NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1892-17T1
COMET MANAGEMENT COMPANY, LLC,
Plaintiff-Respondent/ Cross-Appellant,
v.
NICOLE WOOTEN, KATHLEEN TRUMBLE, and ALLURE PROPERTIES GROUP, LLC,
Defendants-Appellants/ Cross-Respondents. ______________________________
Argued December 10, 2019 – Decided February 25, 2020
Before Judges Accurso, Gilson and Rose.
On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-0740-14.
George T. Daggett argued the cause for appellant/cross- respondent.
Thomas N. Ryan argued the cause for respondent/cross- appellant (Laddey, Clark & Ryan, LLP, attorneys; Thomas N. Ryan and Jessica A. Jansyn, on the briefs). PER CURIAM
Following a six-day jury trial, defendants Allure Properties Group, LLC,
Nicole Wooten and Kathleen Trumble appeal a series of Law Division orders
that culminated in an aggregate final judgment of $361,477.88, including
counsel fees and costs of suit and pre-judgment interest. Defendants argue the
motion judge erred by granting plaintiff's partial summary judgment motion on
liability against Wooten and Trumble; dismissing Wooten's counterclaims for
violations of the Conscientious Employee Protection Act (CEPA), N.J.S.A.
34:19-1 to -14, and the New Jersey Law Against Discrimination (LAD), N.J.S.A.
10:5-1 to -49; and denying reconsideration of those decisions. Defendants
contend the trial judge erred by informing the jury of the motion judge's
decisions establishing liability for breach of contract and breach of the duty of
loyalty; and permitting the jury to consider plaintiff's claims for tortious
interference with economic advantage and breach of the duty of loyalty. For the
first time on appeal, defendants claim error with the jury instructions. Plaintiff
Comet Management Company, LLC cross-appeals the portion of the final
judgment that incorporated a prior order reducing its counsel fees and costs.
We have considered these arguments in light of the record and applicable
legal standards. For the reasons that follow, we affirm all orders under review.
A-1892-17T1 2 I.
Initially, we address defendants' challenges to the motion judge's
decisions on summary judgment, employing the same standard of review that
governs the trial court. Conley v. Guerrero, 228 N.J. 339, 346 (2017). We must
decide "whether the evidence present[ed] a sufficient disagreement to require
submission to a jury or whether it [wa]s so one-sided that one party must prevail
as a matter of law." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536
(1995); R. 4:46–2(c). In doing so, we view the facts from the record before the
motion judge in a light most favorable to the non-moving defendants. Brill, 142
N.J. at 523. Those facts are essentially undisputed. Because Wooten's CEPA
and LAD claims depend upon the timing of certain events, we set forth the facts
in the following chronology in some detail.
A.
Plaintiff manages condominium and homeowners associations. Wooten
was hired by plaintiff in 2003 as the company's office manager. In fewer than
two years, Wooten's responsibilities expanded to property management, which
included working closely with the associations' board members. In 2005,
Wooten signed plaintiff's non-compete agreement. Among other things, Wooten
agreed that "at any time during the period of employment and for a period of
A-1892-17T1 3 one year immediately following termination of [her] employment" she would
not:
A) Sell, solicit or accept business or orders from existing or newly acquired customers of [plaintiff] within a [twenty-five-]mile radius of any of [plaintiff's] offices which are currently maintained within Vernon Township and Hamburg Township, . . . located in Sussex County, . . . with respect to services that are similar to or competitive with [plaintiff] or any of its affiliates . . . . [or]
B) Interfere with, disrupt or attempt to disrupt relationships, contractual or otherwise, between [plaintiff], including [its a]ffiliates, and its existing or newly acquired customers, employees or vendors.
The agreement permitted plaintiff to recover "any and all damages" plus counsel
fees and expenses in the event of Wooten's breach.
In 2008, Wooten became plaintiff's vice-president. As a result of her
promotion, Wooten received an increase in salary and a company car. Hired in
2009, Trumble became plaintiff's financial services manager, providing
accounting services for plaintiff's clients that Wooten managed. Three of those
clients are at issue here: Heritage Lakes at the Quarry Condominium
Association, Inc., and Indian Fields at Hardyston Homeowners Association,
Inc., both of which were located in Hamburg; and Hidden Village Condominium
Association, Inc., which was located in Vernon.
