SHANIQUE WELLS VS. AAA NORTH JERSEY (L-3338-16, PASSAIC COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2885-18T2
SHANIQUE WELLS,
Plaintiff-Appellant,
v.
AAA NORTH JERSEY,
DAVID HUGHES, President
in his official capacity and
individually, and CHARLES
SHOTMEYER, Chairman
of the Board,
Defendants-Respondents.
___________________________
Submitted March 23, 2020 – Decided July 8, 2020
Before Judges Sabatino, Sumners and Geiger.
On appeal from the Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-3338-16.
Hunt, Hamlin & Ridley, attorneys for appellant (Ronald
C. Hunt, of counsel and on the briefs).
DeCotiis, FitzPatrick, Cole & Giblin, LLP, attorneys
for respondents (Susan E. Volkert, of counsel and on
the brief; Gregory J. Hazley, on the brief).
PER CURIAM
Plaintiff Shanique Wells, formerly employed by AAA North Jersey
(AAANJ), filed suit alleging claims under the Law Against Discrimination
(LAD), N.J.S.A. 10:5-1 to -49, and the Conscientious Employee Protection Act
(CEPA), N.J.S.A. 34:19-1 to -14, against AAANJ, its President David Hughes,
and the Chairman of its Board of Directors Charles Shotmeyer. She appeals the
Law Division's November 28, 2018 order granting defendants summary
judgment dismissal of her LAD complaint and denying in camera review of
documents prepared by defendants' counsel, and its January 23, 2019 order
denying her motion for reconsideration. 1 Having reviewed the record in light of
the governing legal principles, we reverse and remand in part.
I.
We summarize the following facts from the record, viewing "the facts in
the light most favorable to [plaintiff,] the non-moving party." Globe Motor Co.
v. Igdalev, 225 N.J. 469, 479 (2016) (citing R. 4:46-2(c)).
1
Wells does not appeal summary judgment dismissal of her CEPA claim; thus,
we will not discuss the facts related to the claim, nor the judge's disposition of
the claim.
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2
A. Sexual Harassment Allegations
Wells was hired as a marketing manager at AAANJ in November 2013.
At that time, Hughes was one of several Vice Presidents of the company and a
member of its Board of Directors, and Shotmeyer was the Chairman of the Board
of Directors. Wells was directly supervised by James Dugan, also a company
Vice President and a member of its Board of Directors.
Wells alleges that soon after she was hired, she was subjected to
inappropriate, sexually lewd behavior by Hughes. In anticipation of her going
to a national AAA meeting, Wells claims Hughes asked her if she was going to
meet with a woman named L.C.2 Wells said she was, and alleges Hughes told
her to "make sure [to] check out [L.C.'s] rack. She has a really nice rack[.]"
When Wells returned from the meeting, she contends Hughes asked her if she
met with L.C. and if she "check[ed] out [L.C.'s] rack, and what [she] thought of
it." Wells stated she replied, "I know we don't know each other very well, but I
don't do this at work. This is not what I do."
Wells stated she subsequently notified Dugan and L.C. of Hughes'
remarks. Dugan allegedly told her to ignore Hughes because she did not have
2
We use initials to protect the privacy of the alleged subject of sexually lewd
comments.
A-2885-18T2
3
to report to Hughes and that he would serve as a buffer between them. Wells
also learned from Dugan that L.C. had filed a complaint about Hughes' behavior
in the past and L.C. was advised to no longer work directly with Hughes. Wells
did not, at that time, file a complaint with AAANJ's Human Resources
Department (HR).
According to Wells, the next incident took place around a year later, in
November 2014, when she went to Hughes' office to remind him she was waiting
for some information from him. She alleged Hughes showed her a picture of a
bikini-clad woman on his computer and told her to "check her rack out,"
declaring "that's a nice set." He also asked her how she thought she compared
with the woman. Wells contends she again complained to Dugan, telling him:
I'm not trying to -- I don't want to run to HR every time
something is said to me that's inappropriate, because
that's not who I am. I've never done it, I don't want to
do it, but this dynamic has got to change, because I
don't want to feel like every time I'm alone with -- he's
going to say something or make me feel uncomfortable,
as he continues to make me feel.
Wells stated Dugan replied he would "take care of it, and [she] believed him."
About three months later, in February 2015, Dugan emailed his concerns
about Hughes to Shotmeyer in light of rumors that AAANJ's president was going
to be forced out, Hughes was going to become president, and presumably
A-2885-18T2
4
Dugan's own job may be in jeopardy. The email criticized Hughes' judgment,
business decisions, and possible conflicts of interest, but did not report
accusations of sexual harassment by employees against Hughes. In March, the
rumors bore truth, as Hughes became President of AAANJ.
In May, Wells claimed Hughes' sexually lewd behavior happened again
when:
[They] were discussing a membership thermometer that
[Hughes] asked our department to make so that we
could see our progress toward our membership goal for
the year. I presented him one -- with one earlier that he
wasn't satisfied with. So, [he] said, "I'm going to come
and I'll show you what I'm talking about."
....
He came to my office and presented me with two
pictures.
....
