LAURIE CAHILL v. PARKWAY INSURANCE COMPANY, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5579-03T25579-03T2

LAURIE CAHILL,

Plaintiff-Appellant,

v.

PARKWAY INSURANCE COMPANY;

FIREMAN'S FUND INSURANCE

COMPANY; and DENIS DEEGAN,

Individually,

Defendants-Respondents.

________________________________________________________________

 

Argued September 27, 2005 - Decided

Before Judges Lefelt, Hoens and R. B.

Coleman.

On appeal from the Superior Court of

New Jersey, Law Division, Somerset

County, Docket No. L-1556-03.

David G. Evans argued the cause for

appellant.

David J. D'Aloia argued the cause for

respondents (Saiber, Schlesinger,

Satz & Goldstein, attorneys; Joan

Schwab and Danalynn T. Colao, on

the brief).

PER CURIAM

Plaintiff Laurie Cahill appeals from the motion judge's dismissal of her ten-count complaint against her former employer, defendant Parkway Insurance Company; Parkway's parent company, defendant Fireman's Fund Insurance Company; and Cahill's supervisor, Parkway's President and Chief Executive Officer, defendant Denis Deegan. Cahill's complaint alleged causes of action based on the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8; the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -30; and various common law claims. The motion judge dismissed all ten counts of plaintiff's complaint for failure to state a claim under R. 4:6-2(e). After reviewing plaintiff's complaint indulgently and with liberality, as is required under the pertinent rule, we conclude that she has stated claims for handicap discrimination, sexual harassment/hostile environment, and retaliation that should have survived defendants' motion to dismiss, which was made before defendants answered the complaint and before the parties engaged in any discovery. Therefore, we affirm in part, reverse in part, and remand.

I.

We recite the facts based upon the allegations contained in plaintiff's complaint. Cahill was Parkway's Human Resource Manager at the company's Bridgewater location when she was fired, allegedly for absenteeism. Cahill alleged several incidents that, according to plaintiff, constituted the real reasons for her termination.

The first incident involved a temporary employee named Corrie Piskosz who had been hired as a receptionist. In early 2002, Deegan advised Cahill that Piskosz should be replaced because she was too young and her demeanor and dress did not reflect the professional image that he thought Parkway should project. Cahill objected and told Deegan that she thought such action would be unethical and discriminatory.

In May 2002, Cahill internally posted a job listing for an Underwriting Assistant including the minimum and maximum salary figures. Piskosz applied for the position and at the meeting to discuss this hiring, the managers insisted that Piskosz was the best candidate. Deegan vigorously objected but reluctantly agreed, becoming visibly angry about the decision. He subsequently told Cahill that he did not want Piskosz to be offered the previously-posted salary and instructed Cahill to lie to Piskosz and tell her that the salary was $500 lower than the original listing. When Cahill did so, Piskosz asked to see the original job listing. Greg Gall, Parkway's Vice President of Information Technology, told Cahill to "white out" the salary figures from the original job listing and Deegan instructed Cahill to destroy all remaining related documents.

Cahill believed this conduct was unethical, and told Deegan that these actions "could cause legal trouble" for Parkway. Deegan responded that he would "take his chances." In the end, Piskosz wrote the head of Human Resources at defendant Fireman's Fund to complain about the salary issue. As a result, Fireman's Fund conducted an investigation into the matter, during which Cahill indicated to a senior Human Resource Manager at the parent company that she believed Deegan's and Parkway's actions were "improper."

Cahill also complained about Parkway's hiring of a headhunter. In May 2002, Deegan told Cahill that he wanted her to execute a contract to hire a headhunter who was a friend of his because it would "look better" if Parkway was ever audited. Cahill was aware that Parkway already had an agreement with another headhunter who was far less costly than Deegan's friend. Because she was not authorized by the company to sign such a contract and believing that there was a potential conflict of interest, Cahill returned the contract to Deegan unsigned, along with a note explaining her reasons for not signing. Later that morning, Deegan threw the contract, which he had signed, on Cahill's desk while she was typing.

