A rarity under New Jersey law: Good news for employers. On Feb. 21, 2007, the New Jersey Supreme Court announced an important ruling favoring employers defending retaliation claims under New Jersey‘s Law Against Discrimination (LAD). In Carmona v. Resorts International Hotel, Inc., A-83-05 (2007), the court held that plaintiffs raising retaliation claims under the LAD have the burden of proving that their underlying complaint was made “reasonably and in good faith.” Or put another way, the court explained: “An unreasonable, frivolous, bad-faith or unfounded complaint cannot satisfy the statutory prerequisite necessary to establish liability for retaliation under the LAD.”

By imposing this obligation on plaintiffs, the court may well have increased the chance for employers to obtain summary judgment when faced with the regrettably commonplace scenario of retaliation claims brought by disgruntled employees who make a pre-emptive discrimination complaint in the face of impending discipline. This ruling should also assist employers facing “whistleblowing” claims under New Jersey’s Conscientious Employee Protection Act (CEPA), because the court stressed that CEPA also requires that any underlying complaint be made reasonably and in good faith in order to meet the statutory prerequisites for such claims.

In Carmona, plaintiff was a front desk clerk. After defendant began an investigation of possible theft by plaintiff, something for which plaintiff had been previously disciplined several times, plaintiff went to defendant’s EEO office and complained that he was being treated differently because of his race. Plaintiff’s complaint had nothing to do with the investigation (it concerned a situation involving the employer’s attendance policy that had been going on for several months without any complaint by plaintiff). Following completion of its investigation, defendant terminated plaintiff’s employment.

Plaintiff filed suit, alleging that his termination three days after his complaint to defendant’s EEO office constituted illegal retaliation in violation of LAD. Defendant requested that the judge instruct the jury that plaintiff had the burden of proving that his complaint to the EEO office was made “reasonably and in good faith” as part of his prima facie case. The trial court refused, and instead instructed the jury that the plaintiff need only show that he made a complaint. The jury found in plaintiff’s favor and awarded substantial damages and attorney’s fees. Defendant appealed to the New Jersey Supreme Court following the Appellate Court’s affirmance of the trial court’s ruling.

The New Jersey Supreme Court reversed. The court agreed with defendant that a plaintiff seeking to establish retaliation claims under LAD “bears the burden of proving that his or her original complaint . . . was made reasonably and in good faith.” Of particular note, the court reasoned that “[c]ommon senses tells us that the Legislature could not have intended that the LAD provide a safe harbor to one who files a baseless, meretricious complaint,” and that “LAD cannot protect one who pre-emptively files a complaint solely in anticipation of an adverse employment action by the employer.”

In short, one for the “good guys.” As the court instructed, LAD’s anti-retaliation provision cannot be used “as a sword to be wielded by a savvy employee against his employer.” Accordingly, simply making a pre-emptive complaint of discrimination prior to one’s termination will not likely be sufficient to resist summary judgment, giving employers an additional persuasive argument that appropriate cases should be dismissed as a matter of law before trial. It may also help to discourage plaintiffs from bringing such suits in the first instance or to settle for more modest amounts.