Legal Issues and Recent Developments, Published by the Lurie Law Firm LLC

Posts Tagged ‘retaliation’

Federal Government Fines NJ Transit $569,000 for OSHA-Related Retaliation

Thursday, April 8th, 2010

On Tuesday, April 6, 2010, the federal Occupational Safety and Health Administration (OSHA) imposed a $569,000 penalty on NJ Transit for retaliating against an employee who reported a work-related injury, according to the New Jersey Law Journal.

While the amount of the award is noteworthy -  it is the largest penalty imposed under the recent Federal Rail Safety Act, which prohibits discrimination against railroad whistleblowers — it is also groundbreaking in other ways.  While successful whistleblowers can recover back pay and front pay (the difference between the income that the employee could have earned, and what he or she actually did earn), OSHA awarded consequential damages for the injuries caused as a result of the loss of income.  More specifically, OSHA awarded the employee,  Anthony Araujo, $40,271 for lost wages, $50,000 for damage to his credit rating, $12,297 for loss of his car and $345,754 for loss of his home.  OSHA also imposed $75,000 in punitive damages, and $5,000 emotional pain and suffering, as well as various other fines and damages.

It appears that OSHA intended to send a strong message, particularly in light of its finding that NJ Transit showed ”reckless disregard for the law and complete indifference for complainant’s rights.”  More specifically, Araujo’s responsibilities included protecting a contractor’s crew from passing trains.  During one of Araujo’s shifts, a contractor’s employee came in contract with an electric line above the tracks, causing an explosion. 

The case stems from a fatal explosion on Feb. 25, 2008, at a job site along a railroad right-of-way in Newark where Araujo had been assigned to protect a contractor’s crew from passing trains. The employee’s clothes caught on fire and, although Araujo radioed for help, the employee died the following day from burns suffered from the explosion. 

Following an initial investigation shortly after the accident, Araujo’s supervisor informed him that he had done nothing wrong.  The next day Araujo told his supervisor that he was distraught and unable to sleep.  He also requested help from NJ Transit’s Employee Assistance Program, was  diagnosed with post-traumatic stress disorder, and began counseling.  On February 27, Araujo was then put on paid EAP leave, Araujo’s supervisor called his EAP counselor, complaining that Araujo was malingering.

On March 5, 2008, NJ Transit notified Araujo that he was under investigation for violating agency policies in connection with the accident, and it suspended without pay.  NJ Transit held a disciplinary hearing more than six months later, and finally notified Araujo on February 11, 2009 that his discipline was over, and that he could return to work.   During his suspension, Araujo had no income from NJ Transit, and tried to live on credit cards, but ultimately lost his house and car, and his credit rating suffered dramatically.

In announcing its findings, OSHA’s Regional Administrator Robert Kulick said, “A preponderance of the available evidence indicates that Complainant’s reporting of his work related illness was a contributing factor in the adverse actions taken against him. Accordingly, OSHA finds that there is reasonable cause to believe that Respondent violated FRSA.”  OSHA also noted that NJ Transit did not cooperate in its investigation, did not make employees available for questioning and, although it requested an extention of time to file an answer to the charge, it never did so. 

This case underscores the need for employers to take employee complaints seriously, to investigate fully and promptly, and to cooperate in governmental investigations.

New Jersey Court Reaffirms that Internal Investigations May Be Discoverable

Tuesday, March 30th, 2010

A few weeks ago, I posted tips for conducting an effective investigation, noting that a good investigation can be an employer’s best friend, but that an improperly conducted investigation — and lack of follow up — can be a nightmare for an organization.   See here for more information.  A recent New Jersey trial court decision, Shanahan v. New Jersey Transit Corporation, reaffirms that such investigations are discoverable, such that employee litigants, and possibly juries, may have the opportunity to review and criticize the employer’s investigation and follow up.

In Shanahan, the plaintiff alleged that her employer, New Jersey Transit Corporation (NJT), subjected her to a hostile work environment based on her sexual orientation, and then retaliated against her when she complained about the harassment.  To support her claims, the plaintiff demanded that NJT turn over four documents that contained a discussion, analysis and recommendations regarding the rise in discrimination complaints under the tenure of plaintiff’s supervisor, as well as data comparing disciplinary actions against white males and minority members, and data regarding trends in hiring of female officers.  The court held that that these documents were clearly relevant, as the documents may have a tendency to prove or disprove that plaintiff’s supervisor had discriminatory motives, as well as to disprove the employer’s reasons for its actions against plaintiff.