A-1892-17T1 4 By the end of 2012, plaintiff's then president began increasing his son-in-
law's management duties; the son-in-law became plaintiff's president in early
2013. When deposed, Wooten said she was "stripped" of her title sometime in
2013; she could not recall the exact date. Notably, she said her responsibilities
for plaintiff began to diminish by June or July 2013. Wooten's salary was not
decreased.
In August 2013, Wooten complained to plaintiff's president that one of the
company's maintenance workers, nicknamed Tennessee, 1 was living in an
association's vacant unit without paying full rent. That unit was under rent
receivership, the purpose of which is to reduce the association's delinquency
rate. Wooten believed the president violated the rent-receivership "order" by
permitting Tennessee to reside in the unit, which had an "excessive balance."
In October 2013, Wooten complained to the president that Tennessee was
spreading an untrue rumor that she and Tennessee had engaged in a sexual
encounter. Tennessee disclosed to the president a diametrically opposed
version, claiming Tennessee and Wooten had, indeed, engaged in a sexual act.
Following an internal investigation – which could not corroborate either account
1 Wooten identified the employee by his full name. We use the employee's nickname to protect his privacy and because it is relevant to the issues on appeal. A-1892-17T1 5 – the president implemented a written "plan of action" instructing Wooten and
Tennessee to "stay away from each other and to stay away from the properties
that either of them worked at." The following month, Tennessee was terminated
for violating that mandate.
In December 2013, the president moved Wooten's office to the Indian
Fields and Heritage Lakes properties because she "spen[t] most of [her] time
there and ha[d] a very close touch with those boards and th[at] was always the
plan with the new building at [another property]." The president's email to
Wooten acknowledged the "little office area" at that location, but told Wooten
she could use the conference room "anytime" she wanted to, and asked her to let
him know if she thought she would be unable to make that change. In t he same
email, the president also advised Wooten that he intended to move Trumble into
Wooten's office, and he would "set [him]self up in [Trumble's] office." Wooten
asked the president why he intended to move Trumble, stating: "If you take
from me[,] I don't care, my thoughts would be not to disrupt anyone else. I can
sit in the conference room, but moving others, not sure about all of that . . . ."
While Wooten was physically moving to her new office location, the
president gave her a bottle of Jack Daniel's Tennessee Whiskey. Wooten was
offended because, as noted, Tennessee was the former maintenance worker's
A-1892-17T1 6 nickname. The president assured Wooten the liquor was intended as a holiday
gift, which he had selected because he "recalled drinking Jack and Cokes with
her husband . . . ." The president said he gifted other employees bottles of wine
or liquor on that day, as he had done for the prior two or three years around the
holidays. Shortly thereafter, Wooten and Trumble began discussing the
formation of a community property management company that would provide
similar services as plaintiff. They co-founded Allure for that purpose on January
31, 2014.
According to Wooten's deposition testimony, while still employed by
plaintiff, she told Heritage Lakes she had started Allure. Dissatisfied with
plaintiff's work, Heritage Lakes asked Wooten whether she knew anyone who
could perform a "clean-out or something like that for a rent receiver [sic] unit."
Wooten replied: "Sure, if you don't mind." Allure began performing
maintenance work for Heritage Lakes on April 24, 2014. Wooten acknowledged
that Allure issued several invoices to Heritage Lakes for services rendered from
April through August 2014, which included dog waste collection, beach repairs,
and maintenance. Allure provided the invoices to Heritage Lakes through
plaintiff's "system."
A-1892-17T1 7 While she was still employed by plaintiff, Wooten also told Indian Fields
she had started Allure, which performed a "clean-out" for that association in the
Summer of 2014. Trumble "pretty much arranged it." Wooten claimed that
work was not something plaintiff could have performed because "anything that
[plaintiff] did was a catastrophe."
