Opinion
DOCKET NO. A-2927-13T4
02-17-2015
ALFIE DEMOSS, Plaintiff-Appellant, v. THE ARC OF SOMERSET COUNTY and LAUREN PANARELLA, Defendants-Respondents.
Eldridge Hawkins, attorney for appellant. Drinker Biddle & Reath LLP, attorneys for respondents (Lawrence J. Del Rossi and John A. Ridley, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher, Nugent and Manahan. On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2359-12. Eldridge Hawkins, attorney for appellant. Drinker Biddle & Reath LLP, attorneys for respondents (Lawrence J. Del Rossi and John A. Ridley, on the brief). PER CURIAM
Plaintiff Alfie DeMoss, an African-American woman, who was in her mid-fifties at the times relevant to this case, appeals, among other things, the dismissal of her age and race discrimination claims, contending her employer replaced her with a younger, white woman. We find her claims lack merit and affirm.
The Arc of Somerset County (ASC), as the record reveals, is a non-profit organization that provides support and services for developmentally-disabled individuals and their families. ASC is overseen by a community-based volunteer board, which includes Executive Director Lauren Panarella, Director of Human Resources Toni Gamble, Director of Finance James Richart, and Board President Edmond Brown. ASC's primary source of funding is New Jersey's Division of Developmental Disabilities (the DDD), but ASC also depends on external funding sources by way of grants and private donations. To this end, the ASC relies on its Development Department for overseeing grant applications, coordinating community volunteers, cultivating donor relationships, publishing a newsletter, and organizing fundraising events. Because the Development Department provides no direct services to disabled individuals, it is not allocated any DDD funding and is, therefore, self-funded and, according to Panarella, expected "to generate the revenue to cover all of [its] expenses."
In July 2007, the ASC's then-Director of Development, Kathleen Hofer, hired Tara Abbott — a white woman then twenty-two-years old — as a full-time "Development Coordinator." Hofer thereafter resigned, leaving a vacancy in the Director of Development position, and Abbott was promoted to Assistant Director of Development, a full-time, $35,000 per annum position.
In September 2007, plaintiff, then fifty-four years old, was interviewed by Panarella and Richart, who recommended she be hired as Director of Development at a starting salary of $72,000. Plaintiff was hired, and her salary was increased to $78,000 six months later.
Panarella was plaintiff's direct supervisor and actively involved in plaintiff's operation and oversight of the Development Department. In Spring 2008, Panarella approved plaintiff's request to hire Camille Singleton, who is African-American, as a full-time Development Coordinator with an annual salary of approximately $27,000, bringing the Development Department to three full-time employees.
Before long, however, as a result of the nationwide economic downturn, ASC experienced financial stress, declining grants and volunteer participation, and decreased cash flow with increased costs and expenses. Several cost-cutting measures were implemented in fiscal years 2009 and 2010, including ASC's reduction in the number of newsletters published and the allocation of some of Singleton's time and budget to a different department. The Department of Development operated at a deficit over this period, with the salary and fringe benefit expenses of its members exceeding its revenue.
ASC's fiscal years begin on July 1 and end on June 30.
Specifically, in Summer 2009, Singleton was assigned to work two days a week in the Family Support Department, while remaining in Development three days a week.
Plaintiff was repeatedly notified of the Department's operational deficit in 2009 and 2010 through performance evaluations and in meetings and follow-up communications with Panarella. For example, in April 2009, Panarella informed plaintiff she needed to operate her department on at least a "revenue neutral" basis in an effort to reduce its operating deficit from $52,000 to zero. By mid-May 2010, however, plaintiff's department had a projected budget deficit for fiscal year 2011 of approximately $82,000.
