Battaglia v. United Parcel Service Inc., A-86/87 September Term 2011; Supreme Court; opinion by Hoens, J.; decided July 17, 2013. On certification to the Appellate Division. [Sat below: Judges Wefing, Baxter and Hayden in the Appellate Division; Judge Paley in the Law Division.] DDS No. 25-1-0681 [60 pp.]

Plaintiff Michael Battaglia began working for defendant United Parcel Service Inc. (UPS) in 1985. In 2001, he became division manager of the South Division. After allegedly overhearing Wayne DeCraine, whom he supervised, make derogatory remarks about women, Battaglia counseled him.

Subsequently, Battaglia accepted a change in position that involved his relocation to another state but he soon returned to New Jersey, where he became a subordinate to DeCraine. Battaglia claims he heard DeCraine make a number of inappropriate sexual comments, although only in the presence of male employees. He also claims that he complained to DeCraine about misuse of company credit cards by employees drinking at lunch. He also sent an anonymous letter to UPS's corporate human resources manager alleging that there were activities in the North Jersey District that he believed were improper.

In 2005, plaintiff was demoted, became depressed, and missed five months of work. UPS asserts that the demotion was justified by plaintiff's violation of company confidentiality policies, his abusive treatment of other employees, and insubordination.

In this action, Battaglia alleges that his demotion was in retaliation for the complaints he made and the anonymous letter, in violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, and the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, and that the demotion represented a breach of contract because it was contrary to assurances in personnel manuals that employees would not be disciplined for raising complaints about improper activities.

The trial court dismissed the breach-of-contract claim, finding that the disclaimers in the manuals were sufficiently prominent and clear to avoid creating any contractual liability and that plaintiff had not proved that any party intended that the manuals would create contractual rights. The jury found defendant liable on the CEPA and LAD claims and awarded plaintiff $500,000 in economic damages and $500,000 in emotional distress damages. However, the court concluded that the latter award was excessive and remitted it to $205,000.

On cross-appeals, the Appellate Division affirmed the CEPA verdict and reversed the LAD verdict, finding that there was no evidence that any gender-based comments were heard by women or of a hostile work environment and, thus, there could be no cognizable claim of discrimination. It also remanded the award of emotional distress damage, finding that the court erred by permitting the jury to include future damages in the award without expert evidence that plaintiff's emotional distress was permanent. The panel affirmed the dismissal of the claim of implied contract.

The parties' cross-motions for certification were granted.

Held: The LAD does not require proof of an identifiable discriminatory impact on a member of a protected class; it is sufficient if the employee makes a complaint in a good-faith belief that the conduct complained of violates the LAD and suffers a retaliation. Proof of future emotional distress must be presented by expert testimony. The focus of a fraud-based CEPA claim is on whether the employee had a reasonable belief that the activity was fraudulent and complained about it for that reason. A proper CEPA jury charge must describe with particularity the conduct the employee believes will support a CEPA recovery.

As to plaintiff's LAD claim, the court says that, considering the broad remedial purposes of the LAD, it cannot endorse the appellate panel's conclusion that plaintiff's complaints about DeCraine's language did not constitute protected activity under the LAD. Although there is no claim and no evidence to suggest that any of the language was heard by any women, the LAD does not only protect those who voice complaints about directly demonstrable acts of discrimination. As long as the complaint is made in a good-faith belief that the conduct complained of violates the LAD, it suffices for purposes of pursuing a cause of action.

The LAD was enacted to protect not only the civil rights of individual aggrieved employees but also to protect the public's strong interest in a discrimination-free workplace. Those purposes would not be served if one who voices complaints and who suffers retaliation as a consequence must also prove that there is a separate, identifiable victim of actual discrimination.

The court concludes that ample evidence supports the conclusion that plaintiff's complaints were protected activity under the LAD and that his demotion was in retaliation for those complaints. The court also holds that the complaints in the anonymous letter, if they were the basis for a retaliatory employment consequence, would suffice for LAD purposes.

The court directs that the verdict in plaintiff's favor on the LAD count be reinstated.

As to the award of emotional distress damages, the court says that a plaintiff can recover for emotional distress without resort to expert testimony. However, an award for future emotional distress must be supported by evidence of permanency presented through expert testimony, lest that verdict be the product of speculation.

Here, by referring to plaintiff's age and life expectancy, the trial court improperly permitted the jury to include a future award for emotional distress, in the absence of any evidence about permanency. Therefore, the award of damages for emotional distress cannot stand.

As to the CEPA verdict, The court says the focus of a fraud-based CEPA claim is on whether the employee making the complaint had a reasonable belief that the activity was fraudulent and complained about it for that reason. Courts must be alert to the sufficiency of the factual evidence as the statute does not protect complaints directed to minor or trivial matters.

Thus, it is critical to identify the evidence that the employee believes will support the CEPA recovery with precision. When instructing juries, trial courts must be vigilant in identifying the essential complaint made by the employee so that the jury will be able to test it against the standards that the law imposes as a prerequisite to recovery.

Here, the evidence on which plaintiff relies to support his CEPA claim is insufficient. The anonymous letter made no reference to any conduct that related to credit cards or business lunches. Therefore, the CEPA claim rises or falls on the oral complaint that plaintiff asserts he made to DeCraine. However, his testimony was vague and he did not suggest or believe that the employees about whom he complained were engaged in fraudulent conduct.

The court says even if plaintiff offered enough evidence to sustain a CEPA recovery, it would reverse this aspect of the verdict because of the erroneous jury charge that told the jurors they could return a CEPA verdict based on complaints that dealt with credit card, meal practices "and other things." This broad and open-ended description failed to give the jury an adequate explanation of the alleged wrongful activity that could support a verdict in plaintiff's favor on his CEPA claim and failed to provide the appropriate focus as a matter of law, i.e., on what plaintiff knew and reasonably believed.

Finally, the court affirms the dismissal of the claim of implied contract, agreeing with the trial court's substantive analysis of the claim and the appellate panel's reasoning that the only damage that could be recovered, if there were any merit to that claim, would be co-extensive with the verdict plaintiff has already received.

Chief Justice Rabner, Justice Patterson, and Judges Parrillo and Fuentes, both temporarily assigned, join in Justice Hoens's opinion. Justices LaVecchia and Albin and Judges Rodriguez and Cuff, both temporarily assigned, did not participate.

For appellant/cross-respondent — Michael T. Bissinger (Day Pitney; Bissinger and Joshua A. Polak on the briefs). For respondent/cross-appellant — Maureen S. Binetti (Wilentz, Goldman & Spitzer; Binetti and Stephanie D. Gironda on the briefs).