INTERACTIVE TELECOMMUNICATIONS SERVICES, INC. v. MIL-COMM PRODUCTS, INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1970-07T31970-07T3

INTERACTIVE TELECOMMUNICATIONS

SERVICES, INC., a New Jersey

Corporation, and HILARY B. THOMAS,

Plaintiffs-Appellants,

v.

MIL-COMM PRODUCTS, INC., a New

Jersey Corporation, FRANCES FURLONG

and R. GORDON FURLONG,

Defendants-Respondents.

_____________________________________

 

Submitted May 20, 2009 - Decided

Before Judges Stern, Payne and Waugh.

On appeal from Superior Court of New Jersey,

Law Division, Morris County, Docket No. L-544-05.

Ellen O'Connell, L.L.C., and Robert Winters, attorneys for appellants (Ms. O'Connell and Mr. Winters, of counsel and on the briefs).

Bressler, Amery & Ross, attorneys for respondents (Stephen R. Knox and Michael T. Hensley, on the brief).

PER CURIAM

Plaintiff, Hilary Thomas, appeals from an amended judgment based on a jury verdict in this case in which she alleged "common law wrongful discharge," "violation of [the] New Jersey Wage Payment Law," "breach of contract," and other claims. The jury found that defendant Mil-Comm Products, Inc. (Mil-Comm), employed Thomas at a salary of $130,000 a year and was indebted to Thomas's consulting company, Interactive Telecommunications Service, Inc. (ITS), in the amount of $45,400, that Thomas's wages were reduced before she was given "notice of the reduction in violation of the Wage Payment Law," that she was discharged because of "her refusal to consent to defendants' violation of the Wage Payment Law," and that she would not have been terminated if she had accepted the salary reduction. While there is no appeal or cross-appeal from the $45,400 award to ITS, Thomas claims that the jury award of only $2,190 for "any losses she sustained as a result of her wrongful lost income and nothing for pain and suffering discharge" was improper and that her motion for additur or new trial should have been granted. We affirm the judgment.

I.

Thomas owned ITS, a consulting firm. Mil-Comm distributed lubrication products. It was founded in 1985 by Robert G. Furlong (Robert). Robert was CEO of Mil-Comm until his death in November 2003. Robert's son, defendant R. Gordon Furlong (Gordon), began working for Mil-Comm in 1992 for a salary of $39,000 per year. After the first year, Gordon was promoted to president and chief operating officer and given a ten thousand dollar raise.

In April 1999, Mil-Comm acquired technology rights to manufacture the lubricant from John Scheld who had been "working with" Mil-Comm. Because of the lubricant's usefulness with weapons, the Department of Defense was Mil-Comm's primary customer. When Gordon was promoted to CEO in November 2003, just prior to his father's death, Gordon earned a salary of $73,060.

Prior to Robert's death, Robert and his wife, defendant Frances Furlong (Frances) were equal shareholders. Frances became the sole shareholder after Robert's death. She was a stock broker and not active in the operation of Mil-Comm.

The record reflects that Mil-Comm needed frequent loans to keep it afloat. In 1993, Gordon was Mil-Comm's only full-time employee, and the company's sales were around $34,000. Mil-Comm's sales increased over the years, and its sales were $700,000 for fiscal year 2000, $800,000 for 2001, and $1 million for 2002 and 2003. From July 2003 to July 2004, Mil-Comm's sales dropped to about $700,000, which Gordon attributed to a decision of the military to no longer keep large standing inventories of the product, and in 2004 sales went back up to $1 million. Gordon testified that 2004, the year Thomas was fired, was the first year Mil-Comm ever made a profit. Mil-Comm had nine employees at the time of trial.

Thomas graduated from college in Wales with an environmental studies degree. She began working in the land-use survey field in Wales and moved to Canada in 1967 to teach environmental studies. She quit that job in 1973, took a year off, and returned to London in 1975 to work at another university as a research assistant for the next eighteen months. She thereafter worked as research assistant for a telecommunications consulting company and moved up in that company, eventually becoming vice president, until she left in 1982.

In 1982, Thomas began working as a consultant for a software development company. She became a vice president/managing director in 1984 and moved with the company to the United States. Sometime around 1986, Thomas began working for France Telecom as vice president of marketing. In 1987 she became president of Minitel USA, part of France Telecom. She was replaced in 1992, but remained as a consultant.

Thomas formed ITS in 1992. Originally, France Telecom was ITS's only client, but Thomas later acquired other clients.

