CEDENO v. MONTCLAIR STATE UNIV

The opinion of the court was delivered by SKILLMAN, J.A.D.

The issue presented by this appeal is whether a person who is statutorily disqualified from obtaining public employment as a result of a criminal conviction may maintain an action for an alleged wrongful discharge, in violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8, or the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42. We hold that such an action may not be maintained and consequently reverse the denial of defendants' motions for summary judgment.

Between 1973 and 1979, plaintiff was employed by the Southeastern Pennsylvania Transportation Authority (SEPTA), an agency of the Commonwealth of Pennsylvania, as its Director of Purchasing. On June 10, 1981, a Pennsylvania grand jury returned a presentment recommending that plaintiff be charged with nineteen counts of bribery in official and political matters, in violation of 18 Pa. Cons. Stat. § 4701. This presentment was based on testimony by four vendors that they had paid kickbacks to plaintiff to obtain contracts from SEPTA or to increase the volume of their sales to SEPTA. The total amount of these kickbacks, which were paid over a six year period, exceeded $15,000. Plaintiff was subsequently charged in accordance with this presentment, and on November 9, 1982, he pled nolo contendere to four counts of bribery. The court sentenced defendant to a five year term of probation and a $2,500 fine on one count of bribery and a suspended sentence on the remaining counts.

After plaintiff left his position at SEPTA, he became employed by Fairfax County, Virginia, as Director of its Purchasing and Supply Management Agency. On June 30, 1980, the Fairfax County Board of Supervisors unanimously voted to discharge plaintiff. This discharge was based on a recommendation by the Acting County Executive, who reported that plaintiff "intimidated his staff, was profane, vulgar and abusive in his speech, [and had brought] discredit on himself and discredit and embarrassment to his agency and to the County Government.

In 1986, plaintiff applied for the position of Director of Purchasing at Montclair State University (MSU). The job application form which plaintiff was required to complete asked whether he had any "criminal convictions." In response, plaintiff checked the line which said "No." In response to another question which asked an applicant to set forth the names of prior employers, plaintiff disclosed his employment with SEPTA but did not set forth his employment with Fairfax County. After plaintiff was interviewed by Dr. Barry Cohen, MSU's Assistant Vice President of Administration and Finance, MSU hired him under a one-year employment contract which was subject to renewal on an annual basis.

On November 7, 1989, Dr. Cohen, who was then plaintiff's supervisor, recommended that his employment contract not be renewed. Dr. Cohen submitted a report which stated that "[i]n the past year, Charles' performance has been significantly impaired by repeated instances of poor judgment, inappropriate behavior, and . . . a failure to complete a particularly important assignment." However, the President of MSU, who was newly appointed, declined to accept this recommendation because he himself had not yet had an opportunity to evaluate plaintiff.

In March of 1996, plaintiff's new supervisor, defendant Raye Jean Mastrangelo, also recommended that plaintiff not be reappointed. Mastrangelo cited numerous deficiencies in plaintiffs job performance, including his failure to maintain a cooperative relationship with other units of the University; unauthorized use of a cellular phone; excessive use of the E-mail system; failure to establish an effective property control system; inappropriate behavior towards his supervisor; adversarial interactions with colleagues; unscheduled absences; and forcing the use of certain vendors who were neither cost beneficial nor convenient. The President of MSU concurred with this recommendation and plaintiffs employment contract expired on June 30, 1996.

Prior to the termination of his employment, plaintiff filed an internal complaint with the MSU Equal Opportunity/ Affirmative Action Office alleging that Mastrangelo had harassed him and discriminated against him on the basis of his national origin and ancestry. Based on evidence presented at a fact-finding hearing relating to this complaint, a hearing officer found that "there were deficiencies in [plaintiffs] work performance during the past year," and that his claims of "discrimination, harassment, disparate treatment and retaliation" were "fundamentally without merit." Plaintiff did not appeal this decision to the MSU Board of Trustees or pursue any other avenue of administrative review.

