The New Jersey Supreme Court recently ruled that jury instruction must require the involvement of upper management in egregious conduct for an employer to be liable for punitive damages in cases under the New Jersey Conscientious Employee Protection Act.
In Longo v. Pleasure Productions, Inc. et al.,
plaintiff filed a CEPA claim, alleging that she was discharged
after reporting a complaint of sexual harassment to her supervisor.
The jury found her employer and one supervisor were liable for
economic loss and emotional distress damages. The court bifurcated
the issue of punitive damages.
At the punitive damages phase of the trial, plaintiff's counsel
argued to the jury that the conduct of any employee could be the
basis for a punitive damages award.
In the jury instruction, the judge explained that punitive damages
are awarded to "punish defendants who have acted in an
especially egregious or outrageous manner and to discourage the
defendants from engaging in similar misconduct in the future."
While the judge noted it is plaintiff's burden to prove this by
a clear and convincing standard, the judge failed to instruct the
jury that they must conclude that upper management was involved in
the egregious conduct under this standard. The instructions
similarly failed to define upper management.
Despite the employer's objections, the judge refused to
reinstruct the jury. The jury awarded plaintiff $500,000 in
punitive damages, which was upheld by the Appellate Division.
The Supreme Court, however, found the instruction to be
fundamentally flawed, which could "only be cured by a new
trial." At the new trial the jury instruction must provide an
upper management charge and must stress that findings must be made
under a clear and convincing standard.
This is a positive ruling for employers as the case emphasized the
high standard plaintiffs must meet to be awarded punitive
damages.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.