In February 1999, Thomas inactivated ITS when she was asked to become an employee of one of her clients, eCharge Corporation, in order to implement a business plan she had written for it. Thomas traveled globally to negotiate agreements between eCharge and other companies, until December 2000 when eCharge "ran out of money" and "closed." In 2000, Thomas did work for I-Said Corporation, another "payment systems kind of company," until that company closed later that year due to "severe financial difficulties." Thomas thereafter was married and tried to find non-profit work, but when she could not find work by 2002, she began "actively looking for work again" in the corporate world. At that time, a friend introduced Thomas to Gordon.

Thomas testified that prior to being employed by Mil-Comm, her salary exceeded $125,000 for "every job" she had since 1990. Thomas clarified, however, that she only had two "jobs" as an employee during that time frame - - France Telecom between 1990 and 1992 and eCharge between 1999 and 2000.

Thomas's relationship with Mil-Comm began in 2002 as a consultant, when Thomas prepared "a three-phase" proposal, which included preparing a business plan to meet the goals of private investment (phase I), preparing a private placement memorandum (phase II), and raising funds and implementing the plan (phase III). Mil-Comm retained ITS in April of 2002 to complete phase I, for $25,000.

Upon completion of phase I, Thomas began phase II. Phase II involved Thomas securing the company's assets and better organizing the company. It is undisputed that Mil-Comm agreed to pay ITS $100 per hour for the phase II work. ITS sent Mil-Comm invoices, totaling $32,500, for October 2002 to December 2002 and Mil-Comm paid the invoices. However, the following year, after Mil-Comm fell behind on the invoices, the parties entered into an agreement whereby Mil-Comm would pay ITS $5,000 bi-weekly and any fees ITS earned over $5,000 were to be carried on the books as debt to ITS.

Gordon testified that while ITS was never guaranteed any amount of work, ITS was billing more than $5,000 per pay period. Thus Mil-Comm was accumulating debt based on the difference between the $5,000 bi-weekly rate and what was actually being billed. Between January 2003 and June 2003, ITS submitted thirteen invoices, totaling $85,425. A statement prepared by ITS showed that on June 30, 2003, Mil-Comm had paid ITS $35,000, and owed $50,425.

Thomas testified that in February 2003, Robert spoke with her about becoming an employee of Mil-Comm. Robert believed it would save the company money, help attract investors by reducing the company's growing debt to ITS, and benefit Mil-Comm by having a non-family member as a senior manager. Thomas testified that she had many conversations with Robert about becoming a full-time employee, as she was at that time already "working much closer to full-time" for Mil-Comm and had no other consulting clients. According to Thomas, she told Robert she was looking for security of at least five to seven years because this was going to be her last job before she was to retire and she was also interested in a "bonus scheme or something of that nature." Thomas indicated that Robert asked her to place her terms in writing, which she did in April of 2003.

Thomas's draft employment agreement included a $73,060 salary, equal to Gordon's salary, in addition to medical benefits, a $409/month car allowance, vacation, bonuses, past due consulting fees, and "2.5% of any investment resulting during [her] tenure, to be taken in equity or cash." Thomas's proposed bonus plan consisted of "1% of gross revenues so long as quarterly target revenue [was] reached," "$1,000 per month on net margin," and "2.5% of net profit for the quarter." The entire proposal totaled $97,059. The second page of Thomas's proposed plan detailed a "Management Compensation Plan" for herself, Gordon, and another senior employee. According to Thomas, Robert rejected the car allowance, because Mil-Comm used to offer one and he was not bringing it back and rejected any bonus scheme based on gross revenue. Thomas testified that she understood this to mean that Robert was "willing to consider a bonus on the net margin." Thomas testified that Robert said he would need to consult with Frances about "the whole concept of the bonus plan for [Thomas] and for Gordon."

According to Thomas, sometime in June 2003, she met with Robert at his home to try to resolve the agreement. Thomas offered Robert a "temporary agreement" where she would work as an employee for the bi-weekly salary of $5,000, but rather than paying it to ITS, Mil-Comm would pay that as a salary to Thomas directly through payroll. In return, Thomas agreed to "freeze the debt and forego any of the additional payments" so that the debt to ITS would "stop growing at the pace it was." Thomas expected all appropriate taxes to be deducted from the $5,000 bi-weekly salary. Thomas testified that she believed Mil-Comm owed ITS around $40,000 at that time, and believed that "ITS would get its money when Mil-Comm could afford to pay it," but the money would remain on the books as a debt. Thomas indicated that Robert thought this "was a very good idea" as a "temporary" arrangement and they would still try to work out a bonus plan for all senior managers, including Thomas and Gordon, over the next few months, and at that time Mil-Comm and Thomas would enter into an employment agreement.

