SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Argued September 11, 2006 -- Decided February 21, 2007
RIVERA-SOTO, J., writing for the majority of the Court.
In this appeal, the Court must determine: 1) whether an employee’s complaint for retaliation under the Law Against Discrimination (LAD) must be made in good faith and on a reasonable basis; and 2) whether an investigative report prepared by an employer, which the employer claims provided an independent basis for the employee’s discharge, should have been admitted into evidence.
Plaintiff Reinaldo Carmona was hired as a front desk clerk by defendant Resorts
International Hotel Inc. On November 9, 2001, Carmona was fired. The reason for
his termination gave rise to this lawsuit.
According to Carmona, he was a recovering cocaine user prone to relapses. Because
of the relapses, he missed work on several occasions. Under Resorts’ progressive discipline,
the absences accumulated as “points” against Carmona. By August 2001, Carmona had accumulated
enough points so that another unexplained absence would render him liable for termination.
While Carmona could have explored seeking an approved medical leave to treat his
cocaine dependency, he focused instead on other Resorts employees who had received approved
medical leave absences, claiming that Resorts applied its absenteeism/termination policy unevenly due to
racism. On November 6, 2001, Carmona went to Resorts’ internal equal employment opportunity
(EEO) office to complain. Resorts’ EEO director informed Carmona that she would conduct
an investigation of his allegations.
On November 5, 2001, the day before Carmona complained to Resorts’ EEO office,
he and William Santiago were observed improperly upgrading rooms in exchange for tips.
Twice before, Carmona had been reprimanded for upgrading rooms without authorization. Santiago was
interviewed, during which he admitted that he had upgraded rooms for gratuities. Santiago
also implicated Carmona. On November 8, 2001, Resorts conducted an audit that showed
that Carmona had improperly and without authorization upgraded twenty-seven rooms in October 2001.
When questioned on November 9, 2001, Carmona admitted to upgrading rooms without authorization,
although he denied receiving gratuities. He was fired that day. Resorts investigators collected
their investigative material and compiled a report concerning the incident.
In April 2002, Carmona sued Resorts. The issues at trial, according to Carmona,
were whether Resorts retaliated against him when it terminated him three days after
he filed his discrimination complaint against Resorts and whether Resorts’ investigation into the
room upgrades was a pretext to justify that retaliation. At trial, Resorts sought
to introduce the investigative report into evidence. Carmona objected, and the trial court
ruled that the report was not admissible because it was hearsay and unreliable.
The trial court refused to instruct the jury that in addition to making
a complaint of discrimination, Carmona had to have a reasonable good faith basis
for the complaint. Instead, the trial court instructed the jury that to satisfy
his burden of proof, Carmona must prove that he made a complaint of
discrimination and that he was retaliated against because of that filing. The jury
found that Carmona proved that the reason Resorts gave for Carmona’s termination was
a pretext and the real reason was retaliation for his complaint of discrimination.
The jury awarded Carmona compensatory damages and lost wages.
On appeal, the Appellate Division affirmed. This Court granted Resorts’ petition for certification.
HELD: In a case alleging retaliation under the LAD, plaintiff bears the burden
of proving that his complaint was made reasonably and in good faith. When
an employer defends against a claim that an employee’s discharge was the product
of retaliation, an investigative report prepared by the employer that purports to demonstrate
a non-retaliatory purpose for the employee’s termination is not hearsay and is admissible.
The LAD is one of New Jersey’s leading legislative pronouncements, which sets forth
the clear public policy of this State to eradicate invidious discrimination from the
workplace. In the development of this State’s anti-discrimination jurisprudence, the Court has frequently
looked to case law under the federal Title VII of the Civil Rights
Act for guidance in developing standards to govern the resolution of LAD claims.
The Court’s continuing examination of the LAD has led it also to look
to subsequent legislative enactments for guidance on LAD’s scope, including the later-adopted New
Jersey Conscientious Employee Protection Act (CEPA). A CEPA plaintiff must show that he
reasonably believed that his employer’s conduct was violating either a law, rule, or
regulation promulgated pursuant to law or a clear mandate of public policy. (pp.
17-20)
A requirement that a LAD-retaliation plaintiff demonstrate that his underlying complaint was reasonable
and in good faith is entirely consonant with the purpose of the LAD.
The Court follows parallel federal precedents, under which a plaintiff must show that
he had a reasonable, good-faith belief that discrimination occurred to prevail on a
retaliation claim, a tenet universally observed by every United States Court of Appeals
that has considered the question. (pp. 20-21)
This requirement that the underlying complaint be reasonable and made in good faith
is recognized because its absence may well lead to abuse. The LAD was
and is intended as a shield to protect employees from the wrongful acts
of their employers, and not as a sword to be wielded by a
savvy employee against his employer.
(pp. 21-22)
Here, Resorts was denied an instruction to the jury to the effect that,
as part of his case-in-chief, Carmona was required to prove that he had
a reasonable, good-faith belief for his underlying discrimination complaint as the basis for
his later retaliation complaint. Carmona did not complain about discrimination in the application
of Resorts’ absenteeism policy until November 6, 2001, the day after an investigation
into allegations of theft by Carmona was started. The trial court charged the
jury that the bare fact that Carmona filed a complaint alleging discrimination, without
more, was sufficient to satisfy his burden in respect of the first element
of his LAD-retaliation claim, a charge that the Court holds to be legally
insufficient and incorrect. The jury could have come to a different result had
it been correctly instructed. (pp. 23-25)
An investigative report concerning an employee is admissible as non-hearsay evidence whenever
the employer’s motivations are directly at issue. Moreover, in the context of a
LAD retaliation claim, a personnel file was admissible because the information in the
file bears on the reasonableness and good faith of defendant’s conduct. There is
no appreciable difference between a personnel file -- which is created and maintained
exclusively by the employer -- and an investigative report. Further support is found
in federal cases that parallel the LAD. Other states also follow this rule.
(pp. 25-30)
Resorts’ investigative report would be admissible to show that Resorts terminated Carmona’s employment
for non-pretextual reasons, provided Resorts also demonstrates (1) that one of its decision
makers knew of the report’s contents and acted in reliance thereon, and (2)
that all portions of the report were separately admissible or properly and intelligibly
redacted. (pp. 30-31)
The judgment of the Appellate Division is REVERSED and REMANDED for proceedings consistent
with this opinion.