On May 24, 2010, the board considered ASC's budget by utilizing projections for fiscal year 2011 both with and without the termination of the Director position held by plaintiff. That is, with the elimination of plaintiff's position and salary, an operating surplus of approximately $2,000 was forecasted, while a deficit of approximately $82,000 was anticipated if plaintiff's position went undisturbed. Consequently, on May 27, 2010, Panarella and Gamble advised plaintiff that, due to budgetary constraints, her position would be terminated effective the end of ASC's 2010 fiscal year. During the six weeks prior to the termination's effective date, plaintiff received full pay and benefits and was permitted to pursue other employment opportunities. Her last day of employment was July 9, 2010.
Within a few weeks, plaintiff secured a position with an insurance agency with an annual 2011 salary of approximately $62,000 (excluding bonuses) and benefits comparable to those she received at ASC.
In the wake of plaintiff's departure, Panarella and Abbott assumed some of plaintiff's responsibilities, including grant writing, newsletter publishing, and donor outreach efforts. Abbott's duties increased and she was promoted to the "modified" position of Assistant Director of Development, which included an upward salary adjustment to $42,636.31. Singleton's hours and salary, however, were reduced in a "continu[ing] effort to try to reduce the deficit in the Development Department." The Department operated at a surplus during fiscal year 2011.
In January 2011, Singleton left ASC.
In December 2010, plaintiff filed a complaint with the United States Equal Employment Opportunity Commission, alleging race and age discrimination on the part of ASC and Panarella. After reviewing her submission, the EEOC declined to pursue plaintiff's claim and issued a "right to sue letter" dated July 29, 2011.
On April 3, 2012, plaintiff filed an eight-count complaint against ASC and Panarella, asserting: (1) hostile work environment under New Jersey's Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -49; (2) race and age discrimination prohibited by NJLAD; (3) violation of N.J.S.A. 10:1-1; (4) violation of the New Jersey Civil Rights Act, N.J.S.A. 10:6-2; (5) violation of N.J.S.A. 10:5-12(a), (c)-(e); (6) breach of both an oral contract and a Woolley claim based on ASC's Employee Handbook; (7) breach of the implied covenant of good faith and fair dealing; and (8) tortious interference.
Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, modified, 101 N.J. 10 (1985).
Defendants moved for dismissal. The motion judge: granted Panarella's motion to dismiss without prejudice counts five and eight; granted ASC's motion to dismiss with prejudice counts three and four; and granted ASC's motion to dismiss without prejudice counts one, five (in part), and eight. The judge denied ASC's motion to dismiss counts six and seven.
After the completion of extensive discovery proceedings, defendants moved for summary judgment. A different judge granted the motion in part, dismissing with prejudice counts two, five, six, seven and eight. The judge also dismissed plaintiff's demand for "punitive damages, emotional distress damages, consequential and/or [sic] special damages, including attorneys' fees." And all claims previously dismissed against Panarella without prejudice were dismissed with prejudice. The only claim that survived was plaintiff's claim of an oral employment contract as alleged in counts six and seven.
The matter was then assigned to another judge for a jury trial on plaintiff's oral employment contract under counts six and seven. On January 30, 2014, a jury returned a unanimous verdict in favor of defendants.
Plaintiff appeals, seeking reversal of all aspects of the trial court's orders that granted dismissal in 2012, that granted summary judgment in 2013 and that denied reconsideration of summary judgment in 2014. Specifically, plaintiff presents the following arguments:
I. PLAINTIFF DID IN FACT PLEAD FACTS SUFFIC[IE]NT TO PLEAD CA[US]ES OF ACTIONS TO WITHSTAND THE [RULE] 4:6-2 AND [RULE] 4:46-2 RULINGS.
II. THE TRIAL COURT ERRED IN ITS GRANTING OF DISMISSAL OF JUNE 28, 2012.
A. Plaintiff has successfully pleaded a Wool[l]ey claim.
B. Plaintiff['s] complaint sufficiently pleads Tort[i]ous Interference with Economic Advantage.
C. All defendants may be guilty of aiding and abetting and should not have been dismissed on either the [Rule] 4:6-2 or the [Rule] 4:46-2 motions.