Gordon testified that on June 7, 2003, his parents called him and told him to fire Thomas. However, Gordon indicated that a few weeks later, on June 17, 2003, rather than fire Thomas, he and Thomas made a verbal agreement in his office that Thomas would become an employee of Mil-Comm at an annual salary of $73,060. Gordon also indicated that Thomas never expressly accepted his offer, but because Thomas came to work, Gordon assumed she accepted his offer.

According to Thomas, on June 17, 2003, Thomas was in a meeting with Gordon and he told her that "over my dead body" would she be paid more than the $73,060 he then made. Gordon admitted to saying this to Thomas, and then storming out of the office, but testified that five minutes after he said it, he came back into the office and "closed the deal" with Thomas. Thomas testified that she told Robert about Gordon's "over my dead body" statement and Robert indicated he would "handle Gordon." According to Thomas, she began working for Mil-Comm "as an employee" in July 2003. At that point ITS's consulting work for Mil-Comm ended.

Thomas further testified that between August 2003 and December 2003, she mentioned to Gordon at least twice that she needed an employment agreement and Gordon responded that they were too busy and needed to complete an agreement with John Scheld first. As already noted, Scheld had originally invented and manufactured the lubricant distributed by Mil-Comm. According to Thomas, Robert reported any discussion regarding bonuses would be delayed until investors had been identified, and thus, Thomas had to wait for her employment agreement until there was a stock and/or bonus plan in place.

In November 2003, when Robert died, Frances became the sole owner of Mil-Comm, and Gordon became the CEO. Thomas testified that in January 2004, she spoke to Frances and Gordon about finalizing the employment agreement, and they both responded that they needed to complete an agreement for Scheld first. According to Thomas, she never received an employment agreement. Also in January 2004, Thomas testified that she received a W-2 from Mil-Comm showing that she was an employee from June 23, 2003, until the end of the year.

Gordon testified that he knew Thomas was having the payroll company deposit her by-weekly paychecks into two separate accounts and believed that Thomas was paying down Mil-Comm's debt to ITS from money she was being paid in excess of her salary of $73,060.

In February 2004, Thomas took a vacation. Thomas testified that when she returned to work on March 16, 2004, Gordon asked to meet with her, with his sister Joan present, and gave Thomas a letter entitled "Clarification of your Compensation and Employment Terms." Both Gordon and Thomas testified to the contents of this letter that Gordon wrote. Gordon indicated that Thomas was hired as an employee in July 2003 at an annual salary of $73,060 and Mil-Comm owed an outstanding debt of $45,400 to ITS. Gordon wrote that since then, Thomas had been receiving $5,000 bi-weekly, amounting to an annual payment of $130,000, and that the amount above Thomas's salary of $73,060 was designed to be credited to reduce the outstanding ITS debt. Gordon indicated that while Thomas was on vacation, he realized that the payments being made to Thomas were not being so allocated. Gordon's ultimatum was essentially that Thomas's salary was $73,060 and she needed "to decide whether [she would] accept [those] terms." Gordon also noted that Thomas was only entitled to two weeks vacation after one year of employment, described acceptable working hours and indicated that working from home was "not authorized." Finally, Gordon said that Mil-Comm would be issuing Thomas a corrected W-2 for 2003, and "taking an adjustment by applying the difference paid against the ITS consulting services amount owed to [Thomas]." Basically, Mil-Comm was going to apply a $2,190 credit to every $5,000 bi-weekly payment Thomas had received since July 2003 against the ITS debt, because $2,190 represented the difference between a salary of $73,060 (a bi-weekly salary of $2,810) and the $130,000 amount Thomas received (as a result of the $5,000 bi-weekly payments).

After this meeting, Thomas received her March 19 paycheck, which reflected a salary of $73,060. This paycheck covered a pay period prior to the March 16, 2004 meeting and the notice Thomas received of the pay adjustment, and she objected to the "retroactive reduction of [her] salary."

On March 22, 2004, Thomas also e-mailed Gordon and Joan, indicating that she did not accept Gordon's proposal and would submit a counter-proposal within a week. In the meantime, Thomas indicated that she would continue working at the same pay rate, and that the actions she took, including cashing her paychecks, did not indicate her acceptance of a salary reduction.

On March 26, 2004, Thomas e-mailed Gordon and Joan again, indicating that she was very busy working on the employment agreement for John Scheld, as well as other things, and would get her proposed employment agreement to them as soon as possible. On April 8, 2004, Thomas gave Gordon a proposal for her employment terms and terms for repayment to ITS. Thomas testified that Gordon never responded to this proposal.

