Alan Schorr’s Employment Case of The Week ending April 5, 2013

Murdock v. Rutgers, New Jersey Superior Court, Essex County (Filed April 5, 2013)

It is not often that a New Jersey employment case captures international headlines, so the wrongful termination lawsuit filed on April 5, 2013 by ex-Rutgers assistant basketball coach Eric Murdock is naturally the Case of the Week. Murdock alleges in his seven count complaint that he repeatedly complained about the abuse and mistreatment of Rutgers basketball players by their head coach, Michael Rice. Murdock alleges in Count One for violation of the New Jersey Conscientious Employee Protection Act (CEPA) that Murdock was terminated in retaliation for complaining and objecting to Rice’s abuse of his students, which he describes as “assault (both physical and verbal), battery, harassment, intimidation, bullying, defamation and other unlawful conduct.”

Recently, a media firestorm erupted as video of Rice repeatedly verbally and physically assaulting players was released by ESPN. Since that time, Coach Rice and athletic director Timothy Pernetti have been fired by Rutgers, and many are calling for the dismissal of school president Robert Barchi. Each of those administrators now finds themselves as individual defendants in this lawsuit.

Unfortunately, when a lawsuit is litigated in the media, strange things begin to happen. Everything becomes magnified and sensationalized. I have previously reviewed two other cases this year where the media has played a significant part in the manner in which the lawsuit played. See my prior posts for McQueary v. Penn State and Clay Corporation v. Colter. It is difficult to discern here whether the attorneys are manipulating the media or vice versa, but likely there is a combination of both. The latest headlines as of Sunday, April 7, 2013 were that the FBI are investigating whether the attorney’s demand letter constituted an extortion attempt. I do not intend to join the media frenzy. I will, however, analyze the Complaint and demand letter.

Murdock’s Complaint contains seven counts, but really the only Counts that have any legs are his CEPA claim and common law (Pierce) wrongful termination claims. The essence of these claims is that Murdock complained that the coach was assaulting, harassing and bullying his players, and that he was terminated in retaliation for those complaints. Rutgers is claiming that the termination was simply a matter of non-contract renewal, but Murdock’s contract had been renewed in the past, and so far they have offered no other reason for the termination. There is a scantily-pled Law Against Discrimination claim, but the Complaint really alleges no facts that sound like discrimination, nor does the Complaint identify the basis for the discrimination claim, although reading between the lines, it is possible that a claim could be made that Murdock was retaliated against for complaining about homophobic slurs made by Rice. The remaining counts are Breach of Contract and Duty of Good Faith and Fair Dealing; Negligence, and Civil Conspiracy.

The media frenzy has touched off a finger-pointing campaign. Pernetti blamed upper management for not permitting him to fire Rice. Upper management is blaming their attorneys, Connell Foley, for giving them poor advice. Pernetti was fired and awarded a seven figure settlement. In the meantime, newspapers are reporting, based solely upon anonymous hearsay linked to unidentified University officials, that the FBI is investigating Murdock and his attorney for extortion, with the sole piece of evidence being a routine demand letter sent by Murdock’s attorney to Rutgers’ attorney seeking to settle the matter out of Court. The attorney’s big mistake was that he included in his letter a monetary demand of $950,000, and that has now been sensationalized by the press. I strongly recommend that, except in the rare case where damages are liquidated, a demand letter should never include a monetary demand. A copy of Murdock’s demand letter can be viewed here.

Frankly, if the FBI is investigating extortion for a lawyer’s demand, then the legal profession has much to be very concerned about. How else can matters be settled other than if not by attorneys writing to each other in attempts to amicably resolve lawsuits without resorting to the Courts? All Murdock’s attorney said was that we have a strong case against you and if you do not properly compensate us, we will file a civil suit and ask a jury and judge to order you to properly compensate us. That is not extortion, that is lawyering, and it is, and should be, entitled to absolute immunity by the litigation privilege.

No New Jersey appellate court has ever addressed whether the litigation privilege extends absolute immunity to pre-litigation demand letters, but there is a published Chancery Division case, New Jersey Sports Productions, Inc. v. Bobby Bostick Promotions, 405 N.J.Super. 173 (Ch. Div. 2007); and two published Federal cases, Rickenbach v. Wells Fargo Bank, N.A., 635 F.Supp.2d 389 (D.N.J. 2009); Waterloov Gutter Protection Sys. Co., Inc. v. Absolute Gutter, 64 F.Supp.2d 398, 415 (D.N.J.1999), that hold that pre-litigation letters are entitled to absolute immunity. While demand letters are not extortion and they are privileged, it is still a very bad idea to overtly demand a specific amount, because it looks like a threat and feels like a threat. If the purpose of the letter is to encourage settlement, demanding large monetary sums is not the best way to foster cooperation.

I do need to mention the most remarkable part of this entire story. According to the Complaint, the videos of Coach Rice that have been released to the press were obtained by Murdock’s lawyer with a simple request made under the New Jersey Open Public Records Act (OPRA). Apparently, the attorney sent an OPRA request for video of the basketball team practicing (after Murdock had already complained and been fired), and the University simply sent the videos. This should be a great lesson as an alternate discovery device against public entities.

This is going to be a fascinating case, and we will periodically update.

Plaintiff’s counsel: Barry A. Kozyra, Raj Gadhog, Kozyra & Hartz, LLC.

Defendants’ pre-litigation counsel: John K. Bennet, Jackson Lewis, LLP; Connell Foley LLP (on the investigation).