Court Opinion

ID: 4546703
Source: CourtListenerOpinion
Date Created: 2020-07-08 14:08:02.442876+00
Date Added: 2024-06-11T12:49:52.240940
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-2885-18T2

SHANIQUE WELLS,

          Plaintiff-Appellant,

v.

AAA NORTH JERSEY,
DAVID HUGHES, President
in his official capacity and
individually, and CHARLES
SHOTMEYER, Chairman
of the Board,

     Defendants-Respondents.
___________________________

                   Submitted March 23, 2020 – Decided July 8, 2020

                   Before Judges Sabatino, Sumners and Geiger.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Passaic County, Docket No. L-3338-16.

                   Hunt, Hamlin & Ridley, attorneys for appellant (Ronald
                   C. Hunt, of counsel and on the briefs).

                   DeCotiis, FitzPatrick, Cole & Giblin, LLP, attorneys
                   for respondents (Susan E. Volkert, of counsel and on
                   the brief; Gregory J. Hazley, on the brief).
PER CURIAM

      Plaintiff Shanique Wells, formerly employed by AAA North Jersey

(AAANJ), filed suit alleging claims under the Law Against Discrimination

(LAD), N.J.S.A. 10:5-1 to -49, and the Conscientious Employee Protection Act

(CEPA), N.J.S.A. 34:19-1 to -14, against AAANJ, its President David Hughes,

and the Chairman of its Board of Directors Charles Shotmeyer. She appeals the

Law Division's November 28, 2018 order granting defendants summary

judgment dismissal of her LAD complaint and denying in camera review of

documents prepared by defendants' counsel, and its January 23, 2019 order

denying her motion for reconsideration. 1 Having reviewed the record in light of

the governing legal principles, we reverse and remand in part.

                                        I.

      We summarize the following facts from the record, viewing "the facts in

the light most favorable to [plaintiff,] the non-moving party." Globe Motor Co.

v. Igdalev, 225 N.J. 469, 479 (2016) (citing R. 4:46-2(c)).

1
  Wells does not appeal summary judgment dismissal of her CEPA claim; thus,
we will not discuss the facts related to the claim, nor the judge's disposition of
the claim.
                                                                          A-2885-18T2
                                        2
      A. Sexual Harassment Allegations

      Wells was hired as a marketing manager at AAANJ in November 2013.

At that time, Hughes was one of several Vice Presidents of the company and a

member of its Board of Directors, and Shotmeyer was the Chairman of the Board

of Directors. Wells was directly supervised by James Dugan, also a company

Vice President and a member of its Board of Directors.

      Wells alleges that soon after she was hired, she was subjected to

inappropriate, sexually lewd behavior by Hughes. In anticipation of her going

to a national AAA meeting, Wells claims Hughes asked her if she was going to

meet with a woman named L.C.2 Wells said she was, and alleges Hughes told

her to "make sure [to] check out [L.C.'s] rack. She has a really nice rack[.]"

When Wells returned from the meeting, she contends Hughes asked her if she

met with L.C. and if she "check[ed] out [L.C.'s] rack, and what [she] thought of

it." Wells stated she replied, "I know we don't know each other very well, but I

don't do this at work. This is not what I do."

      Wells stated she subsequently notified Dugan and L.C. of Hughes'

remarks. Dugan allegedly told her to ignore Hughes because she did not have

2
  We use initials to protect the privacy of the alleged subject of sexually lewd
comments.
                                                                        A-2885-18T2
                                        3
to report to Hughes and that he would serve as a buffer between them. Wells

also learned from Dugan that L.C. had filed a complaint about Hughes' behavior

in the past and L.C. was advised to no longer work directly with Hughes. Wells

did not, at that time, file a complaint with AAANJ's Human Resources

Department (HR).

      According to Wells, the next incident took place around a year later, in

November 2014, when she went to Hughes' office to remind him she was waiting

for some information from him. She alleged Hughes showed her a picture of a

bikini-clad woman on his computer and told her to "check her rack out,"

declaring "that's a nice set." He also asked her how she thought she compared

with the woman. Wells contends she again complained to Dugan, telling him:

            I'm not trying to -- I don't want to run to HR every time
            something is said to me that's inappropriate, because
            that's not who I am. I've never done it, I don't want to
            do it, but this dynamic has got to change, because I
            don't want to feel like every time I'm alone with -- he's
            going to say something or make me feel uncomfortable,
            as he continues to make me feel.

Wells stated Dugan replied he would "take care of it, and [she] believed him."

      About three months later, in February 2015, Dugan emailed his concerns

about Hughes to Shotmeyer in light of rumors that AAANJ's president was going

to be forced out, Hughes was going to become president, and presumably

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                                       4
Dugan's own job may be in jeopardy. The email criticized Hughes' judgment,

business decisions, and possible conflicts of interest, but did not report

accusations of sexual harassment by employees against Hughes. In March, the

rumors bore truth, as Hughes became President of AAANJ.

        In May, Wells claimed Hughes' sexually lewd behavior happened again

when:

             [They] were discussing a membership thermometer that
             [Hughes] asked our department to make so that we
             could see our progress toward our membership goal for
             the year. I presented him one -- with one earlier that he
             wasn't satisfied with. So, [he] said, "I'm going to come
             and I'll show you what I'm talking about."

                   ....

             He came to my office and presented me with two
             pictures.

                   ....

