Leahey v. Singer Sewing Co.

• Decision Date: 04 December 1996
• Citation: 302 N.J.Super. 68,694 A.2d 609
• Parties: Maura LEAHEY, Plaintiff, v. SINGER SEWING COMPANY, Defendant. Monmouth County
• Court: New Jersey Superior Court

Page 68

302 N.J.Super. 68

694 A.2d 609

Maura LEAHEY, Plaintiff, v. SINGER SEWING COMPANY, Defendant.

Superior Court of New Jersey Law Division,

Monmouth County.

Decided Dec. 4, 1996.

Wesley M. Kain (Lawrence, Leslie & Kain), Asbury Park, for Plaintiff.

John M. Nolan (Jackson, Lewis, Schnitzler & Krupman), Morristown, for Defendant.

D'AMICO, J.S.C.

This matter comes before the court on a motion by defendant for summary judgment. Plaintiff has filed a complaint against defendant alleging unlawful discharge from employment. Count One of the complaint alleges that plaintiff was wrongfully terminated while on leave pursuant to the New Jersey Family Leave Act, N.J.S.A. 34:11B-1 through -16 (FLA). Count Two alleges sex discrimination in violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1, through -42 (LAD).

Count Three alleges that by virtue of a handbook prepared by defendant Singer Sewing Company (Singer), plaintiff had an employment agreement which was breached when she was terminated without "just and sufficient cause." Count Four alleges that Singer did not give plaintiff any warning before her discharge, did not give her an opportunity to rehabilitate her position, did not discuss her job performance with her, and otherwise violated company discharge procedures.

Plaintiff Maura Leahey was hired by defendant Singer on May 16, 1988, as an Accounts Receivable Supervisor in Singer's North American Sewing Products Division. She was directly responsible for all credit and collection of special market accounts and fabric chain accounts, including the TransAmerica accounts. Her duties and responsibilities included the establishment of credit limits, the opening of accounts, the tracking of receivable arrears, and the handling of cash receipts. Plaintiff worked very closely with the Accounting and Finance Departments and with outside auditors. She also was the representative or liaison of her department to the systems department. There were three persons who reported to plaintiff and who were trained by her.

Plaintiff was an at-will employee, having not received or signed an employment contract with Singer. On or about January 12, 1994, plaintiff took a disability leave of absence as a result of her pregnancy. Thereafter, she extended her leave pursuant to the FLA, her anticipated date of return being May 23, 1994. At the time plaintiff went out on leave, she was involved in developing certain programs for a new computer system called an "AS400" which Singer had purchased. Plaintiff's responsibilities were assumed by Rosemary DeCarlo, who had previously been responsible for "dealer" accounts. "Dealer" accounts were generally smaller and produced less revenue than the "special market" accounts handled by plaintiff, which involved large retail chains. Several of these "special market" accounts were assigned to Ms. DeCarlo.

During the period of plaintiff's employment, Singer asserts that it experienced financial difficulties and reduced its employee work force in an effort to streamline its organization. According to Peter Diskin, Vice-President of Finance of Singer, he was advised in April, 1994, that another "reduction-in force" would be required. Mr. Diskin decided to eliminate a position in the Finance Department and to consolidate the positions of Accounts Receivable Supervisor and Credit and Collections Supervisor. Mr. Diskin stated: "[U]ltimately, it came down to a decision as to whether I should eliminate the plaintiff's position and assign her responsibilities to Ms. DeCarlo, or eliminate Ms. DeCarlo's position and assign her responsibilities to the plaintiff."

Mr. G.L. Gillespie, Manager of the General Accounting and Credit Department, issued a memorandum on April 19, 1994, entitled "Reporting Change--Accounts Payable." It stated that "in line with our continuing efforts to streamline the Finance Area, ... Maura Leahey's position has been eliminated immediately ... and Rosemary DeCarlo will now assume the overall responsibility of the Credit Department." One other position, that of Janice Kobesto, was also eliminated. Two males were retained, the first being Jim Dermody, whose duties and responsibilities, according to Mr. Diskin, were "quite different from those of the plaintiff and Mrs. DeCarlo." The second was Trevor Tormann, who took on additional responsibilities. Two other females were also retained: Imrana Wahidy and Audrey Martucci.