Wooten resigned from plaintiff's employ on August 27, 2014, effective
two days later. In an email to the president she stated: "I am humble just
because of my experiences working for [plaintiff]." On August 28, Heritage
Lakes notified plaintiff it did not intend to renew its three-year contract, which
expired on August 31. That same day, Trumble tendered her resignation, but
stated she "would continue her employment through September 2014 . . . to
facilitate the transition for [plaintiff]." Plaintiff claims it terminated Trumble
on September 2, 2014 when the company "discovered [she] had met with
Heritage Lakes to solicit its business on behalf of Allure . . . ." On September
2, Heritage Lakes retained Allure as its property management company.
Plaintiff's two-year contract with Hidden Village expired on June 30,
2013; the contract was renewed on a month-to-month basis thereafter. But, in
October 2014, two of Hidden Village's board members approached Wooten,
requesting Allure provide property management services for its association.
A-1892-17T1 8 Wooten claimed she had not told Hidden Village's board about Allure while she
was employed by plaintiff. In January 2015, Hidden Village became Allure's
client.
A few months after Wooten and Trumble resigned, plaintiff filed a ten -
count verified complaint in the Law Division. Relevant here, plaintiff asserted
claims for breach of contract against Wooten and Allure; breach of the duty of
loyalty against Wooten, Trumble and Allure; and tortious interference with
economic advantage against Wooten and Allure.2 Plaintiff sought counsel fees
and costs on each count of its complaint. Defendants collectively filed a verified
answer; Wooten asserted counterclaims for violations of the CEPA and LAD,
and plaintiff's internal harassment policy.
B.
Following discovery, the motion judge granted plaintiff's partial summary
judgment motion on liability against Wooten for breach of contract and against
Wooten and Trumble for breach of the duty of loyalty, and dismissing Wooten's
2 For reasons that are unclear from the record, the jury returned a verdict against all three defendants, individually, for tortious interference with prospective economic advantage.
A-1892-17T1 9 counterclaims for CEPA and LAD violations.3 In a cogent statement of reasons
accompanying the order, the motion judge squarely addressed the legal
principles governing non-compete agreements and the duty of loyalty,
concluding Wooten's non-compete agreement was valid and enforceable, and
that she violated the agreement "by accepting business from Heritage Lakes,
Hidden Village and Indian [Fields]." The judge determined Allure, as a separate
entity and a non-party to the agreement, was not jointly liable for Wooten's
breach of contract. The judge also concluded Wooten and Trumble breached
their duties of loyalty by "actively engaging in competition with their current
employer" by co-founding Allure while they were still employed by plaintiff
and accepting business from plaintiff's clients. Finally, the judge rejected
Wooten's contention that plaintiff violated the CEPA or the LAD, or otherwise
treated her unfairly to prevent enforcement of the covenant not to compete.
3 Although the motion judge's written decision thoroughly sets forth his reasons for denying Wooten's CEPA and LAD claims, the accompanying orders granting partial summary judgment do not include dismissal of those claims, or that Wooten's common law claim was still viable. The order denying reconsideration generally refers to the statement of reasons, which again rejected Wooten's CEPA and LAD claims. Prior to jury selection, the trial judge memorialized an off-the-record conference held in chambers stating: "[T]he parties agree that all the counterclaims have been dismissed by [the motion judge]." A-1892-17T1 10 On appeal, defendants primarily contend the motion judge erroneously
determined Wooten violated the non-compete agreement by "accepting"
business from plaintiff's former clients. Because Heritage Lakes and Hidden
Village had ended their contracts with plaintiff before those associations became
Allure's clients, defendants claim the non-compete agreement's "[p]rohibition
against 'acceptance' is contrary to case law and against public policy." In a
somewhat overlapping argument, defendants contend the motion judge failed to
apply the governing law to plaintiff's breach of the duty of loyalty claims.
Defendants argue the judge failed to consider that the associations had been
dissatisfied with plaintiff's work, positing plaintiff derived a benefit from the
work performed by Allure because plaintiff "wasn't immediately terminat ed" by
the associations. Defendants contentions are misplaced. We address those
contentions in reverse order.
1.
Contract or no contract, employees owe an "undivided loyalty" to their
employers "while [they are] still employed." Auxton Comput. Enters., Inc. v.