             The first one was of a thermometer. Then he took a
             second picture out and he said, "[w]hen I originally
             started to draw this, it started to look like something
             else." And there was what was seemingly a penis
             ejaculating. And then [he] said, "[t]his guy really
             reached his goal, if you know what I mean." And he
             laughed.

                                                                         A-2885-18T2
                                        5
Wells stated she balled the picture up and threw it in a garbage can. She later

retrieved it and presented it to Dugan, telling him she couldn't "keep doing this."

Dugan told her he would "take care of it."

      On July 1, Wells was promoted to Director of Marketing. Later that same

month, she contended Hughes inappropriately felt up her leg when the two were

momentarily talking alone in a breakroom. Wells stated the next morning she

reported the incident as well as the penis drawing incident to Kathy D'Amico,

AAANJ's HR Manager. Wells alleges she was told HR could not do anything

about Hughes' behavior because HR reported to him. Dugan also discussed an

incident where Hughes touched Wells' leg, stating he was present, but he

couldn't recall where the incident took place.3 He believed Wells probably

informally complained about the incident without filing a formal complaint.

      Wells contended another incident took place on July 16.            She was

conducting a meeting with two other employees while sitting on a folding table

facing the door when Hughes walked into the room asking "[i]s that an invite[]"

while raising an eyebrow and making a thrusting motion with his pelvis. Wells

3
  In her deposition, however, Wells stated nobody else was present during the
incident.
                                                                           A-2885-18T2
                                        6
maintains she jumped off the table and promptly adjourned the meeting. Dugan

acknowledged Wells told him about this incident and he told her to document it.

      A week later, on July 22, Wells stated she advised D'Amico and her

assistant about the many instances that Hughes sexually harassed her. D'Amico,

Wells recalled, reiterated that HR had no authority to address her complaints

against Hughes, suggesting there was nothing HR could do about his behavior.

      B. Reassignment/Resignation

      Sometime in April 2016, Wells claims she advised Dugan that Hughes

told her he cosigned a student loan for the daughter of an AAANJ board member.

Wells thought this was inappropriate and possibly contrary to the company's

conflicts of interest policy. Dugan, agreeing with her, advised Shotmeyer of the

situation.

      When Wells was later confronted in her office by an upset Hughes who

threatened to "write [her] up for missing an e-mail," she informed Dugan.

Dugan, according to Wells, advised her the confrontation was caused "because

the matter of a student loan was either going to be discussed or had been

discussed with the board, and he's really pissed off at you and at me." However,

there is no official indication if the AAANJ Board of Directors addressed the

allegation or determined whether Hughes violated company policy.

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                                       7
      In May, Wells contended she made a complaint against a co-worker, Jim

Pereira. She explained:

            Pereira was told through whatever means . . . that they
            were demoting him and making me the vice-president
            of marketing and the branches, basically phasing him
            out as they had done with a few other managers. He
            became very, very upset about that despite . . . Dugan
            and myself telling him . . . it's not true. . . . As a result
            our dynamic shifted considerably. I don't know what
            happened other than that, but our dynamic shifted
            considerably, and it became a situation where we just
            had trouble working together. We were in meetings
            where [Hughes] had to literally tell him he had to
            behave professionally towards me because he was very
            nasty to me. It's documented. It turned into a very
            nasty situation, because it became the tenured legacy
            employees versus the new employees, and that was the
            environment.

      After Wells was confronted by Hughes about missing an e-mail, she

claimed she was placed under the supervision of Pereira as retaliation for

reporting Hughes' co-signing of the student loan. In a June 8 email to Hughes,

Wells sought clarification of any changes to her role and the impact on her

ability to work from home, which was a condition upon which she accepted

employment with the company. That same day, she also complained about the

reassignment in an email to Shotmeyer; expressing her concern she would be

required to report to Pereira, who is "historically combative and hostile towards"

her and is "routinely unprofessional." In an email to Wells the next day, Hughes

                                                                            A-2885-18T2
                                         8
informed her there would be no change in her role, but as far as her working

remotely, he would need to determine if there was any such agreement with her

old supervisors, including Dugan, to work from home, and he would discuss the

matter with her when she returned.

       Wells never reported to Pereira. On June 10, she gave notice she was

taking a leave of absence, retroactive to June 7, due to a serious health condition.

Over a month later, her counsel notified Shotmeyer she was anticipating filing

a lawsuit due to the hostile work environment created by Hughes' sexually lewd

conduct and his retaliation to her complaints regarding his conduct.             On

November 25, Wells resigned from AAANJ.

      After Wells notified Shotmeyer she was planning to file suit, AAANJ's

counsel interviewed Dugan, asking him if he believed from his sexual

harassment training that Hughes had sexually harassed plaintiff. 4           Dugan

responded:

             I'm not sure I don't know – part of the reason I hesitate
             is because I'm foreseeing something else happening to
             me where I'm not going to have a job now because I
             again spoke up against [Hughes] so it gives me some
             pause to be honest with you in three weeks away I'm

4
  The interview was apparently surreptitiously recorded by Dugan and provided
to plaintiff’s counsel after Dugan was served with a subpoena.

                                                                            A-2885-18T2
                                         9
            having another baby and I've already had enough I'm
            not interested in losing my job now.

                  ....

            It's I mean I don't know.

                  ....

            I'm hesitant to answer.

