Employees bringing suit for discrimination under the New Jersey Law Against Discrimination (LAD) frequently bring a common law claim for intentional infliction of emotional distress. What happens to a plaintiff's claim for punitive damages under the LAD when a jury (i) determines that defendants did not act with willful, wanton and reckless conduct to sustain the claim for intentional infliction and (ii) does not award the plaintiff any damages for emotional distress? In Rusak v. Ryan Automotive, L.L.C., 2011 N.J. Super. LEXIS 24 (App. Div. Feb. 8, 2011), New Jersey's Appellate Division ruled that discrimination plaintiffs are not necessarily foreclosed from recovering punitive damages by such jury findings. The proofs for punitive damages under the LAD are not the same as those for recovery under an intentional infliction cause of action. 

Rusak v. Ryan Automotive, L.L.C.

Judith Carrie Rusak was a salesperson for a car dealership that was acquired in 2003 by Ryan Automotive, L.L.C. (Ryan). In 2005, Ryan hired a general manager who, according to Rusak, subjected her to insults, crude comments, and graphic sexual stories. Rusak also claimed that when she told that general manager that a co-worker (and one of the general manager’s hires) showed her and another female employee pornographic material, the general manager cursed at her and told other employees that he was going to fire her. Rusak did not return to work and alleged that as a result of this conduct, she experienced anxiety attacks. 

Rusak sued Ryan and the general manager, alleging that she was discriminated and harassed in violation of the LAD on the basis of gender, was retaliated against in violation of the LAD, and was the victim of intentional infliction of emotional distress. She sought compensatory damages for lost wages and emotional distress, punitive damages, and counsel fees. 

The jury concluded that Ryan was subjected to a sexually hostile work environment and that her report about receiving a pornographic email was a substantial or motivating factor in the general manager’s decision to discharge her. The jury did not find that defendants’ acts constituted “willful, wanton or reckless” conduct for purposes of the intentional infliction count and further decided that Ryan should not be awarded emotional distress damages. It did award Ryan $80,108.80 to compensate her for lost wages and back pay. In light of the jury’s findings on the intentional infliction claim, the trial judge did not proceed to the punitive damages phase of the trial. Ryan appealed. 

The Appellate Division concluded that the evidence supported submission of Ryan’s punitive damage claim to the jury. The Court found that Ryan’s proofs demonstrated a continuous pattern of hostility directed at her because of her gender and that the general manager was in an upper management position. The Court acknowledged that there was proof to the contrary, but further determined that such contrary proof did not warrant taking the punitive damage question from the jury. The Court buttressed its conclusion by reviewing other cases in which much less egregious conduct supported submission of punitive damages to the jury. 

The Appellate Division then considered the effect, if any, on the jury’s answer to the interrogatory on the verdict sheet that defendants’ conduct was not willful, wanton and reckless. The Court concluded that the trial judge erred by interpreting the jury’s negative answer as the equivalent of a factual finding under the Punitive Damages Act with respect to defendants’ state of mind. First, the Court ruled that it was improper to read that question as incorporating within its terms the requisite state of mind necessary to support any award of punitive damages because the tort of intentional infliction did not require anything more than intentional or reckless conduct. Second, the Court determined that Ryan never consented to that question acting as a necessary predicate on which her punitive damage claim was based. The Court also found that the jury could have answered the question in the negative, because it concluded that Ryan did not suffer emotional distress as a result of defendants’ discrimination. 

The Appellate Division remanded for a trial on punitive damages. Should that trial go forward, the Court offered guidance on what the jury should be told so that the jury’s attention would be focused only on those issues relevant to the punitive damage phase of the trial. First, the jury should be instructed that it had already been determined that defendants engaged in unlawful harassment and retaliation under the LAD and that Ryan was awarded compensatory damages for lost wages and back pay, along with the amount of that award. The Court also directed the jury be told that it had been determined that Ryan did not suffer emotional distress damages under the LAD and that the purpose of punitive damages was different from the purpose of compensatory damages.

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