Mr. Diskin states that he made a business decision "based on what I thought was in the best interests of Singer"--specifically, that since January, 1994, Ms. DeCarlo had assumed many of the responsibilities of plaintiff; that Ms. DeCarlo had spent a considerable amount of time developing the program specifications for the AS400 and was very familiar with the system; and that the manner in which the "special market" and "dealer" accounts were handled once the AS400 became operational was quite different from the manner in which the accounts were handled by plaintiff before January, 1994. In addition, Diskin states that the decision was based on the fact that before she joined Singer in 1991, Ms. DeCarlo had experience with bankruptcy matters and collection, eight years of experience in credit and collections, and approximately 15 years of accounting experience.

Plaintiff asserts that at the time she was terminated, her seniority, duties, training, responsibilities, knowledge and experience far exceeded that of Rosemary DeCarlo. Plaintiff contends that she was well-versed in the development and use of programs for the AS400 computer system and that she worked on various systems which were similar to the ones installed at Singer. Plaintiff also contends that the salary earned by her was less than that earned by Rosemary DeCarlo. Plaintiff argues that her termination was due solely to discrimination based upon her sex and her ability to bear children. She asserts that she was discharged while two males were retained. Plaintiff also contends that she was the only woman in the affected departments who was capable of bearing children and who was on leave pursuant to the FLA at the time of the reduction in force; whereas, the person who replaced her, Ms. DeCarlo, was unmarried, forty years of age, and had no children.

In support of its motion for summary judgment, Singer contends that plaintiff's claim that she was wrongfully terminated while on leave pursuant to the FLA must fail as a matter of law. Singer argues that under the FLA, eligible employees are entitled to a leave of absence for up to twelve weeks in order "to provide care made necessary by reason of" either: (1) the birth or placement for adoption of a child; or (2) the serious health conditions of a child, parent or spouse. N.J.S.A. 34:11B-3(i), -4. The FLA further provides as follows An employee who exercises the right to family leave under section 4 of this act shall, upon the expiration of the leave, be entitled to be restored by the employer to the position held by the employee when the leave commenced or to an equivalent position of like seniority, status, employment benefits, pay, and other terms and conditions of employment. If during a leave provided by this act, the employer experiences a reduction in force or layoff and the employee would have lost his position had the employee not been on leave, as a result of the reduction in force or pursuant to the good faith operation of a bona fide layoff and recall system including a system under a collective bargaining agreement where applicable, the employee shall not be entitled to reinstatement to the former or an equivalent position. The employee shall retain all rights under any applicable layoff and recall system, including a system under a collective bargaining agreement, as if the employee had not taken the leave.

[ N.J.S.A. 34:11B-7.]

The term "reduction in force" is not defined in the FLA. There are to date no reported New Jersey decisions involving an alleged violation of the FLA and/or the LAD in the context of a reduction in force. This issue has been considered by the United States Court of Appeals, Third Circuit, however, in the case of Marzano v. Computer Science Corp., Inc., 91 F.3d 497 (3d Cir.1996). In that case a female former employee brought an action in the Superior Court against a former employer alleging unlawful discrimination on the basis of pregnancy in violation of the New Jersey LAD, unlawful interference with her rights under the New Jersey FLA, and breach of an implied in-fact employment contract. The case was removed to Federal Court.

Marzano alleged that she was hired by Computer Science Corp. in September, 1990; that she went on maternity leave in July, 1993; that she gave birth to her son the next month; and that she was laid off on October 5, 1993. Her performance was satisfactory or better throughout her tenure, and she had been promoted. The defendant alleged that Marzano's position was eliminated along with nine others out of some fifty positions in her unit after financial conditions worsened.

Marzano claimed that the defendant violated her right under the FLA to be restored to her previous position or to an equivalent position of like seniority, status, employment benefits, pay and other terms and conditions of employment. N.J.S.A. 34:11B-7. She further argued that the exception permitting termination of someone on leave when the employer experiences a reduction in force did not apply because the defendant's claim of financial distress, which was the stated reason for the alleged forced reduction, was false.

The Circuit Court of Appeals reversed the District Court's action granting a motion for summary judgment for the former employer, holding that there was a genuine question of fact regarding whether or not Marzano's employer experienced a reduction in force. There was some doubt as to the validity of the financial statements of Marzano's unit and whether that unit was, in...