In what is sure to be an important case for employers across the State, the Supreme Court of New Jersey recently heard oral arguments in the matter of Longo v. Pleasure Productions.

In that case, the plaintiff asserted a "whistleblower claim" under New Jersey's Conscientious Employee Protection Act, contending that she was terminated after complaining about sexual harassment.  The employer countered that she was terminated for poor performance.  The jury returned a verdict for plaintiff on the CEPA claim.  Most notably, when the trial proceeded to the punitive damage phase, the trial court failed to give the standard upper management charge.

To award punitive damages for a retaliation claim under New Jersey law, an employee must prove two things: 1) that there was especially egregious retaliatory conduct; AND 2) that upper management actively participated or was willfully indifferent to the especially egregious retaliatory conduct.  The purpose of the "upper management charge" is to instruct the jury that they must find not only "especially egregious retaliatory conduct" but also that there must be some ratification of the egregious conduct by upper management to justify an imposition of punitive damages against the employer.

The plaintiff argued that the upper management charge was unnecessary because upper management was involved in the termination.  So, according to plaintiff, it was only necessary to demonstrate that there was some sort of egregious conduct in addition to the termination.  The trial court agreed and punitive damages were awarded without the benefit of the upper management charge for the jury's consideration.

On appeal to the Supreme Court of New Jersey, the employer argued that failure to provide the upper management charge constituted reversible error.  Without the upper management charge, juries would be permitted to award punitive damages even when upper management has not condoned egregious conduct.  This is not the intent of the Legislature or the Supreme Court's prior decisions on the issue. 

The outcome of this case should be of keen interest to employers in New Jersey.

To watch the video of the oral argument before the Supreme Court, click the link below (you will need to be patient, because it takes about 15-20 seconds for the video to begin):