After Cahill refused to sign the headhunter's contract, Deegan began treating her in an unpleasant manner and began creating, according to Cahill, a hostile work environment. Deegan undermined her position by arbitrarily moving deadlines and making sudden changes to projects. Moreover, Deegan instructed Cahill to keep her door closed, in violation of Parkway's "open door" policy, for the reason that Cahill would be able to more effectively accomplish her goals if employees were not talking to her.

In another incident, Deegan objected to the manner in which Cahill was investigating a sexual harassment allegation filed by another Parkway employee against Gall. Deegan labeled the investigation a "witch hunt" and eventually removed Cahill from the inquiry. Cahill suggests that the matter was "swept under the rug," with defendants ignoring relevant information provided by Cahill.

Cahill alleges that she was also the victim of a sexually explicit comment regarding her vagina, which was made by Gall at a company barbeque luncheon. Deegan laughed at the comment and Cahill was "embarrassed and humiliated" in front of her co-workers and senior staff. Gall admitted making this comment and agreed to issue a written apology, which Cahill never received. Despite this, Deegan told Cahill to make every effort to get along with Gall or her "performance appraisal ratings would be lowered to an unacceptable level in areas of teamwork and communication."

In addition to these incidents, Cahill requested leave under the Family and Medical Leave Act (FMLA), 29 U.S.C.A. 2601 to 2654, for surgery due to a degenerative joint disease that caused her a great deal of pain and discomfort and interfered with the normal use of her hand. Defendants granted Cahill's request, and on July 10, 2002, Cahill began her medical leave. Cahill advised defendant that she intended to return to work on or around October 2, 2002. However, Cahill's recuperation time after surgery was longer than she first anticipated. On September 18, 2002, she sent Parkway a letter from her physician recommending additional rehabilitation time until October 14, 2002. Parkway did not object. In fact, on October 7, 2002, Cahill received a letter from the Absence Management Specialist for Fireman's Fund, informing Cahill that she had exhausted her FMLA leave but that "[a]s long as you remain disabled as defined by our disability plan, you will remain on a medical leave until your doctor releases you to return to work."

On October 14, 2002, Cahill sent Parkway another letter from her physician recommending that she continue her rehabilitation program for an additional four weeks before returning to work. Cahill informed Parkway that she would return on November 13, 2002, pending final review by her physician the day before. Parkway did not object and never informed Cahill that unless she returned by a particular date she would be terminated. In fact, Parkway had previously indicated that it was willing to provide her with a reasonable accommodation until she was completely healed.

Having been previously informed that her medical leave would continue and that Parkway was willing to accommodate her, Cahill was surprised and shocked when a senior Human Resource Director for Fireman's Fund informed her on November 12, 2002, the day before she was to return to work, that she "ha[d] been replaced" and that she "ha[d] no job to return to."

II.

Upon appeal, plaintiff argues that the judge incorrectly dismissed her claims for handicap discrimination under the LAD, retaliation under CEPA and the LAD, sexual harassment/hostile environment under the LAD, wrongful discharge in violation of public policy, and breach of contract. Also, plaintiff claims the court erred in finding that Fireman's Fund was not an employer of plaintiff or an agent of Parkway.

To review the dismissal of plaintiff's complaint, we apply the same test on appeal that governed the trial court. We evaluate the face of plaintiff's complaint to determine "whether a cause of action is 'suggested' by the facts." Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989) (citing Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 192 (1988)). The complaint must be searched with indulgency and "'liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary.'" Ibid. (quoting DiCristofaro v. Lauren Grove Mem'l Park, 43 N.J. Super. 244, 252 (App. Div. 1957). In conducting this generous and hospitable review, we are not concerned with plaintiff's ability to prove the allegations, but only with whether the complaint states a claim, or could state a claim upon amendment, after according the allegations "every reasonable inference of fact." Ibid. (citing Indep. Dairy Workers Union v. Milk Drivers and Dairy Employees Local 680, 23 N.J. 85, 89 (1956)). The motion must be denied if, giving plaintiff the benefit of all her allegations and all favorable inferences, a cause of action has been made out. Velantzas, supra, 109 N.J. at 192; Burg v. State, 147 N.J. Super. 316, 319-20 (App. Div.), certif. denied, 75 N.J. 11 (1977).