D. Plaintiff does demonstrate breach of implied covenant of good faith and fair dealing.
III. THE TRIAL JUDGE WRONGFULLY DENIED TO PLAINTIFF ALL DAMAG[ES] OTHER THAN THE LIMITED ORAL CONTRACTUAL LOSS OF INCOME.
A. Plaintiff is entitled to a punitive and compensatory damage determination by the jury under NJLAD.
B. NJLAD Provides For Pain, Suffering And Humiliation, Past And Future, Loss of Income Which Was Improvidently Denied To Plaintiff By the Trial Court.
IV. [] DEFENDANTS['] MOTIONS FOR SUMMARY JUDG[]MENT SHOULD HAVE BEEN DENIED AS TO PLAINTIFF'S CLAIMS BECAUSE ISSUES OF MATERIAL FACTS AND CREDIBILITY ISSUES EXIST AS TO DEFENDANTS' SUBMITTED FACTS OR THEY ARE EXTREME[]LY LOPSIDED IN PLAINTIFF'S FAVOR.
V. DeMOSS' RACE AND DISCRIMINATION CLAIMS UNDER THE NJLAD SURVIVE AS A MATTER OF LAW.
A. DeMoss does establish the fourth prong of a prima facie case of age and race discrimination under the NJLAD.
B. [ASC's] "Legitimate nondiscrim-inatory reasons for eliminating DeMoss' position and high salary" were pretextual
We find insufficient merit in these arguments to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), and write further only to explain our disposition of the arguments raised in plaintiff's Point V.C. DeMoss Establishes Pretext.
VI. DEMOSS ESTABLISHES HER CLAIM FOR RETALIATION UNDER THE NJLAD (COUNT 5).
VII. DEMOSS' CONTRACT CLAIMS MUST NOT BE DISMISSED.
VIII. DEMOSS' BREACH OF IMPLIED COVENANT AND FAIR DEALING MUST NOT BE DISMISSED (COUNT 7).
IX. DEMOSS' CLAIMS SHOULD NOT BE DISMISSE[D] BECAUSE SHE FAILED TO AVAIL HERSELF OF GRIEVANCE PROCEDURES IN THE HANDBOOK.
X. PLAINTIFF WAS ENTITLED TO A JURY TRIAL ON THE ISSUES OF NJLAD VIOLATIONS.
XII. DEMOSS'S RACE DISCRIMINATION CLAIMS UNDER THE NJLAD SURVIVE AS A MATTER OF LAW.
A. DeMoss did establish the fourth prong of a prima facie case of age and race discrimination under the NJLAD.
XIII. THIS COURT MUST REVERSE THE TRIAL[ ] [COURT'S] RULING AND ENTER JUDG[]MENT AGAINST DEFENDANTS AND IN FAVOR OF PLAINTIFF IN ORDER TO AVOID A MISCARRIAGE OR DENIAL OF JUSTICE TO PLAINTIFF.
It is noted in plaintiff's table of contents that Point XI was intentionally deleted.
New Jersey courts rely on the burden-shifting test developed in McDonnell Douglas Corp. v. Green, 411 U.S. 7 92, 802, 93 S. Ct. 1817, 1824, 36 L. Ed. 2d 668, 677-78 (1973), and its progeny, in assessing a claim based on age or race discrimination. See Zive v. Stanley Roberts, Inc., 182 N.J. 436, 447 (2005); Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 595-96 (1988). Specifically, to establish a prima facie case of age or race discrimination in the termination of employment, a plaintiff must prove: (1) membership in a protected class; (2) actual performance prior to termination; (3) termination from employment; and (4) the employer's pursuit of someone to perform the same work after the plaintiff's termination. Zive, supra, 182 N.J. at 450, 454.
