A Second Chance: NJ Employer Escapes Liability Where It Rectifies Discriminatory Conduct

On May 17, 2023, in Schoenberg v. The Devereux Foundation, the New Jersey Appellate Division affirmed summary judgment for an employer, on a complaint filed by a former employee alleging gender and pregnancy discrimination in violation of the New Jersey Law Against Discrimination (NJLAD). The Court found that even where the employer had discriminated against the employee by revoking a job offer when it learned the employee was pregnant, the employer had rectified the situation and made the employee “whole” by reinstating the offer. The Court concluded that the employee unreasonably rejected the offer.

Facts

In October 2018, Holly M. Schoenberg began her employment with Bellwether Behavioral Health as a full-time direct support professional, assisting disabled persons with vocational activities. In November 2018, Schoenberg became pregnant and informed Human Resources, that her maternity leave was scheduled to begin July 1, 2019. In June 2019, Devereux anticipated that it would acquire Bellwether in July 2019, and held job fairs for employees interested in working for Devereux. All Bellwether employees who sought employment with Devereux were considered new employees and required to submit an employment application.

In June 2019, Schoenberg, then 8 months pregnant, submitted an employment application and was interviewed by Devereux’s hiring manager. Initially, she was offered the same position with the same work shift, with compensation being determined by her years of experience. Schoenberg accepted the offer, and then advised the hiring manager of her July 1 maternity leave. When asked if her maternity leave with Bellwether would roll over to Devereux, the hiring manager told her that she would have to check and get back to her. Upon checking, it was determined that Schoenberg’s previously accrued sick leave would not roll over because Schoenberg would be considered a “day-one employee” and Devereaux would not have acquired Bellwether programs before the commencement of her scheduled maternity leave. In a recorded phone call, Schoenberg alleged that Devereux rescinded the offer because she was pregnant. Devereaux denied the claim. On July 2, 2019, Schoenberg emailed Devereaux that the revocation of her offer was blatant “discrimination and retaliation,” because she was pregnant. Devereaux immediately responded by email that the position was Schoenberg’s at the conclusion of her leave. Schoenberg did not respond to the email. On July 8, her attorneys sent a litigation hold email to Devereaux. Devereaux responded it was a misunderstanding, that it had offered the same position to Schoenberg in an email.

On July 18, 2019, Devereaux mailed a signed offer of employment letter to Schoenberg. Devereaux also offered to pay her medical costs while she was on leave. On July 22, 2019, Devereaux acquired Bellwether and sent Schoenberg a second offer letter. Schoenberg did not respond to either offer letter and instead on August 2, 2019, Schoenberg filed a complaint alleging gender and pregnancy discrimination and retaliation under the NJLAD. Following the birth of her child, and a leave of absence, Schoenberg began a new position with another healthcare entity on November 18, 2019, and never returned to work for Devereaux.

Trial Court & Appellate Decisions

New Jersey Courts have long recognized that employees who allege discriminatory discharge are not at liberty to simply reject unconditional offers of reinstatement. Moreover, employees who claim constructive discharge must allege more than a mere hostile work environment. Employees must show conditions were so intolerable that a reasonable employee would find continued employment was too much to endure. On Devereaux’s motion for summary judgment, the motion court said that even if Schoenberg was initially discriminated against, Devereaux rectified the discrimination by making an offer of employment to Schoenberg. Schoenberg was not at liberty to “consider and reasonably reject the offer” and still sue for discrimination.

The Appellate Division affirmed. The Court concluded that even if Devereaux initially engaged in discriminatory conduct by “revoking” the offer of employment, Devereaux cured any potential revocation by oral and written assurances of employment. Schoenberg unreasonably ignored the offers to make her whole.

Bottom Line

Employers must be alert to conduct that could appear discriminatory. Where discrimination is alleged, it should investigate and take prompt remedial action to limit liability. For more information regarding this decision and best practices on how to avoid discrimination claims and rectify any perceived discrimination, please contact John C. Petrella, Esq., Partner and Chair of the firm’s Employment Law & Litigation practice via email here  or Dina M. Mastellone, Esq., Partner and Chair of the firm’s Human Resources Counseling & Compliance practice via email here or call 973.533.0777.