The first one was of a thermometer. Then he took a
second picture out and he said, "[w]hen I originally
started to draw this, it started to look like something
else." And there was what was seemingly a penis
ejaculating. And then [he] said, "[t]his guy really
reached his goal, if you know what I mean." And he
laughed.
A-2885-18T2
5
Wells stated she balled the picture up and threw it in a garbage can. She later
retrieved it and presented it to Dugan, telling him she couldn't "keep doing this."
Dugan told her he would "take care of it."
On July 1, Wells was promoted to Director of Marketing. Later that same
month, she contended Hughes inappropriately felt up her leg when the two were
momentarily talking alone in a breakroom. Wells stated the next morning she
reported the incident as well as the penis drawing incident to Kathy D'Amico,
AAANJ's HR Manager. Wells alleges she was told HR could not do anything
about Hughes' behavior because HR reported to him. Dugan also discussed an
incident where Hughes touched Wells' leg, stating he was present, but he
couldn't recall where the incident took place.3 He believed Wells probably
informally complained about the incident without filing a formal complaint.
Wells contended another incident took place on July 16. She was
conducting a meeting with two other employees while sitting on a folding table
facing the door when Hughes walked into the room asking "[i]s that an invite[]"
while raising an eyebrow and making a thrusting motion with his pelvis. Wells
3
In her deposition, however, Wells stated nobody else was present during the
incident.
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6
maintains she jumped off the table and promptly adjourned the meeting. Dugan
acknowledged Wells told him about this incident and he told her to document it.
A week later, on July 22, Wells stated she advised D'Amico and her
assistant about the many instances that Hughes sexually harassed her. D'Amico,
Wells recalled, reiterated that HR had no authority to address her complaints
against Hughes, suggesting there was nothing HR could do about his behavior.
B. Reassignment/Resignation
Sometime in April 2016, Wells claims she advised Dugan that Hughes
told her he cosigned a student loan for the daughter of an AAANJ board member.
Wells thought this was inappropriate and possibly contrary to the company's
conflicts of interest policy. Dugan, agreeing with her, advised Shotmeyer of the
situation.
When Wells was later confronted in her office by an upset Hughes who
threatened to "write [her] up for missing an e-mail," she informed Dugan.
Dugan, according to Wells, advised her the confrontation was caused "because
the matter of a student loan was either going to be discussed or had been
discussed with the board, and he's really pissed off at you and at me." However,
there is no official indication if the AAANJ Board of Directors addressed the
allegation or determined whether Hughes violated company policy.
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In May, Wells contended she made a complaint against a co-worker, Jim
Pereira. She explained:
Pereira was told through whatever means . . . that they
were demoting him and making me the vice-president
of marketing and the branches, basically phasing him
out as they had done with a few other managers. He
became very, very upset about that despite . . . Dugan
and myself telling him . . . it's not true. . . . As a result
our dynamic shifted considerably. I don't know what
happened other than that, but our dynamic shifted
considerably, and it became a situation where we just
had trouble working together. We were in meetings
where [Hughes] had to literally tell him he had to
behave professionally towards me because he was very
nasty to me. It's documented. It turned into a very
nasty situation, because it became the tenured legacy
employees versus the new employees, and that was the
environment.
After Wells was confronted by Hughes about missing an e-mail, she
claimed she was placed under the supervision of Pereira as retaliation for
reporting Hughes' co-signing of the student loan. In a June 8 email to Hughes,
Wells sought clarification of any changes to her role and the impact on her
ability to work from home, which was a condition upon which she accepted
employment with the company. That same day, she also complained about the
reassignment in an email to Shotmeyer; expressing her concern she would be
required to report to Pereira, who is "historically combative and hostile towards"
her and is "routinely unprofessional." In an email to Wells the next day, Hughes
A-2885-18T2
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informed her there would be no change in her role, but as far as her working
remotely, he would need to determine if there was any such agreement with her
old supervisors, including Dugan, to work from home, and he would discuss the
matter with her when she returned.
Wells never reported to Pereira. On June 10, she gave notice she was
taking a leave of absence, retroactive to June 7, due to a serious health condition.
Over a month later, her counsel notified Shotmeyer she was anticipating filing
a lawsuit due to the hostile work environment created by Hughes' sexually lewd
conduct and his retaliation to her complaints regarding his conduct. On
November 25, Wells resigned from AAANJ.
After Wells notified Shotmeyer she was planning to file suit, AAANJ's
counsel interviewed Dugan, asking him if he believed from his sexual
harassment training that Hughes had sexually harassed plaintiff. 4 Dugan
responded:
I'm not sure I don't know – part of the reason I hesitate
is because I'm foreseeing something else happening to
me where I'm not going to have a job now because I
again spoke up against [Hughes] so it gives me some
pause to be honest with you in three weeks away I'm
4
The interview was apparently surreptitiously recorded by Dugan and provided
to plaintiff’s counsel after Dugan was served with a subpoena.
A-2885-18T2
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having another baby and I've already had enough I'm
not interested in losing my job now.
....
It's I mean I don't know.
....
I'm hesitant to answer.
