Opinion ID: 1889791
Heading Depth: 1
Heading Rank: 4

Heading: What Criteria Determine Whether an Offender Is a Member of Upper Management Under Lehmann?

Text: As noted, our case law defines what constitutes especially egregious conduct warranting the imposition of punitive damages. Our case law does not as clearly define the standards by which to determine whether a wrongdoer is a member of the defendant employer's upper management.
At the margins, defining upper management is easy. A chief executive officer, chief operating officer, or a member of the board of directors satisfies the definition. At the other extreme, an assembly line worker or clerk with no supervisory responsibilities does not. Our task is to provide guidance for identifying upper management between those extremes. The task is fact-sensitive. See Marley S. Weiss, The Supreme Court 1997-1998 Labor and Employment Law Term (Part I): The Sexual Harassment Decisions, 14 Lab. Law. 261, 293-94 & n. 192 (1998) (citing cases demonstrating that it is unclear how far down the corporate ladder liability should extend). The question of how upper management should be defined implicates several public policy concerns. As the Court in Lehmann noted, the issue of the scope of an employer's liability for ... punitive damages [is] a question of public policy. Lehmann, supra, 132 N.J. at 625, 626 A. 2d 445. In considering these different public policy concerns, the Court noted that the crucial issue [is] which position provides the most effective intervention and prevention of employment discrimination. Ibid. The following public policy considerations will help to define upper management: (1) the purposes of the LAD; (2) the purposes of punitive damages; and (3) the demands of justice for a broadly-based definition that will be applicable to different employment structures.

In Gares v. Willingboro Township, 90 F. 3d 720 (1996), the Third Circuit decided whether, under New Jersey law, a Captain of the Services Division who sexually harassed a female police officer could qualify as a member of upper management for the purpose of assessing punitive damages under the LAD. As a supervisor, Captain Owens set the atmosphere and controlled the day-to-day operations of that office. Because of his high rank and pervasive influence over the employees he supervised, the jury was entitled to find that Captain Owens was an upper management official.... Id. at 733. The court reasoned that the Township's `upper management' cannot be limited to only the uppermost official, but must also include at least the next tier of officials, which includes the Chief of Police. Ibid. (citing Abbamont, supra, 138 N.J. at 429, 650 A. 2d 958) (referring to managerial or supervisory government officials). (Owens had become Chief of Police before the suit was commenced. The court found, as well, that the prior Chief of Police also callously had disregarded Gares's complaints and refused to permit Gares to report his conduct to the [then-] Chief of Police.) Ibid. Generally, our public agencies have viewed managerial executives as occupying more than the uppermost tiers of management. Thus, in contexts such as labor relations, we have described as managerial executives those who have significant power, discretion and influence within their own departments, capable of furthering the mission of the organization and of selecting courses of action from available alternatives. New Jersey Tpke. Auth. v. American Federation of State, County and Mun'l Employees, Council 73, 150 N.J. 331, 356, 696 A. 2d 585 (1997). Whether or not an employee possesses this level of authority may generally be determined by focusing on the interplay of three factors: (1) the relative position of that employee in his employer's hierarchy; (2) his function and responsibilities; and (3) the extent of discretion he exercises. Ibid.
A mere title of manager or supervisor does not by itself suffice to impute that employee's knowledge or actions to the employer. Ulrich v. K-Mart Corp., 858 F.Supp. 1087, 1093 (D.Kan.1994) (holding employer not liable for allegedly harassing activities of an employee who had title of loss control manager but lacked authority to hire, fire, discipline, control employees' wages, or control employees' schedules); Hunter v. Countryside Assoc. for the Handicapped, Inc., 723 F.Supp. 1277, 1278 (N.D.Ill.1989) (holding that alleged harasser, whose title was client supervisor, did not have the kind of supervisory powers necessary to impute his conduct to the employer: alleged harasser lacked authority to hire, promote, fire or discipline). In a narrow set of circumstances, courts will also attribute a non-manager's knowledge to an employer. For example, the clock starts running on employer liability when notice is given to certain employees, who may or may not have any management-level authority but who have responsibility for relaying sexual harassment complaints pursuant to an express policy promulgated by the employer. Campbell v. Board of Regents of the State of Kansas, 770 F.Supp. 1479, 1487-88 (D.Kan.1991). Similarly, employer liability also kicks in when an employee complains of co-worker harassment to a non-management employee who has general responsibility for passing employment-related complaints up the corporate hierarchy.