While his internal complaint was still under consideration, plaintiff filed the present action against MSU and Mastrangelo, alleging a retaliatory discharge, in violation of CEPA, and discrimination on the basis of ethnicity and age, in violation of the LAD. Plaintiff also asserted claims for intentional infliction of emotional distress, conspiracy, invasion of privacy and denial of his right to free speech. Although plaintiff was still employed by MSU when the complaint was filed, he alleged that defendants had "begun taking steps to terminate and replace" him.

During discovery, defendants became aware of plaintiffs employment by Fairfax County and his bribery conviction. Consequently, defendants filed motions for summary judgment on the ground that plaintiffs wrongful discharge claims were barred because he was disqualified from public employment, pursuant to N.J.S.A. 2C:51-2 (d). Defendants, also asserted that plaintiff's action was barred under the doctrines of res judicata and collateral estoppel based on the rejection of his internal discrimination and harassment complaint.

The trial court issued a written decision denying defendants' motions. First, the court ruled that plaintiffs claims were not barred under the doctrines of res judicata and collateral estoppel because the hearing at MSU had not "provide[d][him] a `full and fair' opportunity to litigate the matter." Second, the court decided that plaintiffs criminal conviction in Pennsylvania did not bar him from maintaining a wrongful discharge claim because it constituted "after-acquired evidence." The court relied upon cases such as McKennon v. Nashville Banner Publ'g Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995), which hold that after-acquired evidence is irrelevant in the liability stage of a discrimination case. Although there is no reported decision in this State which has endorsed this rule, the trial court concluded that in view of federal precedent and the important public policies behind the LAD and CEPA, New Jersey would not allow an employer to avoid liability under the these statutes based on after-acquired evidence. The court also stated that it was "tempted to make an exception" to this rule based on plaintiffs disqualification from holding public employment as a result of his criminal conviction as well as his failure to disclose the conviction on his employment application. However, the court concluded that "if such an exception is to be made it has to be made by a higher Court.

Defendants filed motions for leave to appeal from the orders denying their motions for summary judgment. We granted the motions and consolidated the appeals.

We conclude that a person who is statutorily barred from obtaining public employment as a result of a criminal conviction may not maintain an action for an alleged wrongful discharge from that position. Our conclusion that plaintiff is barred from maintaining this action makes it unnecessary to consider defendants' alternative argument that because plaintiffs claims were rejected in the MSU administrative proceeding, he is barred under the doctrines of res judicata and collateral estoppel from pursuing those same claims in this action.

The Supreme Court of New Jersey "has repeatedly emphasized the strong public policy . . . against employment discrimination" expressed in the LAD. Andersen v. Exxon Co, 89 N.J. 483, 492, 446 A.2d 486 (1982). The Court has also indicated that CEPA was enacted to effectuate similar "important public policies." Abbamont v. Piscataway Township Bd. of Educ., 138 N.J. 405, 418, 650 A.2d 958 (1994). "Both CEPA and LAD . . . seek to overcome the victimization of employees and to protect those who are especially vulnerable in the workplace from the improper or unlawful exercise of authority by employers." Ibid. In view of the important public policies served by the LAD and CEPA, we have no hesitancy in concluding that an employer ordinarily may not defeat a wrongful discharge claim under either of these statutes simply by showing that the employee made a misrepresentation on an employment application which, if it had been discovered during the employment, would have resulted in the employee's discharge. See Massey v. Trump's Castle Hotel Casino, 828 F. Supp. 314, 324-25 (D.N.J. 1993) (predicting that Supreme Court of New Jersey would hold that after-acquired evidence of employee misconduct which would have justified discharge does not bar a claim under LAD); In re Jackson, 294 N.J. Super. 233, 237, 683 A.2d 203 (App.Div. 199 6) (stating in dictum that alleged misconduct of an employee in 1996 was not relevant to a determination of whether his removal from public employment in 1993 violated the LAD), certif. denied, 149 N.J. 141, 693 A.2d 110 (1997); cf. Nicosia v. Wakefern Food Corp., 136 N.J. 401, 417-21, 643 A.2d 554 (1994) (discussing the case law and scholarly commentaries relating to the after-acquired evidence doctrine but declining to pass on its applicability in New Jersey because, the issue was not directly presented).