Thomas was fired on May 17, 2004. According to Gordon, because $2,190 in each salary check was to be credited by Thomas to pay off the ITS debt, Mil-Comm had paid off the debt in full in May 2004, before she was fired. Gordon testified that he decided to fire Thomas in May 2004, after she turned in an "expense voucher" he considered fraudulent, and he felt he had "caught her twice for stealing." Gordon considered Thomas's failure to apply any credit to the ITS debt as "embezzlement."

In the termination letter of May 17, Gordon reiterated the issues with Thomas's salary and stated that Mil-Comm was unwilling to meet Thomas's proposed terms regarding her salary or the ITS repayment schedule, reiterated the vacation policy and indicated that Mil-Comm needed "copies of the Private Placement Memorandum documentation [that Thomas was] contracted to create and provide." Thomas testified that Gordon called her a "thief" and a "liar" for withholding this document, and that she told Gordon that if he turned on his computer, she would show him where the Private Placement Memorandum was filed. Thomas also testified that she returned the very next day for her belongings and showed Gordon how to access the file.

Thomas sought $16,692.94 in damages for unpaid salary and expenses from March 16, 2004, to May 17, 2004, as a result of Mil-Comm's reduction of her salary from $130,000 to $73,060. Thomas testified that after being fired, she began looking for a job "[t]owards the end of 2004" in the non-profit field, where she might be better appreciated. At that time, she began networking, volunteering, and applying for jobs. In October 2004, Thomas was offered an administrative assistant job at Heifer International, and turned it down because of the small salary. Thomas testified that she also attempted to work with headhunters, but that did not work out because the headhunters she knew dealt with corporate positions and she was not interested in a corporate job.

Thomas ended up reviving ITS, and by the end of 2004, Woodcock Washburn hired ITS for $250 per hour, but that job ended in the Spring of 2005. In late 2004, ITS obtained a second client, Advances Communications Networks, and was paid a fixed fee of $10,000 for a project.

In May 2006, Thomas received consulting work from St. Bernard's Episcopal Church in Bernardsville where she was working at the time of trial. (By then, in September 2007, she was being paid at an annual rate of $55,000 for thirty to forty hours of work per week). At the time of trial, ITS was also consulting for a San Francisco law firm for $250 per hour. Thomas indicated that she was still looking for additional consulting work for ITS. According to Thomas, she earned "approximately" $25,000 to $26,000 for both the years 2005 and 2006, from all sources.

Thomas's expert economist, Paul M. Gazeleh, testified to Thomas's economic damages. According to Gazeleh, he calculated damages for back pay and front pay for approximately five and one-half years from the time Thomas was fired in May 2004 until the time she would have retired at age sixty-seven. Gazeleh explained that he subtracted what Thomas "actually earned through the date of [his] calculation," including unemployment benefits. Gazeleh also took into account that Thomas was still capable of earning money and the taxes thereon.

Gazeleh calculated Thomas's lost earnings at $200,000 per year, a figure derived from Thomas earning $100 per hour as a consultant, at forty hours per week. In the alternative, he also calculated lost earnings on Thomas's salary of $130,000 per year. According to Gazeleh, if Thomas worked until she was sixty-seven, at a salary of $200,000, her projected loss totaled $724,175. If Thomas worked until she was sixty-seven, at a salary of $130,000, her projected loss totaled $428,620. These same projections were also made assuming Thomas only worked until she was sixty-five.

On cross-examination, Gazeleh admitted that he did not know that Thomas had become an employee of Mil-Comm, that Thomas's employment arrangement was temporary, that during the time ITS was a consultant for Mil-Comm, ITS did not bill $200,000 and that there were some weeks that ITS billed Mil-Comm for less than forty hours. He had "relied on the assumption" of a forty hour work week. Gazeleh also explained on cross-examination that his calculations did not take into account Thomas's prior work history or that she was "unemployed" for fifteen months prior to working for Mil-Comm.

Thomas's W-2 earnings reflected $178,000 for 1992, $40,000 for 1993, $19,500 for 1994, $6,000 for 1995, $22,000 for 1996, $25,000 for 1997, $20,000 for 1998, $121,000 for 1999, $159,800 for 2000, and $5,000 for 2001. Gazeleh testified that he could not determine Thomas's 2002 earnings because there was $52,000 in wages, $33,000 in ITS income, and $15,690 in unemployment income, but he did not know how that was broken up between Thomas and her husband, with whom she filed a joint return.

