Winters v. North Hudson Regional Fire and Rescue, A-45 September Term 2010; Supreme Court; per curiam opinion; dissent by Albin, J; decided September 13, 2012. On appeal from the Appellate Division. DDS No. 33-1-xxxx [46 pp.]

In this matter, the court considers whether a plaintiff, who was removed from public employment after positing a claim of employer retaliation in a civil service disciplinary proceeding, should be barred from pursuing a subsequent Conscientious Employee Protection Act (CEPA) action also alleging retaliation.

Plaintiff Steven J. Winters began his service as a firefighter with the Union City Fire Department in 1984. In 1999, the Union City Fire Department merged with other fire departments to form North Hudson Regional Fire and Rescue (Regional). Winters was a frequent and vocal critic of workplace policies and practices with which he disagreed. Winters also engaged in putative whistle-blowing involving sexual harassment allegations.

Plaintiff was terminated from his position following two close-in-time proceedings involving separate disciplinary matters before the Civil Service Commission. The first resulted in a demotion and the imposition of a 60-day suspension. The second proceeding involved a distinct set of charges relating to plaintiff’s abuse of sick leave.

Following full discovery practice before the Office of Administrative Law (OAL) and the commencement of an evidential proceeding in the second matter, the employer moved for partial summary decision, which was granted by the administrative law judge (ALJ). The ALJ found it significant that despite plaintiff’s defensive theme of employer retaliation, he did not provide support for that claim in his response to the employer’s motion seeking partial summary judgment, and plaintiff’s termination, for sick-leave misuse.

The commission determined that plaintiff had committed, among other infractions, conduct unbecoming a public employee — abuse of sick leave by working two other public-sector jobs while receiving public benefits — and stated that, in light of the “egregious” nature of the misconduct, removal was the appropriate discipline. The commission stated that removal was necessary for plaintiff’s misconduct in breach of the public trust.

Plaintiff’s appeal from that administrative final judgment was unsuccessful. He filed this CEPA action claiming that his termination was retaliatory. His employer moved for summary judgment based on estoppel principles. The trial court denied the motion. The Appellate Division affirmed on interlocutory review.

Held: Plaintiff, who was removed from public employment in a civil service disciplinary proceeding in which he claimed retaliation, is barred from pursuing a subsequent CEPA action alleging retaliation.

This matter raises significant and practical concerns about the intersection of administrative disciplinary proceedings and the important protection provided to whistle-blowing employees through CEPA.

The court finds a litigant should not be permitted to participate in the administrative system designed to promote a fair and uniform statewide system of public employee discipline, raise a retaliation defense (as plaintiff did here), and then hold back on the defense in an attempt to save it for later duplicative litigation. Rather, if an employee and employer engage the system of public employee discipline established by law and the employee raises a claim that employer retaliation at least partially motivated the decision to bring the charge or the level of discipline sought, then both the employee and employer must live with the outcome, including its potential preclusive effect on related employment-discrimination litigation as a matter of the equitable application of estoppel principles.

The disciplinary proceedings here concluded with the determination that plaintiff had forfeited his right to continued employment. He raised his retaliation-themed defense and was told to present it as part of his case in chief. That he did not fully present his defense before the commission and is now barred from doing so in a CEPA action is a consequence with which he must live. If retaliatory animus is involved in the actions of a public employer, that information is important to the commission as part of its overall responsibility for supervision of the public employee employment and discipline system.

The court puts users of the public employment system of employee discipline on notice that integration of employer-retaliation claims should be anticipated and addressed where raised during the discipline review process. Findings made as part of the discipline process will have preclusive impact in later employment-discrimination litigation raising allegations of employer retaliation based on the same transactional set of facts.

The question is in this case is whether the issues in the proceedings were aligned and were litigated as part of the final judgment in the administrative action. The court holds that they essentially were. Winters cannot take advantage of his own tactic of throttling back on his claim of retaliation in the administrative proceeding after having initially raised it. Retaliation was a central theme of his argument and that he chose not to present his comprehensive proof of that claim does not afford him a second bite at the apple. The ALJ’s finding that the specific sick-leave charge was not infected by retaliatory concerns is sufficient for the court to end this matter.

In the interest of promoting the public interest in finality and consistency in judicial and quasi-judicial proceedings involving the same transaction, the court finds plaintiff is estopped from proceeding with this CEPA action, and is barred from seeking restoration of his public position or damages for the loss of position. The judgment of the Appellate Division is reversed.

Justice Albin, in a separate dissenting opinion, believes that Winters was not collaterally estopped from prosecuting his retaliation claim.

Chief Justice Rabner and Justices LaVecchia, Hoens, Patterson, and Judge Wefing, temporarily assigned, join in this opinion. Justice Albin filed a separate dissenting opinion.

For appellants: Michael J. DeOrio — Thomas R. Kobin and David J. Pack (Chasan Leyner & Lamparello); North Hudson Regional Fire and Rescue and Brion McEldowney — Thomas B. Hanrahan & Associates (Kobin and Thomas B. Hanrahan of counsel); Jeffrey C. Welz — David F. Corrigan (The Corrigan Law Firm; Corrigan and Bradley D. Tishman on the briefs). For respondent — Robert L. Herbst, of the N.Y. bar (The Nirenberg Law Firm; Herbst and Jonathan I. Nirenberg on the briefs). For amici curiae: National Employment Lawyers Association/New Jersey chapter — Richard E. Yaskin (Bennet D. Zurofsky of counsel); Employers Association of New Jersey — Marvin M. Goldstein (Proskauer Rose; Goldstein, Mark A. Saloman and John J. Sarno on the brief).