After finding that the documents were relevant, the court then held that the documents were not privileged.  More specifically, NJT argued that the documents were protected by the “deliberative process privilege,” which allows governmental agencies to withold documents that reflect advisory opinions, recommendations, and deliberations to help the agency formulate policies and decisions.  The court rejected this argument, ruling that the deliberative privilege does not apply in employment discrimination cases.  In reaching this result, the court cited Payton v. New Jersey Turnpike Authority, 148 N.J. 524 (1997), in which the New Jersey Supreme Court specifically held that investigations of  discrimination complaints are not privileged, noting that “we particularly disfavor privileges in the employment-discrimination context.” 545.  The Shanahan court further noted that, for the deliberative privilege to apply, the documents must contain opinions, recommendations or advice to help make decisions, and not just facts.  Here, the court observed that the disputed documents contained only high level and general recommendation (e.g., “we do need to remain diligent in … insuring that their HR practices minimize the filing of complaints”) or recommended further review and analysis.

Finally, the court noted that at least one of the documents was never used in any deliberations.  According to the court: 

Ms. Illescas [the author of one of the reports] testified at her deposition that no action/no decision was ever made by Defendants in response to the T&J Associates report or her report. In fact the testimony of Ms. Illescas demonstrates that Defendants were dismissing these reports and findings and took no action whatsoever on them. Ms. Illescas testimony reveals that at least one of these reports (Ms. Illescas’ report) may have been used in a retaliatory fashion by Defendants.

In other words, not only was the document not protected by the deliberative process, the court found that it may support the plaintiff’s allegation of retaliation.

It would be a mistake for an employer to assume from this case that it should not investigate and/or document any potential areas for improvement.  It is axiomatic that ann organization should not put its head in the sand, in the hopes that everything is fine, or that no one will find out that there are any issues if they do not document them.  Rather, I have found that issues go to litigation precisely because they fester under an employer’s neglectful or unrealistic watch.  Moreover, while juries may understand that no organization is perfect, they tend not to be sympathetic to employers that turn a blind eye to potentially unjust treatment, or that engage in “blame the victim and shoot the messenger” when issues are raised.  Rather, a prudent employer should learn from this case that any investigation or issue may be discoverable, and that they should act as though all of their decisions and actions will see the light of day, and do the right thing.

This case is also a good reminder that there are numerous “investigative” records, besides formal investigations, that may document potential issues and recommendations, and which may be discoverable.  Many companies have HR issue software, which track investigations and issues, and may include the ability to run various analyses.  Following Sarbanes-Oxley, many companies routinely report audits and other issues to the  Board of Directors and/or Audit Committee.  The Federal Sentencing Guidelines recommends that organizations adopt compliance programs, which includes issue tracking asd part of risk assessments, as well as regular reports to compliance committees and senior management of issues and trends.  Many companies have also implemented hotline reporting systems, from which different analytics can be run regarding trends and statistics, including rise or decline or various issues, as well as statistics regarding the company’s response, which may or may not demonstrate that the company took these complaints seriously, as well as whether employees felt comfortable raising concerns.  Prudent employers would be wise to periodically review all of these documents to determine whether there are issues that need to be addressed.  Depending on the specific facts, plaintiffs might also be wise to consider including these documents in their discovery requests.

A copy of the Shanahan decision is on file with the author, and can be provided on request.


Overview of New Jersey’s Conscientious Employee Protection Act

Sunday, March 28th, 2010

A few weeks ago, I commented on a recent New Jersey case concerning New Jersey’ Conscientious Employee Protection Act (CEPA), and the need to allege that the employee was either terminated or “constructively terminated,” that is, that the employer made the employee’s working conditions so intolerable that the employee feel that he or she had no recourse but to quit.

A few readers have asked for more information regarding CEPA. 

Brief Overview

It is often difficult for employees to put the public good ahead of their own interest and to complain about their employer’s potentially illegal activity. Recognizing this difficulty, and the importance of ensuring lawful business conduct, New Jersey enacted the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 et seq., which has been described as one of the most far reaching whistle-blower protection laws in the county. It protects employees from retaliation for disclosing illegal conduct, testifying before a public body and for refusing to participate in an unlawful activity

Disclosure of Illegal Activity

CEPA prohibits employers from retaliating against an employee because the employee discloses, or threatens to disclose, an activity, policy or practice of the employer that the employee reasonably believes is in violation of a law, or a rule or regulation. CEPA protects disclosures made to either a supervisor and to a public agency or official.  An employer also cannot retaliate against an employee who raises concerns about potential illegal activity by a company with whom the employer has a business relationship.  Licensed or certified health care professional are also protected under CEPA for raising concerns about improper quality of patient care.