JUSTICE WALLACE has filed a separate, DISSENTING, opinion, concluding that the Court should
not impose a new standard that requires an employee to establish that the
complaint for retaliation was made in good faith and on a reasonable basis.
JUSTICES LONG, LaVECCHIA, ZAZZALI and ALBIN join in JUSTICE RIVERA-SOTO’s opinion. JUSTICE WALLACE
filed a separate, DISSENTING opinion.
SUPREME COURT OF NEW JERSEY
A-
83 September Term 2005
REINALDO CARMONA,
Plaintiff-Respondent,
and
WILLIAM SANTIAGO,
Plaintiff,
v.
RESORTS INTERNATIONAL HOTEL, INC., d/b/a RESORTS ATLANTIC CITY,
Defendant-Appellant.
Argued September 11, 2006 – Decided February 21, 2007
On certification to the Superior Court, Appellate Division.
Rosemary Alito argued the cause for appellant (Kirkpatrick & Lockhart Nicholson Graham LLP,
attorneys).
Caren Litvin argued the cause for respondent (Law Offices of Caren Litvin LLC,
attorneys).
JUSTICE RIVERA-SOTO delivered the opinion of the Court.
This appeal arises in the context of an employee who alleged that, after
he complained about claimed unfair treatment, he was retaliated against in violation of
the Law Against Discrimination (LAD), N.J.S.A. 10:5-12d. Specifically, this appeal requires that we
address two separate issues: whether the employee’s complaint that allegedly triggers a retaliation
claim must be made in good faith and on a reasonable basis, and
whether an investigative report prepared by an employer, which the employer claims provided
an independent basis for the employee’s discharge, should have been admitted into evidence.
Both the trial court and the Appellate Division held that the LAD contains
no independent requirement that a plaintiff in a LAD-retaliation case also prove that
the complaint predicate to a retaliation claim must have a reasonable, good-faith basis,
and that it was not an abuse of discretion to exclude from evidence
the investigative report prepared by the employer. We do not agree.
We hold that, in a case alleging retaliation under the LAD, the plaintiff
bears the burden of proving that his or her original complaint was made
reasonably and in good faith. Stated conversely, an unreasonable, frivolous, bad-faith or unfounded
complaint cannot satisfy the statutory prerequisite necessary to establish liability for retaliation under
the LAD. We also hold that, when an employer defends against a claim
that an employee’s discharge was the product of retaliation, an investigative report prepared
by the employer that purports to demonstrate a non-retaliatory reason for the employee’s
termination is a non-hearsay statement. Finally, we hold that the admissibility of an
investigative report in these circumstances is subject not only to all other relevant
evidentiary limitations, but also to proof that a decision maker relied on that
report in deciding to discharge the employee from employment.
In 1999, plaintiff Reinaldo Carmona was hired as a front desk agent or clerk by defendant Resorts International Hotel, Inc., d/b/a Resorts Atlantic City (Resorts). As a front desk agent, plaintiff was responsible for checking guests into and out of Resorts. Plaintiff was employed by Resorts until November 9, 2001, when he was fired. The disputed reason for that termination -- plaintiff’s claim of retaliation for an internal claim of discriminatory or disparate treatment, or Resorts’ claim that plaintiff was terminated for stealing -- is what gives rise to this lawsuit.
According to plaintiff, he was a recovering cocaine user prone to relapses. Because of the relapses, plaintiff missed work on several occasions. Under Resorts’ progressive discipline policy for absenteeism, a policy that did not apply in instances of serious misconduct, including theft, the absences accumulated as “points” against plaintiff. By August 2001, plaintiff had accumulated sufficient “points” so that another unexplained or unauthorized absence would render him liable to termination. His supervisor explained to plaintiff that absences pursuant to an approved medical leave would not be counted against him. Yet, plaintiff did not explore seeking an approved medical leave to treat his cocaine dependency. Instead, he focused on other Resorts employees who had applied for and received approved medical leaves of absence. He later claimed that Resorts applied its absenteeism/termination policy unevenly.
In particular, plaintiff noted the case of co-plaintiff William Santiago, who also was employed as a front desk agent at Resorts. In November 2001, Santiago reported to work although he was suffering from problems with his face. His supervisor sent Santiago to the hospital, where he was diagnosed with Bell’s Palsy. Santiago returned to work that same day. He did so because he was concerned that he had reached the limit on “points” he could accumulate as a result of absenteeism, which placed him at risk of termination from employment. In this instance, Santiago’s supervisor elected not to discipline him, choosing instead to make an “exception.”
Plaintiff also focused on Robin Hewitt, another front desk agent who had excessive absences. He was informed by a supervisor that Hewitt had applied for and received a medical leave and, thus, her absences were not counted for disciplinary purposes. Plaintiff confirmed this information by looking at Hewitt’s attendance sheet, which contained entries for “leave of absence” or “FMLA” See footnote 1 but did not accumulate any “points” based on her absences.
Resorts had adopted an anti-discrimination policy, and employees who complain of discrimination are encouraged to bring those complaints to Resorts’ internal equal employment opportunity (EEO) office. Accordingly, three months after having this information in hand, on Tuesday, November 6, 2001, plaintiff went to Resorts’ EEO office to complain. He met with the director of EEO at Resorts, noted that Hewitt was receiving medical leave without the accumulation of any points, and claimed that
it wasn’t fair that [Hewitt] was out and she was only employed at Resorts for like no more than three months and she was placed on the family leave, and I have been there two years and I wasn’t placed on one, and I couldn’t go to a hospital [for drug rehabilitation] because of being afraid of getting points, which I brought a doctor’s note for that and I got points anyway.
Plaintiff attributed the difference in treatment between Hewitt, who was on medical leave,
and plaintiff and Santiago, who had not been placed on medical leave, to
racism: Hewitt is Caucasian, while Santiago and plaintiff are Hispanics. Resorts’ EEO director
informed plaintiff that she would conduct an investigation of his allegations. However, shortly
after she started her inquiry, she was informed that both plaintiff and Santiago
were being terminated for stealing. Resorts’ EEO director then ended her investigation of
plaintiff’s allegations.
