New Jersey Supreme Court answers a document dilemma

Many companies that violate the law try to keep their employees from having the ability to prove those violations of the law. The impose rules that prohibit employees from taking company documents home, or disclosing them to anyone (even courts and government law enforcement agencies). Then, if an employee uses company documents to blow the whistle on illegality, or uses company documents to sue the company, the company can fire the employee, or counter-sue the employee for “theft” of the company’s documents. This creates a dilemma for whistleblowers. When you see company documents that could help prove that company managers are violating the law, do you copy them or not?

Yesterday, the New Jersey Supreme Court issued what could become a landmark decision on this issue. In Quinlan v. Curtis Wright Corp., Case No. A-51-09, the Court reinstated a $10,649,117 judgment in a sex discrimination case. Joyce Quinlan began working for the Curtis Wright Corp. in 1980 as a benefits analyst. By 1999, she had risen to become Executive Director of Human Resources. In 2000, the company hired a man to be Director of Succession Planning and Management Development. In 2003, the company promoted him to be Corporate Director of Human Resources and Management Development, and made him Quinlan’s supervisor. Quinlan objected, but to no avail. She then reviewed the company’s records and copied 1,800 pages that showed a pattern of sex discrimination in wages and promotions. She sued, and the company asked her lawyers for copies of the evidence she planned to use. Her lawyers produced the 1,800 pages. Later, Quinlan also copied the man’s evaluation and her lawyers used it in his deposition. The company then fired Quinlan for copying company documents. Quinlan amended her lawsuit to add a claim for retaliation.

The state supreme court started its analysis on page 24 with a recognition of the remedial purpose of the state Law Against Discrimination (LAD). Essential purpose of the LAD is the “eradication ‘of the cancer of discrimination.’” We have “been scrupulous in [our] insistence that the Law Against Discrimination be applied to the full extent of its facial coverage.” On page 26, the court said, “the LAD operates not only to fight discrimination wherever it is found, but to protect those who assist in rooting it out.”

The court recognized that, “that employees have a common law duty to safeguard confidential information they have learned through their employment relationship and that they are generally precluded from sharing that information with unauthorized third parties.” However, the court had to “strike the balance between the employer’s legitimate right to conduct its business, including its right to safeguard its confidential documents, and the employee’s right to be free from discrimination or retaliation.” Page 27. Activities under the participation clause are essential to the “‘machinery
set up by Title VII, and are therefore vigorously protected to ensure that employees will continue to have access to all mechanisms of enforcement, . . ..’” Page 29. Under the opposition clause, however, the courts use a balancing test. That test seeks to “balance the purpose of the Act to protect persons engaging reasonably in activities opposing . . . discrimination, against Congress’ equally manifest desire not to tie the hands of employers in the objective selection and control of personnel.” Page 30. The employee’s conduct must be reasonable in light of the circumstances.

The court was “reluctant to embrace a rule that permits the employer clever enough to include the word “theft” in a termination letter to thereby insulate itself from an entirely legitimate claim that the termination nonetheless has been an act of discrimination.” Page 38. “Because the fundamental purpose of our LAD is so important to the analysis, we conclude that it must be identified as a separate analytical factor.” Page 39. “Our consideration therefore leads us to adopt a flexible, totality of the circumstances approach that rests on consideration of a wide variety of factors, all of which must be balanced in order to achieve the essential goals embodied in the LAD.” The court set out the factors to consider on pages 40-42 as follows:

1. How the employee came to have possession of, or access to, the document. If the employee came upon it innocently, for example, in the ordinary course of his or her duties for the employer, this factor will generally favor the employee.
2. What the employee did with the document. If the employee looked at it, copied it and shared it with an attorney for the purpose of evaluating whether the employee had a viable cause of action or of assisting in the prosecution of a claim, the factor will favor the employee. If the employee copied the document and disseminated it to other employees not privileged to see it, this factor will balance in the employer’s favor.
3. The nature and content of the particular document. If the document is protected by privilege, in whole or in part, if it reveals a trade secret or similar proprietary business information, or if it includes personal or confidential information such as Social Security numbers or medical information about other people, whether employees or customers, the employer’s interest will be strong.
4. Whether there is a clearly identified company policy on privacy or confidentiality that the employee’s disclosure has violated. The evaluation of this factor should take into account considerations about whether the employer has routinely enforced that policy, and whether, in the absence of a clear policy, the employee has acted in violation of a common law duty of loyalty to the employer.
5. The circumstances relating to the disclosure of the document to balance its relevance against considerations about whether its use or disclosure was unduly disruptive to the employer’s ordinary business. If the document had marginal relevance to the claim of discrimination, but was intended to be used merely to cast unfair aspersions, to divert the attention of the jury, or to sensationalize the trial, this factor would weigh in the balance against the employee. On the other hand, if the document was central to the discrimination claim and merely troubling or upsetting to the employee to whom it related, the factor will more likely weigh in favor of the employee.
6. The strength of the employee’s expressed reason for copying the document rather than, for example, simply describing it or identifying its existence to counsel so that it might be requested in discovery. In this evaluation, the court should consider whether there is evidence that demonstrates that, in the absence of the employee’s act of copying the document, there was a likelihood that the employer would not maintain it, or would have discarded it in the ordinary course of business, that it would have been destroyed, or that its authenticity would be called into doubt.

It will be hard for whistleblowers to be objective about these factors when they are in the heat of deciding whether to use an opportunity to preserve evidence. Hopefully, courts will be understanding if employees focus on getting the advise of an attorney with experience in employment law. Indeed, this is factor number 2 in the Quinlan court’s analysis. So, it is my advice to whistleblowers that they consult with an experienced employment law lawyer early and often about these document dilemmas. This decision is a victory not only for Joyce Quinlan, but also for all whistleblowers who need legal protection when they assess what to do when they catch their boss breaking the law.

Here the New Jersey Supreme Court’s bottom line from pages 45-46 of the Quinlan decision:

Perhaps most important, when considering the strong remedial purposes of the LAD [Law Against Discrimination], and when evaluating the impact that protecting the use of the Lewis appraisal would have in the limited context of plaintiff’s employment discrimination and retaliation claim, the balance weighs heavily in favor of concluding that the conduct was protected. Applying this balancing test to the documents before the court, we find ourselves in agreement with the distinction that the trial court drew. The trial court correctly told the jury that plaintiff’s act of taking the documents, including the Lewis appraisal, was not protected and that the employer was free to terminate her for doing so. In its charge, the trial court asked the jury to decide whether the employer fired her for taking the documents or for pursuing her claim that the failure to promote her was discriminatory. Our application of our balancing test compels us to conclude that the trial court’s approach was the correct one. When presented with that question, the jury found for plaintiff, concluding that she was the victim of retaliatory discharge. We find no warrant to interfere with that finding.

Congratulations to Quinlan’s lawyers, Neil M. Mullin and Nancy Erika Smith. My friend Glen D. Savits and his associates Claudia A. Ries and Jon W. Green submitted an amicus brief on behalf of the National Employment Lawyers Association (NELA). Bravo.