NJ Supreme Court Issues A Grim Prognosis For Employers Facing Hostile Work Environment Claims

After losing in both the trial and appellate courts, Armando Rios, Jr., an ex-Pharmaceutical Executive, managed to sway the minds of the Justices on the State’s highest court to revive his hostile work environment claim. Rios claimed his direct supervisor twice referred to Hispanics by a racial epithet thereby creating a hostile work environment. The lower courts held that two incidents are not severe or pervasive enough to constitute a hostile work environment and dismissed his case. A unanimous New Jersey Supreme Court, however, disagreed and reversed the lower court decisions.

Facts

Armando Rios, Jr., a Hispanic male, was hired by Meda Pharmaceuticals, Inc., in May of 2015 to serve as its Director of Brand Marketing. His direct supervisor was Tina Cheng-Avery. Weeks after joining Meda, Rios found himself in a difficult situation. While telling Cheng-Avery that he and his wife were looking to buy a house, Rios claims she commented that “it must be hard for a sp-c to have to get a Federal Housing Administration Loan.” Shortly thereafter, Ms. Cheng-Avery allegedly repeated the slur when describing a Hispanic woman who was being considered for an acting role in a Meda television commercial.

Following each incident, Rios met with Meda’s Director of Human Resources, Glenn Gnirrep, to report Cheng-Avery’s comments. According to Rios, both his complaints fell on deaf ears. Gnirrep was allegedly dismissive, did not take any notes during their meetings, and unfortunately passed away while this case was in its infancy. While Meda had an Equal Employment Opportunity Policy and Complaint procedure, Rios feared that availing himself of the process would result in retaliation.

Several months then passed without any recorded incident. In February of 2016, Cheng-Avery placed Rios on probation for poor performance. As his performance allegedly deteriorated, Cheng-Avery initiated a performance improvement plan. After a series of mostly unfavorable written reviews, and approximately 7 months after the second reported use of a racial slur, Cheng-Avery decided to terminate Rios’ employment in June of 2016.

Rios not only claimed that his termination was an act of retaliation, rather than a reflection of his performance, but that he was subject to a hostile work environment due to the two incidents with Cheng-Avery. To that end, he filed a complaint on March 31, 2017, against Meda, Cheng-Avery and Gnirrep primarily under the New Jersey Law Against Discrimination (NJLAD).

On March 20, 2019, the trial court granted summary judgment in favor of Meda and the individual defendants, and dismissed Rios’ complaint – including the hostile work environment claim. Essentially, the Judge found that that the two incidents with Cheng-Avery failed to amount to either severe or pervasive treatment – which Rios is required to show under the NJLAD. Rios then filed an appeal hoping to overturn the trial court’s decision. Instead, the Appellate Panel affirmed the lower court’s decision, albeit for different reasons.

The Appellate Division Affirms

In what was perhaps an artful and calculated tactic to avoid having to address an issue as divisive as racial slurs in the workplace, the Appellate Division focused on causation. The Appellate Panel acknowledged that the racial slur “could have met the severity requirement,” but determined that the fatal flaw in Rios’ claim was the absence of a correlation between the discrimination he endured, and the adverse employment actions taken against him. Because he was unable to bridge that gap, the Appellate Division affirmed the dismissal of his case.

Rios’ last resort was to petition the New Jersey Supreme Court. Given the gravity and nature of the case, it also attracted the attention of the New Jersey Association for Justice, who was permitted to file its own brief in further support of Rios’ claims.

The New Jersey Supreme Court Weighs In

Over the course of its 20-page opinion, the unanimous New Jersey Supreme Court grappled with the following sole question: Were the alleged racial slurs, which were directed at a Hispanic employee, severe or pervasive enough to warrant reviving Rios’ hostile work environment claim? The answer, according to the New Jersey Supreme Court, is simply yes. The path to that conclusion, however, is not so simple.

On the one hand, the NJLAD seeks to “eradicate the cancer of discrimination” in the workplace. On the other, it is not designed to handcuff employers to a specific code of civility. Otherwise put, the NJLAD prohibits a boss from discriminating against their employees, but it doesn’t require them to be nice to them either. Thus, in order to assert a valid hostile work environment claim, the plaintiff must show, among other things, that the complained-of conduct was so severe or pervasive that it altered their employment conditions and created a hostile or abusive atmosphere.

There’s no cookie-cutter approach to what constitutes severe or pervasive conduct. Instead, the Supreme Court held that we have to “measure the surrounding circumstances” and consider the “cumulative effect of the various incidents” to arrive at a conclusion. At first blush, this “standard” is reminiscent of the famous United States Supreme Court “I know it when I see it” analysis. Fortunately, the Court provides some guidance to flesh out its benchmark for what is severe or pervasive.

Racial epithets, such as the slur uttered to Rios, are accompanied with a “connotation that can materially contribute to the remark’s severity.” They are, by nature, “unambiguously demeaning,” or “ugly, stark and raw” such that one use of the slur can be deemed sufficiently severe. Additionally, who utters the slur weighs into the equation. Because supervisors are envisioned as the ones to thwart discrimination, harassment by a supervisor, especially when it entails the use of racial slurs, produces a greater impact than when committed by colleagues on equal footing. Lastly, how a company reacts to reports of harassment provides insight into the culture of the workplace. Ignoring genuine claims of workplace harassment, which appears to have occurred here, can be indicative of an atmosphere that fosters or perpetuates discrimination.

After considering all of those factors, the New Jersey Supreme Court found that a reasonable jury could very well find that Rios was victim to severe or pervasive harassment. The Court reversed the Appellate and Trial Courts and ordered that the case be sent to trial where Rios will have the opportunity to plead his case before a jury of his peers.

Bottom Line

Societal standards are vastly different from those of the past and will continue to evolve over time. What that means for employers is that they have an ongoing responsibility to train their employees (which includes supervisors) on what kind of conduct will not be tolerated in the workplace.

Moreover, how a company responds to harassment claims may be just as important, and in the long run perhaps more important, than training to prevent discriminatory conduct. If a company demonstrates that it will simply look the other way when faced with allegations of harassment, no amount of preventative training will undo the culture of harassment that will become embedded in the company. Thus, a clear policy and comprehensive procedure for filing and investigating complaints are invaluable in the effort to avoid unnecessary litigation and eradicate discrimination.

For more information regarding this decision and best practices to implement effective policies and training to avoid claims hostile work environment claims, please contact John C. Petrella, Esq., Chair of the firm’s Employment Law & Litigation Practice Group via email here or Dina M. Mastellone, Esq., Chair of the Human Resources, Counseling & Compliance Practice Group via email here or 973-533-0777.