Case Title: Dzwonar v. McDevitt

Citation: 

Docket Number: a-109-01

State: new-jersey

Court: New Jersey Supreme Court

Date: 2003-08-12T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). In this appeal, the Court determines whether the jury's verdict in favor of plaintiff is sustainable under the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to 8. Local 54 of the Hotel and Restaurant Employees International Union (Union) represents employees in the hotel and restaurant industries in Atlantic City and elsewhere in the state. In accordance with the Union's bylaws and constitution, an Executive Board governs its day-to-day operations. The Executive Board consists of a President, Vice-President, Secretary-Treasurer, Recording Secretary, Chairman of the Trustees and four members elected from the rank and file. Executive meetings occur at least monthly; general membership meetings occur quarterly. In August 1996, the general membership elected to the Executive Board defendant Robert McDevitt as President and plaintiff Regina Dzwonar as Recording Secretary. Later that year, plaintiff accepted a full-time paid position as an Arbitration Officer/Representative for the Union. Shortly after the election, Dzwonar came into conflict with McDevitt over several of the Union's internal procedures and policies. Specifically, plaintiff claimed that certain Executive Board actions, including the hiring of a business agent, the authorization of overtime pay to the Union Controller, the issuance of credit cards to certain Union officers, a loan arrangement with the parent International Union, and the prepayment of rent for a newly hired Union organizer, should have been disclosed to the rank-and-file members for their approval. In part, plaintiff relied on a bylaw that required Executive Board approval of all proposed expenditures other than routine operating expenses along with membership ratification at a regular or special meeting, a bylaw requiring the approval at a regular meeting of the Union of all wages, salaries and regular expense allowances paid to officers and employees, and a bylaw providing that "[a]ll actions of the Executive Board are subject to the approval of the membership meetings." Plaintiff testified at trial that she did not believe the Executive Board's actions were illegal, but she objected to the Board's refusal to read its minutes at the general membership meetings. She believed the Board was denying the rank-and-file membership the right to participate, deliberate and vote in Union matters as prescribed by the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C.A. 401 to 531. In September 1997, McDevitt, with the approval of a majority of the Executive Board, discharged plaintiff from her position as an arbitration officer, allegedly for insubordination and the mishandling internal documents, including the official minutes of the Executive Board meetings. It is undisputed that plaintiff provided several Union members with unauthorized access to Executive Board minutes. Despite plaintiff's termination as an arbitration officer, she continued to perform her duties as Recording Secretary. Plaintiff filed suit under CEPA alleging that she was terminated in retaliation for expressing a reasonable belief that the Executive Board's failure to adequately inform the general membership of its actions violated the LMRDA and the Union's bylaws. At the close of plaintiff's case, defendant filed a motion to dismiss for failure to state a claim under CEPA. The trial court denied the motion. The jury found that defendants had violated CEPA and awarded compensatory damages. Subsequently, the trial court denied defendants' motion to set aside the jury's verdict based on the weight of the evidence and their motion for judgment not withstanding the verdict or for a new trial. The Appellate Division reversed, 348 N.J. Super. 164 (2002), finding that federal labor law preempted plaintiff's CEPA claim because it was based solely on an alleged LMRDA violation implicating neither federal nor state criminal law. The panel noted that plaintiff's dispute with defendants was over policy relating to the manner and extent of providing information to the general members. Even assuming plaintiff was dismissed because she believed the LMRDA required more of defendant, the panel found that the dispute could not support a CEPA claim. HELD : Plaintiff's asserted belief that defendants' conduct violated a law or public policy was not objectively reasonable, therefore as a matter of law her claim under the Conscientious Employee Protection Act (CEPA) fails. 1. The Legislature enacted CEPA to encourage employees to report illegal or unethical workplace activities and to discourage employers from engaging in such conduct. In part, CEPA precludes an employer from retaliating against an employee who objects to any activity, policy or practice that the employee reasonably believes violates a law, rule or regulation promulgated pursuant to law, is fraudulent or criminal, or is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or the protection of the environment. The employee must demonstrate that (1) he or she reasonably believed that the employer's conduct violated either a law, rule or regulation promulgated pursuant to law or a clear mandate of public policy, (2) he or she performed a whistle-blowing activity described in N.J.S.A. 34:19-3c; (3) an adverse employment action was taken against him or her; and (4) a causal connection exists between the whistle-blowing activity and the adverse employment action. (Pp. 10-12). 