However, this case involves exceptional circumstances. Plaintiff did not simply make a misrepresentation on his employment application which would have provided a basis for his discharge. Instead, as a result of his conviction for bribery, plaintiff was statutorily barred from ever obtaining any public employment in New Jersey.

N.J.S.A. 2C:51-2 (d) (formerly N.J.S.A. 2C:51-2 (c)) provides in pertinent part that "any person convicted of an offense involving or touching on his public office, position or employment shall be forever disqualified from holding any office or position of honor, trust or profit under this State or any of its administrative or political subdivisions." A conviction for bribery based on acts committed in the course public employment clearly constitutes "an offense involving or touching on [plaintiffs] public office, position or employment," and the position of Director of Purchasing which plaintiff held at MSU constituted a "position of honor, trust or profit under this State." See Moore v. Youth Correctional Inst. at Annandale, 119 N.J. 256, 266, 574 A.2d 983 (1990); Pastore v. County of Essex, 237 N.J. Super. 371, 568 A.2d 81 (App.Div. 1989), certif. denied, 122 N.J. 129, 584 A.2d 205 (1990); State v. Musto, 187 N.J. Super. 264, 310, 454 A.2d 449 (Law Div. 1982), aff'd, 188 N.J. Super. 106, 456 A.2d 114 (App.Div. 1983). Thus, at the time of his application for employment and throughout the course of his employment, plaintiff was absolutely disqualified by statute from holding the position from which he claims to have been discharged in violation of the LAD and CEPA. Consequently, MSU's administrators were prohibited by statute from hiring plaintiff, and if they had become aware of his conviction at any time during his employment, they would have been required to summarily discharge him.

Plaintiff concedes that the disqualification from public employment imposed by N.J.S.A. 2C:51-2 (d) would preclude an order mandating his reinstatement to the position of Director of Purchasing even if he could show that his discharge violated the LAD or CEPA. However, plaintiff argues that he is entitled to maintain a claim for back pay for the period between the termination of his employment and MSU's discovery of his criminal conviction. Plaintiff relies upon McKennon v. Nashville Banner Publ'g Co., supra, which held that a discharged employee can maintain an action under the federal Age Discrimination in Employment Act (ADEA) 29 U.S.C. §§ 621- 634, even though the employer subsequently discovers evidence which would have provided "lawful and legitimate grounds" for the discharge, and that the employee could seek recovery for "backpay from the date of the unlawful discharge to the date the new information was discovered" 513 U.S. at 362, 115 S.Ct. at 886, 180 L.Ed.2d at 863. The court stated that "[t]he private, litigant who seeks redress for his or her injuries vindicates both the deterrence and the compensation objectives of the ADEA," and concluded that "[i]t would not accord with this scheme if after-acquired evidence of wrongdoing that would have resulted in termination operates, in every instance, to bar all relief from an earlier violation of the Act" 513 U.S. at 358, 115 S.Ct. at 884, 130 L.Ed.2d at 861; see also Wallace v. Dunn Constr. Co., supra, 62 F.3d 374 (holding that the principles set forth in McKennon apply with equal force to actions under Title VII, 42 U.S.C. § 2000e to e-17, and the Federal Equal Pay Act, 29 U.S.C. § 206(d)(1)).