Regarding Thomas's non-economic damages, Thomas testified that after being terminated, she "was very upset" because she believed she "had been fired wrongly" and had "given up salary" and "had loaned [Mil-Comm] money free of interest" by allowing ITS's debt to remain unpaid for so long. Thomas testified that on her last day, she felt "[h]orrible," "let down," "humiliated, mistrusted, [and] misunderstood." She was upset at having been called "a liar and a thief" and after putting her "heart and soul into [Mil-Comm, she] just got the whole thing thrown in [her] face," as if she was "thrown on the trash heap." Thomas indicated she had trouble sleeping and felt anxiety and loss of confidence for two or three months. According to Thomas, she felt like:

[T]he credibility and the expertise that I had built up throughout my whole career was being questioned and I began perhaps to question it myself, to feel as though I - - I didn't want to face up to the idea of going back in - - into the world. I felt I couldn't trust people as I always had before.

As already noted, in response to special interrogatories, the jury found that: (1) Thomas had an oral agreement with Mil-Comm "to become an employee for [a] $130,000 annual salary"; (2) Gordon reduced Thomas's wages to pay down Mil-Comm's debts to ITS; (3) Thomas was terminated in May 2004 because she refused to consent to Mil-Comm's violation of the Wage Payment Law; (4) Thomas would not have been terminated had she agreed to Gordon's actions in March 2004; (5) Mil-Comm owed ITS $45,400 in outstanding invoices; and (6) Mil-Comm owed Thomas $2,190 for lost income to compensate her for wrongful termination but owed her nothing for "[p]ain, suffering and loss of employment life." As also already noted, the trial judge reduced the damages awarded to ITS by $8,760, to $36,640, to reflect payments already made.

Thomas filed a Motion for New Trial "or in the alternative for additur," arguing that the damages were "against the weight of the evidence," the jury failed to award damages for the "uncontested facts concerning lost income," and for "violation of the Prevailing Wage Law," and the verdict "violated the principles set forth for compensatory damages in retaliatory discharge cases" established in Potter v. Village Bank of N.J., 225 N.J. Super. 547 (App. Div.), certif. denied, 113 N.J. 352 (1988) and Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58 (1980). The trial court denied the motion. The trial judge concluded that the verdict did "not shock the judicial conscience," and there was no "miscarriage of justice." Specifically, the court found that "the jury accepted the fact that [Thomas] had an oral agreement to be paid [a] $130,000 annual salary" but that she was an at-will employee who Gordon would not let be paid more than him. The court explained that the jury award of $2,190 in damages for lost income was "reasonable," and could be explained "because the jury found that there was a violation of the Wage Payment Law and that [Thomas's] salary was actually reduced [retroactively] for one pay period before she was given notice of the reduction." According to the court, under the Wage Payment Law, Gordon was not permitted to retroactively reduce Thomas's wages. However, Thomas's salary could be reduced, with notice, as an "at-will employee," and the jury could award an amount for the one pay period involving the retroactive adjustment. According to the court, "that is simply what [the jury] did in terms of the best explanation that can be given for the $2,190."

The court also noted that "plaintiff's counsel is not taking any issue with the Court's instruction to the jury" pursuant to Potter, that it "instructed the jury on future lost income," and that Thomas did not seek new employment until August 2004, three months after she was out of work, and since then, Thomas had become a consultant again. Finding that the jury's verdict did "not shock the judicial conscience," and was not "a miscarriage of justice," the judge denied a new trial and an additur.

II.

Thomas claims that because the jury found she was wrongfully discharged, but only awarded her $2,190, "the damages awarded were completely at odds with the liability verdict." She also contends that the jury award was against the weight of evidence on damages and that the jury was confused by the compensatory damages charge.

Thomas claims the jury was confused because she was an at-will employee and the jury was not expressly instructed that fact was irrelevant as to damages. She asks us to hold that a jury must be advised that the "at will" relationship is irrelevant for purposes of damages in a wrongful termination case. Stated differently, Thomas asks us to "make it clear" that "[a]fter a jury has rendered a verdict that the discharge is wrongful, then the Plaintiff is entitled to the Potter damages flowing from the wrongful conduct, whether or not she is at will," and those damages include compensation for lost pay, fringe benefits, costs of job search, and emotional distress and anguish.

In Pierce, supra, 84 N.J. at 72, the Supreme Court addressed the role of public policy in at-will employment when it held that:

[A]n employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. . . . An employer's right to discharge an employee at will carries a correlative duty not to discharge an employee who declines to perform an act that would require a violation of a clear mandate of public policy.