      Dugan’s employment at AAANJ eventually ended; the record does not

indicate when or why. 5

      C. AAANJ'S Investigation

      In September 2016, the same month Wells filed her lawsuit, AAANJ's

counsel investigated her allegations.    Dugan was interviewed regarding his

knowledge about Wells' complaints, and he acknowledged knowing about the

penis drawing incident but was not sure when it happened. He claimed he

advised Wells to document her complaint in a formal memo, but she did not do

5
  On December 6, 2017, Dugan filed a five-count complaint in the Law Division
against defendants alleging claims for hostile work environment, retaliation,
failure to accommodate, and aiding and abetting under the LAD, and intentional
infliction of emotional distress. The complaint was removed to the District
Court of New Jersey, but later remanded back to the Law Division. After
initially ordering Dugan's complaint and Wells' complaint be consolidated if it
was sent back to state court, the trial judge reconsidered his order following the
remand and did not consolidate the complaints.

                                                                          A-2885-18T2
                                        10
so. He said he reported the incident to D'Amico, who told him there was nothing

she could do because HR reported to Hughes in his capacity as company

President.

      Dugan stated he was asked by Shotmeyer if he knew anything about the

concerns regarding Hughes' behavior towards women in the office because

Hughes had propositioned a woman contractor with the company to "go to his

place." Dugan said he told Shotmeyer about the incidents regarding L.C. and

the penis drawing.

                                      II.

      On September 22, 2016, Wells filed a three-count complaint against

defendants alleging gender/sexual harassment and sexual discrimination in

violation of the LAD, and retaliation in violation of the CEPA.

      On January 12, 2018, Wells moved for an order granting leave of court

"to propound interrogatories outside of Forms A, B, and C . . . in a manner

consistent with the interrogatories propounded by the [d]efendants an d

responded to by . . . [her]." In her merits brief, Wells contends she "requested

the [p]roduction of [d]ocuments from . . . [d]efendants which included any

documents or statements made by any witnesses to the alleged harassment."

                                                                        A-2885-18T2
                                      11
      Defendants responded to Wells' request for documents with general

objections and limitations, noting that any documents they had were privileged,

and "following a thorough review by outside legal counsel for . . . AAA[NJ], . .

. which was conducted in anticipation of litigation . . . it was concluded that the

allegations made by [Wells] were entirely false."

      Despite Wells' request to extend discovery ninety days, discovery ended

on July 31 and her counsel still sought responses to incomplete discovery. Wells

specifically sought defendants' counsel's investigative materials to determine

whether the company breached its duty to perform an adequate investigation.

Defendants' counsel advised she would not be responding to discovery requests

because discovery had ended, and investigation documents were the work of

outside counsel hired in anticipation of defending against Wells' lawsuit.

      With trial scheduled for October 22, defendants moved for summary

judgment on August 24.       The trial date was adjourned pending the Civil

Presiding Judge's ruling on Dugan's motion to consolidate his and Wells'

complaints. On July 27, Wells submitted a letter to the trial judge requesting

the discovery end date be extended by ninety days if the court decided to

consolidate her complaint with Dugan's complaint against AANJ, pursuant to its

February 2, 2018 order. After summary judgment oral argument on October 15,

                                                                           A-2885-18T2
                                       12
the judge reserved decision pending the rulings on the consolidation motion.

The Civil Presiding Judge denied Dugan's motion to consolidate on October 26.6

       On November 28, the judge entered an order and placed his oral decision

on the record, granting summary judgment dismissal of Wells' complaint.

Beyond mentioning the LAD and the CEPA, the judge's decision did not cite

any law. In dismissing Wells' LAD hostile work environment sexual harassment

claim, the judge stated she was required to prove retaliatory action and failed to

do so because she had effectively quit her job rather than report to her new

supervisor, Pereira.   The judge determined Wells failed to establish her

employment conditions met that standard. Regarding Wells' request7 to compel

discovery and have the judge conduct an in camera inspection of AAANJ's

counsel's investigation documents, the judge determined it was immaterial

because continued discovery to prove she was sexually harassed would not have

overcome her failure to show an adverse employment action.

       Wells later moved for reconsideration, arguing she was not required to

prove she suffered an adverse employment action as a prima facie element of

6
    Dugan's motion for reconsideration was denied on December 6.
7
  Wells request was presented to the trial judge in her opposition to summary
judgment.
                                                                          A-2885-18T2
                                       13
her LAD hostile work environment sexual harassment claim.              After oral

argument, the judge issued his oral decision denying reconsideration. The judge

initially pointed out there was a question concerning whether the motion was

filed within the twenty-day requirement of Rule 4:49-2, but rather than deciding

the motion on procedural grounds, he addressed the merits of the motion. 8 He

then stated "looking at the allegations, giving [Wells] the benefit of assuming

these allegations to be accurate, I don’t believe that the allegations reflect

conduct on the part of . . . defendant[s] that is sufficiently severe or pervasive

to allow a reasonable jury to conclude that there was a hostile work

environment." The judge also maintained he didn't believe Wells "demonstrated

anything that would suggest that an adverse employment action was taken."

                                       III.

      We address Wells' arguments on appeal in the order presented. Before

doing so, we point out her last argument – that the trial judge erred in denying

her motion for reconsideration – need not be addressed because the argument

and law pertaining to that motion are fully addressed in resolving her

8
   Wells contended she attempted to file a motion for reconsideration on
December 18 but was prevented from doing so by the eCourts system. In a letter
to the court dated December 21, Wells explains the submission issue, and
advises the motion was filed as a new matter with a comment to reference the
preexisting case.
                                                                          A-2885-18T2
                                       14
contentions related to the judge's initial decision granting summary judgment to

defendants.