However, the Court in McKennon also stated that "[i]n determining the appropriate order for relief, the court can consider taking into further account extraordinary equitable that affect the legitimate interests of either party." 513 US. at 362, 115 S.Ct. at 886, 130 L.Ed.2d at 863. The Court further observed that "[t]he proper boundaries of remedial relief in the general class of cases where, after termination, it is discovered that the employee has engaged in wrongdoing must be addressed by the judicial system in the ordinary course of further decisions, for the factual permutations and the equitable considerations they raise will vary from case to case" Id. at 361, 115 S.Ct. at 886, 130 L.Ed.2d at 863 therefore, McKennon does not establish a blanket rule that any plaintiff in a wrongful discharge case brought under federal discrimination laws can maintain a claim for back pay for the period between the discharge and the employer's discovery of wrongdoing which would have provided legitimate grounds for discharge. Instead, McKennon recognizes that courts should consider the equitable circumstances of each individual case.

In this case, the award of back pay to plaintiff for the period of time up to MSU's discovery of his criminal conviction hot only would be plainly inconsistent with the legislative directive of N.J.S.A. 2C:51-2 (d) that "any person convicted of an offense involving or touching his . . . public employment should be forever disqualified" from public employment, but also would be highly inequitable. Due to plaintiffs, failure to disclose his criminal conviction on his employment application, he has already received a state salary for ten years. Even assuming that those past salary payments cannot be recouped, any award of back pay for a portion of the period subsequent to plaintiffs discharge would have the inequitable consequence of allowing him to derive additional profit from the misrepresentations on his employment application. Therefore, we are satisfied that this is a case where the effectuation of the legislative policies of N.J.S.A. 2C:51-2 (d) and equitable circumstances dictate the denial of any award of back pay.

Furthermore, there is no basis for allowing plaintiff to pursue a claim for any other form of monetary relief. The decision whether to impose monetary liability for an alleged violation of either the LAD or CEPA is "influenced by considerations of public policy." Abbamont v. Piscataway Township Bd. of Educ., supra, 138 N.J. at 417, 650 A.2d 958. In this case the dominant public policy consideration is the legislative mandate of N.J.S.A. 2C:51-2 (d) to disqualify any person who has been convicted of an offense involving or touching public employment from any further public employment. In our view, this policy would be seriously undermined if plaintiff were allowed to pursue any form of monetary claim against the State.

We can conceive of other circumstances, such as the aggravated sexual harassment alleged in Lehmann v. Toys `R' Us, inc., 132 N.J. 587, 626 A.2d 445 (1993), where the need to vindicate the policies of the LAD or CEPA and to compensate an aggrieved party for tangible physical or emotional harm could lead to the conclusion that even a person who was absolutely disqualified from holding public employment should be allowed to seek compensation for harm suffered during that employment. However, this is not such a case. Although defendants' motions for summary judgment were based solely on plaintiffs disqualification from public employment and the alleged preclusive effect of the internal hearing before MSU, we are satisfied, based on our own review of substantial excerpts from the depositions in this case and the transcript of the complete hearing before MSU, that even if plaintiffs allegations could be substantiated, there would be no basis for finding the kind of severe physical or emotional harm to plaintiff or aggravated wrongdoing which might warrant an award of monetary relief other than back pay.

Our conclusion that the absolute disqualification from public employment imposed by N.J.S.A. 2C:51-2 (d) precludes plaintiff from maintaining a wrongful discharge action under the LAD or CEPA is supported by Camp v. Jeffer, Mangels, Butler Marmaro, 35 Cal.App.4th 620, 41 Cal. Rptr .2d 329 (1995). The plaintiffs in that case, a husband and wife who had been convicted of conspiracy to use false information to defraud a federally insured bank, falsely stated on their employment applications that they had never been convicted of a felony. Their employer had a contract with a federal agency, the Resolution Trust Company (RTC), which required a certification that none of its employees had been convicted of a felony. Relying upon plaintiffs' employment applications, the employer made this certification to the ETC. After one of the plaintiffs allegedly brought information to the employer's attention concerning insider trading, they were both discharged. Plaintiffs then brought a wrongful discharge action, alleging a "whistleblower" claim based on the insider trading complaint. During pretrial discovery, the employer became aware of plaintiffs' criminal convictions and successfully moved for summary judgment on that basis. Although the California courts had rejected the after-acquired evidence doctrine in other contexts, the court of appeal affirmed the summary judgment on the ground that plaintiffs "were not lawfully qualified for [their] job[s]" because they "misrepresented a job qualification imposed by the federal government." Id. at 338. In distinguishing McKennon, the court stated:

[T]he equities compel a different result where an employee who is disqualified from employment by government-imposed requirements nevertheless obtains a job by misrepresenting the pertinent qualifications.