Parker, 174 N.J. Super. 418, 423-24 (App. Div. 1980). If an employee is not
subject to a non-compete agreement, he "may anticipate the future termination
of his employment and, while still employed, make arrangements for some new
A-1892-17T1 11 employment by a competitor or the establishment of his own business in
competition with his employer." Id. at 423. "The mere planning, without more,
is not a breach of an employee's duty of loyalty and good faith to his employer."
Id. at 424. But, an employee "may not solicit his employer's customers for his
own benefit before he has terminated his employment," and an employee may
not "do other similar acts in direct competition with the employer's business,"
or "contrary to the employer's interests" while still employed. Id. at 423, 425;
accord Chernow v. Reyes, 239 N.J. Super. 201, 202 (App. Div. 1990).
In Cameco, Inc. v. Gedicke, 157 N.J. 504, 516 (1999), our Supreme Court
recognized that a breach of loyalty claim generally requires a fact-specific
analysis, explaining "[t]he scope of the duty of loyalty that an employee owes
to an employer may vary with the nature of their relationship. Employees
occupying a position of trust and confidence, for example, owe a higher duty
than those performing low-level tasks." Generally, "the adjudication of such
claims summons rules of reason and fairness." Ibid. To guide trial courts, the
Court later identified four factors relevant to the determination of whether an
employee-agent breaches the duty of loyalty:
(1) The existence of contractual provisions relevant to the employee's actions; (2) the employer's knowledge of, or agreement to, the employee's actions; (3) the status of the employee and his or her relationship to the
A-1892-17T1 12 employer, e.g., corporate officer or director versus production line worker; and (4) the nature of the employee's [conduct] and its effect on the employer.
[Kaye v. Rosefielde, 223 N.J. 218, 230 (2015) (internal quotation marks omitted).]
As the motion judge correctly concluded, "Wooten and Trumble breached
the duty of loyalty when they accepted business and were in competition with
[p]laintiff, while still employed by [p]laintiff." According to Trumble's
deposition, plaintiff had no knowledge of Allure while Wooten and Trumble
were still employees. Both defendants held high-level management positions
while employed by plaintiff. Further, the non-compete agreement prohibited
Wooten from "accept[ing] business" from plaintiff's clients "during the period
of employment." We are therefore satisfied that the conduct of Wooten and
Trumble "went beyond making arrangements for the future and [they] were
actively engaging in competition," thereby breaching their duty of loyalty to
plaintiff. We also are satisfied that Wooten breached the non-compete
agreement by accepting business from Heritage Lakes and Indian Fields while
she was still employed by plaintiff.
2.
Defendants' primary challenge to the non-compete agreement is grounded
in public policy concerns. They also claim plaintiff mistreated Wooten, thereby
A-1892-17T1 13 rendering the non-compete provision unenforceable. Defendants do not
otherwise challenge the reasonableness of the agreement's restrictions.
Initially, we note the non-compete agreement signed by Wooten
prohibited competition both during and for one year after her employment with
plaintiff ended. The undisputed facts established Wooten breached the
agreement by competing with plaintiff while she was still employed by plaintiff.
Wooten notified Hidden Village, Indian Fields and Heritage Lakes that she had
started her own company when those associations still had effective
management agreements with plaintiff. Allure began performing services for
two of those clients before they had terminated their business relationships with
plaintiff.
Moreover, the restrictive covenant was reasonable. A non-compete
agreement is enforceable if it satisfies the test for reasonableness set forth in
Karlin v. Weinberg, 77 N.J. 408 (1978), as reaffirmed in Community Hospital
Group, Inc. v. More, 183 N.J. 36, 57 (2005), and Pierson v. Medical Health
Centers, P.A., 183 N.J. 65, 69 (2005). The Karlin test, also known as the Solari
or Solari/Whitmyer test,4 requires the court to determine whether: "(1) the
4 Solari Indus., Inc. v. Malady, 55 N.J. 571 (1970); Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25 (1971). A-1892-17T1 14 restrictive covenant was necessary to protect the employer's legitimate interests
in enforcement, (2) whether it would cause undue hardship to the employee, and
(3) whether it would be injurious to the public." Cmty. Hosp. Grp., Inc., 183
N.J. at 57. Courts should also consider three other factors "in determining
whether the restrictive covenant is overbroad: its duration, the geographic limits,
and the scope of activities prohibited. Each of those factors must be narrowly
tailored to ensure the covenant is no broader than necessary to protect the
employer's interests." Id. at 58. Ultimately, a court must assess an agreement's
reasonableness on a case-by-case basis. Pierson, 183 N.J. at 69.
