NEW JERSEY SUPREME COURT HOLDS THAT WHEN AN EMPLOYEE ALLEGES RETALIATION UNDER THE NEW JERSEY LAW AGAINST DISCRIMINATION, THE EMPLOYEE BEARS THE BURDEN OF PROVING THAT ITS COMPLAINT WAS MADE REASONABLY AND IN GOOD FAITH.

Dear Clients and Friends:

On February 21, 2007, the New Jersey Supreme Court issued a major decision holding that when an employee alleges a retaliation claim under the New Jersey Law Against Discrimination (NJLAD), the employee bears the burden of proving that the complaint made against the employer was made reasonably and in good faith. The Supreme Court's decision in Carmona v. Resorts International Hotel, Inc.,, 189 NJ. 354 (2007), held that an employee cannot maintain an action for retaliation under the NJLAD if the complaint is unreasonable, frivolous, made in bad faith, or unfounded.

The employee worked as a front desk clerk for Resorts International Hotel, Inc. (Resorts). As part of his job duties, the employee was responsible for checking guests into and out of Resorts. The employee was employed by Resorts from 1999 until his termination in 2001, when he was fired. The employee alleged that he was terminated in retaliation for his complaint to the company of discrimination and disparate treatment. In his complaint to the company, the employee alleged that Resorts had applied its absenteeism/termination policy unevenly based on race. Within a few days after Resorts' Equal Employee Opportunity Director began an investigation, Resorts terminated the employee for stealing.

Prior to this case, no state court in New Jersey had ever addressed the issue of whether an employee who brings a retaliation case under the NJLAD must have a good faith basis for that complaint. The Court reasoned that a good faith basis requirement is necessary in an NJLAD retaliation claim because without it an employee could preemptively file a frivolous complaint solely in anticipation of an adverse employment action by the employer. The United States Court of Appeals for the Third Circuit had already interpreted the NJLAD to require that "a plaintiff establishes a retaliation claim if she shows that she had a reasonable belief that her employer was engaged in an unlawful employment practice and that the employer retaliated against her for protecting against that practice." Drinkwater v. Union Carbide Corp., 904 .2d 853 (3d Cir. 1990).

In light of this case, employees will now face an increasing burden in establishing a retaliation case pursuant to the NJLAD by bearing the burden of proving that the original complaint was made reasonably and in good faith. While this may increase the employee's burden, Employers should still keep accurate and detailed records of any actions by employees that may lead to any type of adverse employment actions against those employees (for example, termination) so the employer, can defend against retaliation and discrimination claims.

If you have any questions with regard to the application of this case to your Company or with respect to any other labor and employment law matter, please do not hesitate to contact Steven Harz, Esq. at (201) 342-6000, or via email at sharz@hertenburstein.com

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August, 1 2007