                                        A.

                       Hostile Work Environment Claims

      Wells argues the judge misinterpreted the LAD as articulated in Lehmann

v. Toys 'R' Us, Inc., 132 N.J. 587, 601 (1993) and its progeny, in dismissing her

hostile work environment sexual harassment claim. Specifically, the judge

wrongly determined she was required to show she "in any way suffer[ed] adverse

employment retaliatory activity at the hands of . . . defendant[s,]" and wrongly

applied the more rigorous "severe and pervasive" test required to prove a

constructive discharge allegation, instead of the "severe and pervasive" test

needed to sustain a hostile work environment sexual harassment claim under the

LAD. Citing Shepherd v. Hunterdon Developmental Ctr.,174 N.J. 1, 26-29

(2002), Wells contends the judge's application of the more rigorous "severe and

pervasive" test for constructive discharge claims compared to sexual harassment

claims, runs contra to how courts should address both claims when found in the

same case. She argues that in Shepherd, our Supreme Court explained even

when there is an absence of "severe and pervasive" facts to prove constructive

discharge, facts may still exist to sustain a hostile work environment claim. Ibid.

                                                                           A-2885-18T2
                                       15
      Defendants contend Hughes' conduct was not severe or pervasive enough

to be actionable under the LAD. Citing Godfrey v. Princeton Theological

Seminary, 196 N.J. 178, 183-88, 199 (2008) (holding repeated date requests and

small gift offerings by elderly tenant of the Seminary's apartment to two

Seminary students did not involve the type of conduct actionable under the

LAD), they contend Hughes' alleged behavior, at worst, would be considered

"offensive utterances" that reflect a lack of workplace decorum. Under the

circumstances here, such a defense is without merit.

      The LAD is remedial legislation enacted to prohibit unlawful employment

practices and discrimination in the form of harassment, "based on race, religion,

sex, or other protected status, that creates a hostile work environment."

Lehmann, 132 N.J. at 601; see N.J.S.A. 10:5-12(a). The LAD provides:

            It shall be an unlawful employment practice, or, . . . an
            unlawful discrimination:

            a. For an employer, because of . . . sex . . . of any
            individual . . . to bar or to discharge . . . from
            employment such individual or to discriminate against
            such individual in compensation or in terms, conditions
            or privileges of employment[.]

            [N.J.S.A. 10:5-12(a).]

      As our Supreme Court pointed out in Lehmann, the LAD does not contain

any provision specific to sexual harassment, and "[t]he legislative history of the

                                                                          A-2885-18T2
                                       16
LAD is silent on" the subject. 132 N.J. at 600. However, noting the LAD closely

tracks its federal counterpart, Title VII of the Civil Rights Act of 1964, the Court

held "[s]exual harassment is a form of sex discrimination that violates . . . the

LAD." Id. at 600-01 (citing Meritor Sav. Bank v. Vinson, 477 U.S. 57 (1986);

Erickson v. Marsh & McLennan Co., 117 N.J. 539, 555–56 (1990)). The "[l]oss

of a tangible job benefit is not necessary for a hostile work environment claim

because the harassment itself affects the terms of conditions of employment."

Shepherd, 174 N.J. at 28.

      To prove a hostile work environment sexual harassment claim under the

LAD, a plaintiff must show:

            [T]he complained-of conduct (1) would not have
            occurred but for the employee's gender; and it was (2)
            severe or pervasive enough to make a (3) reasonable
            woman believe that (4) the conditions of employment
            are altered and the working environment is hostile or
            abusive. When the harassing conduct is sexual or sexist
            in nature, as when a plaintiff alleges that she has been
            subjected to sexual touchings or comments, the first
            element will automatically be satisfied. However, a
            LAD plaintiff is also compelled to prove that the
            harassing conduct, not its effect on the plaintiff or on
            the work environment, was severe or pervasive. To
            satisfy the third and fourth factors, a LAD plaintiff must
            show that her working conditions were affected by the
            harassment to the point at which a reasonable woman
            would consider the working environment hostile.

                                                                            A-2885-18T2
                                        17
            [Griffin v. City of E. Orange, 225 N.J. 400, 413-14
            (2016) (citations and quotation marks omitted).]

      The first element is satisfied by Wells because she alleged she was subject

to sexual touching and lewd comments. As to elements two through four we

review them interdependently because "[o]ne cannot inquire whether the alleged

conduct was 'severe or pervasive' without knowing how severe or pervasive it

must be." Lehmann, 132 N.J. at 604. Wells must thus show the conduct was

"severe or pervasive enough to make a reasonable woman believe that the

conditions of employment are altered and her working environment is hostile."
Ibid. In considering the severity and pervasiveness of the conduct, we are

instructed to "consider the cumulative effect of the various incidents, bearing in

mind 'that each successive episode has its predecessors, that the impact of the

separate incidents may accumulate, and that the work environment created may

exceed the sum of the individual episodes.'" Id. at 607 (quoting Burns v.

McGregor Elec. Indus., Inc., 955 F.2d 559, 564 (8th Cir. 1992)).