Dugan’s employment at AAANJ eventually ended; the record does not
indicate when or why. 5
C. AAANJ'S Investigation
In September 2016, the same month Wells filed her lawsuit, AAANJ's
counsel investigated her allegations. Dugan was interviewed regarding his
knowledge about Wells' complaints, and he acknowledged knowing about the
penis drawing incident but was not sure when it happened. He claimed he
advised Wells to document her complaint in a formal memo, but she did not do
5
On December 6, 2017, Dugan filed a five-count complaint in the Law Division
against defendants alleging claims for hostile work environment, retaliation,
failure to accommodate, and aiding and abetting under the LAD, and intentional
infliction of emotional distress. The complaint was removed to the District
Court of New Jersey, but later remanded back to the Law Division. After
initially ordering Dugan's complaint and Wells' complaint be consolidated if it
was sent back to state court, the trial judge reconsidered his order following the
remand and did not consolidate the complaints.
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so. He said he reported the incident to D'Amico, who told him there was nothing
she could do because HR reported to Hughes in his capacity as company
President.
Dugan stated he was asked by Shotmeyer if he knew anything about the
concerns regarding Hughes' behavior towards women in the office because
Hughes had propositioned a woman contractor with the company to "go to his
place." Dugan said he told Shotmeyer about the incidents regarding L.C. and
the penis drawing.
II.
On September 22, 2016, Wells filed a three-count complaint against
defendants alleging gender/sexual harassment and sexual discrimination in
violation of the LAD, and retaliation in violation of the CEPA.
On January 12, 2018, Wells moved for an order granting leave of court
"to propound interrogatories outside of Forms A, B, and C . . . in a manner
consistent with the interrogatories propounded by the [d]efendants an d
responded to by . . . [her]." In her merits brief, Wells contends she "requested
the [p]roduction of [d]ocuments from . . . [d]efendants which included any
documents or statements made by any witnesses to the alleged harassment."
A-2885-18T2
11
Defendants responded to Wells' request for documents with general
objections and limitations, noting that any documents they had were privileged,
and "following a thorough review by outside legal counsel for . . . AAA[NJ], . .
. which was conducted in anticipation of litigation . . . it was concluded that the
allegations made by [Wells] were entirely false."
Despite Wells' request to extend discovery ninety days, discovery ended
on July 31 and her counsel still sought responses to incomplete discovery. Wells
specifically sought defendants' counsel's investigative materials to determine
whether the company breached its duty to perform an adequate investigation.
Defendants' counsel advised she would not be responding to discovery requests
because discovery had ended, and investigation documents were the work of
outside counsel hired in anticipation of defending against Wells' lawsuit.
With trial scheduled for October 22, defendants moved for summary
judgment on August 24. The trial date was adjourned pending the Civil
Presiding Judge's ruling on Dugan's motion to consolidate his and Wells'
complaints. On July 27, Wells submitted a letter to the trial judge requesting
the discovery end date be extended by ninety days if the court decided to
consolidate her complaint with Dugan's complaint against AANJ, pursuant to its
February 2, 2018 order. After summary judgment oral argument on October 15,
A-2885-18T2
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the judge reserved decision pending the rulings on the consolidation motion.
The Civil Presiding Judge denied Dugan's motion to consolidate on October 26.6
On November 28, the judge entered an order and placed his oral decision
on the record, granting summary judgment dismissal of Wells' complaint.
Beyond mentioning the LAD and the CEPA, the judge's decision did not cite
any law. In dismissing Wells' LAD hostile work environment sexual harassment
claim, the judge stated she was required to prove retaliatory action and failed to
do so because she had effectively quit her job rather than report to her new
supervisor, Pereira. The judge determined Wells failed to establish her
employment conditions met that standard. Regarding Wells' request7 to compel
discovery and have the judge conduct an in camera inspection of AAANJ's
counsel's investigation documents, the judge determined it was immaterial
because continued discovery to prove she was sexually harassed would not have
overcome her failure to show an adverse employment action.
Wells later moved for reconsideration, arguing she was not required to
prove she suffered an adverse employment action as a prima facie element of
6
Dugan's motion for reconsideration was denied on December 6.
7
Wells request was presented to the trial judge in her opposition to summary
judgment.
A-2885-18T2
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her LAD hostile work environment sexual harassment claim. After oral
argument, the judge issued his oral decision denying reconsideration. The judge
initially pointed out there was a question concerning whether the motion was
filed within the twenty-day requirement of Rule 4:49-2, but rather than deciding
the motion on procedural grounds, he addressed the merits of the motion. 8 He
then stated "looking at the allegations, giving [Wells] the benefit of assuming
these allegations to be accurate, I don’t believe that the allegations reflect
conduct on the part of . . . defendant[s] that is sufficiently severe or pervasive
to allow a reasonable jury to conclude that there was a hostile work
environment." The judge also maintained he didn't believe Wells "demonstrated
anything that would suggest that an adverse employment action was taken."
III.
We address Wells' arguments on appeal in the order presented. Before
doing so, we point out her last argument – that the trial judge erred in denying
her motion for reconsideration – need not be addressed because the argument
and law pertaining to that motion are fully addressed in resolving her
8
Wells contended she attempted to file a motion for reconsideration on
December 18 but was prevented from doing so by the eCourts system. In a letter
to the court dated December 21, Wells explains the submission issue, and
advises the motion was filed as a new matter with a comment to reference the
preexisting case.