Defendants claim the non-compete agreement fails to satisfy the third
Karlin factor, suggesting a restrictive covenant that prevents a former employee
from "accepting" business from her prior employer's former clients should be
declared void as against public policy. In A.T. Hudson & Co. v. Donovan, 216
N.J. Super. 426, 432-33 (App. Div. 1987), we determined an employer's interest
in protecting customer relationships outweighed the public's interest in "an
unrestricted choice of management consultants." We distinguished the
commercial services rendered by a management consultant from the
professional services rendered by an attorney to a client, a doctor to a patient or
an accountant to a client. Id. at 433-34.
A-1892-17T1 15 Weighing "the competing interest of the customers against plaintiff's
business interest," the motion record here is devoid of any evidence that a one-
year, twenty-five-mile restriction on providing property management services to
plaintiff's existing or newly acquired clients was unreasonably injurious to the
public. See id. at 433. As the motion judge explained, "[a]bsent from the record
before the [c]ourt [we]re any certifications on behalf of [d]efendants certifying
that enforcement of the covenant would restrict the public's access to other
qualified property managers within the [twenty-five-mile] area." The judge
elaborated:
Similarly, absent is evidence in the record showing any undue burden on finding customers from the twenty- five-mile radius restriction. Defendant Wooten is a property manager and her services to the public are in [a] for-profit, commercial context. Unlike the lawyers in Dwyer [v. Jung, 133 N.J. Super. 343 (Ch. Div. 1975), aff'd, 137 N.J. Super. 135 (App. Div. 1975)], or the doctors in [Community Hospital Grp., Inc.], a property manager does not stand in a special relationship to the public [footnote omitted]. Accordingly, there is no negative impact on the public interest.
We agree with the motion judge that defendants failed to support their
claim and that their argument lacks merit. In reaching our conclusion, we reject
defendants' reliance on the Chancery court's observation in Mailman, Ross,
Toyes & Shapiro v. Edelson, 183 N.J. Super. 434, 442 (Ch. Div. 1982), that "a
A-1892-17T1 16 covenant which attempts to 'protect' the clients from contact with the former
employee operates to restrict the solicitation rights of the public[,]" thereby
binding "those who were never parties to the agreement."
More than two decades ago, we explained our discord with Mailman's
implication that "covenants restricting professionals in their practice are
necessarily so 'injurious to the public' that they should rarely, if ever , be
enforced." Schuhalter v. Salerno, 279 N.J. Super. 504, 511 (App. Div. 1995).
Indeed, we rejected a categorical "assertion of invalidity of restrictive covenants
that 'impinge on the public's right to free access to the professional of its
choice,'" the same type of categorical rule for which defendants now advocate.
Id. at 512. Adopting that sort of bright-line approach would contravene our
Supreme Court's mandate that non-compete agreements be assessed on a case-
by-case basis. Pierson, 183 N.J. at 69.
Notably, unlike here, the non-compete agreement in Mailman prohibited
a certified public accountant from "accept[ing], solicit[ing] or offer[ing]
accounting services" to his employer's clients for a two-year period following
his termination. 183 N.J. Super. at 436. After resigning from his position, the
employee accepted employment from one of his former employer's clients. Id.
at 437. Applying the Solari test, the Chancery court denied injunctive relief to
A-1892-17T1 17 the employer. Id. at 442. But, unlike Wooten, the employee in Mailman
"accepted employment from a client[,] which had already terminated its
relationship with [the employer] before seeking out [the employee's] services."
Id. at 441 (emphasis added). Further, unlike here, the non-compete agreement
at issue in Mailman entirely lacked a territorial limitation, which served as a
"pure restriction on competition." Ibid.
