Erickson v. Marsh & McLennan Co.
569 A.2d 793, 117 N.J. 539, 7 I.E.R. Cas. (BNA) 1661 (1990)
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Rule of Law:
A plaintiff in a reverse sex discrimination case must show that the employer is the unusual type that discriminates against the majority. Favoritism based on a consensual romantic relationship, without evidence of coercion, does not constitute sex discrimination under the New Jersey Law Against Discrimination (LAD).
Facts:
- Marsh & McLennan Co., Inc. (M&M) employed John Erickson as an account executive, where he supervised Karen Niedhammer. His direct supervisor was Angela Kyte, and her supervisor was Frank Hayes.
- Niedhammer reported to Kyte and Hayes that Erickson had sexually harassed her on several occasions.
- Shortly thereafter, during a severe snowstorm, Hayes drove Niedhammer home and stayed the night because his car was stuck in the snow.
- Following an investigation in which two other female employees reported improper comments and gestures by Erickson, Kyte issued a formal written warning to him.
- Erickson retained an attorney and formally contested the harassment allegations, claiming they were fabricated.
- Kyte subsequently gave Erickson a performance evaluation between 'acceptable' and 'inadequate,' which Erickson formally disputed in writing as being prejudicial and retaliatory.
- Kyte, Hayes, and another manager jointly decided to terminate Erickson's employment, citing his poor performance and negative reaction to criticism. Niedhammer was not hired to replace him.
- After his termination, Kyte provided written references to two prospective employers, stating that Erickson's 'level of expertise... did not match the depth required for the proper service of M&M clients.'
Procedural Posture:
- John Erickson sued Marsh & McLennan Co., Inc. (M&M) in the New Jersey Superior Court, Law Division (trial court), alleging sex discrimination, wrongful discharge, and libel.
- A jury returned a verdict in favor of Erickson on all three claims, awarding him $250,000 in compensatory and $750,000 in punitive damages.
- The trial court denied M&M's post-trial motion for a judgment notwithstanding the verdict or a new trial.
- M&M, as the appellant, appealed the verdict to the Superior Court of New Jersey, Appellate Division.
- The Appellate Division reversed the trial court's judgment and entered a judgment in favor of M&M on all claims.
- Erickson, as the petitioner, successfully petitioned for certification to the Supreme Court of New Jersey, which is the court issuing this opinion.
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Issue:
Does an employer's termination of a male employee, allegedly to create a position for a supervisor's female paramour, constitute reverse sex discrimination in violation of the New Jersey Law Against Discrimination (LAD)?
Opinions:
Majority - Garibaldi, J.
No. An employer's termination of a male employee, even if motivated by favoritism for a female employee involved in a consensual romantic relationship with a supervisor, does not constitute reverse sex discrimination under the LAD. To establish a prima facie case of reverse discrimination, a male plaintiff must first show that the employer is the 'unusual employer who discriminates against the majority,' which Erickson failed to do. The court reasoned that favoritism based on a consensual 'paramour' relationship is not discrimination based on gender, because the disfavored employee's gender is irrelevant; anyone, male or female, who was not the paramour would have been treated the same. Furthermore, Erickson failed the fourth prong of the discrimination test by not showing that M&M sought a woman to replace him. The court also rejected his retaliation claim, finding that defending oneself against a sexual harassment allegation is not a 'protected activity' under LAD. On the separate libel claim, the court held that an employer has a qualified privilege when providing references but remanded the issue for a new trial because the trial court applied the wrong burden of proof (preponderance of the evidence) instead of the correct standard (clear and convincing evidence) to overcome the privilege.
Analysis:
This decision significantly shapes New Jersey employment law by clarifying the high evidentiary bar for reverse discrimination claims. It establishes that male plaintiffs must show their employer has a history or inclination to discriminate against men, a difficult standard to meet. The ruling also carves out 'paramour preference' from the scope of sex discrimination, aligning New Jersey with federal courts holding that favoritism based on a consensual affair is not illegal gender bias. This provides a clear, though potentially controversial, line for employers, distinguishing between illegal harassment or discrimination and merely unfair, but lawful, favoritism.
