worked in Pennsylvania and the conduct occurred there. Id. at 10. Relying on D'Agostino v. Johnson & Johnson, Inc., 133 N.J. 516, 538-39 (1993), for the proposition that "New Jersey law regulates conduct in New Jersey, not outside the state," the court determined that Pennsylvania substantive law, not that of New Jersey, should apply. Ibid. As further support for its decision, the Buccilli court cited Shamley, supra. Id. at 10-11. In Buccilli, this court agreed that it would be unreasonable to allow the rights of co-workers to differ depending upon their states of residence. Id. at 11.

Ultimately, determination of which law applies turns on a qualitative, not quantitative analysis of the operative factors. The state with the greatest interest should have its law applied. D'Agostino, supra, 133 N.J. at 526 (citing Veazey, supra, 103 N.J. at 248). In D'Agostino, the plaintiff worked for a Johnson and Johnson subsidiary in Switzerland. Id. at 518. He filed a lawsuit in New Jersey, the state of Johnson and Johnson's corporate headquarters, alleging that the corporation and its officials in New Jersey had wrongly discharged him for refusing to participate in an illegal bribe in Switzerland. Ibid. The Court determined that New Jersey law, not Swiss law, should be applied to the case because the conduct in question emanated in New Jersey in the form of a directive of the New Jersey parent company, Johnson and Johnson, Inc. Id. at 545. In addition, the Court found that because of the location of corporate headquarters, New Jersey was tied to the hiring and firing of D'Agostino. Ibid.

Although plaintiff argues that his situation is analogous to D'Agostino, we conclude that this case is more analogous to Buccilli. We cannot ignore that all of the conduct that formed the basis for plaintiff's claims occurred at the place of his employment and that the actors were employees at the New York store. We are also mindful that employees at the Newburgh store could reasonably be residents of three states: New York and the contiguous states of New Jersey and Connecticut. The public policy of eradicating discrimination of every sort in the workplace is not advanced when different rules govern the conduct of the employees given the residence of individual employees. Therefore, we conclude that Judge Pincus correctly ruled that New York law applies to this dispute.

At trial, plaintiff sought to introduce the testimony of Kelly Rutkowski, a former employee at the Sears Newburgh store. Plaintiff explained that Rutkowski complained that she was sexually harassed at work but that her complaint was received by her superiors with indifference. Moreover, store management suspended her and her harasser with pay rather than investigate her complaint and discipline the offender. Plaintiff contended that store management's reaction to the Rutkowski complaint demonstrated a pattern and practice at the store. Judge Ciuffani, the trial judge, found that the evidence was relevant but also determined that the evidence had the capacity to confuse the jury and cause undue prejudice to Sears.

We accord considerable deference to evidentiary rulings. Benevenga v. Digregorio, 325 N.J. Super. 27, 32 (App. Div. 1999), certif. denied, 163 N.J. 79 (2000). We employ an abuse of discretion standard. Thus, we will find that a trial judge has mistakenly exercised his discretion only when the trial judge excludes evidence "'without a rational explanation'" or "'inexplicably depart[s] from established polices, or . . . on an impermissible basis.'" Flagg v. Essex County Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)).

 
Plaintiff sought to admit the Rutkowski testimony in support of his retaliation claim. Notably, Rutkowski never asserted a retaliatory discharge claim. Furthermore, it appears from the offer of proof that Rutkowski was employed in a different department of the Newburgh store, she worked with different people, her complaint was investigated by different people, she was harassed by a different employee, and the decision-makers at the store were different at the time of her incident. Under these circumstances, the trial judge had a reasonable basis for concern that this testimony had the capacity to confuse the jury with inordinate detail about an incident that was not the central focus of the trial. In short, the exclusion of this evidence was well within the discretion of the trial judge.

Affirmed.

(continued)

(continued)

11

A-1305-04T2

December 28, 2005