On Monday, November 5, 2001 -- the day before plaintiff complained to Resorts’
EEO office -- plaintiff and Santiago were observed improperly upgrading rooms in exchange
for tips. That is, plaintiff and Santiago would dole out room accommodations that
were better, larger, or more luxurious than what the guest was being charged
for, and the guests would then “tip” plaintiff and Santiago for the upgraded
accommodations. Plaintiff was not a stranger to those allegations: he had twice before
been reprimanded -- in October 1999 and July 2000 -- for upgrading rooms
without authorization. Those observations made their way to Resorts’ labor relations counselor, who
asked that the hotel reservations data for that day be produced. That data
showed that both plaintiff and Santiago, without authorization, had upgraded a number of
hotel rooms for guests; Santiago alone upgraded twenty of twenty-six hotel rooms. The
information was then transmitted to Resorts’ investigations department.
On Wednesday, November 7, 2001, two Resorts investigators interviewed Santiago. According to one
of the investigators, “[d]uring the interview Mr. Santiago admitted that he had done
upgrades for gratuities[,] to receive gratuities. He also implicated other employees [including plaintiff].
He also informed [Resorts] that [plaintiff] had a password of one of the
supervisors to access the computer to do this.” Based on those allegations, on
November 8, 2001, the Resorts investigators asked that the front desk supervisors audit
plaintiff’s work for the prior month. That audit showed that plaintiff had improperly
and without authorization upgraded twenty-seven rooms.
Plaintiff was not scheduled to work on either November 7 or 8, 2001.
When he returned to work on November 9, 2001, he too was interviewed
by Resorts’ investigators. An investigator testified that
[w]hen I was interviewing [plaintiff] he admitted that he did make upgrades of
patrons. He was questioned as to knowing that he didn’t have the authority
to, and he admitted that he didn’t have the authority to do so.
He was questioned as to his motive for doing that, and I asked
him specifically . . . was the motive for the upgrades to receive
gratuities, and he said no. He denied receiving any gratuities for doing it.
I asked him then why, why did you do it? And he had
no answer.
Shortly afterwards he said he only had one thing left to say, and
that was that he believed it was time for him to change careers.
And that was about the substance of our conversation.
Plaintiff’s version of this interview differs in tone from the investigator’s testimony. Significantly,
even though plaintiff denies receiving any gratuities in exchange for unauthorized room upgrades,
he does not deny upgrading rooms without authorization. Further, although plaintiff led the
investigator to believe that plaintiff was resigning from employment, he in fact was
fired that day. During the investigation, the investigators collected their investigative material, ultimately
compiling a report concerning this incident.
In April 2002, plaintiff sued Resorts, claiming that Resorts had violated the LAD
by allowing a hostile work environment; by discriminating against him in respect of
the medical leave of absence and attendance policy; and by retaliating against him
for complaining to Resorts’ EEO office of the alleged harassment and discrimination.
See footnote 2
Plaintiff
voluntarily withdrew his hostile work environment and discrimination claims, but maintained his retaliation
claim. Thus, according to plaintiff, the issues joined for trial were crystallized: did
Resorts retaliate against him when it terminated him three days after he filed
his discrimination complaint against Resorts, and was Resorts’ investigation into the room upgrades
merely a pretext to justify that retaliation?
At trial, Resorts sought to introduce the investigative report into evidence. In Resorts’
view, the investigative report was a business record exempt from the reach of
the hearsay rule,
See footnote 3
and was relevant
See footnote 4
to prove “the purpose of motivation, which
is what this case is about, what was Resorts doing, what was Resorts
thinking.” Plaintiff objected to this proffer, and the trial court, explaining that it
did not “even think this is a close call[,]” ruled that the report
was not a “contemporaneous business record[,]” and that it was “completely hearsay, and
it is simply not admissible.” The trial court nonetheless allowed Resorts to “pursue
the fact that there was an investigation where a report was formed and
that people made entries, . . . to show that there was a
process that Resorts was following in going through an investigation and the basic
details of how that is set up and what is done[.]” As provided
by N.J.R.E. 612, the trial court also permitted the use of the investigative
report to refresh the investigator’s recollection.
After the close of the evidence but before instructing the jury, the trial
court, at Resorts’ urging, focused on part of plaintiff’s burden of proof in
respect of his retaliation claim. Observing that there was no question that plaintiff
had made a complaint of discrimination to Resorts itself, the trial court explained
that
[t]he issue that’s in dispute, I think, from what I understand of counsel[,]
legally is whether or not the Court has to instruct the jury that
[plaintiff] not only had to have made the complaint but he had to
have a reasonable good faith basis for making the complaint[,] which some of
the Title 7 cases federal cases say[.]
The trial court rejected any parallel between a plaintiff’s burden of proof in
the cases decided under Title VII of the Civil Rights Act of 1964,
42 U.S.C. §§ 2000e to 2000e-16, and those determined under the LAD. The trial
court did allow Resorts to re-open that issue the next day.
The following morning, Resorts addressed its “contention that[,] as part of his case[,
plaintiff] is required to prove that he had a reasonable good faith belief
that there was discrimination occurring.” Resorts noted that, because an earlier complaint is
always a condition precedent to a retaliation claim, an anomalous result would occur
if a reasonable good faith belief in the basis of a plaintiff’s earlier
complaint was not a condition precedent to a retaliation claim. Resorts’ counsel remarked
that
[i]f we think about it[,] of putting no such requirement in, Judge, I
think we create a situation where anybody who thinks they’re about to be
fired can run in and say I’m being discriminated against and he has
protected activity. I don’t think that was the intent of the statute. Frankly,
I think in most cases this isn’t going to be an issue, but
in some cases, and I think this is one of them[,] where there
is somewhere the claim of discrimination [that] is so tenuous that there is
a fact issue about what [plaintiff] reasonably could have believed in that situation
[and] I think [that] is a question that needs to go to the
jury as part of the plaintiff’s burden of proof.