Once a prima facie case has been established, the burden of production shifts to the employer to rebut the presumption of discrimination by articulating a legitimate, nondiscriminatory reason for the challenged employment action. Id. at 449. In the final stage, "the burden of production shifts back to the employee to prove by a preponderance of the evidence that the reason articulated by the employer was merely a pretext for discrimination and not the true reason for the employment decision." Ibid. In this last respect, to survive a motion for summary judgment, the plaintiff must produce "direct or circumstantial [evidence], from which a factfinder could reasonably either (1) disbelieve the employer's articulated legitimate reasons; or (2) believe that an invidious discriminatory reason was more likely than not a motivating or determinative cause of the employer's action." Romano v. Brown & Williamson Tobacco Corp., 2 84 N.J. Super. 543, 551 (App. Div. 1995) (quoting Fuentes v. Perskie, 32 F.3d 759, 764-65 (3d Cir. 1994)). "Although the burden of production shifts throughout the process, the employee at all phases retains the burden of proof that the adverse employment action was caused by purposeful or intentional discrimination." Bergen Commercial Bank v. Sisler, 157 N.J. 188, 211 (1999).
Here, plaintiff satisfied the first prong of the McDonnell Douglas test as she was a member of a protected class both as to race and age; she is African-American and was, at the time of her termination, fifty-seven-years old. "All that is necessary" to meet the second prong is "evidence showing that [plaintiff] was actually performing the job prior to the termination." Zive, supra, 182 N.J. at 454. This "slight burden" was also established. Id. at 455. And, as for prong three, the parties do not dispute plaintiff's employment was terminated. Thus, plaintiff provided sufficient evidence to meet her burden on the first three prongs.
As for prong four, plaintiff contends she was replaced by Abbott, a white female in her mid-twenties. The question here largely rests on whether Abbott actually "replaced" plaintiff. Plaintiff provided a document purporting to establish that Abbott received a large salary increase following plaintiff's termination to suggest she was replaced by Abbott. This document — an offer letter confirming Abbott's "acceptance [of] the modified Position of Assistant Director of Development" — states that Abbott "will continue to work 40 hours per week," but her "salary will be adjusted upward to $42,636.31 annually," as a result of the "additional duties" of her new position. Abbott's new position began July 1, 2010, at the time of the commencement of a new fiscal year and one week before the actual date of plaintiff's termination.
The starting salary for this "modified" position was approximately $7,600 more than the starting salary for Abbott's previous position, which she began in October 2007. This salary was, however, only approximately $2,4 00 more than Abbott's reported income on her 2009 W-2 form.
In arguing this document proves Abbott replaced her, plaintiff refers to a written annotation, which states "30 hrs/biweekly $1,639.86, annual $66,703.00, offer 04/10/11." This ambiguous annotation, which defendants acknowledge "was written on a yellow post-it and placed on the June 22, 2010 letter to Ms. Abbott," was explained by way of the following argument:
[t]he handwritten notations on the post-it are from Marge Kukla, an [ASC] employee in Human Resources. Apparently, she was attempting to do some kind of calculation that did not apply to Ms. Abbott's situation as either the Assistant Director of Development in 2010 or the Director of Fundraising and Public Relations in 2011 to the present.According to defendants, the "letter did not contain the post-it when Ms. Abbott signed it on or about June 29, 2010 [,] [and] [s]he was unaware of the post-it or its contents." Abbott's lack of knowledge of this post-it note is supported by her deposition, during which she testified that her annual salary, as of May 14, 2013, was approximately $4 3,000.
Whatever the meaning of the written annotation, the trial judge determined that Abbott's W-2 forms, from 2007 through 2012, conclusively established plaintiff's salary for the disputed period. As the judge said in response to the argument about the annotation: "[O]n the other hand what I have are the W-2s that show that Ms. Abbott was constantly making forty-two to forty-three thousand dollars a year for . . . quite a number of years . . . . That's what I do have. So those are the facts as they exist," as opposed to plaintiff's suppositions and speculation about the post-it note's meaning. By way of this analysis, the judge dismissed plaintiff's NJLAD claims.
We conclude that the judge properly analyzed the parties' contentions, finding the post-it note speculation, which was belied by the hard facts established by the W-2 forms, demonstrated the lack of substance to plaintiff's contentions on the fourth prong.