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contentions related to the judge's initial decision granting summary judgment to
defendants.
A.
Hostile Work Environment Claims
Wells argues the judge misinterpreted the LAD as articulated in Lehmann
v. Toys 'R' Us, Inc., 132 N.J. 587, 601 (1993) and its progeny, in dismissing her
hostile work environment sexual harassment claim. Specifically, the judge
wrongly determined she was required to show she "in any way suffer[ed] adverse
employment retaliatory activity at the hands of . . . defendant[s,]" and wrongly
applied the more rigorous "severe and pervasive" test required to prove a
constructive discharge allegation, instead of the "severe and pervasive" test
needed to sustain a hostile work environment sexual harassment claim under the
LAD. Citing Shepherd v. Hunterdon Developmental Ctr.,174 N.J. 1, 26-29
(2002), Wells contends the judge's application of the more rigorous "severe and
pervasive" test for constructive discharge claims compared to sexual harassment
claims, runs contra to how courts should address both claims when found in the
same case. She argues that in Shepherd, our Supreme Court explained even
when there is an absence of "severe and pervasive" facts to prove constructive
discharge, facts may still exist to sustain a hostile work environment claim. Ibid.
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Defendants contend Hughes' conduct was not severe or pervasive enough
to be actionable under the LAD. Citing Godfrey v. Princeton Theological
Seminary, 196 N.J. 178, 183-88, 199 (2008) (holding repeated date requests and
small gift offerings by elderly tenant of the Seminary's apartment to two
Seminary students did not involve the type of conduct actionable under the
LAD), they contend Hughes' alleged behavior, at worst, would be considered
"offensive utterances" that reflect a lack of workplace decorum. Under the
circumstances here, such a defense is without merit.
The LAD is remedial legislation enacted to prohibit unlawful employment
practices and discrimination in the form of harassment, "based on race, religion,
sex, or other protected status, that creates a hostile work environment."
Lehmann, 132 N.J. at 601; see N.J.S.A. 10:5-12(a). The LAD provides:
It shall be an unlawful employment practice, or, . . . an
unlawful discrimination:
a. For an employer, because of . . . sex . . . of any
individual . . . to bar or to discharge . . . from
employment such individual or to discriminate against
such individual in compensation or in terms, conditions
or privileges of employment[.]
[N.J.S.A. 10:5-12(a).]
As our Supreme Court pointed out in Lehmann, the LAD does not contain
any provision specific to sexual harassment, and "[t]he legislative history of the
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LAD is silent on" the subject. 132 N.J. at 600. However, noting the LAD closely
tracks its federal counterpart, Title VII of the Civil Rights Act of 1964, the Court
held "[s]exual harassment is a form of sex discrimination that violates . . . the
LAD." Id. at 600-01 (citing Meritor Sav. Bank v. Vinson, 477 U.S. 57 (1986);
Erickson v. Marsh & McLennan Co., 117 N.J. 539, 555–56 (1990)). The "[l]oss
of a tangible job benefit is not necessary for a hostile work environment claim
because the harassment itself affects the terms of conditions of employment."
Shepherd, 174 N.J. at 28.
To prove a hostile work environment sexual harassment claim under the
LAD, a plaintiff must show:
[T]he complained-of conduct (1) would not have
occurred but for the employee's gender; and it was (2)
severe or pervasive enough to make a (3) reasonable
woman believe that (4) the conditions of employment
are altered and the working environment is hostile or
abusive. When the harassing conduct is sexual or sexist
in nature, as when a plaintiff alleges that she has been
subjected to sexual touchings or comments, the first
element will automatically be satisfied. However, a
LAD plaintiff is also compelled to prove that the
harassing conduct, not its effect on the plaintiff or on
the work environment, was severe or pervasive. To
satisfy the third and fourth factors, a LAD plaintiff must
show that her working conditions were affected by the
harassment to the point at which a reasonable woman
would consider the working environment hostile.
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[Griffin v. City of E. Orange, 225 N.J. 400, 413-14
(2016) (citations and quotation marks omitted).]
The first element is satisfied by Wells because she alleged she was subject
to sexual touching and lewd comments. As to elements two through four we
review them interdependently because "[o]ne cannot inquire whether the alleged
conduct was 'severe or pervasive' without knowing how severe or pervasive it
must be." Lehmann, 132 N.J. at 604. Wells must thus show the conduct was
"severe or pervasive enough to make a reasonable woman believe that the
conditions of employment are altered and her working environment is hostile."
Ibid. In considering the severity and pervasiveness of the conduct, we are
instructed to "consider the cumulative effect of the various incidents, bearing in
mind 'that each successive episode has its predecessors, that the impact of the
separate incidents may accumulate, and that the work environment created may
exceed the sum of the individual episodes.'" Id. at 607 (quoting Burns v.
McGregor Elec. Indus., Inc., 955 F.2d 559, 564 (8th Cir. 1992)).
