Workers' Compensation: $10 Million Punitive Damage Award for Workplace Discrimination Upheld

Unlike the NJ workers' compensation claims, there is no cap on punitive damages available for claims under the NJ Law Against Discrimination.

LAD Remedy vs. Punitive Damages

The LAD prohibits discrimination in the workplace based on protected characteristics. If successful under LAD, Pritchett could be entitled to reinstatement, compensatory damages for emotional distress and lost wages, and attorneys' fees.

On the other hand, punitive damages are meant to punish the defendant for egregious conduct and deter similar behavior in the future. The court awarded Pritchett $10 million in punitive damages, a significant sum above the compensatory damages. LAD claims are specifically excluded from the restrictions of the Punitive Damage Acts [PDA].

Judge Currier, P.J.A.D., wrote, "'[P]laintiff presented a case from which the jury could have found especially egregious conduct by clear and convincing evidence.' Pritchett, slip op. at 79 (emphasis added). The evidence demonstrated that the defendant was aware of the plaintiff's MS diagnosis in November 2011 but failed to notify its ADA coordinator, resulting in the denial of the plaintiff's opportunity “to engage in the interactive process” required in a request for accommodation situation. The plaintiff was forced to retire early due to the defendant's actions, suffering economic harm. Given the plaintiff's medical condition, she was also financially vulnerable. Upper management decided to deny the plaintiff's leave requests and ignored the advice of HR personnel. After the plaintiff instituted litigation, the defendant revised the JJC's Leave of Absence policy to state that leaves would be subject to the approval of management and possible reasonable accommodation through the ADA coordinator. There is ample evidence to find defendant's conduct was reprehensible and warranted a substantial punitive damages award."

"After having reviewed the award with great care in light of the defendant's status as a public entity, we find the award appropriate to deter future unlawful conduct. We are mindful the source of the damages award is public funds, but nevertheless have considered the remedial nature of the LAD statute and the expectation “that public officials will be motivated to avoid misconduct that exposes the State to financial sanction in the form of punitive damages if only because of the stigma attached to the judgment.” Lockley, 177 N.J. at 431, 828 A.2d 869. This award serves the purpose of encouraging high-level officials to conform their behavior."

Comparison with Workers' Compensation

New Jersey Workers' Compensation Act provides a specific framework for employees injured on the job, including psychological injuries. Benefits typically cover medical expenses, lost wages, and disability payments. However, these benefits are usually capped statutorily and don't include punitive damages or compensation for emotional distress unrelated to a physical injury.

Key takeaways

This case highlights the potential for LAD claims to yield significant damage awards, exceeding what might be available under Workers' Compensation.
The availability of punitive damages in LAD cases adds another layer of potential financial recovery for employees who experience discrimination.

Considerations

The court's opinion emphasizes that punitive damages against public entities like the State of New Jersey are determined differently than for private companies.
The long-term impact of this ruling on LAD claims and public employers in New Jersey remains to be seen.

Pritchett v. State of New Jersey (Docket No. A-1414-21) (NJ App. Div. 2024) Decided January 30, 2024.

Recommended Citation: Gelman, Jon L., $10 Million Punitive Damages Award for Workplace Discrimination Upheld, www.gelmans.com (04/03/2024)

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ORDER NOW

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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.