The trial court disagreed, holding that “[i]f the jury believes [plaintiff was] fired
because [he] made this complaint[,] this is a reasonable complaint to make, and
the Court rules that that’s true as a matter of law so whether
reasonable is required or not I don’t think it is an issue in
this case.” The trial court’s instruction to the jury on plaintiff’s burden of
proof consisted, in its entirety, of the following:
In order to prove a claim under [the retaliation] provision of the New
Jersey Law Against Discrimination plaintiff must establish certain elements as follows:
One, that plaintiff engaged in a protected activity. Two, that the employer knew
that the plaintiff had engaged in a protected activity. Three, that plaintiff was
thereafter subjected to an adverse employment decision by the employer. And, four, there
was a causal link between the plaintiff engaging in the protected activity and
the adverse action. I charge you that if plaintiff complained about discrimination based
on his being a Latino, that that constitutes a protected activity for the
purpose of meeting the first of the four requirements. Therefore, to carry his
burden of proof [plaintiff] must prove he made a complaint of discrimination by
a preponderance of the evidence. He then must prove the three elements previously
discussed.
In assessing whether there is a causal connection between his complaint and his
discharge, you’re to determine whether there are circumstances that justify an inference of
a retaliatory motive. You can consider the time between the complaint to the
EEO and the termination, but you should consider all the evidence, not just
one factor in making your decision. Here Resorts claimed that they had a
legitimate non-retaliatory business reason for terminating him, which was misconduct by the plaintiff
on the job. Once the employer presents a non-retaliatory reason, then the plaintiff
must show that more likely than not it was retaliation that motivated the
employer’s action. The claimant can accomplish this by proving that Resorts’ stated reason
was a pretext for retaliation or that retaliation for making a complaint of
discrimination was more likely the reason that motivated the employer. In other words,
plaintiff must prove that the articulated reason is unworthy of credence.
If you find that the plaintiff was terminated for complaining about discrimination and
that the defendant’s stated reason was just a pretext, and that, in fact,
he was terminated for his complaint, you should find in favor of the
plaintiff. If plaintiff hasn’t proven all the elements of this claim, then you
should find for the defendant. The law does not require th[at] Resorts treat
its employees fairly, but it does make it illegal to retaliate against an
employee for a complaint of discrimination.
[(emphasis supplied).]
Ruling on special interrogatories, the jury unanimously found that plaintiff “proved by a
preponderance of [the] evidence that he complained to the EEO office at Resorts
about discriminatory employment practices[;]” that plaintiff “prove[d] it was more likely than not
that the reason Resorts gave for [plaintiff’s] termination was a pretext or cover-up
and the real reason for his termination was retaliation for his complaint of
discrimination[;]” and that plaintiff “prove[d] by a preponderance of the evidence that he
suffered emotional distress because of a retaliatory discharge from Resort[s.]” The jury unanimously
awarded plaintiff $175,000 in compensatory damages and $3,400 in lost wages.
After the jury was excused and at Resorts’ request, the trial court placed
on the record the sole question the jury had during deliberations:
The jury had requested – the only question they had was a request that
they be provided with D-4, which was the investigative report. I believe defense
counsel had offered to submit that into evidence, and plaintiff’s counsel objected, and
the Court ruled that it was not admissible. I, therefore, instructed the jury
that it was not in evidence, and we didn’t give it to them.
Finally, in response to plaintiff’s subsequent motion for attorneys’ fees, costs and interest,
the trial court awarded plaintiff “$102,448.13 in legal fees incurred through the conclusion
of the trial,” “$8223.74 in legal fees incurred for post-judgment services,” and “an
additional $3311.08 in costs,” for an aggregate of $113,982.95 in attorneys’ fees and
costs; post-judgment interest on both the fees and costs was also awarded.
Resorts appealed. In an unpublished, per curiam opinion, the Appellate Division affirmed the
judgment of the trial court. In respect of the jury instruction requested by
Resorts but denied by the trial court, the panel held that it
agree[d with the trial court] that the right of every potential LAD claimant
to vindicate his or her rights under the law granting protection against unlawful
discrimination must remain free from qualifications not established in the statute, and that
employers and others who might be called upon to defend against such claims
are amply protected by existing proof requirements.
It explained that “in a retaliation case, such as this one, plaintiffs must
establish, among other proof requirements, that ‘participation in the protected activity caused the
retaliation.’” (quoting Craig v. Suburban Cablevision, Inc.,
140 N.J. 623, 629-30 (1995)). As
the Appellate Division saw it, “[i]n applying this requirement, and assuming, of course,
a legitimate business reason for the employer’s adverse action, we have no doubt
that all reasonable juries will reject retaliation claims allegedly resulting from discrimination complaints
that were filed in bad faith without any factual bases.” The panel eschewed
the construct urged by Resorts for the following reason:
Adopting the definition of protected activity urged by Resorts as a separate proof
element, however, runs the risk of causing the rejection of meritorious retaliation claims
simply because the jury concludes that plaintiff failed to establish a sufficient factual
basis for his or her discrimination complaint. We do not believe that such
an additional burden on plaintiffs acting in good faith is warranted.
Finally, in respect of Resorts’ claim that the trial court improperly excluded the
investigative report, particularly in light of the sole jury question on that issue,
the panel concluded that “all of the trial court’s evidentiary rulings were well
within the trial judge’s discretion [and that t]he judge gave ample, affirmable reasons
for each ruling.”
Resorts sought certification, raising both its requested jury instruction in respect of a
plaintiff’s burden of proof in a LAD retaliation case, and the admissibility of
its investigative report. We granted the petition.
186 N.J. 243 (2006).
Resorts’ argument in respect of a plaintiff’s burden of proof in a LAD retaliation case is as follows. According to Resorts, in order to trigger protection under the LAD, an employee’s activity must, at a minimum, be reasonable and in good faith. Thus, Resorts asserts, the jury must be instructed that the bare filing of a complaint -- what at first blush appears to be engaging in LAD-protected activity -- is insufficient to invoke the remedies available under the LAD. Stated differently, Resorts urges that the safe harbor created by the LAD, with its broad reach and substantial sanctions, cannot be accessed save by those who are in fact engaged in the activity the LAD is designed to protect, and not those who seek its refuge based on a pretext or some other reason unworthy of protection.
Resorts also argues that the trial court abused its discretion when it refused to admit into evidence Resorts’ investigative report in respect of plaintiff’s unlawful activities. According to Resorts, the investigative report was not barred by the hearsay rule because it was not “offered in evidence to prove the truth of the matter asserted[,]” N.J.R.E. 801(c). Instead, Resorts asserts, the investigative report was offered to prove “(i) what steps [Resorts] took to investigate plaintiff’s misconduct before terminating his employment and (ii) its motivation for terminating his employment.” In Resorts’ view, reports relevant to a party’s motive for an action are universally admitted into evidence. Resorts claims that the failure to admit its investigative report was prejudicial for three reasons: (1) the employer’s intent is central to a discrimination case; (2) plaintiff’s counsel attacked Resorts’ investigation; and (3) its absence is the subject of the only question posed by the jury during its deliberations. Finally, Resorts notes that the trial court’s concerns in respect of the investigative report’s reliability were unfounded.