Not all complaints are protected, however. The complainant must reasonably believe that the conduct is in violation of law. CEPA also protects employees who disclose, or threaten to disclose, fraudulent or criminal activity, including potential fraud against shareholders, investors, clients, patients, customers, employees and other persons. Mere disagreement with management, however, is not protected by CEPA.  Unreasonable complaints are also not protected.  While the complainant is not required to be correct, he or she must demonstrate a reasonable belief that the conduct at issue was illegal or fraudulent.

Testimony Before a Public Agency

CEPA also prohibits an employer from retaliating against an employee who provides information to, or testifies before, any public body conducting an investigation or hearing into a potential violation of law by the employer or its business associates. Protected activity also includes investigations and hearings into potential deception or misrepresentation by the organization to shareholders, investors, clients, patients, customers and other individuals. CEPA also protects licensed or certified healthcare professionals who provide information to, or testify before, a public body investigating the quality of patient care.

Objection and Refusal to Participate

CEPA also prohibits employers from retaliating against employees who object to, or refuse to participate in any activity, policy or practice which the employee reasonably believes:

(1) is in violation of a law, or a rule or regulation promulgated pursuant to law or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care;

(2) is fraudulent or criminal; or

(3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment.

Mere disagreements with management decisions are not protected; the whistle-blowing activity in question must serve a public interest, and should be able to point to some law or public policy that is being violated. The employee must also have a reasonable basis for his or her allegations.

Retaliatory Action

CEPA protects employees from discharge, suspension, demotion or other adverse employment action affected the employee’s terms and conditions of employment. Courts have found that a series of abusive conduct by supervisors, veiled death threats, multiple disciplinary investigations and job transfers can constitute retaliatory action.

Civil Proceedings

Complainants must file civil actions within one year, and have the right to a jury trial.  Damages may include reinstatement, back pay, front pay, emotional distress, punitive damages and attorneys fees.

Other Statutes Prohibiting Retaliation

There are, of course, other statutes that also prohibit retaliation.  For example, under both federal and New Jersey discrimination laws, employers cannot retaliate against employees who complain about unlawful discrimination or harassment.  Other laws also have anti-retaliation and whistleblower provisions, including Sarbanes-Oxley (“SOX”) and the recently enacted Patient Protection and Affordable Care Act of 2009.

Tips for Conducting an Effective Investigation

Monday, March 15th, 2010

In my experience representing both employers and employees, as well as having conducted numerous investigation, I have found that litigation often arises when employees feel that their employer does not — or will not — take their complaints seriously, and that a court of law is their only recourse.  In addition, our courts have held that employers may avoid liability for sexual harassment and other complaints if they conduct a good faith, prompt and thorough investigation. Put simply, a prompt and thorough investigation is good business and good law.

While the need for conducting an investigation is clear, a poorly executed investigation can be disastrous.  Rather than address the problem, it may exacerbate it if the employee feels that his or her concerns was not taken seriously.  If the complainant feels that they have somehow been punished for raising these concerns, this may also lead to a claim of retaliation.  Moreover, an inadequate investigation may chill other employees from complaining, resulting in long-festering problems and additional lawsuits.  Finally, a jury might regard an inadequate investigation as a “whitewash,” leading to potential significant liability.

Here are some tips in how to conduct an effective investigation.