Although case law regarding specific conduct which rises to actionable
sexual harassment under the LAD is sparse, Lehmann, 132 N.J. at 595-97, and
Griffin, 225 N.J. at 406, both describe unwanted kissing and sexual advances
rising above the sexual and crass jocular behavior described by Wells. In
Baskerville v. Culligan Int'l Co., 50 F.3d 428, 430-31 (7th Cir. 1995), a Title
A-2885-18T2
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VII sexual harassment case, the Seventh Circuit Court of Appeals provides that
close calls regarding whether conduct constitutes a severe and pervasive hostile
work environment should be a question for a jury, declaring:
[T]he line that separates the merely vulgar and mildly
offensive from the deeply offensive and sexually
harassing. It is not a bright line, obviously, this line
between a merely unpleasant working environment on
the one hand and a hostile or deeply repugnant one on
the other; and when it is uncertain on which side the
defendant's conduct lies, the jury's verdict, whether for
or against the defendant, cannot be set aside in the
absence of trial error.
[(citations and quotations omitted).]
In that same vein, our Supreme Court has held, in hostile work
environment cases, whether rude and obnoxious behavior is severe or pervasive
enough to be actionable, is a jury question, precluding summary judgment. See
Cutler v. Dorn, 196 N.J. 419, 436 (2008) (finding whether anti-Semitic jokes
and remarks made by co-workers to a Jewish police officer were severe or
pervasive enough to be actionable under the LAD was properly heard by a jury).
Viewing Wells' allegations as true under our summary judgment standard,
Holmes v. Jersey City Police Dep't, 449 N.J. Super. 600, 602-03 (App. Div.
2017), she accused Hughes of: (1) telling her to admire L.C.'s breasts when she
saw L.C. at a convention; (2) asking her after the convention what she thought
A-2885-18T2
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of L.C's breasts; (3) stating he admired the breasts a bikini-clad woman he
showed her on his computer, and asking her how her breasts compared with the
woman's breasts; (4) showing her a picture he drew simulating an ejaculating
penis; (5) touching her leg inappropriately when they were in a breakroom; and
(6) walking into a room where she was sitting on the edge of a desk surrounded
by colleagues, and making a thrusting motion with his pelvis, after raising an
eyebrow and asking if her position was an invite. We conclude a jury should
decide if such alleged conduct over the course of two-and-a-half-years is deeply
offensive and sexually harassing enough to make a reasonable woman believe
her workplace environment is hostile. Wells did not have to prove that her
employment was adversely affected beyond the fact that Hughes' behavior was
severe and pervasive sexual harassment. Thus, the judge erred in finding Wells
did not prove a prima facie LAD claim to avoid summary judgment.
B.
Direct/Vicarious Liability as to AAANJ and Shotmeyer
In determining Wells' LAD claims should be dismissed on summary
judgment grounds because she failed to prove an adverse employment action,
the judge did not rule on whether AAANJ and Shotmeyer could be held
negligent and reckless for having poor policies and procedures or vicariously
A-2885-18T2
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liable for Hughes' conduct. Under certain circumstances, in accordance with
Rule 2:10-5, we "may exercise such original jurisdiction as is necessary to the
complete determination of any matter on review." Because our review is de
novo, and the issue has been fully briefed and orally argued, we perceive no
need to remand this issue to the trial court and will address it in the interests of
judicial economy. See e.g., Marion v. Borough of Manasquan, 231 N.J. Super.
320, 330 (App. Div. 1989) (exercising original jurisdiction where resolution of
the issue "is necessary for a complete determination and the facts necessary to
resolve it are present in the record") (citing R. 2:10-5)).
To establish AAANJ's policies and procedures were sufficient and
adhered to, AAANJ and Shotmeyer point to the policies in place during the time
Wells was allegedly harassed; the training Wells received regarding those
polices; and the complaints by other employees and Wells that were properly
addressed. They therefore argue a structure was in place at AAANJ to
thoroughly and effectively handle complaints of harassment, and if Wells had
legitimate complaints of harassment or discrimination, she clearly failed to take
advantage of AAANJ's available structure.
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AAANJ’s policies and procedures regarding sexual harassment are
detailed in a document titled "NON-HARASSMENT POLICY," which
provides:
We want all employees to know that they can work in
security and with dignity, and are not required to endure
insulting, degrading or exploitative treatment. The
[c]ompany will not tolerate harassment of its
employees on the basis of . . . sex . . . and strongly
disapproves of all forms of sexual harassment. All
employees have a right to be free from discrimination
in their work environment, including freedom from
sexual harassment. Any violation of this policy by any
employee will result in discharge or other disciplinary
action.
[E]ngaging in other sexually harassing or offensive
conduct or creating offensive or hostile conditions in
the workplace is prohibited on the part of all
employees. Sexual harassment includes, among other
things, . . . unwanted physical contact, as well as other
verbal or physical conduct of a sexual nature such as
epithets, jokes and insults, or any other unwelcome
conduct of a sexual nature. Abusing the dignity of an
employee through unwelcome jokes or derogatory
comments creating a hostile work environment will
also not be tolerated.
If an employee feels this policy has been violated in any
way, the employee should immediately report the
matter to the President. Any communication pursuant
to this policy will be maintained in the strictest
confidence, to the extent possible under the
circumstances. An employee need not be the actual
target of harassment to bring any matter to the attention
of the President.