Given the focus of defendants' argument, we need not review the
remaining Karlin factors. For the sake of completeness, we observe – as did the
motion judge – that plaintiff's management agreements generally exceeded one
year in duration, therefore the covenant's one-year restriction was "consistent
with [p]laintiff's interests in protecting its client relationships . . . ." Further, as
the property manager for each of the three properties, Wooten had "substantial
dealings" with plaintiff's clients. See Solari, 55 N.J. at 586 (suggesting that
following a remand hearing, a one-year limitation on an employee may be
appropriate for actual or prospective customers with whom the employee had
"substantial dealings" during his employment).
Regarding the "undue hardship" factor, the Court has recognized, "where
the breach results from the desire of an employee to end his relationship with
his employer rather than from any wrongdoing by the employer, a court should
A-1892-17T1 18 be hesitant to find undue hardship on the employee, he in effect having brought
that hardship on himself." Karlin, 77 N.J at 423-24; see also Cmty. Hosp. Grp.,
Inc., 183 N.J. at 102 ("If the employee terminates the relationship, the court is
less likely to find undue hardship as the employee put himself or herself in the
position of bringing the restriction into play.").
As the motion judge noted, Wooten "voluntarily left her employment
relationship with [p]laintiff" in August 2014 and became Allure's property
manager. Importantly, Wooten's non-compete agreement did not prevent her
from providing property management services entirely, and as such, her ability
to earn a living was not impaired. For example, Wooten acknowledged Allure
provided management services to associations other than plaintiff's clients,
including associations located in Nutley and Toms River. We agree with the
motion judge that the record before him was devoid of evidence "showing any
undue burden on finding customers from the twenty-five-mile radius
restriction."
Defendants' contention that Wooten's alleged unfair treatment by plaintiff
somehow voided the non-compete provision lacks sufficient merit to warrant
discussion in our written opinion. R. 2:11-3(e)(1)(E). We simply add
defendants' reliance on Solari is misplaced. Unlike the defendant in that case,
A-1892-17T1 19 Wooten never "expressed the thought that she was being deliberately forced out"
nor did plaintiff terminate her employment. Solari, 55 N.J. at 573.
3.
We also find no merit in Wooten's contention that the motion judge
erroneously dismissed her CEPA and LAD counterclaims. She argues the judge
misunderstood the relevance of her move to a closet-sized office without a desk,
chairs or a telephone, and the insulting gift of whiskey that bore Tennessee's
nickname. She claims the president took those "adverse actions" in retaliation
for her reporting Tennessee's unlawful living arrangements and his false rumor -
spreading, causing her constructive discharge and thereby violating the LAD
and CEPA. Wooten's argument is unavailing.
To establish a prima facie CEPA claim, the employee must prove
(1) he or she reasonably believed that his or her employer's conduct was violating either a law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy;
(2) he or she performed a "whistle-blowing" activity described in N.J.S.A. 34:19-3(c);
(3) an adverse employment action was taken against him or her; and
(4) a causal connection exists between the whistle- blowing activity and the adverse employment action.
A-1892-17T1 20 [Dzwonar v. McDevitt, 177 N.J. 451, 462 (2003).]
Relevant here, CEPA prohibits an employer from taking "retaliatory
action" against an employee for protected whistleblower conduct. N.J.S.A.
34:19-3. "Retaliatory action" is defined as "the discharge, suspension or
demotion of an employee, or other adverse employment action taken against an
employee in the terms and conditions of employment." N.J.S.A. 34:19-2(e).
What constitutes an "adverse employment action" must be viewed in light of the broad remedial purpose of CEPA, and our charge to liberally construe the statute to deter workplace reprisals against an employee speaking out against a company's illicit or unethical activities. Cast in that light, an "adverse employment action" is taken against an employee engaged in protected activity when an employer targets him for reprisals – making false accusations of misconduct, giving negative performance reviews, issuing an unwarranted suspension, and requiring pretextual mental-health evaluations – causing the employee to suffer a mental breakdown and rendering him unfit for continued employment.
[Donelson v. DuPont Chambers Works, 206 N.J. 243, 257-58 (2011).]