Plaintiff, however, asserts that the trial court and the Appellate Division correctly ruled that overarching policy considerations trump the notions advanced by Resorts. In plaintiff’s view, a plaintiff claiming retaliation does not have to prove the veracity of his or her original discrimination complaint; he or she need only prove that the original complaint was in fact filed and that he or she was retaliated against because of that filing. For those reasons, plaintiff makes no legal distinction between original complaints that are reasonable and in good faith, and those original complaints that are filed capriciously, maliciously, or intentionally solely as a subterfuge to purposely invoke the LAD’s protections. Like the Appellate Division, plaintiff implies that a jury will sort out those latter instances and find accordingly.
In respect of Resorts’ investigative report, plaintiff claims that Resorts offered the investigative report precisely for the truth of the matter asserted: Resorts’ claim that plaintiff was engaged in illegality. Plaintiff also supports the trial court’s reasoning that the report was unreliable and, hence, inadmissible under the business records exception to the hearsay rule. In the alternative, plaintiff argues that if the trial court wrongly excluded the investigative report, then that error was harmless.
We address first Resorts’ claim that, as a condition precedent to a retaliation claim under the LAD, a plaintiff bears the burden of proving that his or her initial complaint that triggered the later claimed retaliation was filed reasonably and in good faith in the first instance. We then address the admissibility of Resorts’ investigative report in the context of this retaliation lawsuit.
A.
The anti-retaliation section of the LAD provides that
[i]t shall be an unlawful employment practice, or, as the case may be, an unlawful discrimination:
. . . .
d. For any person to take reprisals against any person because that person has
opposed any practices or acts forbidden under this act or because that person
has filed a complaint, testified or assisted in any proceeding under this act
or to coerce, intimidate, threaten or interfere with any person in the exercise
or enjoyment of, or on account of that person having aided or encouraged
any other person in the exercise or enjoyment of, any right granted or
protected by this act.
[N.J.S.A. 10:5-12d.]
The LAD is one of New Jersey’s leading legislative pronouncements that set forth
“the familiar proposition that the clear public policy of this State is to
eradicate invidious discrimination from the workplace.” Craig v. Suburban Cablevision, Inc.,
140 N.J. 623, 630 (1995) (citing Fuchilla v. Layman,
109 N.J. 319, 334-35, cert. denied,
488 U.S. 826,
109 S. Ct. 75,
102 L. Ed.2d 51 (1988)).
In the development of this State’s anti-discrimination jurisprudence,
we have frequently looked to case law under Title VII of the Civil
Rights Act of 1964,
42 U.S.C. §2000e, for guidance in developing standards to
govern the resolution of LAD claims. See Erickson v. Marsh & McLennan Co.,
117 N.J. 539, 549-50[] (1990) (explaining that New Jersey Supreme Court has adopted
methodology of proof used in Title VII cases for use in LAD cases);
Shaner v. Horizon Bancorp.,
116 N.J. 433, 437[] (1989) (noting that LAD standards
“have been influenced markedly by the experience derived from litigation under federal anti-discrimination
statutes”); Peper v. Princeton Univ. Bd. of Trustees,
77 N.J. 55, 82-83[] (1978)
(adopting framework formulated in McDonnell-Douglas Corp. v. Green,
411 U.S. 792,
93 S.
Ct. 1817,
36 L. Ed.2d 668 (1973), for litigation under Title VII);
Drinkwater v. Union Carbide Corp.,
904 F.2d 853, 865 (3d Cir. 1990) (stating
that New Jersey courts would apply Title VII standard to claims under the
LAD); Weiss v. Parker Hannifan Corp.,
747 F. Supp. 1118, 1126 (D.N.J. 1990)
(same).
[Id. at 631.]
We have explained our process for importing the jurisprudence developed under the federal
Civil Rights Act of 1964 thusly:
In construing the terms of the LAD, this Court has frequently looked to
federal precedent governing Title VII . . . as “a key source of
interpretive authority.” Grigoletti [v. Ortho Pharm. Corp.], 118 N.J. [89,] 97[(1990)]. Although the
“substantive and procedural standards that we have developed under the State’s LAD have
been markedly influenced by the federal experience,” ibid., we have “applied the Title
VII standards with flexibility” and “have not hesitated to depart” from federal precedent
“if a rigid application of its standards is inappropriate under the circumstances.” Id.
at 107[].
[Lehmann v. Toys ‘R’ Us,
132 N.J. 587, 600-601 (1993).]
Our continuing examination of the LAD has led us also to look to
subsequent legislative enactments for guidance on the LAD’s scope. Thus, we have compared
the LAD with the later-adopted Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to
-8, which was enacted “to provide ‘broad protections against employer retaliat[ion]’ for workers
whose whistle-blowing actions benefit the health, safety and welfare of the public.” Feldman
v. Hunterdon Radiological Assocs.,
187 N.J. 228, 239 (2006) (quoting Mehlman v. Mobil
Oil Corp.,
153 N.J. 163, 179 (1998)). We have held that
courts frequently compare CEPA to LAD, applying the legal tests and frameworks developed
under one to the other, because “CEPA, like [LAD], is a civil rights
statute.” Kolb v. Burns,
320 N.J. Super. 467, 477[] (App. Div. 1999). Indeed,
we have emphasized that the two statutes share a similar purpose: “Both CEPA
and LAD . . . seek[] to overcome the victimization of employees and
to protect those who are especially vulnerable in the workplace from the improper
or unlawful exercise of authority by employer.” Abbamont[ v. Piscataway Twp. Bd. of
Educ.], 138 N.J. [405,] 417-18 [(1994)] (holding that LAD principles of employer liability
are “fully applicable” to action brought under CEPA).
[Id. at 241-42.]