Viewing plaintiff's complaint in this manner, we affirm the trial court's dismissal of the breach of contract count because plaintiff was an at-will employee. Parkway's Employee Manual stated in straightforward terms that employees, such as Cahill, could be terminated "at any time," and the manual did not "constitute an employment contract." See Nicosia v. Wakefern Food Corp., 136 N.J. 401, 413-14 (1994); Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284, 298-99 (1985). We also agree with the trial court's dismissal of plaintiff's Pierce v. Ortho Pharm. Corp., 84 N.J. 58, 71 (1980), claim because the allegations do not seek to vindicate any "interests independent of those protected by the LAD." Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. Super. 78, 90 (App. Div. 2001); and see Catalane v. Gilian Instrument Corp., 271 N.J. Super. 476, 492 (App. Div.), certif. denied, 136 N.J. 298 (1994). However, we believe that plaintiff has stated causes of action for handicap discrimination, retaliation, and hostile environment. We start by analyzing plaintiff's handicap discrimination allegations.

III.

Plaintiff's allegations were sufficient to qualify her as handicapped under the LAD because her degenerative joint disease constituted a "physical disability, [or] infirmity" which was "caused by bodily injury, birth defect or illness." N.J.S.A. 10:5-5(q). Once an employee qualifies as handicapped under the LAD, the employer is required to provide a reasonable accommodation. Tynan v. Vicinage 13 of the Super. Ct. of N.J., 351 N.J. Super. 385, 396 (App. Div. 2002). A failure to accommodate an employee's handicap may result in a disability discrimination claim. Id. at 397.

"Under the LAD, 'excessive absenteeism need not be accommodated even if it is caused by a disability otherwise protected by the Act.'" Muller v. Exxon Research & Eng'g Co., 345 N.J. Super. 595, 605 (App. Div. 2001), certif. denied, 172 N.J. 355 (2002) (quoting Malone v. Aramark Servs., Inc., 334 N.J. Super. 669, 675 (Law Div. 2000)). And an employer is not obligated to hold a position open indefinitely. See id. at 606.

Based on the complaint, however, defendants never informed plaintiff that her job was in jeopardy because of "excessive absenteeism." In fact, according to an indulgent view of plaintiff's allegations, the parties were engaged in an informal interactive process to determine an appropriate accommodation for plaintiff's return to work, when she was terminated without any previous warning. See Tynan, supra, 351 N.J. Super. at 400-01 (detailing the interactive process that is required under the LAD).

To this end, "'both parties have a duty to assist in the search for appropriate reasonable accommodation and to act in good faith.'" Id. at 400 (quoting Taylor v. Phoenixville School Dist., 184 F.3d 296, 312 (3d Cir. 1999) (quoting Mengine v. Runyon, 114 F.3d 415, 420 (3d Cir. 1997)). Here, the only information plaintiff received from defendants indicated that an accommodation would be reached. She was not informed that, unless she reported for work on November 11, she would be terminated the next day. No warning was given under Parkway's attendance policies. Indeed, a letter from Fireman's Fund informed Cahill that she would remain on leave until her doctor released her to return to work.

We can also infer from plaintiff's complaint that during the interactive accommodation process, in direct conflict with the Fireman's Fund letter, defendants surreptitiously hired Cahill's replacement while continuing to delude plaintiff with its silence and failure to contradict the Fireman's Fund letter. Compare Gerety v. A.C. Hilton, 184 N.J. 391, 406 (2005) (finding no violation of the LAD when defendant denied plaintiff's request for additional pregnancy leave beyond the company maximum and fired plaintiff when she failed to return to work).