      Although case law regarding specific conduct which rises to actionable

sexual harassment under the LAD is sparse, Lehmann, 132 N.J. at 595-97, and

Griffin, 225 N.J. at 406, both describe unwanted kissing and sexual advances

rising above the sexual and crass jocular behavior described by Wells. In

Baskerville v. Culligan Int'l Co., 50 F.3d 428, 430-31 (7th Cir. 1995), a Title

                                                                          A-2885-18T2
                                       18
VII sexual harassment case, the Seventh Circuit Court of Appeals provides that

close calls regarding whether conduct constitutes a severe and pervasive hostile

work environment should be a question for a jury, declaring:

            [T]he line that separates the merely vulgar and mildly
            offensive from the deeply offensive and sexually
            harassing. It is not a bright line, obviously, this line
            between a merely unpleasant working environment on
            the one hand and a hostile or deeply repugnant one on
            the other; and when it is uncertain on which side the
            defendant's conduct lies, the jury's verdict, whether for
            or against the defendant, cannot be set aside in the
            absence of trial error.

            [(citations and quotations omitted).]

      In that same vein, our Supreme Court has held, in hostile work

environment cases, whether rude and obnoxious behavior is severe or pervasive

enough to be actionable, is a jury question, precluding summary judgment. See

Cutler v. Dorn, 196 N.J. 419, 436 (2008) (finding whether anti-Semitic jokes

and remarks made by co-workers to a Jewish police officer were severe or

pervasive enough to be actionable under the LAD was properly heard by a jury).

      Viewing Wells' allegations as true under our summary judgment standard,

Holmes v. Jersey City Police Dep't, 449 N.J. Super. 600, 602-03 (App. Div.

2017), she accused Hughes of: (1) telling her to admire L.C.'s breasts when she

saw L.C. at a convention; (2) asking her after the convention what she thought

                                                                        A-2885-18T2
                                      19
of L.C's breasts; (3) stating he admired the breasts a bikini-clad woman he

showed her on his computer, and asking her how her breasts compared with the

woman's breasts; (4) showing her a picture he drew simulating an ejaculating

penis; (5) touching her leg inappropriately when they were in a breakroom; and

(6) walking into a room where she was sitting on the edge of a desk surrounded

by colleagues, and making a thrusting motion with his pelvis, after raising an

eyebrow and asking if her position was an invite. We conclude a jury should

decide if such alleged conduct over the course of two-and-a-half-years is deeply

offensive and sexually harassing enough to make a reasonable woman believe

her workplace environment is hostile. Wells did not have to prove that her

employment was adversely affected beyond the fact that Hughes' behavior was

severe and pervasive sexual harassment. Thus, the judge erred in finding Wells

did not prove a prima facie LAD claim to avoid summary judgment.

                                      B.

            Direct/Vicarious Liability as to AAANJ and Shotmeyer

      In determining Wells' LAD claims should be dismissed on summary

judgment grounds because she failed to prove an adverse employment action,

the judge did not rule on whether AAANJ and Shotmeyer could be held

negligent and reckless for having poor policies and procedures or vicariously

                                                                        A-2885-18T2
                                      20
liable for Hughes' conduct. Under certain circumstances, in accordance with

Rule 2:10-5, we "may exercise such original jurisdiction as is necessary to the

complete determination of any matter on review." Because our review is de

novo, and the issue has been fully briefed and orally argued, we perceive no

need to remand this issue to the trial court and will address it in the interests of

judicial economy. See e.g., Marion v. Borough of Manasquan, 231 N.J. Super.
320, 330 (App. Div. 1989) (exercising original jurisdiction where resolution of

the issue "is necessary for a complete determination and the facts necessary to

resolve it are present in the record") (citing R. 2:10-5)).

      To establish AAANJ's policies and procedures were sufficient and

adhered to, AAANJ and Shotmeyer point to the policies in place during the time

Wells was allegedly harassed; the training Wells received regarding those

polices; and the complaints by other employees and Wells that were properly

addressed.    They therefore argue a structure was in place at AAANJ to

thoroughly and effectively handle complaints of harassment, and if Wells had

legitimate complaints of harassment or discrimination, she clearly failed to take

advantage of AAANJ's available structure.

                                                                            A-2885-18T2
                                        21
     AAANJ’s policies and procedures regarding sexual harassment are

detailed in a document titled "NON-HARASSMENT POLICY," which

provides:

            We want all employees to know that they can work in
            security and with dignity, and are not required to endure
            insulting, degrading or exploitative treatment. The
            [c]ompany will not tolerate harassment of its
            employees on the basis of . . . sex . . . and strongly
            disapproves of all forms of sexual harassment. All
            employees have a right to be free from discrimination
            in their work environment, including freedom from
            sexual harassment. Any violation of this policy by any
            employee will result in discharge or other disciplinary
            action.

            [E]ngaging in other sexually harassing or offensive
            conduct or creating offensive or hostile conditions in
            the workplace is prohibited on the part of all
            employees. Sexual harassment includes, among other
            things, . . . unwanted physical contact, as well as other
            verbal or physical conduct of a sexual nature such as
            epithets, jokes and insults, or any other unwelcome
            conduct of a sexual nature. Abusing the dignity of an
            employee through unwelcome jokes or derogatory
            comments creating a hostile work environment will
            also not be tolerated.

