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July 3, 2000

New Jersey Law Journal

Vol. CLXI – No. 1 INDEX 28

Maurice W. McLaughlin

Holding Supervisors Liable Under The Law Against Discrimination

New Jersey’s Law Against Discrimination prohibits employment discrimination based on an employee’s inherent characteristics such as gender, race, age and sexual orientation.  N.J.S.A. 10:5-12.  The LAD prohibits such discrimination by employers, labor organizations and employment agencies.

When an employer is not a sole proprietorship, the issue of the individual liability for discriminatory conduct under the LAD arises.  This article will discuss how individual supervisors can be liable for their discriminatory conduct under the LAD.

The LAD provides that:  “It shall be … an unlawful [discrimination] …[lf]or any person, whether an employer or an employee or not, to aid, abet, incite, compel or coerce the doing of any acts forbidden under this act, or attempt to do so.”  N.J.S.A. 10:5-12(e).

On its face, however, this language would appear to limit individual liability to only those who are instrumental in the discriminatory conduct of others, rather than those who directly engage in discriminatory conduct.  This conclusion strains rationality, however, and has been rejected by the courts.

New Jersey’s Supreme Court has held that the LAD may impose liability on the individual supervisors of a corporate employer.  The Court did not address the issue of whether the individual supervisor could be held liable for money damages, but rather held that he was properly subject to a restraining order requiring him to refrain from discriminatory conduct.  Anderson v. Exxon Co., U.S.A. 89 N.J. 483, 502 (1982).

The Appellate Division, however, has expressly stated that “named individual defendants” who are an employee’s supervisors up the chain of command “are employers within the intendment of the [LAD],” and that they would be liable if the facts supported such a finding.  Peper v. Princeton University Board of Trustees, 151 N.J. Super 15, 23 (App. Div. 1977) (the court, however, found that the facts in this case did not support liability against these particular individual supervisors), rev’d on other grounds, 77 N.J. 55 (1978).

This trend is also apparent when New Jersey’s federal courts interpret the LAD.  One district court held that:  “a supervisor who engages in discriminatory conduct while acting within the scope of his employment shares the intent and purpose of the employer (the principal) and may be held individually liable (as an accomplice) for aiding and abetting the employer’s unlawful conduct.”  Tyson v. Cigna Corp., 918 F. Supp. 836, 841 (D.N.J. 1996), aff’d, 149 F.3d 1165 (3d Cir. 1998).  The import of this decision is that the LAD clearly does not allow individuals to do that which they cannot aid or abet the employer to do.

Thus, the district courts have held that where the individual’s action either was in the scope of employment or cloaked with the mantle of his authority as plaintiff’s supervisor, he or she may be directly liable in their individual capacity.  Caldwell v. KFC Corp., 958 F. Supp 962, 971 (D.N.J. 1997).

The Third U.S. Circuit Court of Appeals recently held, predicting how New Jersey’s Supreme Court would rule, that a supervisor may be liable as an “aider and abettor” under the LAD for both actions and omissions.  The court, which dealt only with omissions by the employee’s supervisors, explained that the LAD imposes a duty on supervisors to prevent harassment.  When a supervisor violates this duty – whether actively or by omission – the supervisor violates the LAD and may be individually liable.

Intent is not a requirement for the supervisor’s individual liability.  Hurly v. Atlantic City Police Dept., 174 F.3d 95, 125-127 (3d Cir. !999); cf. Whitaker v. Mercer County, 65 F. Supp. 2d 230, 246-47 (D.N.J. 1999) (holding that an omission must rise to the level of “substantial assistance or encouragement”).

An individual supervisor, therefore, can be held directly liable for failing to prevent discrimination, even though that supervisor had not actually engaged in any discriminatory conduct. 

During the last several years federal courts have held that a supervisor may be individually liable as an “aider and abettor” based on his or her individual conduct, which “shares the intent and purpose of the employer,” Tyson, 918 F. Supp. at 841; Caldwell, 958 F. Supp. at 971, and for their failure to prevent discriminatory conduct by others even though the supervisors did not engage in discriminatory conduct themselves.  Hurley, 174 F.3d at 125-127.

It is significant that the Third Circuit also predicted New Jersey’s Supreme Court would hold that supervisors were “employers” under the LAD, and thus subject to direct liability.  Id. at 125.

These decisions clearly comport with reason.  In most circumstances where the employer is not a sole proprietor, it is merely an organization, a legal fiction.  A corporation, for instance, does not itself ”act.”  It is the people who run the organization who act.  Therefore, to refuse to impose individual liability would be to insulate those who actually perform the discriminatory conduct.  Indeed, tangible, adverse employment actions taken by the supervisor are deemed to be actions taken by the employer.  See, e.g., Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 762-763(1998).

This construction also comports with public policy.  New Jersey’s Legislature has expressly provided that:

[P]ractices of discrimination against any of [New Jersey’s] inhabitants,  because of race, creed, color, national origin, ancestry, age, sex, affectional or sexual orientation, marital status, familial status, liability for services in the Armed Forces of the United States, or nationally, are matters of concern to the government of the State … The Legislature further declares its opposition to such practices of discrimination when directed against any person [for such] reason … in order that the economic prosperity and general welfare of the inhabitants of the State may be protected and ensured.

The Legislature further finds that because of discrimination, people suffer personal hardships, and the State suffers a grievous harm.  The personal hardships include:  economic loss; time loss; physical and emotional stress; and in some causes severe emotional trauma, illness, homelessness or other irreparable harm resulting from the strain of employment controversies; relocation, search and moving difficulties; anxiety caused by lack of information, uncertainty, and resultant planning difficulty; career, education, family and social disruption; and adjustment problems, which particularly impact on those protected by this act.  Such harms have, under the common law, given rise to legal remedies, including compensatory and punitive damages.  The Legislature intends that such damages be available to all persons protected by this act …N.J.S.A. 10:5-3.

New Jersey courts’ interpretation of the LAD clearly conforms with this policy.  Courts construe the LAD liberally in favor of employees.  See, e.g., Fraser v. Robin Dee Day Camp, 44 N.J. 480, 486 (1965).

It is therefore clear that supervisors may be liable under the LAD for their discriminatory conduct toward employees, and for their omissions in preventing such conduct by co-employees.

 

 

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