We agree that "leaves of absence and allowance of time-off for medical care or treatment may constitute reasonable accommodations for disability-related absences." Svarnas v. AT&T Commc'ns, 326 N.J. Super. 59, 79 (App. Div. 1999). However, the trial court determined from plaintiff's complaint alone that she was adequately accommodated and that she was fired because of an inability to confirm the date by which she would return to work. These determinations, in our view, resolved factual disputes by construing the pertinent allegations favorably toward defendants, which directly conflicts with the required analysis for motions to dismiss pursuant to R. 4:6-2(e). See Printing Mart-Morristown, supra, 116 N.J. at 746.

Considering plaintiff's allegations indulgently and without concerning ourselves with whether plaintiff can prove these charges, we conclude she has alleged a cause of action for handicap discrimination based on defendants' bad faith in the accommodation process. Consequently, this count should have withstood defendants' dismissal motion.

IV.

The trial court also dismissed plaintiff's CEPA retaliation claim because she "failed to adequately indicate a law, regulation or public policy that she reasonably believed Defendants were violating . . . and failed to allege any reasonable basis for a causal link between her purported whistle-blowing and her termination."

CEPA was enacted to protect "employees who 'blow the whistle' on organizations engaged in illegal or harmful activity." Young v. Schering Corp., 141 N.J. 16, 23 (1995). In relevant part, CEPA provides that "[a]n employer shall not take any retaliatory action against an employee because the employee . . . [o]bjects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes . . . is in violation of a law . . . or is incompatible with a clear mandate of public policy." N.J.S.A. 34:19-3(c). CEPA reaffirms "'this State's repugnance to an employer's retaliation against an employee who has done nothing more than assert statutory rights and protections.'" Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 431 (1994) (quoting Lepore v. Nat'l Tool & Mfg. Co., 115 N.J. 226, 228 (1989)).

Cahill can establish a prima facie cause of action under CEPA by demonstrating that she reasonably believed her employer was violating a law or a clear mandate of public policy and that she was terminated because she blew the whistle on this violation. Dzwonar v. McDevitt, 177 N.J. 451, 462 (2003). Plaintiff alleged that Deegan told her Piskosz was too young to represent Parkway as its receptionist. Later, when Piskosz was to be promoted to underwriting assistant, Deegan objected vigorously and reduced the salary for the position. He then attempted to cover-up the salary reduction by having documents destroyed that contained the previous higher salary. Plaintiff objected to Deegan and others about this conduct, thereby provoking an investigation by Fireman's Fund of the alleged discrimination.

It seems to us that plaintiff's allegations can reasonably be interpreted as charging that she believed Deegan's comment and subsequent actions constituted age discrimination in violation of the LAD, N.J.S.A. 34:19-3(c), and our public policy. See Bergen Commercial Bank v. Sisler, 157 N.J. 188, 199 (1999). These are acts, which if true, may constitute a public harm sufficient to support a CEPA claim. Maw v. Advanced Clinical Commc'ns, Inc., 179 N.J. 439, 447-48 (2004); Mehlman v. Mobil Oil Corp., 153 N.J. 163, 188 (1998).

We acknowledge that plaintiff's termination came some five months after the Piskosz incident. The five month delay thereby creates a factual dispute regarding whether plaintiff's opposition to, and reporting of, Deegan's actions were a "determinative or substantial motivating factor in defendant[s'] decision to terminate" her. Donofry v. Autotote Sys., Inc., 350 N.J. Super. 276, 296 (App. Div. 2001); see also Romano v. Brown & Williamson Tobacco Corp., 284 N.J. Super. 543, 550 (App. Div. 1995) (finding proximity is not the "only circumstance that justifies an inference of causal connection"). But that is the kind of factual dispute that is not to be resolved on motions to dismiss for failure to state a claim, especially in this case where much of the five months was consumed by plaintiff's leave of absence, during which she allegedly cooperated with the Piskosz investigation. Therefore, the CEPA retaliation claim must also be restored.