2. In satisfying the first prong of the test, the trial court, as a threshold matter, must identify a statute, regulation, rule or public policy that closely relates to the complained-of conduct. The trial court can and should enter judgment for a defendant when no such law or policy is forthcoming. However, N.J.S.A. 34:19-3c does not require a plaintiff to show that a law, rule, regulation or clear mandate of public policy actually would be violated if all the facts he or she alleges are true. Instead, a plaintiff must set forth facts that would support an objectively reasonable belief that a violation has occurred. When a defendant requests that the trial court determine as a matter of law that a plaintiff's belief was not objectively reasonable, the court must make a threshold determination that there is a substantial nexus between the complained-of conduct and a law or public policy identified by the court or the plaintiff. If the trial court so finds, the jury then must determine whether the plaintiff actually held such a belief and, if so, whether that belief was objectively reasonable. (Pp. 12-16). 3. Here, plaintiff failed to show that she reasonably believed the defendants' conduct violated a law, rule or regulation promulgated pursuant to law or a clear mandate of public policy concerning the public health, safety or welfare or the protection of the environment. In respect of section 101(a)(1) of the LMRDA, which is an anti-discrimination provision, a claimant must allege a denial of rights accorded to other members. Plaintiff's claim regarding the reading of minutes to the general membership does not concern a denial of such rights and reflects only a disagreement regarding access to information. Although CEPA does not require that plaintiff set forth facts that, if true, would constitute a violation of the provision, it does require a close relationship between the claim and the provision. Because no such relationship exists here, plaintiff's belief that defendants' actions were in violation of that provision was not objectively reasonable. In respect of section 101(a)(2) of the LMRDA, which states that every member shall have the right to assemble freely with other members and to express opinions, plaintiff fails to identify any actions by defendants that implicate those protections. Plaintiff's complaints concern the administration of meetings generally, rather than the suppression of any one member's views. To the extent that defendant McDevitt may have precluded a member from speaking at a general membership meeting, that incident occurred subsequent to plaintiff's discharge and therefore is irrelevant to her CEPA claim. Plaintiff's claim that non-compliance with bylaws requiring general membership approval of certain decisions violates section 501(a) of the LMRDA also fails. That provision requires that officers hold union money and property solely for the benefit of the organization and manage it in accordance with its constitution and bylaws. Plaintiff does not contend, however, that the Executive Board's actions constituted misappropriation. She argues only that defendants should have explained their actions more fully to the general membership. Because plaintiff's dispute concerns the adequacy of the Union's internal procedures, the Court concludes as a matter of law that plaintiff did not possess an objectively reasonable belief that section 501 of the LMRDA was violated. (Pp. 16-21). 4. Plaintiff's belief that defendants violated the Union's bylaws also does not provide the basis for an actionable CEPA claim. Bylaws are not laws, rules or regulations, but rather a contract between the union and its members. Nor can the Court identify a clear mandate of public policy concerning the health, safety or welfare or protection of the environment that might have been violated by the Board's conduct. (Pp. 21-22). 5. Because plaintiff failed to establish a CEPA claim, the Court declines to comment on the Appellate Division's holding that federal labor law preempts a state law claim for common law or statutory wrongful discharge when that claim implicates a union's internal policies and fails to allege that criminal conduct has occurred. (P. 22). The judgment of the Appellate Division is AFFIRMED. CHIEF JUSTICE PORITZ and JUSTICES COLEMAN, LONG, VERNIERO, LaVECCHIA and ALBIN join in JUSTICE ZAZZALI's opinion. Plaintiffs-Appellants, v. ROBERT MCDEVITT, LOCAL 54 OF THE HOTEL EMPLOYESS RESTAURANT EMPLOYEES INTERNATIONAL UNION, Defendants-Respondents, and ALAN M. COHEN, JABIEL SANTIAGO, ALBERT SICILIANO and THE LOCAL 54 EXECUTIVE BOARD, Defendants. Argued January 7, 2003 Decided August 12, 2003 On certification to the Superior Court, Appellate Division, whose opinion is reported at 348 N.J. Super. 