            If an employee feels this policy has been violated in any
            way, the employee should immediately report the
            matter to the President. Any communication pursuant
            to this policy will be maintained in the strictest
            confidence, to the extent possible under the
            circumstances. An employee need not be the actual
            target of harassment to bring any matter to the attention
            of the President.

                                                                        A-2885-18T2
                                      22
      AAANJ and Shotmeyer also contend it conspicuously displayed notices

advising employees of their rights under Title VII and the LAD. Proof their

employees were properly trained regarding those laws, is evidenced in Wells'

signing a "receipt of employee guide" on November 1, 2013, which contained

the company's non-harassment policy.         She also completed training for

"preventing sexual harassment" and "preventing discrimination," on December

7, 2015.9

      AAANJ and Shotmeyer presented several instances where Wells used its

harassment policy to file complaints and those complaints were properly

addressed. Wells made a complaint to HR about an unpleasant interaction with

a mail room employee, which was addressed when Jim Dobi, an AAANJ Vice-

President at that time, wrote an email providing that he "talked to [the employee]

and gave him a verbal warning." Wells also filed a formal complaint about

another AAANJ employee, which resulted in an investigation by an outside

counsel and a finding the employee was insubordinate, but her conduct did not

constitute a hostile work environment because her actions were not based on

Wells' protected status. In addition, Wells sent emails to Pereira and Dugan,

9
  Dugan completed similar training on September 27, 2010, November 27, 2013,
and November 6, 2015.
                                                                          A-2885-18T2
                                       23
following up on a previous complaint about a AAA branch manager. The record

does not indicate how that complaint was resolved.

      To substantiate its position that Wells and Dugan never reported Hughes'

harassing conduct, defendants rely upon the certification of D'Amico, whom

Wells and Dugan contended they complained to. D'Amico's stated:

            If [Wells] had reported to me that she was sexually
            harassed and/or discriminated against by Mr. Hughes I
            would have immediately prepared a write-up and
            placed it in [Wells'] employee file, as is my usual
            practice. . . . Additionally, I would have immediately
            reported the complaint to my supervisor at the time,
            [AAANJ] Vice President Jim Dobi, to determine
            whether the matter should be referred to the Board of
            Directors (in light of the fact that Mr. Hughes was
            President of AAANJ) for further investigation.

D'Amico also certified she denied ever being notified by Wells or Dugan about

any sexual harassment or discrimination regarding Hughes. She further asserted

the claims by Wells and Dugan, that she told them there was nothing she could

do because Wells reported to Hughes, did not make sense given Dobi had always

been her direct supervisor.

      Wells argues AAANJ and Shotmeyer are not entitled to summary

judgment on negligence and vicarious liability claims because she presented

sufficient evidence showing AAANJ's policies and procedures were deficient

because: (1) all complaints of harassment were "required to go through" Hughes,

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                                     24
the alleged harasser; (2) there were complaints about Hughes' conduct from

other women and his misconduct persisted; (3) other managers and higher level

employees that were trained in AAANJ's policies and procedures were aware of

the conduct and failed to take corrective action; and (4) AAANJ failed to

monitor its policies, as shown by Dugan's concern of retaliation if he disclosed

his thoughts about Hughes' conduct. Wells also maintains if the court disagrees

that the evidence bends in her favor, there were: (1) factual disputes as to the

effectiveness of AAANJ’s harassment policies and procedures, and (2) factual

disputes as to whether she complained about Hughes and that AAANJ and

Shotmeyer failed to affirmatively defend her from Hughes' sexual harassment.

      Wells asserts that in evaluating the effectiveness AAANJ’s sexual

harassment policy, a court is to assess the "complaint structures for employees'

use, both formal and informal in nature." Gaines v. Bellino, 173 N.J. 301, 312-

14 (2002). She contends the argument that she did not submit a formal or written

complaint to HR is not determinative as to the merits of her claims, but it does

speak to the effectiveness of AAANJ’s policies and procedures in combating

sexual harassment. Id. at 317-18 ("The County's defense to this cause of action

has been to focus attention on plaintiff's failure to file a formal complaint. That

alone is insufficient to entitle defendants to an affirmative defense insulating the

                                                                            A-2885-18T2
                                        25
County from liability for an alleged hostile work environment caused by one of

its highest ranking officers.").

      Wells argues AAANJ and Shotmeyer failed to monitor the effectiveness

of its anti-harassment policies, pointing to Dugan's fear in stating whether he

believed Hughes sexually harassed her. She contends the ineffectiveness of the

policies and procedures is borne out by the lack of any action taken to prevent

Hughes' ongoing conduct despite her complaints reaching Dugan, her immediate

supervisor, Shotmeyer, the chairman of the board, and other senior level

employees, all of whom were trained in AAANJ's policies and procedures.

Wells points out when she complained to HR she was told the department could

not do anything about the allegations because it reported to Hughes.

      Wells also contends there were other instances of harassment by Hughes

toward other personnel and "[e]vidence of sexual harassment directed at other

women is relevant to both the character of the work environment and its effects

on the complainant." Lehmann, 132 N.J. at 611. In particular, Wells states

Dugan identified two women who complained about Hughes to HR, however it

is unknown if the complaints were regarding sexual harassment. Dugan also

explained that Shotmeyer had told him Hughes had propositioned a female

contractor for the company.

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                                     26
      Wells contends she has presented a prima facie LAD claim against

AAANJ under a vicarious liability cause of action because Hughes can be

considered her supervisor under this claim and AAANJ failed to affirmatively

protect her from him.