For similar reasons, we believe plaintiff's LAD retaliation complaint must also be restored. It is unlawful for "any person to take reprisals against any person because that person has opposed any practices or acts forbidden under [the LAD.]" N.J.S.A. 10:5-12(d). To establish a prima facie case of discriminatory retaliation, Cahill must demonstrate that she engaged in a protected activity, and that thereafter, because of her participation in the protected activity, her employer retaliated against her. Craig v. Suburban Cablevision, Inc., 140 N.J. 623, 629-30 (1995).

When plaintiff objected to Deegan's perceived acts because she believed they were discriminatory against Piskosz, she was engaged in a protected activity. Craig v. Suburban Cablevision, Inc., 274 N.J. Super. 303, 310 (App. Div. 1994), aff'd, 140 N.J. 623 (1995). The disputes that remain regarding whether plaintiff was terminated in retaliation for her objection are factual in nature and therefore should not be resolved in the context of a motion to dismiss.

V.

The trial court also dismissed plaintiff's sexual harassment/hostile work environment complaint without prejudice. This count was based upon the joke by Gall about plaintiff's vagina, Gall's subsequent failure to deliver a promised apology, and Deegan's threat that plaintiff had to get along with Gall or suffer a reduced performance appraisal rating. In dismissing this count, the court did not explain why the count was dismissed without prejudice, though presumably plaintiff could replead this count, assuming the statute of limitations has not run. See Mason v. Nabisco Brands, Inc., 233 N.J. Super. 263, 267-68 (App. Div. 1989).

To state a claim for hostile work environment/sexual harassment under the LAD, a female plaintiff must allege that the conduct "(1) would not have occurred but for the employee's gender; and it was (2) severe or pervasive enough to make a (3) reasonable woman believe that (4) the conditions of employment are altered and the working environment is hostile or abusive." Lehmann v. Toys "R" Us, Inc., 132 N.J. 587, 603-04 (1993).

Our Supreme Court has recognized that a hostile work environment claim does not require repeated incidents to make it actionable, but requires only that the employer's conduct be either severe or pervasive; a single statement may suffice. Taylor v. Metzger, 152 N.J. 490, 501-02 (1998). However, a hostile work environment discrimination claim is not established by comments that are "merely offensive." Heitzman v. Monmouth County, 321 N.J. Super. 133, 147 (App. Div. 1999) (citing Harris v. Forklift Sys., Inc., 510 U.S. 17, 21, 114 S. Ct. 367, 370, 126 L. Ed. 2d 295, 302 (1993)). Indeed, "the LAD is not intended to be a general civility code for conduct in the workplace." Ibid. (internal quotation marks omitted).

Ultimately, "whether an environment is 'hostile' or 'abusive' can be determined only by looking at all the circumstances," which "may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a merely offensive utterance; and whether it unreasonably interferes with an employee's work performance." Harris, supra, 510 U.S. at 23, 114 S. Ct. at 371, 126 L. Ed. 2d at 302-03; see also Taylor, supra, 152 N.J. at 499.

Obviously, a supervisor such as Deegan plays a unique role in shaping the workplace environment. Part of a supervisor's responsibilities is the duty to prevent, avoid, and rectify invidious harassment in the workplace. See Lehmann, supra, 132 N.J. at 622-23. An employer must not only take strong and aggressive measures to prevent invidious harassment, but also to correct and promptly remediate such conduct when it occurs. Payton v. N.J. Tpk. Auth., 148 N.J. 524, 537 (1997).

The trial court found plaintiff's claim on this count insufficient. Relying on Taylor, supra, 152 N.J. at 502-03, the court was concerned that plaintiff failed to allege the "specific comment that was uttered. Therefore, unlike the term 'jungle bunny', [the] Court [had] no way of judging the severity of the comment based upon cultural context." The court further indicated that plaintiff was asking the court "to make an educated guess as to what precisely was said. Such guesswork is not enough to defeat a motion for failure to state a claim upon which relief may be granted."