[ Id., 41 Cal. Rptr 2d at 339.]

See also Egbuna v. Time-Life Libraries, Inc., 153 F.3d 184 (4th Cir. 1998) (en bane) (holding that an undocumented alien is barred from maintaining an action under Title VII for alleged discrimination in hiring because she is ineligible for employment within the United States), cert. denied, ___ U.S. ___, 119 S.Ct. 1034, ___ L.Ed.2d ___ (1999).

The point is not, as conceived by the dissent, whether the policies expressed in N.J.S.A. 2C:51-2 (d) "outweigh the policies embodied in the [LAD and CEPA]." (dissenting op. at 163, 725 A.2d at 45). Our courts have long recognized that the important public policies underlying the LAD and CEPA require these laws to be liberally construed. See, e.g., Abbamont v. Piscataway Township Bd. of Educ., supra, 138 N.J. at 431, 650 A.2d 958; Zahorian v. Russell Pitt Real Estate Agency, 62 N.J. 399, 409-13, 301 A.2d 754 (1973); Jackson v. Concord Co., 54 N.J. 113, 122-25, 253 A.2d 793 (1969). However, in construing the LAD and CEPA, as in construing any other legislation, we ultimately must determine the "probable legislative intent" with respect to the specific issue before the court. Young v. Schering Corp., 141 N.J. 16, 25, 660 A.2d 1153 (1995). Civil Rights laws, like all other laws, "must be sensibly and practically applied." Andersen v. Exxon, supra, 89 N.J. at 496, 446 A.2d 486. Moreover, in determining legislative intent, a court should attempt to harmonize the provisions of civil rights laws with other legislative enactments. See Hinfey v. Matawan Reg'l Bd. of Educ., 77 N.J. 514, 391 A.2d 899 (1978). Thus, the question is not whether the policies which underlie N.J.S.A. 2C:51-2 (d) are more or less important than the policies embodied in the LAD and CEPA, but rather whether it can reasonably be concluded, in light of N.J.S.A. 2C:51-2 (d), that plaintiff must be allowed to pursue a claim for money damages against the State to effectuate the Legislature's intent in enacting the LAD and CEPA.

We are satisfied that it would be beyond the probable legislative intent of the LAD and CEPA to allow a former public employee to seek back pay and related damages based on allegations that he was wrongfully discharged from a position he was statutorily barred from obtaining. We of course recognize that monetary awards under the LAD and CEPA are made not only to compensate the alleged aggrieved party but also to deter conduct that violates the prohibitions of these important laws. See Abbamont v. Piscataway Bd. of Educ., supra, 138 N.J. at 418-21, 429-32, 650 A.2d 958; Lehmann v. Toys `R' Us, Inc., supra, 132 N.J. at 623- 25, 626 A.2d 445; see also McKennon v. Nashville Banner Publ'g Co., supra, 513 US. at 358-59, 115 S.Ct. at 884-85, 130 L.Ed.2d at 861; Wallace v. Dunn Constr. Co., supra, 62 F.3d at 379. However, the pursuit of a discrimination claim against the State by a convicted felon who is disqualified from public employment is so unusual a circumstance that the denial of any relief to such a plaintiff does not create any realistic danger of undermining the effective enforcement of the LAD or CEPA.

Finally, the same policy considerations which require the dismissal of plaintiffs wrongful discharge claims under the LAD and CEPA also require the dismissal of his claims based on an alleged denial of his right to free speech, intentional infliction of emotional distress, conspiracy and invasion of privacy.

Accordingly, the orders denying defendants' motions for summary judgment are reversed.