Thus, to sustain a cause of action under CEPA’s anti-retaliation provisions, it is
not enough that the employee “blow any whistle.” A CEPA plaintiff must show
that “he or she reasonably believed that his or her employer’s conduct was
violating either a law, rule, or regulation promulgated pursuant to law, or a
clear mandate of public policy[.]” Dzwonar v. McDevitt,
177 N.J. 451, 462 (2003).
That continuing examination leads us to this case.
The trial court and the Appellate Division correctly concluded that the plain language of the LAD retaliation provision does not include the requirement that a plaintiff also prove, in addition to the standard elements of a LAD cause of action, that he or she had a good-faith, reasonable belief that he or she was engaged in protected activity. For that reason, both the trial court and the Appellate Division deemed it inappropriate to graft such a requirement on to this statute and, thus, to charge the jury in respect of that requirement. Because a requirement that a LAD-retaliation plaintiff demonstrate that his underlying complaint was reasonable and in good faith is entirely consonant with the purpose of the LAD, we disagree. In doing so, we follow parallel federal precedents, under which a plaintiff must show that “he had a reasonable, good-faith belief that discrimination occurred to prevail on a retaliation claim[,]” Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 187, 125 S. Ct. 1497, 1512, 161 L. Ed. 2d 361, 380 (2005) (Thomas, J., dissenting), a tenet universally observed by every United States Court of Appeals that has considered the question. Id. at 187 n.1, 125 S. Ct. at 1512 n.1, 161 L. Ed. 2d at 380 n.1 (citing cases).See footnote 5
We recognize this requirement as an element of plaintiff’s required proofs in a LAD-retaliation claim because its absence may well lead to abuse. Common sense tells us that the Legislature could not have intended that the LAD provide a safe harbor to one who files a baseless, meretricious complaint. It also tells us that the LAD cannot protect one who preemptively files a complaint solely in anticipation of an adverse employment action by the employer. The LAD was and is intended as a shield to protect employees from the wrongful acts of their employers, and not as a sword to be wielded by a savvy employee against his employer.
This question comes before us for the first time. Yet, the issue of whether a good faith and reasonableness requirement is part of a LAD-retaliation action has been addressed twice by the United States Court of Appeals for the Third Circuit. That Court consistently has interpreted the LAD to require that “a plaintiff establishes a retaliation claim if she shows that she had a reasonable belief that her employer was engaged in an unlawful employment practice and that the employer retaliated against her for protesting against that practice.” Drinkwater v. Union Carbide Corp., 904 F.2d 853, 865 (3d Cir. 1990). See also Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1085 (3d Cir. 1996) (holding that “a plaintiff need not prove the merits of the underlying discrimination complaint, but only that he was acting under a good faith, reasonable belief that a violation existed” (citations and internal quotation marks omitted)). We are entirely in accord with the reasoning of those decisions.
Therefore, we hold that, in a case in which a plaintiff alleges retaliation under the LAD, N.J.S.A. 10:5-12d, the plaintiff bears the burden of proving that his or her original complaint -- the one that allegedly triggered his or her employer’s retaliatio n -- was made reasonably and in good faith. The obverse also holds true: an unreasonable, frivolous, bad-faith, or unfounded complaint cannot satisfy the statutory prerequisite necessary to establish liability for retaliation under the LAD.
We apply this holding to the case before us. Here, Resorts requested and was denied an instruction to the jury to the effect that, as part of his case-in-chief, plaintiff was required to prove that he had a reasonable, good-faith belief for his underlying discrimination complaint as the basis for his later retaliation complaint. We explained the principles that govern our review of the jury charge in a LAD case as follows:
A jury is entitled to an explanation of the applicable legal principles and how they are to be applied in light of the parties’ contentions and the evidence produced in the case. Rendine v. Pantzer, 276 N.J. Super. 398, 431[] (App. Div. 1994). In accordance with that principle, a jury charge must correctly state the applicable law, outline the jury’s function and be clear in how the jury should apply the legal principles charged to the facts of the case at hand. Velazquez ex rel. Velazquez v. Portadin, 163 N.J. 677, 688[] (2000). An incorrect jury charge, however, constitutes reversible error only if the jury could have come to a different result had it been correctly instructed. Ibid. Moreover, in construing a jury charge, a court must examine the charge as a whole, rather than focus on individual errors in isolation. Ryder v. Westinghouse Elec. Corp., 128 F.3d 128, 137 (3d Cir. 1997). Stated differently, an appellate court must consider the language surrounding an alleged error in order to determine its true effect. See, e.g., [i]bid. (considering sentence and paragraphs following erroneous sentence to be correct statements that negate effect of incorrect statement).
[Viscik v. Fowler Equip. Co.,
173 N.J. 1, 18 (2002) (internal quotation marks
omitted).]
In the circumstances of this case, and in light of the delay between
the August 2001 claimed discrimination in the application of Resorts’ absenteeism policy and
plaintiff’s November 2001 complaint to that effect -- a complaint that purportedly arose
several months before but was not filed until the day after an investigation
into allegations of theft by plaintiff was started -- we conclude that the
jury charge as a whole was not “clear in how the jury should
apply the legal principles charged to the facts of the case at hand.”
Ibid. That conclusion is inescapable because the trial court unequivocally charged the jury
that the bare fact that plaintiff filed a complaint alleging discrimination, without more,
was sufficient to satisfy plaintiff’s burden in respect of the first element of
his LAD-retaliation claim, a charge that we hold to be legally insufficient and
incorrect. As a result, we must also conclude that “the jury could have
come to a different result had it been correctly instructed.” Ibid.
A.
In respect of the admission of its investigative report, Resorts primarily argued before the trial court that the investigative report concerning plaintiff’s activities of improperly upgrading room assignments in exchange for gratuities should have been admissible under the business records exception to the hearsay rule. As presented to the trial court, Resorts’ investigative report
is kept in the regular course of business. It is the normal procedure for the investigations unit to prepare a report like this for every investigation that is done. The witness is going to testify about that. He is going to testify about what he did. This is the business record of it. It comes in for the purpose of motivation, which is what this case is about, what was Resorts doing, what was Resorts thinking.
The trial court rejected Resorts’ proposed hearsay exception basis for the admission of
the investigative report, finding that the report was hearsay and was unreliable. The
trial court plainly did not address Resorts’ additional, but later point: that the
report was admissible for a non-hearsay purpose, that is, to prove Resorts’ motive
in terminating plaintiff’s employment.