By reporting what she perceived to be Tennessee's unlawful occupancy of
the rent-receivership unit, Wooten presented sufficient evidence that she
engaged in protected whistleblowing activity. But, Wooten failed to
demonstrate plaintiff demoted, suspended or discharged her, reduced her rank
A-1892-17T1 21 or compensation, or constructively discharged her in response to that
whistleblowing activity. Maimone v. City of Atlantic City, 188 N.J. 221, 236
(2006). Indeed, as Wooten candidly acknowledged, she could not recall when
she was allegedly demoted, she never received a pay-cut, and her responsibilities
began to diminish in June or July 2013 before she reported Tennessee's unlawful
conduct in August 2013 and rumor-spreading in October 2013.
We agree with the motion judge's determination that Wooten's office
relocation and the gifting of "Tennessee" whiskey did not constitute adverse
employment action under the CEPA. See Shepard v. Hunterdon Dev. Ctr., 336
N.J. Super. 395, 416 (App. Div. 2001) ("Neither rudeness nor lack of sensitivity
alone constitutes harassment, and simple teasing, offhand comments, and
isolated incidents do not constitute discriminatory changes in the terms and
conditions of one's employment."), aff'd in relevant part, 174 N.J. 1 (2002). As
the motion judge recognized, the president testified that every year around
Christmas, he "gave all employees either a bottle of wine or some type of gift as
a thank-you." The president also relocated Trumble's office on the same day
that he relocated Wooten's. We therefore discern no error in the judge's decision
dismissing Wooten's CEPA claim.
A-1892-17T1 22 Defendants rely upon the same conduct to support Wooten's LAD claim.
Because "[i]t is beyond dispute that the framework for proving a CEPA claim
follows that of a LAD claim,"5 Donofry v. Autotote Sys., Inc., 350 N.J. Super.
276, 290 (App. Div. 2001), we find Wooten's LAD claims are without sufficient
merit to warrant discussion in our written opinion. R. 2:11-3(e)(1)(E). We
affirm the judge's dismissal of those claims for the reasons expressed by the
motion judge.
II.
We have considered defendants' challenges to the trial judge's decisions
and find them equally meritless. Accordingly, we affirm those decisions without
discussion, ibid., other than to note defense counsel acknowledged the judge's
preliminary statement to the jurors – informing them liability had been
established and was not an issue before them – was "acceptable" to defendants;
defense counsel did not request a jury instruction regarding the lack of evidence
that defendants "solicited" plaintiff's clients; and the claims of breach of the duty
5 Under the LAD, a claimant must demonstrate: (1) the employee was in a protected class; (2) the employee engaged in protected activity known to the employer; (3) the employee was thereafter subjected to an adverse employment consequence; and (4) that there is a causal link between the protected activity and the adverse employment consequence. Woods-Pirozzi v. Nabisco Foods, 290 N.J. Super. 252, 266, 274 (App. Div. 1996). A-1892-17T1 23 of loyalty and tortious interference with economic advantage are cognizable in
a single action. See Lamorte Burns & Co. v. Walters, 167 N.J. 285, 309 (2001).
III.
On its cross-appeal, plaintiff contends the trial judge erroneously reduced
its fee and cost award. Plaintiff renews its argument that the work its counsel
performed in litigating its three claims – breach of the non-compete agreement,
breach of the duty of loyalty, and interference with prospective economic
advantage – cannot be differentiated. Accordingly, plaintiff contends it is
entitled to fees and costs for all the work performed. Notably, defendants have
not addressed plaintiff's cross-appeal.
It is well-settled that reviewing courts will disturb a trial court's fee award
"only on the rarest of occasions, and then only because of a clear abuse of
discretion." Rendine v. Pantzer, 141 N.J. 292, 317 (1995); see also Litton Indus.
v. IMO Indus., 200 N.J. 372, 386 (2009); Packard-Bamberger & Co. v. Collier,
167 N.J. 427, 444 (2001). "Where the lower court's determination of fees was
based on irrelevant or inappropriate factors, or amounts to a clear error in
judgment, the reviewing court should intervene." Garmeaux v. DNV Concepts,
Inc., 448 N.J. Super. 148, 155-56 (App. Div. 2016).
