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Epstein Becker Green Labor and EmploymentOn February 11, 2015, the New Jersey Supreme Court, in Aguas v. New Jersey, decided three important legal issues regarding employment discrimination claims under the New Jersey Law Against Discrimination (“LAD”).

First, the Court adopted the affirmative defense articulated by the Supreme Court of the United States in Burlington Industries v. Ellerth, 524 U.S. 742, 765 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775, 807-08 (1998) (“Ellerth/Faragher”), to claims alleging supervisory hostile work environment in violation of the LAD. Thus, the Court in Aguas ruled that, under the LAD:

[t]he employer in a hostile work environment sexual harassment case may assert as an affirmative defense that it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and “the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise,” provided that the employer has not taken an adverse tangible employment action against the plaintiff employee.

Second, with respect to LAD claims based on sexual harassment giving rise to a hostile work environment, the Court adopted the Equal Employment Opportunity Commission’s (“EEOC’s”) broad definition of who is a “supervisor.” The Court held that, under the LAD, “an allegedly harassing employee is the complainant’s supervisor if that employee had the authority to take or recommend tangible employment actions affecting the complaining employee, or to direct the complainant’s day-to-day activities in the workplace.”

Finally, the Court held that claims alleging entitlement to punitive damages should be assessed in accordance with New Jersey’s Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17 (“PDA”). That standard requires determining whether the “plaintiff has shown by clear and convincing evidence that the … [employer] committed ‘egregious conduct,’ and if so, whether she has presented clear and convincing evidence that ‘upper management’ either participated directly in sexual harassment, or showed ‘willful indifference.’”

The Court’s decision in Aguas, however, is less about offering guidance to litigants about burdens of proof, defenses, and exposure in LAD lawsuits alleging supervisory hostile work environment sexual harassment than about providing incentives to employers to establish and enforce policies and procedures to prevent harassment in the first place.

This focus explains the apparent inconsistency in the Court’s application of federal precedent in support of its decision. While the Court followed U.S. Supreme Court precedent in adopting the Ellerth/Faragher affirmative defense, at the same time it rejected the U.S. Supreme Court’s definition of “supervisor” articulated in Vance v. Ball State University, ____U.S. ____, 133 S. Ct. 2434, 2443, 186 L. Ed. 2d 565 (2013), in favor of the EEOC’s broader definition of the term set forth in U.S. Equal Emp’t Opportunity Comm’n, No. 915.002 Enforcement Guidance on Vicarious Liability for Unlawful  Harassment by Supervisors 3-5 (June 18, 1999).

The Court adopted the Ellerth/Faragher affirmative defense because “it furthers the LAD’s purpose of eliminating sexual harassment in the workplace by motivating employers to maintain effective anti-harassment policies and by encouraging employers to take prompt action against harassing supervisors in accordance with those policies.” By increasing the number of potential employees who will be deemed to be supervisors and whose behavior will be attributable to the employers, the Court has increased the number of employees to whom employers should provide anti-harassment and anti-discrimination training.  Further, by incorporating the PDA’s high threshold for punitive damages into the LAD, the Court has provided additional motivation for employers to take concrete steps to show management’s commitment to establishing and maintaining a harassment-free environment.

The Court’s decision in Aguas has essentially “pumped up the volume” regarding the need for New Jersey employers to be actively engaged in ongoing efforts to maintain a workplace free of discrimination. The guidance is not new, but the importance is heightened. Certainly, the primary goal for employers, as per the Court, is to prevent harassment in the first instance.  When confronted with a lawsuit, however, the next goal for employers is to obtain a favorable resolution. The Aguas decision, which reversed summary judgment that had been entered for the employer, makes plain that the more an employer has done to prevent harassment, the better its odds will be to obtain summary judgment and prevail if a claim is filed.

What Employers Should Do Now

Accordingly, to demonstrate an organizational commitment to preventing harassment in the workplace and efforts undertaken in support of that goal, employers should do the following:

  • Prepare a comprehensive written anti-harassment and anti-discrimination policy that is provided upon hire and re-distributed annually (with signed acknowledgments of receipt). 
  • Establish formal and informal internal complaint procedures.
  • Provide anti-harassment training for all employees upon hire, and periodically thereafter.
  • Provide management training to all employees who have supervisory responsibilities regarding their obligation to help maintain a harassment-free workplace.
  • Require executives and managers to maintain a presence in the workplace—i.e., have them walk around, look around, listen, set an example, and address problems immediately.
  • Provide a prompt and documented response to, and/or undertake an investigation of, all harassment complaints.
  • Take prompt remedial action, when appropriate.
  • Maintain an explicit non-retaliation policy.

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For more information about this Advisory, please contact:

Maxine H. Neuhauser
(973) 639-8269

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