      When a plaintiff establishes sexual harassment by a supervisor or co-

worker, under certain circumstances, the employer can be held liable for the

harassing conduct. Aguas v. State, 220 N.J. 494, 509-10 (2015); Lehmann, 132
N.J. at 615-16. A plaintiff has two causes of action for employer liability, "a

direct cause of action against the employer for negligence or recklessness under

[Restatement (Second) of Agency § 219(2)(b)] . . . [and] a claim for vicarious

liability under [Restatement (Second) of Agency § 219(2)(d)]" if the harasser

was the plaintiff's supervisor.   Aguas, 220 N.J. at 512 (citations omitted).

"Although direct claims for negligence or recklessness under [Restatement

(Second) of Agency § 219(2)(b)] and claims for vicarious liability under

[Restatement (Second) of Agency § 219(2)(d)] are often discussed in tandem,

they are analytically distinct from and independent of one another." Ibid.

Therefore, "the two claims must be addressed separately." Ibid.

      "The negligence standard imposes on [a plaintiff] the burden to prove that

the [defendant] failed to exercise due care with respect to sexual harassment in

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                                      27
the workplace, that its breach of the duty of due care caused the plaintiff's harm,

and that she sustained damages." Ibid. (citing Komlodi v. Picciano, 217 N.J.
387, 409 (2014); Robinson v. Vivirito, 217 N.J. 199, 208 (2014)). When a

defendant challenges the sufficiency of a plaintiff's proofs of a Restatement

(Second) of Agency § 219(2)(b) cause of action against an employer, the court,

deciding a dispositive motion considering the claim, should consider five

factors:

            (1) formal policies prohibiting harassment in the
            workplace; (2) complaint structures for employees' use,
            both formal and informal in nature; (3) anti-harassment
            training, which must be mandatory for supervisors and
            managers, and must be available to all employees of the
            organization; (4) the existence of effective sensing or
            monitoring mechanisms to check the trustworthiness of
            the policies and complaint structures; and (5) an
            unequivocal commitment from the highest levels of the
            employer that harassment would not be tolerated, and
            demonstration of that policy commitment by consistent
            practice.

            [Aguas, 220 N.J. at 513 (citing Gaines, 173 N.J. 313).]

Concurrently or alternatively, a plaintiff may assert a Restatement (Second) of

Agency § 219(2)(d) claim. "[T]he plaintiff has the initial burden of presenting

a prima facie hostile work environment claim." Id. at 524.

            If no tangible employment action has been taken
            against the plaintiff, the defendant employer may assert
            [a] two-pronged affirmative defense . . . . To establish

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                                       28
            that defense, the defendant has the burden to prove, by
            a preponderance of the evidence, . . . that the employer
            exercised reasonable care to prevent and to correct
            promptly sexually harassing behavior[] and . . . the
            plaintiff employee unreasonably failed to take
            advantage of preventive or corrective opportunities
            provided by the employer or to otherwise avoid harm.

            [Ibid. (citing Burlington Indus., Inc. v. Ellerth, 524 U.S.
742, 765 (1998); Faragher v. City of Boca Raton, 524
U.S. 775, 807 (1998)).]

The employee may then rebut the elements of the affirmative defense. Ibid.

      The affirmative defense is not available in cases where the supervisor's

harassment has resulted in an adverse employment action, such as "undesirable

reassignment," nor will the defense provide "protection to an employer whose

sexual harassment policy fails to provide 'meaningful and effective policies and

procedures for employees to use in response to harassment.'" Id. at 522 (citing

Gaines, 173 N.J. at 317). "[A]n allegedly harassing employee is the

complainant's supervisor if that employee had the authority to take or

recommend tangible employment actions affecting the complaining employee,

or to direct the complainant's day-to-day activities in the workplace." Id. at 500.

A four-part test for the factfinder must then be applied. Id. at 514.

            1. Did the employer delegate the authority to the
            supervisor to control the situation of which the plaintiff
            complains . . . ?

                                                                           A-2885-18T2
                                       29
            2. Did the supervisor exercise that authority?

            3. Did the exercise of authority result in a violation of
            [the LAD]?

            4. Did the authority delegated by the employer to the
            supervisor aid the supervisor in injuring the plaintiff?

            If each of these questions are answered in the
            affirmative, "then the employer is vicariously liable for
            the supervisor's harassment under [Restatement
            (Second) of Agency] § 219(2)(d)."

            [Ibid. (first alteration in original) (citations omitted).]

      Under these principles, if Wells proves Hughes' lewd conduct occurred

and she complained about them, which resulted in her reassignment to a less

desirable position by reporting to a person whom she had previous complained

about, AAANJ and Shotmeyer have no affirmative defense. If, contrary to those

claims, they can prove by a preponderance of evidence that Hughes did not

harass Wells and she made no complaints about him, they might prevail at trial.

To prevail on a summary judgment motion to avoid vicarious liability for Wells'

claims, AAANJ and Shotmeyer would be required to demonstrate there are no

factual disputes concerning the fact-sensitive issues surrounding their

affirmative defense. Simply asserting they did not know the President of their

company was sexually harassing a subordinate is no defense. Moreover, since

there are such disputes, they are not entitled to summary judgment for

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                                        30
negligence and vicarious liability related to Wells' hostile work environment due

to sexual harassment. See Holmes, 449 N.J. Super. at 602-03.