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22
AAANJ and Shotmeyer also contend it conspicuously displayed notices
advising employees of their rights under Title VII and the LAD. Proof their
employees were properly trained regarding those laws, is evidenced in Wells'
signing a "receipt of employee guide" on November 1, 2013, which contained
the company's non-harassment policy. She also completed training for
"preventing sexual harassment" and "preventing discrimination," on December
7, 2015.9
AAANJ and Shotmeyer presented several instances where Wells used its
harassment policy to file complaints and those complaints were properly
addressed. Wells made a complaint to HR about an unpleasant interaction with
a mail room employee, which was addressed when Jim Dobi, an AAANJ Vice-
President at that time, wrote an email providing that he "talked to [the employee]
and gave him a verbal warning." Wells also filed a formal complaint about
another AAANJ employee, which resulted in an investigation by an outside
counsel and a finding the employee was insubordinate, but her conduct did not
constitute a hostile work environment because her actions were not based on
Wells' protected status. In addition, Wells sent emails to Pereira and Dugan,
9
Dugan completed similar training on September 27, 2010, November 27, 2013,
and November 6, 2015.
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23
following up on a previous complaint about a AAA branch manager. The record
does not indicate how that complaint was resolved.
To substantiate its position that Wells and Dugan never reported Hughes'
harassing conduct, defendants rely upon the certification of D'Amico, whom
Wells and Dugan contended they complained to. D'Amico's stated:
If [Wells] had reported to me that she was sexually
harassed and/or discriminated against by Mr. Hughes I
would have immediately prepared a write-up and
placed it in [Wells'] employee file, as is my usual
practice. . . . Additionally, I would have immediately
reported the complaint to my supervisor at the time,
[AAANJ] Vice President Jim Dobi, to determine
whether the matter should be referred to the Board of
Directors (in light of the fact that Mr. Hughes was
President of AAANJ) for further investigation.
D'Amico also certified she denied ever being notified by Wells or Dugan about
any sexual harassment or discrimination regarding Hughes. She further asserted
the claims by Wells and Dugan, that she told them there was nothing she could
do because Wells reported to Hughes, did not make sense given Dobi had always
been her direct supervisor.
Wells argues AAANJ and Shotmeyer are not entitled to summary
judgment on negligence and vicarious liability claims because she presented
sufficient evidence showing AAANJ's policies and procedures were deficient
because: (1) all complaints of harassment were "required to go through" Hughes,
A-2885-18T2
24
the alleged harasser; (2) there were complaints about Hughes' conduct from
other women and his misconduct persisted; (3) other managers and higher level
employees that were trained in AAANJ's policies and procedures were aware of
the conduct and failed to take corrective action; and (4) AAANJ failed to
monitor its policies, as shown by Dugan's concern of retaliation if he disclosed
his thoughts about Hughes' conduct. Wells also maintains if the court disagrees
that the evidence bends in her favor, there were: (1) factual disputes as to the
effectiveness of AAANJ’s harassment policies and procedures, and (2) factual
disputes as to whether she complained about Hughes and that AAANJ and
Shotmeyer failed to affirmatively defend her from Hughes' sexual harassment.
Wells asserts that in evaluating the effectiveness AAANJ’s sexual
harassment policy, a court is to assess the "complaint structures for employees'
use, both formal and informal in nature." Gaines v. Bellino, 173 N.J. 301, 312-
14 (2002). She contends the argument that she did not submit a formal or written
complaint to HR is not determinative as to the merits of her claims, but it does
speak to the effectiveness of AAANJ’s policies and procedures in combating
sexual harassment. Id. at 317-18 ("The County's defense to this cause of action
has been to focus attention on plaintiff's failure to file a formal complaint. That
alone is insufficient to entitle defendants to an affirmative defense insulating the
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25
County from liability for an alleged hostile work environment caused by one of
its highest ranking officers.").
Wells argues AAANJ and Shotmeyer failed to monitor the effectiveness
of its anti-harassment policies, pointing to Dugan's fear in stating whether he
believed Hughes sexually harassed her. She contends the ineffectiveness of the
policies and procedures is borne out by the lack of any action taken to prevent
Hughes' ongoing conduct despite her complaints reaching Dugan, her immediate
supervisor, Shotmeyer, the chairman of the board, and other senior level
employees, all of whom were trained in AAANJ's policies and procedures.
Wells points out when she complained to HR she was told the department could
not do anything about the allegations because it reported to Hughes.
Wells also contends there were other instances of harassment by Hughes
toward other personnel and "[e]vidence of sexual harassment directed at other
women is relevant to both the character of the work environment and its effects
on the complainant." Lehmann, 132 N.J. at 611. In particular, Wells states
Dugan identified two women who complained about Hughes to HR, however it
is unknown if the complaints were regarding sexual harassment. Dugan also
explained that Shotmeyer had told him Hughes had propositioned a female
contractor for the company.
A-2885-18T2
26
Wells contends she has presented a prima facie LAD claim against
AAANJ under a vicarious liability cause of action because Hughes can be
considered her supervisor under this claim and AAANJ failed to affirmatively
protect her from him.
