Labor and Employment


By: M. Karen Thompson

Once again, the New Jersey Appellate Division has made it more difficult for employers to dispose of employment lawsuits on motion prior to trial. In Entrot v. The BASF Corporation, 359 N.J.Super. 162 (App. Div. 2003), the court refused to dismiss plaintiff’s complaint alleging sexual harassment by her coworker, concluding that whether the coworker was, in fact, plaintiff’s supervisor was a jury question. Typically, the New Jersey Law Against Discrimination (“LAD”) imposes vicarious liability on an employer for the acts of a harassing coworker, provided the harasser is the supervisor of the complaining party. If the harasser is not a supervisor, then the employer who is unaware of the harassing conduct is not liable.

The standard indicia of supervisory status, such as the power to fire or demote, to influence compensation and to direct all job functions, are no longer enough to resolve the issue according to the court. Rather, the court would analyze whether the victim “reasonably perceived” the alleged harasser to have the power to adversely affect the victim’s working life.

Entrot is significant because it will encourage complainants to tailor their testimony to assert that they perceived the alleged harasser had a supervisory role, rather than having the court decide the case based on the purely objective criteria previously used. This will require more cases to be presented to the jury to determine whether the complainant’s belief was reasonable and credible.

Entrot dealt a second devastating blow to employers. It eviscerated a valuable affirmative defense created in two United States Supreme Court decisions, which had been applied in New Jersey. Specifically, that defense exonerates an employer from liability if the plaintiff failed to avail himself or herself of an effective anti-sexual harassment workplace policy. The Entrot court ruled that if the employee quit due to the harassing conduct of a supervisor, he or she would be deemed constructively discharged, and the defense would not be available to relieve the employer of vicarious liability.

In another significant development, the Appellate Division extended the protection of the LAD to independent contractors, who previously had been considered not entitled to the same protections granted to employees. In Rubin v. Chilton Memorial Hospital, 359 N.J. Super. 105 (App. Div. 2003), defendant hospital terminated the contracts of two doctors, which the doctors claimed was due to age discrimination. Notwithstanding the doctors’ status as independent contractors, the court ruled that the LAD protected them from discrimination under the provision prohibiting refusals to contract with persons based on a protected characteristic such as age, sex, race, national origin, etc. The federal Civil Rights Act does not have a similar provision.

Since the LAD now extends virtually the same protections to employees and independent contractors, employers should review and revise their anti-discrimination policies.

May 2003