NJ District Court Awards Rule 11 Sanctions in Favor of Employer for Frivolous Suit

On March 31, 2023, the United States District Court for the District of New Jersey, in the matter of Desire v. Dreamwear Inc., imposed Rule 11 sanctions in favor of an employer based on the filing of a frivolous Second Amended Complaint. This case serves as an important reminder that filing frivolous claims will not be tolerated by the court and when warranted, employers should move for sanctions.

Facts

Tiffany Robertson and Fedeline Desire, two African American females, filed an Amended Complaint alleging that Dreamwear unlawfully discriminated against them and that they suffered “dueling indignities of sexual harassment, racial discrimination, and diminished economic opportunities because Defendants foster a hostile work environment and enforce a de facto racial hierarchy among its staff.” The Second Amended Complaint also alleged that while the few African American women employed by the company possess exceptional qualifications and perform well, they experienced discrimination and limitations in terms of their opportunities to advance their pay. Robertson and Desire further alleged that they filed complaints while working at Dreamwear and the company failed to investigate their claims of racial and sexual discrimination or remedy the harassment. Robertson and Desire also claimed that Dreamwear retaliated against them for raising their concerns in regard to harassment and unsafe policies in response to the Covid-19 pandemic. The Second Amended Complaint alleged violations inter alia of the New Jersey Law Against Discrimination (NJLAD), the Conscientious Employee Protection Act (CEPA), the Equal Pay Act of 1963, 42 U.S.C. § 1983 (§1983), and Title VII of the Civil Rights Act of 1964 (Title VII).

Procedural History

Dreamwear thereafter filed a motion to dismiss the Second Amended Complaint arguing that it failed to allege any dates, locations, or specific circumstances surrounding the alleged misconduct, making it difficult to discern what actually happened, even taking the facts in the Amended Complaint as true. Despite their previous dismissal with prejudice, Plaintiffs re-pled the same Title VII, NJLAD, CEPA and § 1983 claims in their Second Amended Complaint.

After Robertson and Desire failed to file opposition to the motion to dismiss, Dreamwear attempted to resolve the issue without necessitating sanctions, by way of requesting the voluntarily withdrawal of the frivolous claims prior to the filing of the motion for sanctions. Due to Robertson and Desire’s failure to respond, Dreamwear filed a Motion for Sanctions pursuant to Federal Rule of Civil Procedure 11 (Rule 11). Rule 11 is intended to discourage the filing of frivolous, unsupported, or unreasonable claims and sanctions are available to a party as a remedy for the filing of a frivolous suit, filing of lawsuit for an improper purpose and actions that needlessly increase the cost or length of litigation. Rule 11 sanctions can include, among other things, fines paid to the Court and paying the opposing party’s reasonable attorneys’ fees and other expenses incurred in the action.

Two days before the District Court’s hearing, Robertson and Desire filed a letter requesting the denial of the motion. After a hearing, the District Court granted Dreamwear’s motion and awarded legal fees and costs associated with the filing of the Motion to Dismiss the Second Amended Complaint and the Motion for Sanctions in the amount of $23,753.00.

Bottom Line

The decision in this case should give pause to employees (and their legal counsel) who file frivolous lawsuits, especially in federal court, where the court is much less likely to allow its time to be wasted. Although this decision was made pursuant to Rule 11, similar remedies may also be available to employers pursuant to the NJLAD for lawsuits brought in bad faith.

For more information regarding this decision and strategies on filing motions for sanctions in response to frivolous litigation, please contact John C. Petrella, Esq. and Harris S. Freier, Esq., Partners in the firm’s Employment Law & Litigation Practice Group via email here or here, respectively, or call 973.533.0777.