When a plaintiff establishes sexual harassment by a supervisor or co-
worker, under certain circumstances, the employer can be held liable for the
harassing conduct. Aguas v. State, 220 N.J. 494, 509-10 (2015); Lehmann, 132
N.J. at 615-16. A plaintiff has two causes of action for employer liability, "a
direct cause of action against the employer for negligence or recklessness under
[Restatement (Second) of Agency § 219(2)(b)] . . . [and] a claim for vicarious
liability under [Restatement (Second) of Agency § 219(2)(d)]" if the harasser
was the plaintiff's supervisor. Aguas, 220 N.J. at 512 (citations omitted).
"Although direct claims for negligence or recklessness under [Restatement
(Second) of Agency § 219(2)(b)] and claims for vicarious liability under
[Restatement (Second) of Agency § 219(2)(d)] are often discussed in tandem,
they are analytically distinct from and independent of one another." Ibid.
Therefore, "the two claims must be addressed separately." Ibid.
"The negligence standard imposes on [a plaintiff] the burden to prove that
the [defendant] failed to exercise due care with respect to sexual harassment in
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27
the workplace, that its breach of the duty of due care caused the plaintiff's harm,
and that she sustained damages." Ibid. (citing Komlodi v. Picciano, 217 N.J.
387, 409 (2014); Robinson v. Vivirito, 217 N.J. 199, 208 (2014)). When a
defendant challenges the sufficiency of a plaintiff's proofs of a Restatement
(Second) of Agency § 219(2)(b) cause of action against an employer, the court,
deciding a dispositive motion considering the claim, should consider five
factors:
(1) formal policies prohibiting harassment in the
workplace; (2) complaint structures for employees' use,
both formal and informal in nature; (3) anti-harassment
training, which must be mandatory for supervisors and
managers, and must be available to all employees of the
organization; (4) the existence of effective sensing or
monitoring mechanisms to check the trustworthiness of
the policies and complaint structures; and (5) an
unequivocal commitment from the highest levels of the
employer that harassment would not be tolerated, and
demonstration of that policy commitment by consistent
practice.
[Aguas, 220 N.J. at 513 (citing Gaines, 173 N.J. 313).]
Concurrently or alternatively, a plaintiff may assert a Restatement (Second) of
Agency § 219(2)(d) claim. "[T]he plaintiff has the initial burden of presenting
a prima facie hostile work environment claim." Id. at 524.
If no tangible employment action has been taken
against the plaintiff, the defendant employer may assert
[a] two-pronged affirmative defense . . . . To establish
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28
that defense, the defendant has the burden to prove, by
a preponderance of the evidence, . . . that the employer
exercised reasonable care to prevent and to correct
promptly sexually harassing behavior[] and . . . the
plaintiff employee unreasonably failed to take
advantage of preventive or corrective opportunities
provided by the employer or to otherwise avoid harm.
[Ibid. (citing Burlington Indus., Inc. v. Ellerth, 524 U.S.
742, 765 (1998); Faragher v. City of Boca Raton, 524
U.S. 775, 807 (1998)).]
The employee may then rebut the elements of the affirmative defense. Ibid.
The affirmative defense is not available in cases where the supervisor's
harassment has resulted in an adverse employment action, such as "undesirable
reassignment," nor will the defense provide "protection to an employer whose
sexual harassment policy fails to provide 'meaningful and effective policies and
procedures for employees to use in response to harassment.'" Id. at 522 (citing
Gaines, 173 N.J. at 317). "[A]n 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." Id. at 500.
A four-part test for the factfinder must then be applied. Id. at 514.
1. Did the employer delegate the authority to the
supervisor to control the situation of which the plaintiff
complains . . . ?
A-2885-18T2
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2. Did the supervisor exercise that authority?
3. Did the exercise of authority result in a violation of
[the LAD]?
4. Did the authority delegated by the employer to the
supervisor aid the supervisor in injuring the plaintiff?
If each of these questions are answered in the
affirmative, "then the employer is vicariously liable for
the supervisor's harassment under [Restatement
(Second) of Agency] § 219(2)(d)."
[Ibid. (first alteration in original) (citations omitted).]
Under these principles, if Wells proves Hughes' lewd conduct occurred
and she complained about them, which resulted in her reassignment to a less
desirable position by reporting to a person whom she had previous complained
about, AAANJ and Shotmeyer have no affirmative defense. If, contrary to those
claims, they can prove by a preponderance of evidence that Hughes did not
harass Wells and she made no complaints about him, they might prevail at trial.
To prevail on a summary judgment motion to avoid vicarious liability for Wells'
claims, AAANJ and Shotmeyer would be required to demonstrate there are no
factual disputes concerning the fact-sensitive issues surrounding their
affirmative defense. Simply asserting they did not know the President of their
company was sexually harassing a subordinate is no defense. Moreover, since
there are such disputes, they are not entitled to summary judgment for
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30
negligence and vicarious liability related to Wells' hostile work environment due
to sexual harassment. See Holmes, 449 N.J. Super. at 602-03.
IV.