  1. Plan for an Investigation Before a Complaint is Raised.  Make sure that your employees know that they can complain and how to do so.  Make sure that your anti-harassment and discrimination policies provide contacts for complaints; for organization of any significant size, there should be multiple individuals, and not just supervisors, who can receive complaints.  Employers should also make sure that this information is covered in training.  If you have a hotline or helpline, this information should also be conspicuously posted.  (It should also be noted that New Jersey employers are also required to post, and annually distribute, information about employee’s rights under the Conscientious Employee Protection Act.)   Employers may also want to consider developing an investigation policy and procedure, including types of issues to be investigations, sources of complaints, identification of investigation leads, the conduct and method of an investigation, when to notify management of the investigation, responsibilities for corrective action, and other issues.
  2. Determine Whether to Conduct an Investigation.  Employees may raise issues, and then ask that you do nothing.  Or you may believe that an employee is simply venting, rather than asking for assistance.  Other times, you may believe that the employee is simply disgruntled, and that they are just trying to raise issues to salvage their job.  You might also think “I’ve heard all of this before, and I’m not going to waste my time on investigating this.”   In each case, you should carefully consider — and re-consider — any decision not to investigate.  It is usually more prudent to investigation than to try to explain why an investigation was not conducted.  Further, as noted above, a prudent employer might want to consider adopting policies identifying who should ultimately make the decision as to whether or not to investigate. 
  3. Decide Whether Any Action is Necessary While the Investigation Proceeds.  Depending on the nature of the allegation, and the anticipated time to complete the investigation, you might want, or need, to take some interim action.  For example, an employer may need to immediately address an allegation of unsafe working conditions, embezzlement or employee violence.  Similarly, a prudent employer might want to take some immediate (albeit temporary) action if there are egregious claims of sexual harassment by an employee against his or her supervisor.   
  4. Decide who Should Conduct the Investigation.  Clearly, an investigator should be impartial; targets of the investigation, and witnesses, should not be involved in conducting or overseeing the investigation.  Employers might also consider hiring an outside investigator, particularly where the allegations concern senior management or are politically sensitive.  In any event, in addition to being impartial, the investigator should have an open demeanor and be able to put the complainant and witnesses at ease; investigations should rarely be conducted as cross-examinations, and should certainly never signal that the investigator has already reached a conclusion, and is merely trying to uncover evidence to support that conclusion.  In addition, the investigator may be called as a witness, and employers may want to ensure that the investigator is articulate and credible.  It is also often a good idea to have two people present during the investigation, as this will allow one person to focus on the questions and answers, while the other documents the conversation.  It is also often helpful to have a second set of eyes and ears, both to observe the credibility of witnesses and to make sure that all appropriate ground is covered, as well as to corroborate what was said in the event of a later dispute.
  5. Consider Conducting the Investigation under Attorney-Client Privilege. The complaint should be reviewed carefully to determine if there are any potential legal issues or liability lurking.  If so, employers may want to consider having the investigation, at the outset, conducted at the request of an attorney, to try to protect the investigation to the fullest extent possible, as it may be difficult to assert the privilege later.  Regardless of whether or not it is conducted under privilege, however, I have found that every investigation should be conducted with the understanding that it might see the light of day, and the investigator should feel comfortable defending the investigation and its conduct.  
  6. Plan the Investigation.  Sloppy, haphazard investigations should be avoided.  The investigator should have a relatively clear grasp of the allegations, and should plan the investigation accordingly.  It is usually wise to start with the complainant, and delve further into the facts, including identification of documents and witnesses.  Witnesses should be prioritized, based on their level of involvement and claimed knowledge of the facts.   
  7. Obtain, Review and Preserve  all Relevant Documents. Investigators should make sure that they ask for, and obtain, any relevant or supporting documents, including handwritten notes, diaries, calendars, e-mails, expense reports, tape recordings and personnel documents.  It is always better to discover all facts during an investigation than to be surprised by additional evidence at litigation. It is also critical to preserve all documents and information, in the event of a litigation or the results of the investigation are questioned.
  8. Remind the Complainant and all Witnesses of the Non-Retaliation Policy.  The law generally prohibits retaliation against employees who complain of discrimination or harassment, or who participate in such complaints.  Prudent employers will likewise have a strong non-retaliation policy, stating that there will be no retaliation against anyone for raising a complaint in good faith.  At the beginning of the interview, complainants and witnesses should be re-assured that the company takes the non-retaliation policy seriously, and they should be encouraged at the end to let the investigator know if they believe, at any time, that they have suffered any retaliation.  Supervisors should likewise be reminded that the company will not tolerate any retaliation against the complainant or witness.
  9. Remind Employees of Confidentiality, and do not Promise Anonymity.  Complainants and witnesses should be reminded that, in order for the investigation to be conducted appropriately, everything must remain confidential; neither the complainant nor any witness (particularly the subject of the investigation) should tell anyone else what was said during the investigation, and they should certainly not ask anyone to corroborate or support them.  Complainants and witnesses should also be informed that, while the company will try to keep their identity anonymous (if they so choose), this cannot be guaranteed, as this information may be discernible or may need to be divulged in order for the investigation to proceed.
  10. Follow the Investigation Where It Leads, But Beware of Scope Creep.  During the course of an investigation, new facts and allegations may be discovered.  Employers ignore these at their peril.  Once an employer is put on notice of potential claims, it may not simply ignore them because they were not part of the initial complaint or investigation.  On the other hand, too often investigations are never completed because of investigation of tangential or unrelated issues.  If new, but unrelated issues need to be investigated, employers may want to consider instituting a second investigation. 
  11. Prepare a Written Investigation Report.  At the conclusion of the investigation, the investigator should prepare a written report, summarizing the allegations (including the date the complaint was raised), how the investigation was conducted, relevant policies and procedures, key factual findings, and a notation of inconsistent or conflicting information.  Employers should bear in mind that the written report, as well as all documents collected or created during the investigation, may be subject to discovery in the event of a lawsuit.  Accordingly, all documents and drafts should be maintained in accordance with the employer’s record retention policies.
  12. Keep the Complainant Informed.  The complainant should be kept informed of the progress during the course of the investigation, should be notified shortly before the investigation is concluded (and asked if there are any additional facts that they wish to bring forward) and then again at its conclusion to let him or her know that the investigation is concluded and that appropriate action will be taken.  Depending on the specific facts, the company may want to give the complainant more or less details about the corrective action.
  13. Take Appropriate Corrective Action. Corrective action needed should be tailored to the specific situation, including a root cause analysis of the problem. Appropriate action can range from no action, to training, discipline (up to and including termination), and creation or revision of policies.
  14. Touch Base with the Complainant.  Depending on the situation and resolution, the employer might consider touching back periodically with the complainant, to make sure that there has been no retaliation and that the corrective action has been effective. 
  15. Track for Trends.  Companies should periodically track for trends, including trends concerning a department, a geographic location or type of issue.  If trends emerge, the employer should consider further corrective action, including additional training, monitoring or policy creation.

