Alan Schorr’s Employment Case of The Week ending December 14, 2012

Fang v. State of New Jersey, 2012 WL 6097082 (App. Div. December 10, 2012) (Mercer County) (not approved for publication)

The effects of the Supreme Court’s recent decision in Winters v. North Hudson Regional Fire and Rescue, 212 N.J. 67 (2012) (read blog article here), are already being felt in the Appellate Courts, and it is clear that its effects will be widespread. Following Winters, the Appellate Division has ruled, for the first time, that bringing a discrimination action under the New Jersey Law Against Discrimination (LAD) at the Division on Civil Rights can bar a subsequent lawsuit under the Conscientious Employee Protection Act (CEPA).

Yuan Fang is a certified public accountant who was employed by the New Jersey Department of Transportation. She alleges that she began to suffer harassment, which she attributed to her Chinese origin and her gender. She complained internally, and thereafter received suspensions. She filed a complaint with the New Jersey Division on Civil Rights (DCR) in November 2005, alleging discrimination and retaliation for complaining.

The matter languished at the Division of Civil Rights for over three years. In the meantime, Ms. Fang alleged that she suffered additional retaliation as a result of complaint about misappropriation of funds. While the DCR matter was still pending, she filed a lawsuit under CEPA, which apparently was filed in 2007. Ms. Fang did not employ an attorney for any of the matters at the Division on Civil Rights or in Superior Court, and represented herself pro se until the Appellate Division appeal. After filing the CEPA lawsuit, summary judgment was partially granted based upon insufficient pleadings, and Ms. Fang filed an Amended Complaint in July 2008.

In November 2008, Judge Wilbur Mathesius of Mercer County dismissed the CEPA claim, finding it too “duplicative and improper, due to the fact that plaintiff had presented the same or similar allegations to the DCR.” Judge Douglas H. Hurd similarly denied reconsideration. The Appellate couched the “pivotal issue” as “plaintiff is free to litigate her claims of retaliation in the Law Division, on an alternative legal theory founded upon substantially overlapping factual allegations, having already failed to prove retaliation before the DCR.” The biggest problem here is that the Appellate Division got its timing completely wrong. At the time of the dismissal, the DCR had not yet rendered any decision at all. The DCR did render a Finding of No Probable Cause, but not until December 15, 2008, four weeks after the trial court dismissed the case. So it is impossible for the Court to have dismissed based upon a failure to prove retaliation at the DCR.

Ultimately, the take away from this opinion is that Winters has created a minefield for New Jersey employees. The Courts now seem willing to dismiss CEPA claims based upon administrative claims which have nothing to do with CEPA. The Appellate Division never addressed the fact that the CEPA claim was based upon retaliation for reporting misappropriation and did not relate to discriminatory actions. The very fact that Ms. Fang asked the Division on Civil Rights to investigate her claim that she was being discriminated against due to her national origin and gender was enough to trigger the new collateral estoppel standard announced by the Supreme Court in Winters.

Of course, in hindsight, there are probably many things that Ms. Fang could have done differently and better, considering that she represented herself pro se, but this case not only highlights the difficulties raised by the Winters case, but also highlights the systemic problems with New Jersey’s Division on Civil Rights. It is this writer’s opinion that no employee who is represented by counsel should ever file a claim with the Division on Civil Rights. First, there is no tolling provision at the DCR. The three years that the DCR took to render a decision in this case is pretty much the average time frame. Unfortunately, the Statute of Limitations for LAD is only two years. CEPA is one year. So, while the matter was sitting at the DCR, Ms. Fang’s statute of limitations ran on the LAD claim. Secondly, a Finding of No Probable Cause creates a complete disqualification of any further claim, subject to Appellate Division review. Third, as this case vividly demonstrates, it can act as a collateral estoppel. And fourth, the DCR is simply too underfunded to do an adequate job of investigation. Unless there is uncontroverted direct evidence or an admission of liability, it is virtually impossible to get a positive Finding.

The Appellate Division did not need to incorporate Winters into this analysis, and should have taken more care to get the facts right. In this case, the Appellate Division could have simply affirmed based upon CEPA’s waiver provision, N.J.S.A. 34:19-8 which forbids the litigation of CEPA retaliation if there are other retaliation claims brought under other laws. At the very end of the opinion, the Appellate Division mentions the waiver provision and holds that the motion judge “incorrectly alluded” to the waiver provision, although they approve of his logic. Instead, the Appellate Division relies upon the Winters decision, which was decided almost four years after the dismissal of this case.

In the final analysis, this case underscores the fact that collateral estoppel in New Jersey has been significantly widened, and employees must be aware that disciplinary hearings and other ancillary actions can foreclose future discrimination and retaliation claims.

Plaintiff’s counsel: Trial Court, pro se; Appellate Division: Herbert J. Tan, Esquire.

Defendants’ counsel: Jeffrey S. Chiesa, Attorney General; Melissa H. Raksa, A.A.G.; Jacqueline Augustine, D.A.G.; Eric M. Snyder, D.A.G.

Trial Court Judges: Wilbur Mathesius, J.S.C.; reconsideration motion – Douglas H. Hurd, J.S.C.

Appellate Division Judges: A.A. Rodriguez and Sabatino.