Before the Appellate Division, Resorts shifted the focus of its argument. There, Resorts
emphasized that the investigative report was a non-hearsay statement and, thus, that the
trial court abused its discretion in barring the admission of that report into
evidence. Focusing on the purpose for which the investigative report was tendered, Resorts
argued that “[t]he [investigative r]eport was not hearsay because it was not offered
to prove the truth of the facts it contained” but “as evidence of
[Resorts’] investigation of [plaintiff’s] misconduct and [Resorts’] actual motivation for terminating [plaintiff’s] employment,
which was the central issue in the case.” Resorts further asserted that “[t]he
prejudice to Resorts from this erroneous ruling was considerable, as the [investigative r]eport
was key to its defense.” The panel rejected that argument, concluding without explanation
that its “review of the record discloses that all of the trial court’s
evidentiary rulings were well within the trial judge’s discretion [and that t]he judge
gave ample, affirmable reasons for each ruling.”
Our Rules of Evidence define hearsay as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” N.J.R.E. 801(c). We have made clear that
[u]nder that definition, the hearsay rule applies when a declaration is offered to prove the truth of the statement attributed to the declarant. It follows, therefore, that if evidence is not offered for the truth of the matter asserted, the evidence is not hearsay and no exception to the hearsay rule is necessary to introduce that evidence at trial. But if proffered evidence is hearsay, it can be admitted only pursuant to one of the exceptions to the hearsay rule.
[State v. Long,
173 N.J. 138, 152 (2002) (citations omitted).]
Thus, the threshold question here is whether Resorts’ investigative report was being “offered
in evidence to prove the truth of the matter asserted” or for some
other reason.
Resorts submits that it “offered the [investigative r]eport as evidence of [Resorts’] investigation
of [plaintiff’s] misconduct and [Resorts’] actual motivation for terminating [plaintiff’s] employment, which was
the central issue in the case.” We agree. We hold that, within the
usual limits that govern the admissibility of evidence as a whole, an investigative
report concerning an employee is admissible as non-hearsay statements whenever the employer’s motivations
are directly at issue. As a general proposition, “[w]here statements are offered, not
for the truthfulness of their contents, but only to show that they were
in fact made and that the listener took certain action as a result
thereof, the statements are not deemed inadmissible hearsay.” Russell v. Rutgers Cmty. Health
Plan,
280 N.J. Super. 445, 456-57 (App. Div.), certif. denied,
142 N.J. 452
(1995) (citing Jugan v. Pollen,
253 N.J. Super. 123, 136-37 (App. Div. 1992);
Statham v. Bush,
253 N.J. Super. 607, 615 (App. Div. 1992)). Moreover, in
the specific context of a LAD retaliation claim, a personnel file was admissible
as non-hearsay because “the information in [the] file bears on the reasonableness and
good faith of defendant’s conduct.” El-Sioufi v. St. Peter’s Univ. Hosp.,
382 N.J.
Super. 145, 165 (App. Div. 2005). In respect of whether a report is
a non-hearsay statement, we see no appreciable difference between a personnel file --
which is created and maintained exclusively by the employer -- and an investigative
report.
Because N.J.R.E. 801(c) is identical to its federal counterpart, Fed. R. Evid. 801(c),
further support is found in federal cases that parallel the LAD. For example,
in an employment discrimination case,
internal documents relied upon by the employer in making an employment decision are
not hearsay as that term is defined in Fed. R. Evid. 801(c) --
statements offered to prove the truth of the matters asserted. Rather, such documents
are relevant and admissible because they help explain (or may help explain) the
employer's conduct.
[Wolff v. Brown,
128 F.3d 682, 685 (8th Cir. 1997).]
Accord Blanks v. Waste Mgmt.,
31 F. Supp.2d 673, 680 (E.D. Ark.
1998) (same); see also Bush v. Dictaphone Corp.,
161 F.3d 363, 367 (6th
Cir. 1998) (holding that “the truth of the statements is not at issue
as long as the declarants had a reasonable basis to believe them to
be true”); Hardie v. Cotter & Co.,
849 F.2d 1097, 1101 (8th Cir.
1988) (holding that “[t]he documents to which [plaintiff] objects were not offered to
prove the truth of the material contained within them, but to demonstrate the
state of mind of [the employer’s] personnel who made the decision to discharge
[plaintiff], a factor of crucial importance in wrongful discharge cases”); Jones v. Los
Angeles Cmty. Coll. Dist.,
702 F.2d 203, 205 (9th Cir. 1983) (holding that
proposed hearing officer’s decision and memoranda of unsatisfactory performance was admissible because employer
“did not offer the documents to prove the truth of the allegations but
to show that it had a legitimate basis for believing [plaintiff]’s conduct warranted
termination”); Moore v. Sears, Roebuck & Co.,
683 F.2d 1321, 1322 (11th Cir.
1982) (holding that, in age discrimination case, memoranda prepared by plaintiff’s supervisors showing
unsatisfactory job performance was admissible because memoranda “did not constitute hearsay”).
Other states also follow this rule. See McElroy v. State,
637 N.W.2d 488,
502 (Iowa 2001) (holding that “internal documents relied upon by an employer in
making employment decisions in a discrimination case are generally not hearsay because they
can be relevant to explain the employer’s conduct”); Salvi v. Suffolk County Sheriff’s
Dep’t,
855 N.E.2d 777, 785 (Mass. App. Ct. 2006) (holding, in hostile work
environment case, that out-of-court “statement was admissible not to prove what [another] said,
which was hearsay, but to establish an offensive remark by [declarant] designed to
intimidate, offend, or humiliate the plaintiff because of his sexual orientation”); Green v.
Augusta Ford, 2
003 Me. Super. LEXIS 182, *2 n.2 (Me. Super. Ct. 2003)
(holding, in sexual harassment case, that out-of-court offensive statement was not hearsay because
offered not for truth of matter asserted, but as proof that statement was
made). But see Mackey v. U.P. Enters., 2
005 Tex. App. LEXIS 6044 (Tex.
App. 2005) (concluding that trial court’s error in admitting investigative report in discrimination
claim under business records exception of hearsay rule was harmless).