Here, it seems the trial court applied the summary judgment standard, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), rather than the standard for evaluating a motion to dismiss for failure to state a claim, which was made before answer or any discovery. If the court believed that the precise statement made by Gall was crucial to its determination, the court should have provided plaintiff with an opportunity to amend the complaint, rather than dismissing it without prejudice. DiCristofaro, supra, 43 N.J. Super. at 252.

In addition, plaintiff has alleged that after the comment was made, Deegan failed not only to remediate the offensive conduct, but contributed to its seriousness by threatening plaintiff with job-related adverse action. Giving plaintiff the benefit of all reasonable inferences, it seems to us that a factual dispute has been created as to whether the sexual joke and subsequent conduct, including Deegan's apparent support for the alleged harasser, altered plaintiff's workplace and was serious enough to warrant relief. Accordingly, we believe a cause of action has been stated here also.

VI.

With regard to plaintiff's final contention, we recognize that even though defendants moved to dismiss the complaint specifically against Fireman's Fund, the court did not address the issue in its decision dismissing plaintiff's complaint. Defendants argue that plaintiff was a Parkway employee and her complaint was correctly dismissed as against Fireman's Fund. Plaintiff's complaint, however, cites a number of interactions with Fireman's Fund employees who were acting on behalf of Parkway. Indeed, a Fireman's Fund employee offered an accommodation to plaintiff during her leave of absence and Fireman's Fund Human Resources Director fired plaintiff.

The record is inadequate to address this issue at this time. We merely note that we have restored the four counts of plaintiff's complaint discussed above as to all defendants, and leave resolution of the Fireman's Fund issue to the trial court during the remand.

VII.

In conclusion, we restore those counts of plaintiff's complaint alleging retaliation under the CEPA and the LAD, handicap discrimination under the LAD, and sexual harassment/hostile work environment under the LAD. We affirm dismissal of the counts alleging breach of contract and wrongful discharge in violation of public policy.

To emphasize the parameters of our decision, we decide only that plaintiff has stated a claim, is entitled to defendants' answer to those counts we have restored, and should proceed to discovery. The allegations we have not analyzed, for example the head hunter, closed-door directive, and sexual-harassment-investigation incidents, appear to reflect internal disputes over how Parkway's business should have been conducted. Even if Deegan's actions relating to these incidents violated company- wide policies, those actions do not, based on this record, constitute violations of law, regulation, or public policy. See Klein v. Univ. of Med. and Dentistry of N.J., 377 N.J. Super. 28, 46 (App. Div.), certif. denied, 185 N.J. 39 (2005). These incidents appear at this time to be mere distractions from the claims we have restored. In addition, the potential insurance regulatory violations, as argued by plaintiff based on her complaint, are too speculative at this time to constitute legitimate concerns under the LAD and CEPA. See Dzwonar, supra, 177 N.J. at 469. We take no position on whether any of these allegations may, after discovery, more properly support the claims we have restored.

Finally, to make our position completely clear, we stress that though we are remanding parts of plaintiff's complaint, we do not intend to imply any view of ours on the worthiness of her claims. We have not decided the merits of the restored claims or, for that matter, even whether plaintiff could withstand summary judgment, should such a motion be made after the completion of discovery.

Affirmed in part, reversed in part, and remanded.

 

Plaintiff appealed from dismissal of her entire ten count complaint. However, she briefed only counts one through six, thereby abandoning objection to the dismissal of counts seven, wrongful discharge in violation of company policy; eight, breach of the covenant of good faith and fair dealing; nine, intentional infliction of emotional distress; and ten, fraud/misrepresentation. Mackowski v. Mackowski, 317 N.J. Super. 8, 10-11 (App. Div. 1998).

Plaintiff did not allege the specific content of the comment as a part of her pleading. Its relationship to plaintiff's "vagina" was revealed at oral argument before the motion judge.

Plaintiff's original complaint had alleged violations of the FMLA, but after defendants removed the complaint to Federal Court, Cahill voluntarily dismissed that complaint and refiled the current complaint in Superior Court without the FMLA claim.

(continued)

(continued)

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A-5579-03T2

October 24, 2005