A-1892-17T1 24 Recognizing our jurisprudence "generally disfavors the shifting of
attorneys' fees, [but] a prevailing party can recover those fees if they are
expressly provided for by statute, court rule, or contract," Packard-Bamberger,
167 N.J. at 440, the trial judge limited plaintiff's fee award to its breach of
contract claim because the non-compete agreement expressly provided for fees
in the event of a breach. The judge elaborated:
[B]ecause only one of the three issues, the breach of contract claim, has a basis to recover attorney[s'] fees, the court will calculate these costs by dividing the costs by three, and providing one[-]third of the fees and costs for the breach of contract claim. The court concurs that the time is not broken down in the time slips because the three claims are intertwined. The court has reviewed the factors set forth in [the Rules of Professional Conduct (RPC)] 1.5 [6] and finds the fees as
6 RPC 1.5(a) delineates the factors to be considered by the court in determining the reasonableness of counsel fees:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
A-1892-17T1 25 submitted are reasonable and the hourly rates are reasonable. The court also finds that allocating attorney[s' fees] equally between the affirmative claims and the counterclaims . . . is reasonable and appropriate based on the court's review of the billing.
Citing our decision in Silva v. Autos of Amboy, Inc., 267 N.J. Super. 546
(App. Div. 1993), which applied the United States Supreme Court's decision in
Hensley v. Eckerhart, 461 U.S. 424 (1983), plaintiff argues that precedent
precludes the approach utilized by the trial judge. We disagree.
In Silva, we observed that when a plaintiff presents claims for which fees
are permitted by statute along with claims for which such fees cannot be
awarded, attorneys' fees for all of the time devoted by counsel to the case can
be awarded if the work on the unrelated claims "can[] be deemed in pursuit of
the ultimate result achieved." 267 N.J. Super. at 556 (citing Hensley, 461 U.S.
at 434-35). A suit will not be considered a collection of separate discrete claims
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;
(8) whether the fee is fixed or contingent. A-1892-17T1 26 if it rests on "a common core of facts" or is "based on related legal theories."
Ibid. (internal quotation marks omitted) (quoting Hensley, 461 U.S. at 435).
We are persuaded the judge reasonably reduced plaintiff's award by two -
thirds because Wooten's breach of the non-compete agreement primarily
involved Wooten's actions while she was employed by plaintiff, while its claims
for unlawful interference with prospective business advantage pertained to the
conduct by Wooten, Trumble, and Allure after both individuals resigned from
plaintiff's employment. In that regard, the trial judge's decision tracks our
direction in Silva – that when the same core facts are relevant to claims for which
fees are to be awarded and other claims – "the court must focus on the
'significance of the overall relief obtained . . . in relation to the hours reasonably
expended on the litigation.'" 267 N.J. Super. at 556 (quoting Hensley, 461 U.S.
at 435). Because the "significance" of plaintiff's relief obtained for its breach
of contract claim, i.e., $93,928.31 – which was expressly permitted under the
non-compete agreement – was much less when compared with the significance
of its non-contractual claims, i.e., $187,856.62 for the unlawful interference
with prospective business advantage, and an aggregate $19,705.68 for its breach
of the duty of loyalty claims, we conclude the judge's award was reasonable.
A-1892-17T1 27 Moreover, we have observed: "In fixing counsel fees, a trial judge must
ensure that the award does not cover effort expended on independent claims that
happen to be joined with claims for which counsel is entitled to attorney fees."
Grubbs v. Knoll, 376 N.J. Super. 420, 431 (App. Div. 2005); see also Chattin v.
Cape May Greene, Inc., 243 N.J. Super. 590, 614 (App. Div. 1990) (holding the
court must consider plaintiff succeeded on two claims that did not provide for
counsel fees when awarding fees on the third claim), aff'd o.b., 124 N.J. 520
(1991). Accordingly, we discern no error in the judge's fee award in the present
case, which reasonably distinguished the work plaintiff's counsel performed in
connection with its breach of contract claim from the other work performed.
Affirmed.
A-1892-17T1 28