                                      IV.

      The remaining issue involves Wells' argument that the judge abused his

discretion by not conducting an in camera review of the documents prepared by

defendants' outside counsel while conducting an investigation into Wells'

allegations. It is unclear when in September 2016 defense counsel's interview

with Dugan took place, but it appears that at the very least defendants were

aware of Wells' intentions to sue them based upon Hughes' alleged behavior.

      Based upon his review of a transcript of the secretly recorded interview

Dugan gave to Wells' counsel under subpoena, the judge stated, "a fatal problem

with this case and that isn't going to change even with more discovery, more

depositions, more anything. [Wells] quit." The judge then stated that since

Wells did not return to work after her leave of absence because she did not

approve of being reassigned to report to Pereira, she "chose to quit for reasons

known only to her, but absolutely not reasons that give rise to a cause of action

in my opinion."

      Wells, relying upon Payton v. N.J. Tpk. Auth., 148 N.J. 524, 532 (1997),

argues Dugan's interview with defendants' counsel indicates AAANJ had

                                                                         A-2885-18T2
                                      31
knowledge of Hughes' misconduct prior to the investigation into her allegations

by outside counsel, and any documents regarding that prior knowledge would

not be privileged. She contends the interview documents are not privileged and

could be used to show AAANJ's policies and procedures were inadequate or that

there was an adverse employment action taken against her.

      Wells argues defendants should have acknowledged the existence of their

counsel's interviews in response to her discovery requests and then claimed any

asserted privilege so that any disputes could be raised before the judge. She

maintains throughout the discovery period, defendants failed to acknowledge

the existence of Dugan's statements and other documents in response to Wells'

discovery requests.     Wells contends defendants' counsel agreed to curb

discovery to mediate the case and pursue the deposition of Dugan and others

after the discovery end date. Wells argues it is apparent that if the interview of

Dugan was not provided prior to his proposed deposition, defendants would be

making the same arguments that they were unaware of Hughes' misconduct

notwithstanding Dugan's admissions otherwise.

      Defendants contend any information obtained from Dugan's interview or

any other source is subject to the attorney-client and work-product privileges

because it was only conducted in the anticipated litigation after Wells' counsel

                                                                          A-2885-18T2
                                       32
sent notice of the potential lawsuit to Shotmeyer. Citing Pomerantz Paper Corp.

v. New Cmty. Corp., 207 N.J. 344, 371 (2011) and Bender v. Adelson, 187 N.J.
411, 428 (2006), defendants argue Wells failed to move for an order to produce

the documents or conduct an in camera review, therefore she cannot now argue

to this court that the judge abused its discretion.

      Defendants assert Wells' attempt to invoke Payton to argue the judge

should have reviewed certain documents in camera is misplaced. There, the

Court held "if the purpose [of the attorney's actions] is to provide legal advice

or to prepare for litigation, then the privilege applies." Payton, 148 N.J. at 551.

Additionally, under Miller v. J.B. Hunt Transp., Inc., 339 N.J. Super. 144, 150

(App. Div. 2001), any documents prepared by counsel are privileged work-

product because the "dominant purpose in preparing . . . [them] was concern

about potential litigation and the anticipation of litigation was objectively

reasonable."

      Defendants further argue Wells has not overcome the work product

privilege, by showing "(1) that [s]he has a substantial need for the requested

documents; and (2) that [s]he is unable, without undue hardship, to obtain the

substantial equivalent of the materials by other means." Medford v. Duggan,

323 N.J. Super. 127, 136-37 (App. Div. 1999).

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                                        33
      Based upon the judge's ruling, we surmise that because he had decided to

grant summary judgment dismissal of Wells' complaint, he found it unnecessary

to conduct an in camera review and determine under the controlling law whether

Wells was entitled to any of the documents gathered by defendants' counsel's

investigation. Consequently, in view of our remand, we vacate the judge's

decision denying an in camera review and require the judge to review the

documents in camera in accordance with the principles set forth in Pomerantz

Paper, Payton and Medford, and any relevant case law or Rules of Court. Unless

one has already been provided, defendants' counsel shall submit to the trial court

a detailed privilege log identifying all disputed privileged communications to

help aid the court in its review. In reviewing the documents, the judge should

consider whether the privileges relied upon by defendants apply to preclude

release to Wells.    The judge should then issue his findings of facts and

conclusions of law. We leave it to the judge's discretion whether to entertain

additional briefing or argument.

                                       V.

      In sum, we express no opinion on whether Wells can prove a hostile work

environment sexual harassment LAD claim against Hughes.               We merely

conclude the trial judge's order granting summary judgment to defendants

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                                       34
incorrectly determined Wells failed to establish a prima facie claim and was

required to prove adverse employment action to sustain her LAD claim. We

also express no opinion on whether AAANJ and Shotmeyer can establish a

defense to direct and vicarious liability for Hughes' alleged behavior. Whether

Wells suffered from a hostile work environment sexual harassment LAD claim

due to Hughes' behavior, and whether AAANJ and Shotmeyer are directly or

vicariously liable for that behavior, should be decided by a jury. In addition,

the judge should conduct an in camera review of the documents prepared by

defendants' counsel sought by Wells and determine if she is entitled to any of

the documents. We take no position as to whether the documents should be

released to Wells.

      Reversed and remanded.

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                                     35