164 (2002). Nelson C. Johnson argued the cause for appellants (Johnson & DeMarco, attorneys; Mr. Johnson and Nancy A. Valentino, on the briefs). William T. Josem argued the cause for respondents (Cleary & Josem, attorneys; Mr. Josem, Regina C. Hertzig and Cassie R. Ehrenberg, on the briefs). Alan Hyde, a member of the California bar, submitted a brief on behalf of amicus curiae The Association for Union Democracy, Inc. (Ronald Chen, attorney). Raymond G. Heineman, Jr., submitted a brief on behalf of amicus curiae New Jersey State AFL-CIO (Lynch Martin, attorneys). The opinion of the Court was delivered by ZAZZALI, J. This appeal requires us to determine whether the jury s verdict in favor of plaintiff is sustainable under the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to 8. Plaintiff, formerly a paid arbitration officer and an unpaid elected Executive Board member of Local 54 of the Hotel and Restaurant Employees International Union (Local 54 or the Union), alleges that the Union wrongfully discharged her from her paid position after she repeatedly voiced concerns regarding the Executive Board s failure to read its minutes at general membership meetings. Plaintiff claims that she believed that the Board s conduct denied Union members the right to participate, deliberate, and vote in Union matters as prescribed by federal labor law and the Union s internal bylaws. The jury found that defendants had violated CEPA, but the Appellate Division set aside the verdict on the ground that federal labor law preempted plaintiff s CEPA claim. We conclude as a matter of law that plaintiff s asserted belief that defendants conduct violated a law or public policy was not objectively reasonable. We therefore affirm the Appellate Division. Our conclusion that plaintiff has failed to present a CEPA claim makes it unnecessary to address the panel s holding that federal labor law preempts plaintiff s state law claim. (a) All applications for donations, and all proposed expenditures other than the routine operating expenses, shall when timely, first be referred to the Executive Board for their approval, which approval shall be subject to membership ratification by a majority vote of the membership present at a regular or special meeting. (b) All wages, salaries and regular expense allowances paid to officers, employees, delegates and committees must be determined by a recommendation of their Executive Board and approval of a regular meeting of the Union. Section 10. (a) . . . . All actions of the Executive Board are subject to the approval of the membership meetings. There shall be no stay of execution from Executive Board actions. All expenditures of the Local Union shall be subject to the approval of the Executive Board. The Executive Board shall in general take up for discussion and decision all business of the Local Union. A majority of the Executive Board members present shall constitute a quorum. (b) All applications for donations, and all proposed expenditures other than routine operating expenses shall first be referred to the board for their approval, which approval shall be subject to membership ratification by a majority vote of the membership present at a regular or special meetings. All wages, salaries and regular expense allowances paid to officers, employees, delegates and committees must be determined by a recommendation of their Executive Board and approval of a regular meeting of the Union. At trial, plaintiff testified that although she did not believe that the Executive Board s actions were illegal, her objections to the Board s refusal to read its minutes at the general membership meetings reflected her concern that the Board was denying the rank-and-file members the right to participate, deliberate, and vote in Union matters as prescribed by the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C.A. 401 to 531. Plaintiff explained that she was familiar with Local 54 s By-laws and the LMRDA prior to attending the George Meaney [sic] Center for Labor Studies in May of 1997. While at the Meany Center, plaintiff overheard other union representatives state that many union locals were reading their Executive Board minutes at general membership meetings in order that the members could deliberate and vote upon the actions being taken by the Board. Accordingly, plaintiff pursued this issue with the Board, demanding that the general membership be informed of, and approve, all Executive Board actions. When the Board did not respond to plaintiff s concerns, plaintiff sent a letter in July of 1997 to the Board, stating: There is some feedback from the rank and file that some members are suggesting that we are violating the By-Laws because we do not read the minutes of the E-Board meetings into the record at the G.M. meetings. We should at least offer them even if we ask for a motion to enter them as read. I really think we should address this A.S.A.P. In September of 1997, McDevitt, with the approval of a majority of the Executive Board, discharged plaintiff from her position as an arbitration officer, allegedly for mishandling internal documents, including the official minutes of the Executive Board meetings, and more generally for insubordination. Plaintiff s termination letter stated that [r]ecent indiscretions and remarks regarding the current Administration and Officers have made effective functioning in your position impossible. It is undisputed that plaintiff provided several Union members with unauthorized access to Executive Board