The remaining issue involves Wells' argument that the judge abused his
discretion by not conducting an in camera review of the documents prepared by
defendants' outside counsel while conducting an investigation into Wells'
allegations. It is unclear when in September 2016 defense counsel's interview
with Dugan took place, but it appears that at the very least defendants were
aware of Wells' intentions to sue them based upon Hughes' alleged behavior.
Based upon his review of a transcript of the secretly recorded interview
Dugan gave to Wells' counsel under subpoena, the judge stated, "a fatal problem
with this case and that isn't going to change even with more discovery, more
depositions, more anything. [Wells] quit." The judge then stated that since
Wells did not return to work after her leave of absence because she did not
approve of being reassigned to report to Pereira, she "chose to quit for reasons
known only to her, but absolutely not reasons that give rise to a cause of action
in my opinion."
Wells, relying upon Payton v. N.J. Tpk. Auth., 148 N.J. 524, 532 (1997),
argues Dugan's interview with defendants' counsel indicates AAANJ had
A-2885-18T2
31
knowledge of Hughes' misconduct prior to the investigation into her allegations
by outside counsel, and any documents regarding that prior knowledge would
not be privileged. She contends the interview documents are not privileged and
could be used to show AAANJ's policies and procedures were inadequate or that
there was an adverse employment action taken against her.
Wells argues defendants should have acknowledged the existence of their
counsel's interviews in response to her discovery requests and then claimed any
asserted privilege so that any disputes could be raised before the judge. She
maintains throughout the discovery period, defendants failed to acknowledge
the existence of Dugan's statements and other documents in response to Wells'
discovery requests. Wells contends defendants' counsel agreed to curb
discovery to mediate the case and pursue the deposition of Dugan and others
after the discovery end date. Wells argues it is apparent that if the interview of
Dugan was not provided prior to his proposed deposition, defendants would be
making the same arguments that they were unaware of Hughes' misconduct
notwithstanding Dugan's admissions otherwise.
Defendants contend any information obtained from Dugan's interview or
any other source is subject to the attorney-client and work-product privileges
because it was only conducted in the anticipated litigation after Wells' counsel
A-2885-18T2
32
sent notice of the potential lawsuit to Shotmeyer. Citing Pomerantz Paper Corp.
v. New Cmty. Corp., 207 N.J. 344, 371 (2011) and Bender v. Adelson, 187 N.J.
411, 428 (2006), defendants argue Wells failed to move for an order to produce
the documents or conduct an in camera review, therefore she cannot now argue
to this court that the judge abused its discretion.
Defendants assert Wells' attempt to invoke Payton to argue the judge
should have reviewed certain documents in camera is misplaced. There, the
Court held "if the purpose [of the attorney's actions] is to provide legal advice
or to prepare for litigation, then the privilege applies." Payton, 148 N.J. at 551.
Additionally, under Miller v. J.B. Hunt Transp., Inc., 339 N.J. Super. 144, 150
(App. Div. 2001), any documents prepared by counsel are privileged work-
product because the "dominant purpose in preparing . . . [them] was concern
about potential litigation and the anticipation of litigation was objectively
reasonable."
Defendants further argue Wells has not overcome the work product
privilege, by showing "(1) that [s]he has a substantial need for the requested
documents; and (2) that [s]he is unable, without undue hardship, to obtain the
substantial equivalent of the materials by other means." Medford v. Duggan,
323 N.J. Super. 127, 136-37 (App. Div. 1999).
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33
Based upon the judge's ruling, we surmise that because he had decided to
grant summary judgment dismissal of Wells' complaint, he found it unnecessary
to conduct an in camera review and determine under the controlling law whether
Wells was entitled to any of the documents gathered by defendants' counsel's
investigation. Consequently, in view of our remand, we vacate the judge's
decision denying an in camera review and require the judge to review the
documents in camera in accordance with the principles set forth in Pomerantz
Paper, Payton and Medford, and any relevant case law or Rules of Court. Unless
one has already been provided, defendants' counsel shall submit to the trial court
a detailed privilege log identifying all disputed privileged communications to
help aid the court in its review. In reviewing the documents, the judge should
consider whether the privileges relied upon by defendants apply to preclude
release to Wells. The judge should then issue his findings of facts and
conclusions of law. We leave it to the judge's discretion whether to entertain
additional briefing or argument.
V.
In sum, we express no opinion on whether Wells can prove a hostile work
environment sexual harassment LAD claim against Hughes. We merely
conclude the trial judge's order granting summary judgment to defendants
A-2885-18T2
34
incorrectly determined Wells failed to establish a prima facie claim and was
required to prove adverse employment action to sustain her LAD claim. We
also express no opinion on whether AAANJ and Shotmeyer can establish a
defense to direct and vicarious liability for Hughes' alleged behavior. Whether
Wells suffered from a hostile work environment sexual harassment LAD claim
due to Hughes' behavior, and whether AAANJ and Shotmeyer are directly or
vicariously liable for that behavior, should be decided by a jury. In addition,
the judge should conduct an in camera review of the documents prepared by
defendants' counsel sought by Wells and determine if she is entitled to any of
the documents. We take no position as to whether the documents should be
released to Wells.
Reversed and remanded.
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