I. EMPLOYMENT LAW

Actual or Threatened External Complaint is Not an Element of Cause Of Action For Wrongful Discharge

In the unpublished opinion, Tartaglia v. UBS PaineWebber, Inc., 2008 WL _______, (N.J. December 16, 2008), the New Jersey Supreme Court ordered a new trial for plaintiff, Maria Tartaglia, a former employee of UBS PaineWebber, Inc. ("PW") who alleged, among other things, that she was fired in retaliation for complaining about the legal department's conflict of interest in dealing with internal disputes.

Plaintiff was hired as a Staff Attorney in PW's Regulatory Group in 1992. After moving among several departments within PW, Ms. Tartaglia ended up working in the Early Dispute Resolution Unit and was responsible for investigating customer complaints about PW's Financial Advisors. Tartaglia believed it might be a conflict of interest for her to represent PW and its Financial Advisors in response to customer complaints. Tartaglia expressed this concern to her supervisors and sought the advice of another attorney regarding the issue. During this same time period, a decision was made to terminate Ms. Tartaglia for poor performance. Before she was advised of the termination, Ms. Tartaglia submitted a disability request. On the same day that HR received Tartaglia's disability request, a letter of termination was sent to her. Tartaglia filed a complaint against PW alleging, among other things, wrongful discharge and common law retaliatory discharge as established in Pierce v. Ortho. Pharm Corp., 84 N.J. 58 (1980).

The trial court granted summary judgment in favor of PW on the common law retaliatory discharge claim because Tartaglia did not complain to an outside agency about the allegedly wrongful conduct of PW. The Appellate Division affirmed agreeing with the trial court that Tartaglia's failure to notify an outside authority about her complaint regarding the violation of conflict of interest rules was fatal to her retaliation claim.

The Supreme Court held that the summary judgment on the common law retaliatory discharge claim was improper. The court provided that under Pierce, an employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. The court held that nothing in Pierce requires an actual or threatened external complaint as an element of the cause of action. The claim was reversed and remanded for further proceedings.

Court Rejects Application of "Single Publication Rule" to Information Conveyed to Consumer Reporting Agencies; Allows Defamation Suit Against Employer Based on Information Provided to Employment Screening Database

In Pendergrass v. ChoicePoint, Inc., 2008 WL 5188782 (E.D. Pa. Dec. 10, 2008), Plaintiff who was employed as a shift supervisor at a Rite Aid store in Philadelphia was terminated for unexplained merchandise losses, fraudulent transactions, and other related infractions. Plaintiff alleges that during the investigation of the alleged merchandise losses he was coerced into signing a written statement.

At some time after January 11, 2006, Rite Aid published a report of this incident to ChoicePoint, Inc. One of ChoicePoint's services is Esteem, an employment screening database "that subscribing members use to supplement their background investigations of prospective job applicants." Subscribing members, which include many of the largest retail chains in the United States, have 24-hour access to the Esteem database through the internet or other forms of electronic information transfer.

After his termination, Plaintiff interviewed with other stores and during the process was told on or about November 30, 2006 that a "bad report" in his employment history prevented his hiring. According to Plaintiff, the "bad report" was the report Rite Aid submitted to the Esteem database.

Plaintiff filed a complaint alleging, among other things, a defamation claim under Pennsylvania law against Rite Aid and ChoicePoint. Rite Aid sought dismissal because the applicable statute of limitations bars Plaintiff's defamation claim.

Rite Aid argued that Plaintiff's defamation claim arises from the publication of the allegedly false theft report to ChoicePoint, which Plaintiff discovered on or about November 30, 2006. Even assuming that the one-year statute of limitations period did not begin until Plaintiff discovered the existence of the publication on or about November 30, 2006, Rite Aid argues that the Complaint is barred because it was filed in January 2008, well beyond the one-year statute of limitations period.

Plaintiff argued that Rite Aid was liable for the foreseeable repetition of the incident report by ChoicePoint. Therefore, Rite Aid was liable for each "republication" of the Esteem report, including the July 2007 viewing by Target and any other republications occurring within the statutory limitations period.

The court acknowledged the single publication rule which provides "any one edition of a book or newspaper, or any one radio, television broadcast, exhibition of a motion picture or similar aggregate communication is a single publication."  However, the court noted that Rite Aid's report to ChoicePoint was an electronic report that was "not made available to the public but only to subscribing members of a database." The court provided that that "[a]lthough the Pennsylvania courts have not decided whether to apply the single publication rule to information conveyed to consumer reporting agencies, . . .given the vast differences between traditional "mass publication" for a general audience and confidential publication to a consumer reporting agency, the single publication rule would not apply in the instant case." The court held that "[t]he risks of an infinite statute of limitations resulting from widespread circulation of a single publication are not present in the instant case. Rite Aid made an allegedly false report to a confidential database that was viewed exclusively by subscribing members. . . . Because the risks justifying the [single publication] rule are not present, the Court finds that Pennsylvania courts would not apply the single publication rule to the facts of this case."