Employees Should be Careful When Taking Confidential Documents

Wednesday, March 10th, 2010

Yesterday, the New Jersey Supreme Court heard oral argument in Quinlan v. Curtiss-Wright,  a case where the plaintiff, a human resources employee for Curtiss-Wright, looked for — and intentionally took — confidential information to help support her claim that she was discriminatorily denied a promotion, while still employed by Curtiss-Wright.   More specifically, she began to review files in the human resources department looking for and copying material that she felt would help her litigation, including  documents containing confidential personal information such as home addresses, telephone numbers and social security numbers, as well as salary information.     She delivered more than 1800 pages of this confidential material to her attorneys.   During the course of litigation, plaintiff’s attorney used this material in deposition, alerting Curtiss-Wright to the fact that plaintiff had taken this material on her own.  Curtiss-Wright then fired the plaintiff,  leading to a retaliation claim in addition to the previous failure-to-promote claim.

At trial, the jury concluded that Curtiss-Wright had discriminated against plaintiff, and that it had retaliated against her for engaging in protected activity.  Following this verdict, the trial court entered judgment for plaintiff in plaintiff’ in the amount of $10,649,117.49,  coinsisting of $4,565,479 in compensatory damages, $4,565,479 in punitive damages, $44,363.49 in prejudgment interest, $1,398,796 for counsel fees and costs, and $75,000 to compensate the plaintiff for negative tax consequences she would experience as a result of this award.  On appeal, the Appellate Division reversed the jury’s verdict regarding retaliation.  Quinlan v. Curtiss-Wright Corp., 409 N.J Super. 193 (App. Div. 2009).  The Appellate Division held that neither plaintiff’s theft of material, nor her attorney’s use of the material during deposition, was “protected activity” under the New Jersey Law Against Discrimination.  The court explained that any other result could “have the undesirable result of encouraging employees to go through their employers’ files and copy confidential material, secure in the knowledge that employers could do nothing so long as that material was later used in litigation.”

In oral argument, the New Jersey Supreme Court signaled that it was also leaning in that direction.  Justice Barry Albin questioned plaintiff’s counsel whether “the employer is just supposed to sit back” when it learns that an employee has stolen confidential documents.  Justice Albin further wondered “Why should we allow a system that encourages employee theft?”  Justice Roberto Rivera-Soto suggested that, if plaintiff knew the documents existed, she should have told her lawyer about them, and the lawyer could then issue a document request or subpoena, in accordance with the court rules.

While the Court’s questions may signal that it is leaning toward prohibiting theft of confidential information, no decision has been issued yet.  In the meantime, the Appellate Court’s opinion and the general tenor of the Supreme Court’s oral argument serves as a reminder to litigants that, regardless of whether or not they feel taht their employer has violated the law, this does not provide license to violate company policies and procedures, particularly regarding theft of confidential information about other individuals.  While we fully appreciate that the wheels of justice might move slowly, litigants should avoid independent self-help measures, and should consult their lawyer before engaging in any discovery on their own.