In Potter, we held that compensatory damages are recoverable for a retaliatory discharge in violation of a clear mandate of public policy, as provided by Pierce. Therein Judge (later Justice) Coleman wrote:

[A]n at will employee who has sustained a retaliatory discharge in violation of a clear mandate of public policy is entitled to recover economic and noneconomic losses. Such an employee may recover (1) the amount he or she would have earned from the time of wrongful discharge for a reasonable time until he or she finds new employment, including bonuses and vacation pay, less any unemployment compensation received in the interim; (2) expenses associated with finding new employment and mental anguish or emotional distress damages proximately related to the retaliatory discharge; and (3) the replacement value of fringe benefits such as an automobile and insurance for a reasonable time until new employment is obtained.

[Potter, supra, 225 N.J. Super. at 562 (internal citations omitted) (emphasis added).]

We explained that "compensatory damages are designed to put the injured party in as good a position as he would have been in had the tortuous conduct not occurred" and sufficient evidence supporting a compensatory damages award is "[e]vidence affording a basis for estimating damages with some degree of certainty." Ibid. (citing Amer. Sanitary Sales v. Purchase & Prop. Div., 178 N.J. Super. 429, 435 (App. Div. 1981), certif. denied, 87 N.J. 420 (1981)).

Indeed, compensatory damages are awarded when a plaintiff "has met his burden of proving that he [or she] has suffered some loss or injury and if he [or she] has given the jury some information from which to estimate the amount of damages, even if he is unable to prove the exact measure of his damages." Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 42 n.1 (1984); see also Caldwell v. Haynes, 136 N.J. 422, 436 (1994) ("[T]he burden of proving net income in personal-injury and wrongful-death actions should be placed clearly and squarely on the plaintiff."). According to Nappe, supra, 97 N.J. at 42 n.1, "a plaintiff would not be entitled to a compensatory damage award for his loss or injury if he failed to come forward with sufficient information to enable the jury to estimate the amount of money that would fairly compensate him for that loss." See also Love v. Nat'l R.R. Passenger Corp., 366 N.J. Super. 525, 528-32 (App. Div.), certif. denied, 180 N.J. 355 (2004) (noting that damages for pain and suffering was not required merely because an injury occurred and lost wages were awarded, but finding a "fatal inconsistency" under the proofs).

Here, the jury found a violation of the Prevailing Wage Act, the consequence of defendants' treatment of Thomas as an employee and unilaterally reducing her wages retroactively without prior notice. See N.J.S.A. 34:11-4.6(b). However, we reject the contention that additional damages were required under Potter. Plaintiff had the burden to prove her damages by a preponderance of the evidence independent of proving the wrongful discharge. The jury was not instructed that "at-will" status mitigated or affected damages and, while Potter allowed recovery for economic and non-economic damages in retaliatory discharge cases, it does not require them. See Potter, supra, 225 N.J. Super. at 562 (stating "an employee may recover" (emphasis added)). Potter does not change a plaintiff's burden to prove compensatory damages. See ibid.

Thomas also contends that the cost of the post-discharge job search was not included for consideration in jury instructions as required by Potter, and that a new trial is therefore required. However, independent of the fact that Thomas voiced no objections to the jury instructions, the record reflects that Thomas provided no evidence at trial of her "expenses associated with finding new employment." See ibid. Again, the problem with plaintiff's arguments on this appeal is that her proofs were lacking.

The jury could properly find that Thomas was terminated in May 2004 because she refused to consent to Mil-Comm's retroactive reduction in pay, which constituted a violation of the Wage Payment Law, and the jury could award Thomas only $2,190 in back pay and nothing for "[p]ain, suffering and loss of [future] employment life" in the absence of better or more persuasive proofs. See Love, supra, 366 N.J. Super. at 528; Potter, supra, 225 N.J. Super. at 561-62. Given Thomas's uneven employment history, the result was justified. She became an employee of Mil-Comm when ITS could not support her. Her employment there and elsewhere was short lived, and there were weeks ITS billed less than forty hours. Gazeleh's calculations did not take into account Thomas's work history before Mil-Comm or that she was unemployed for fifteen months prior to working for Mil-Comm.

Thomas testified that after she was fired, she waited three months to search for work, and then she only searched for non-profit work. She also testified that immediately prior to working for Mil-Comm, she had tried unsuccessfully to find non-profit work for two years. Moreover, in October 2004, Thomas turned down a non-profit job because of its small salary.

It is undisputed that the jury was charged on economic damages based on model jury charges. Regarding damages in general and economic damages specifically, the jury was instructed, in part, that:

Now in the event that you find she has proved her claim for a wrongful discharge against the defendants by a preponderance of the evidence, you must then determine the amount of damages that the plaintiff has sustained with respect to that claim, if any.