Moreover, even if plaintiff established a prima facie showing of age or race discrimination under the four-prong McDonnell Douglas test, the motion judge properly found that the claim could not stand further scrutiny. The judge recognized that ASC articulated a legitimate, nondiscriminatory reason for eliminating plaintiff's position and high salary and, thus, concluded that ASC had "absolutely legitimate business reasons" for terminating plaintiff in light of what "both parties admit was going on in the economy." Specifically the motion judge found from the undisputed evidence that plaintiff's department was, at best, "breaking even at times and it was going from losing money to breaking even." This circumstance has been recognized as a legitimate reason for termination. See, e.g., Young v. Hobart W. Group, 385 N.J. Super. 448, 460 (App. Div. 2005) (holding plaintiff failed to establish claim for age discrimination where her position was eliminated as "a cost reduction measure in response to an economic downturn"); Linn v. Beneficial Commercial Corp., 22 6 N.J. Super. 74, 80 (App. Div. 1988) (holding "action for wrongful discharge does not generally lie for one whose loss of work is actuated by elimination of the job itself due to legitimate economic or business reasons, and not as a bad faith pretext to arbitrarily terminate").
In addition, the motion judge determined that plaintiff could not demonstrate by a preponderance of the evidence the reasons advanced for her termination were pretextual. As the judge correctly concluded, plaintiff "utterly failed" to submit competent evidence that either cast doubt on the ASC's proffered legitimate reason for terminating plaintiff's position or would allow a factfinder to infer that discrimination was "more likely than not a motivating or determinative cause" of the termination decision. Romano, supra, 284 N.J. Super. at 551 (quoting Fuentes, supra, 32 F.3d at 764).
In arriving at this determination, the motion judge correctly seized on the undisputed fact that Panarella both hired and fired plaintiff, suggesting a "total lack of discriminatory intent or purpose at any point in this process." He considered this fact "telling" as "people don't generally hire people for the sole purpose of discriminating against them from the get-go, which is what . . . is alleged here, and then firing them." This lack of discriminatory animus or conduct was further buttressed by plaintiff's own admission at her deposition that her only evidence of race or age discrimination was that Abbott was under thirty years old and white.
We note a different approach in age discrimination cases in comparing the plaintiff's age with the age of retained employees. That is, the mere fact that Abbott was younger than plaintiff does not carry the same significance in an age discrimination case as the fact that they are of different races in a race discrimination case. As the Supreme Court has recognized "there can be no greater inference of age discrimination (as opposed to '40 or over' discrimination) when a 40-year-old is replaced by a 39-year-old than when a 56-year-old is replaced by a 40-year-old." O'Connor v. Consol. Coin Caterers Corp., 517 U.S. 308, 312, 116 S. Ct. 1307, 1310, 134 L. Ed. 2d 433, 438 (1996) (quoted with approval in Sisler, supra, 157 N.J. at 212)).
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In addition, the trial judge correctly rejected plaintiff's argument that discrimination was a motivating factor in her termination based on the reallocation of Singleton's hours to two different departments in Summer 2009. Specifically, on the basis of budgetary concerns within the Development Department, Singleton was assigned to work in the Family Support Department for two days a week and remained in Development three days a week. Plaintiff acknowledged the efficacy of this allocation in her deposition testimony where she agreed the shift in Singleton's hours was a strategy to "mitigate the short fall" in the Development Department while "supporting [Singleton's] employment position so that she would not lose partial salary or benefits."
In the final analysis, we agree with the motion judge that the claims of discrimination were based only on speculation and even if it could be said that all four prongs of the McDonnell Douglas test were demonstrated, defendants articulated a legitimate, non-discriminatory reason for plaintiff's termination. In contrast, plaintiff failed to sustain her burden of pretext by producing evidence that discrimination was more likely than not a motive or determining cause for her discharge or by discrediting the reason given by her employer. El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 173 (App. Div. 2005). As we have observed, the burden is not "insignificant." Id. at 174.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION