Sending employees a memo that hours would be cut because one of the staff brought a wage-and-hour claim can constitute an adverse action that supports a whistleblower suit, a New Jersey appeals court held on Wednesday.
The Appellate Division held, in reinstating a dismissed suit, that the universe of possible retaliatory actions under the Conscientious Employee Protection Act (CEPA) is broader than discharge, suspension and promotion.
It may include “creating a hostile work environment through a memorandum that defendants knew or should have known would incite plaintiff’s co-workers, who then commenced harassing plaintiff about his lawsuit to such an extent that the work environment became so intolerable to plaintiff that he was forced to resign,” the judges held in Flecker v. Statue Cruises, A-4390-10.
It could also encompass plaintiff Howard Flecker III’s claim that his company reduced his work hours, they said.
Flecker was a deckhand for Statue Cruises of Jersey City, which provides boat rides departing from Battery Park in Manhattan that offer views of the Statue of Liberty, Ellis Island, the Brooklyn Bridge and other New York harbor landmarks.
On Sept. 10, 2009, he sued the company in Hudson County Superior Court, claiming that a provision of the collective bargaining agreement that covered him and 40 to 45 other unionized employees was illegal under New Jersey’s Wage and Hour Law.
The provision entitled workers to overtime only if they put in more than 48 hours a week, while overtime at time-and-a-half the usual hourly wage kicks in after 40 hours under the Wage and Hour Law.
Three weeks later, on Oct. 1, Statue’s chief operating officer, Michael Burke, circulated a memo advising employees that Flecker had sued and that until the case was resolved, it would try to mitigate damages by not scheduling union workers to more than 40 hours a week.
The memo identified Flecker as the brother of a union official, indicated that the union might support the wage suit and stated, “we are puzzled and disappointed that the Union apparently did not consider the impact the lawsuit would likely have on you and our Company.
“For those of you who will lose a day’s pay (or more) every week, I leave it to your good judgment whether Local 333′s possible involvement in this lawsuit was in your best interests,” it continued.
Reaction from co-workers was swift and strong, with some confronting Flecker, saying they were upset by the suit and urging him to drop it, while others started ignoring him.
One allegedly told Flecker that the suit was “ruining everybody’s career” and hurting people financially, and that he wanted to burn the complaint “on the boat with everybody.”
A shop steward allegedly asked Flecker “to consider the whole, big picture” and the impact on more senior employees and drafted a letter on behalf of himself and 20 others opposing the suit and encouraging the union to address the overtime issue in contract negotiations.
Flecker did not report the confrontations to Statue. He says he did not trust management to help him after deliberately embarrassing him with the memo.
His lawyer, Ravi Sattiraju, demanded that the company retract the memo on the ground that it violated CEPA.
The response from Statue’s attorney, Raymond McGuire, said it was “well within its rights to engage in normal management practices (i.e., scheduling so as to limit the cost of overtime), and to limit any potential damages resulting from the lawsuit.”
Flecker claims his hours were cut from 40-50 to 35 hours a week and the stress of his encounters with co-workers forced him to resign. On Oct. 15, 2009, he amended his complaint to add the CEPA claim, which, like the wage claim, was a putative class claim.
On Nov. 30, 2009, the company sent out what the appeals court referred to as two “curative notices.”
One, to nonunionized captains, instructed them not to discuss the case with deckhands. The other, to the unionized staff, said the Oct. 1 memo was not meant to influence their decision to join Flecker’s suit and the company would not interfere or retaliate.
Class certification was granted on the overtime claim but denied regarding CEPA.
On April 1, 2011, Judge Mark Baber threw out the entire case on summary judgment, holding the overtime claim was pre-empted by federal law.
Appellate Division Judges Francine Axelrad, Paulette Sapp-Peterson and Mitchel Ostrer disagreed with Baber’s finding that the memo was not an adverse employment action because it was not a completed personnel action that impacted Flecker’s employment.
But the panel affirmed on denial of class status.
On the wage claim, it reversed and remanded for specific factual findings, including a determination of the extent to which Statue’s operations extend into federal waters and, if so, whether applying New Jersey’s overtime law would prove so disruptive that federal law should pre-empt it.
Sattiraju, who heads a firm in Princeton, says he is “pleased that the court recognized the retaliatory conduct to which plaintiff was subjected.”
McGuire, of Kauff, McGuire & Margolis in New York, did not return a call. Neither did his co-counsel, Patrick McGovern, of Genova, Burns, Giantomasi & Webster in Newark.