If you find for the plaintiff, she is entitled to damages in an amount [t]hat will reimburse her for the losses that she can show actually resulted from the defendant's conduct. Damages may not be based on speculation or conjecture. The plaintiff must prove the amount of her damages by a preponderance of the evidence. The plaintiff is not entitled to any damages that would place her in a better position than she is entitled to be. She's not entitled to a windfall. In other words, she is only entitled to what are the fair and reasonable damages caused by the defendants' conduct.

. . . .

First, let me discuss economic damages. Lost income. She claims that she suffered damages in the form of what could be called back pay. Meaning pay before the time of travel [sic]. Specifically, she is entitled to receive the amount that she would have received from the time of the wrongful discharge for a reasonable time until she finds new employment, including vacation pay, and less any unemployment compensation received in the interim.

. . . .

Now when we talk about past los[t] earnings, we're talking about the plaintiff's right to be compensated for any earnings lost as a result of her wrongful discharge caused by the defendants' wrongdoing.

. . . .

So, you must decide whether or not she was harmed by the retaliatory discharge that violated a public policy which in turn resulted in a loss of income. If you find that that took place, next you have to decide and fix the amount of the lost earnings. And you do this by considering the length of time during which she was unable to work, what her income was before the discharge, whether the injuries which were caused by the discharge affected her ability to do any tasks required on the job, and any lessening or decrease in her income after returning to work.

You should also think about any special skills she has and whether there were other jobs available that she was able to do, so that she could earn some income. I will say more about this in a few minutes, but a plaintiff must try to minimize the damages resulting from a loss of earnings, but extraordinary or impractical efforts are not necessary. All that is required are reasonable efforts and ordinary care in trying to reduce the loss.

Now in determining the amount of lost earnings, you'll make your decision based upon the earnings that were probably lost. Naturally, this means that you must exercise your sound judgment since she does not have to prove the loss of earnings with precision, but rather with reasonable probability.

Now you've heard from the expert witness, Paul Gaz[e]leh, an accountant -- a certified public accountant -- and you've heard him discuss the present value of future earning loss, and you also heard him project the future earning loss up to when it was probable that she would stop working.

Now it's up to you as to whether you accept that testimony or not. You may consider some of what he said, all of what he said or none of what he said in determining a fair figure to compensate the plaintiff for her lost earnings. The expert gave you his bottom line figures as to past and future lost earnings, and the past loss earnings really went up to, I believe, a period that was about a year prior to when this trial took place. And then after that, he consider[ed] it future lost earnings.

But as I told you before he even took the stand, an economist gives you opinions and projections which are based upon assumptions and it's critical that you look at those assumptions and that you just not uncritically receive what he had to say even though no other economist was called in the case to refute it.

You are free to determine, based on all the evidence, including the expert testimony that you do choose to accept, what amount of dollars will fairly compensate Hilary Thomas for her lost earnings.

We find no error. "Reversible error . . . will not be found where the charge, considered as a whole, adequately conveys the law and is unlikely to confuse or mislead the jury," even when "part of the charge, standing alone, might be incorrect." Fischer v. Canario, 143 N.J. 235, 254 (1996).

The jury was never instructed to consider Thomas's at-will employment status in determining damages. Moreover, it does not follow that, because the jury awarded Thomas $2,190 for lost income to compensate her for wrongful termination, but awarded her no other damages, that the jury must have considered Thomas's at-will status in the damages analysis.

Next, Thomas argues that the trial judge "may have communicated that the jury need not concern itself with the damages question" when the judge said:

And after the case is over and after you have answered the questions that you've heard about during plaintiff counsel's summation to you, if there are adjustments to be made in the numbers by way - by reason of the way you have answered the question - those judgments and those adjustments will be made by the Court. But we can't make any adjustments at all in this with respect to numbers until we get your answer to the questions that I'm going to give you in a few [minutes.]

We reject the argument as the trial court was clear that the jury was required to make the damage determinations when the court instructed multiple times that the jury needed to "answer[] the questions."

Thomas now argues, also for the first time, that had the jury been told that Thomas's "salary was part of a deal pending an employment agreement," the jury might have decided Thomas was not an at-will employee and awarded Thomas economic damages pursuant to Potter. According to Thomas, the jury's question during deliberations supports this argument. After deliberating for about thirty minutes, the jury stated:

We are concerned with the wording of the first question. It does not characterize the deal as temporary pending a formal written agreement.

The jury was referring to the first interrogatory which asked:

1. Did the plaintiff Hilary Thomas have an oral agreement with defendant Mil-Comm Products, Inc. to become an employee for $130,000 annual salary?