We caution that, like any other evidence, the tender of an investigative report
must be relevant. Thus, it is not enough for an employer to simply
state that it has an investigative report concerning a terminated employee and that
such report is ipso facto relevant to the terminated employee’s discrimination or retaliation
claim. That relevance burden requires that the employer also prove a logical nexus
between the report and the witness who speaks of it, that is, that
the employer knew of the report’s contents and acted based on the information
therein contained. See Aliotta v. Nat’l R.R. Passenger Corp.,
315 F.3d 756, 762
(7th Cir. 2003) (holding that, in context of application of vicarious admission exception
to hearsay rule in employment discrimination cases, “the declarant must be involved in
the decision making process affecting the employment action involved (i.e., the declarant must
be in management or in the company personnel function) in order for his
statements to qualify as having been made within the scope of his employment”);
Williams v. Pharmacia, Inc.,
137 F.3d 944, 950-51 (7th Cir. 1998). Also, if
the investigative report itself contains hearsay statements, each of these must be separately
admissible or it is subject to redaction. See, e.g., N.J.R.E. 805 (explaining that
“statement within the scope of [a hearsay] exception . . . shall not
be inadmissible on the ground that it includes a statement made by another
declarant which is offered to prove the truth of its contents if the
included statement itself meets the requirements of [a hearsay] exception”).
We hold, therefore, that the trial court abused its discretion when it excluded
Resorts’ investigative report solely on the basis that it was inadmissible hearsay. Instead,
that report would be admissible as a non-hearsay statement relevant to show that
Resorts terminated plaintiff’s employment for non-pretextual reasons, provided Resorts also demonstrates (1) that
one of its decision makers knew of the report’s contents and acted in
reliance thereof, and (2) that all portions of the report were separately admissible
or properly and intelligibly redacted. Therefore, we hold that the trial court, subject
to any relevant limitations, must determine anew whether that report is admissible upon
retrial.
Finally, despite the absence of any supporting proofs, the trial court also excluded Resorts’ investigative report because it was maintained as an electronic record on a computer system that was capable of being modified and, therefore, in the trial court’s view, it was not trustworthy. That determination was made in the context of the business records exception to the hearsay rule, which requires the exclusion of an otherwise qualified business record if “the sources of information or the method, purpose or circumstances of preparation indicate that it is not trustworthy.” N.J.R.E. 803(c)(6). However, business records maintained in a computer system are not treated differently from hard copies merely because they are stored electronically. Stated in the context of the business records exception to the hearsay rule, “[t]here is no reason to believe that a computerized business record is not trustworthy unless the opposing party comes forward with some evidence to question its reliability.” Hahnemann Univ. Hosp. v. Dudnick, 292 N.J. Super. 11, 18 (App. Div. 1996) (citations omitted); Garden State Bank v. Graef, 341 N.J.Super. 241, 245 (App. Div. 2001) (same). All that is needed to lay the foundation for the admission of systematically prepared computer records otherwise qualified as business records is if “the witness (1) can demonstrate that the computer record is what the proponent claims and (2) is sufficiently familiar with the record system used and (3) can establish that it was the regular practice of that business to make the record.” Hahnemann Univ. Hosp. v. Dudnick, supra, 292 N.J. Super. at 18 (citations omitted).
The judgment of the Appellate Division is reversed, the judgment of liability in favor of plaintiff is vacated in all respects, See footnote 6 and the case is remanded to the Law Division for further proceedings consistent with this opinion.
JUSTICES LONG, LaVECCHIA, ZAZZALI, and ALBIN join in JUSTICE RIVERA-SOTO’s opinion. JUSTICE WALLACE filed a separate DISSENTING opinion.
SUPREME COURT OF NEW JERSEY
A-
83 September Term 2005
REINALDO CARMONA,
Plaintiff-Respondent,
and
WILLIAM SANTIAGO,
Plaintiff,
v.
RESORTS INTERNATIONAL HOTEL, INC., d/b/a RESORTS ATLANTIC CITY,
Defendant-Appellant.
JUSTICE WALLACE, JR., dissenting.
I respectfully dissent. I am in substantial agreement with the reasoning of the
Appellate Division that we should not impose a new standard and require that
plaintiff establish a good faith, reasonable belief that he or she was engaged
in protected activity. Moreover, the trial court, in rejecting defendant’s request to give
a good faith-reasonable belief charge to the jury, found that “if there is
a reasonable requirement under the law in New Jersey it [has] already been
met here.” Consequently, I see no reason for a retrial.
Beyond that, I find no abuse of discretion in the trial court’s exclusion
of defendant’s investigative report. The jury was informed that an investigation was undertaken
and the investigator testified concerning his investigation. Thus, plaintiff was able to cross-examine
the investigator to assist the jury in receiving a complete picture concerning the
report, but without the admission of the report. I find no error, let
alone reversible error.
SUPREME COURT OF NEW JERSEY
NO. A-83 SEPTEMBER TERM 2005
ON CERTIFICATION TO Appellate Division, Superior Court
REINALDO CARMONA,
Plaintiff-Respondent,
And
WILLIAM SANTIAGO,
Plaintiff,
v.
RESORTS INTERNATIONAL HOTEL,
INC., d/b/a RESORTS ATLANTIC
CITY,
Defendant-Appellant.
DECIDED February 21, 2007
Justice Long PRESIDING
OPINION BY Justice Rivera-Soto
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY Justice Wallace
CHECKLIST
Footnote: 1
“FMLA” is an acronym commonly used to refer to medical leaves of
absence under either the federal Family and Medical Leave Act of 1993, 29
U.S.C. §§ 2601-2654, or the New Jersey Family Leave Act, N.J.S.A. 34:11B-1 to -16,
or both.
Footnote: 2
Santiago also was a named plaintiff in the case, and, in that
capacity, was deposed. However, before jury selection began, his claims were dismissed and
his counsel relieved from continuing to represent him because his counsel had been
unable to locate him for a year immediately preceding the trial. Portions of
Santiago’s deposition were read to the jury.
Footnote: 3 See N.J.R.E. 803(c)(6) (“Whether or not the declarant is available as a witness . . . [a] statement contained in a writing or other record of acts, events, conditions, and, subject to Rule 808 [excluding expert opinions contained in hearsay statements], opinions or diagnoses, made at or near the time of observation by a person with actual knowledge or from information supplied by such a person [shall be admissible], if the writing or other record was made in the regular course of business and it was the regular practice of that business to make it, unless the sou