In Quinlan v. Curtiss-Wright Corp., the New Jersey Supreme Court recently reinstated a multimillion dollar verdict in favor of an employee who was fired for taking documents from her employer and using them in her lawsuit against the company. The Court’s opinion, which adopts a multi-factor balancing test to decide whether an employee can establish a retaliation claim under the New Jersey Law Against Discrimination, provides new challenges for employers with operations in New Jersey.

Briefly summarized, a senior HR employee had sued her employer for gender discrimination after being passed over for a promotion. In support of her case, she gathered 1,800 pages of the employer’s documents and produced them during discovery. The employer-defendant initially took no action against her for the disclosure of the documents. But, several weeks later, after she copied a witness’s performance evaluation and her attorney used it during his deposition, the company terminated her employment for the “unauthorized taking of confidential and privileged information . . . constitut[ing] theft of Company property.” The plaintiff amended her complaint to add a retaliation count based on her termination.

The Court adopted a virtually unworkable, seven-factor test to balance the employer’s “right to safeguard its confidential documents” against the employee’s “right to be free from discrimination or retaliation.” In this instance, the court ruled that the employer could have terminated the plaintiff for engaging in self-help by taking or copying 1,800 documents because some included “plainly confidential information . . . and defendants had a reasonably clear company policy against taking the documents to which plaintiff had agreed.” But it also ruled that the appraisal was directly relevant to her claim, she had “colorable basis to believe that [it] would not have been disclosed during discovery,” and its disclosure did not threaten the company’s operation. Under those circumstances, she had a stronger interest in remedying the company’s discrimination and the Court held that the jury properly found that she was terminated for engaging in a protected activity.

The dissent underscores the problem with the decision: “From this point forward, no business can safely discharge an employee who is stealing highly sensitive personnel documents even as she is suing her employer and disregarding the lawful means for securing discovery.”

As a result of this decision, New Jersey employers must move cautiously before terminating an employee who has stolen documents for the purpose of using them in a lawsuit against his or her company. Otherwise, they may find themselves in the same position as the employer in Curtiss-Wright – confident that the proper steps had been taken but left with having to write a very large check to the employee.