After discussion with counsel and agreement by both parties as to most of the essentials, including Thomas's receipt of $5,000 bi-weekly, which "annualized" to $130,000, the judge responded that:

[I]t really doesn't matter that that question doesn't characterize it as a temporary pending formal written agreement. If you decide that that was the case, so be it. What does matter is what was the deal at the outset and what was the deal with respect to salary at the outset.

We know that she received $5,000 biweekly. That's undisputed. But there are two different views as to what the deal was at the outset with respect to salary. And when we talk about salary, we usually talk about what a person will be paid on an annual basis. But if they're an at-will employee, we don't know how long that person is going to work because there is no contract, written contract, with a term in it as to how long the person will work.

So, you know, whether she worked for a month, six months, a year or more than a year, the question is what agreement, if any, was there with respect to salary at the outset. And that's why we asked Question 1 the way we did.

Insofar as it was temporary pending a formal written agreement, well, you can decide that, but I still need to know -- and we all need to know -- what was the salary at the outset. And so, we're not going to change the wording of any question now. It's just a matter of, you know, hopefully my explanation will help you as you proceed.

But again, if you have more questions concerning these questions or anything else, you'll address them to us tomorrow when you return.[]

The jury ultimately answered the question in the affirmative.

We do not understand Thomas's argument in context. Thomas does not assert that the trial judge's answer to the jury's question, with which she agreed, was incorrect, and we do not understand how a different answer would have helped her. The jury's answer was in her favor.

III.

There is no basis to disturb the denial of a new trial or additur. Baxter v. Fairmount Food Co., 74 N.J. 588, 596 (1997); Potter, supra, 225 N.J. Super. at 563. See also Jastrum v. Kruse, 197 N.J. 216 (2008).

IV.

Thomas argues for the first time in her reply brief that the Supreme Court's holding in Abbamont v. Piscataway Township Board of Education, 138 N.J. 405, 417-18 (1994), should govern this case. In Abbamont, the Court indicated that strict liability should apply to equitable relief in a Conscientious Employee Protection Act ("CEPA") action pursuant to N.J.S.A. 34:19-1 to -9. The Court held "that to fulfill the remedial purposes of CEPA, employers should be strictly liable for equitable relief in the nature of reinstatement, restoration of back pay and the like." Abbamont, supra, 138 N.J. at 418.

We decline to consider whether the CEPA strict liability standard should also apply to a common law wrongful discharge action under Pierce. The issue was raised for the first time in Thomas's reply brief. See Randolph Town Ctr., L.P. v. County of Morris, 374 N.J. Super. 448, 452 n.2 (App. Div. 2005), aff'd in part, vacated in part on other grounds, 186 N.J. 78 (2006); A.D. v. Morris County Bd. of Social Servs., 353 N.J. Super. 26, 30-31 (App. Div. 2002).

V.

 
As the record supports the jury's determination, and the trial judge's conclusion that there was "no miscarriage of justice under the law," the judgment is affirmed.

Co-plaintiff ITS has not appealed. Defendant Mil-Comm filed a counterclaim which was dismissed during trial. It withdrew its subsequent cross-appeal. The judgment reduced the $45,400 ITS award to $36,640 because of prior payments, but added pre-judgment interest to both plaintiffs.

In developing the facts, we note that the trial court entered an order permitting an abbreviated record.

The 2003 W-2 is not included in the record; only the 2004 W-2 is included.

Gordon testified at trial that he was unaware of the Wage and Payment Law.

This fact is undisputed although the transcript reads $70,060.

He said that "Mil-Comm has taken appropriate adjustments to your ITS balance . . . for the differences in each paid salary check since July, 2003, of $2,190.00, which is the actual difference between your gross salary due of $2,810.00, against $5,000.00 amounts paid."

ITS was a subchapter S corporation so its income was considered as Thomas's "and taxed as such."

The jury did not award Thomas non-economic damages, and Thomas does not appeal on that issue.

The jury found that Mil-Comm violated two sections of the Wage Payment Law. We deal with retroactive wage reduction without notice. N.J.S.A. 34:11-4.14, which addresses a violation based on Mil-Comm's unlawful diverting of wages to ITS, is not relevant to Thomas's personal economic damages claim.

Thomas is not challenging the jury's verdict on non-economic damages on this appeal. Nor does she claim entitlement to any further back pay above the $2,190 loss.

As the record was abbreviated, and the judge stated he would consider the matter further over night, we are not sure the subject was not further addressed. The next day's proceedings, including the verdict, were not transcribed.

(continued)

(continued)

33

A-1970-07T3

 

August 26, 2009