New Jersey Supreme Court Holds That Employees Disciplined for Stealing Confidential Company Documents in Support of Discrimination Claims Can Sue for Unlawful Retaliation

The New Jersey Supreme Court has just announced a new test under which an employer may be held liable for unlawful retaliation when taking action against an employee who misappropriates and uses confidential company documents against the employer in support of a discrimination claim. Those who believe that simplicity is a virtue not practiced often enough will not have their minds changed by the New Jersey Supreme Court’s decision in Quinlan v. Curtiss-Wright Corporation, in which the Court, by a 5-2 majority, established a complex and confusing seven-part “balancing test” for determining whether an employee’s wrongful taking of company documents nevertheless constitutes “protected activity” under the New Jersey Law Against Discrimination (the “LAD”). Applying this test, the Court held that the plaintiff in Quinlan could have been terminated for the wrongful taking of documents, but should not have been terminated for her attorney’s use of one of the documents at a deposition.

The Quinlan decision has serious implications for employers who seek to protect their confidential information and demand the loyalty of their employees. The clearest takeaway from this decision is that extreme care must be taken when dealing with an employee who has misappropriated confidential documents in conjunction with a discrimination claim. Presumably the employer in Quinlan would have avoided liability for retaliation if it had terminated the employee before the document at issue surfaced in the deposition. But under the Court’s seven-part balancing test, this might not have been the case under similar but not identical facts. Any employer action must be supported by a clear and consistent policy. Quinlan reinforces the importance of having clearly worded and effective policies concerning confidential business and personnel information and of consistent and uniform enforcement of those policies.

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