minutes. Despite plaintiff s termination as an arbitration officer, she continued to perform her duties as Recording Secretary. At a general membership meeting in December of 1997, plaintiff objected to the Executive Board s refusal to read its minutes, while other members objected to its failure generally to provide the rank-and-file members with greater access to those minutes. For example, John Dzwonar, plaintiff s husband and member of Local 54, accused the Executive Board of sanitizing its minutes. Another Union member objected to the Board s refusal to allow plaintiff to tape record the Executive Board s meetings. Scott Shuster, a Union member and a political opponent of Robert McDevitt, testified that he attempted to raise several questions regarding financial expenditures approved by the Executive Board, but that McDevitt stifled his ability to speak freely. The minutes reveal that plaintiff informed McDevitt that Shuster had a right to speak freely at membership meetings. Plaintiff filed suit under CEPA against defendants Robert McDevitt, Alan Cohen, Jabiel Santiago, Local 54, and Local 54 s Executive Board, alleging that she was terminated in retaliation for expressing [her] opinions and [her] efforts to keep [the] Union members informed of important Union business. She claimed that between October 1996 and September 1997, [d]efendants repeatedly refused to inform the general membership . . . of decisions and expenditures affecting the welfare of the Union members, and that her termination as an arbitration representative was in retaliation for expressing a reasonable belief that the Executive Board s failure adequately to inform the general membership of its actions violated the LMRDA and Local 54 s bylaws. At the close of plaintiff s case, defendants filed a motion to dismiss for failure to state a claim under CEPA. The trial court denied defendants motion, concluding: The thrust of [Dzwonar s] argument is that there was a concerted attempt by the defendants to prevent 29 U.S.C.A. 411 from being affected [sic] and that, in fact, they were thwarting -- and intentionally thwarting the rights of the members to participate in deliberations, to vote on the business of the meetings, to express their views or at least to take any kind of knowledgeable vote or to express their views and to obtain information which was their right to have. And the Court finds that if, in fact, the jury believes that is the case, and they believe the other elements under the Statute, that then they could, in fact, find in her favor on these issues. The jury found that defendants had violated CEPA and awarded Dzwonar $84,000 in compensatory damages, consisting of $40,000 for lost wages and $44,000 for emotional distress. See footnote 1 Defendants filed one motion to set aside the jury s verdict based on the weight of the evidence, and another based on allegations of juror bias. The trial court denied both motions. Defendants also filed a motion for judgment notwithstanding the verdict, or in the alternative, for a new trial. The court denied that motion, stating: [I]t was up to the jury to make a determination whether [plaintiff] had and was, as she said, continually complaining about . . . violations of the members rights to speak and be represented, and giving specific examples of what she considered to be questionable activities. But she said repeatedly through her testimony that it wasn t so much that any of those particular activities were illegal, but that the membership was not adequately advised about them and that she was not, they were not adequately able to speak at meetings and question and find out what was going on because things were not being properly presented, because dissenting questions and comments were being shouted down so that even asking a question was not really being, there was no response. . . . The Appellate Division reversed, holding that federal labor law preempted plaintiff s CEPA claim because it was based solely on an alleged LMRDA violation implicating neither federal nor state criminal law. Dzwonar v. McDevitt, 348 N.J. Super. 164, 170 (2002). Further, the panel noted that [t]he essence of [plaintiff s] dispute with McDevitt and the Executive Board was over policy relating to the manner and extent of providing information to the general membership. Id. at 174. Thus, the panel concluded that even assuming that [plaintiff] was dismissed from her employment because she reasonably believed that the LMRDA required more of defendants, that policy dispute cannot in itself form the basis of a CEPA claim. Ibid. (citation omitted). We granted plaintiff s petition for certification limited to issues implicating CEPA and the LMRDA, 172 N.J. 180 (2002). (1) is in violation of a law, or a rule or regulation promulgated pursuant to law . . .; (2) is fraudulent or criminal; or (3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment. NO. A-109 SEPTEMBER TERM 2001 ON CERTIFICATION TO Appellate Division, Superior Court REGINA DZWONAR and CYNTHIA A. BURGESS, Plaintiffs-Appellants, v. ROBERT MCDEVITT, LOCAL 54 OF THE HOTEL EMPLOYEES RESTAURANT EMPLOYEES INTERNATIONAL UNION, Defendants-Respondents. DECIDED August 12, 2003 Chief Justice Poritz PRESIDING OPINION BY Justice Zazzali CONCURRING OPINION BY DISSENTING OPINION BY