Doreen Longo will still receive $150,000 in economic and emotional damages from East Coast News.
New Jersey Supreme Court EAST WINDSOR — The state Supreme Court has reversed an appellate opinion granting $500,000 in punitive damages to a woman who said she was fired from a township adult novelty wholesaler for complaining about sexual harassment, the court said yesterday.
Doreen Longo will still receive $150,000 in economic and emotional damages from East Coast News, but must return to a lower court for a retrial to pursue the punitive damages, the court’s decision said.
The jury members were not properly instructed before they decided to grant the $500,000 in punitive damages to Longo, the Supreme Court said in its unanimous decision.
The ruling was authored by Judge Ariel Rodriguez, who is temporarily assigned to the court.
Francis Cook, the attorney for East Coast News, said the company was pleased with the result and feels “absolutely” confident going into a new trial. Cook, who was not involved in the initial trial, brought the argument to the appeals court two years ago, but it failed to lead to a reversal. This time, he was more successful.
“There was never, in this case, sufficient evidence to warrant the award of punitive damages because there was never evidence connecting upper management to this conduct,” Cook said.
Longo was hired as a sales representative by East Coast News in 2002, and began working with Marc Kercheval in 2005, the opinion said.
They had an initially pleasant relationship, but she claims it deteriorated after he threatened to sexually assault her, suggested that she trade sexual favors with a client, and told her he would like to gouge out the eyes of their supervisor, David Pezzullo.
Longo said she told Pezzullo about Kercheval’s behavior several times, and sent him an e-mail describing a number of incidents involving Kercheval, noting that she feared he was becoming dangerous.
Shortly after sending these e-mails, Longo and Kercheval were called into a meeting with East Cost News co-owner Frank Koretsky, Longo said. During the meeting Koretsky yelled at both of them, and soon after Kercheval was fired, she said. Shortly after Kercheval’s firing, Longo said she was called into the office of general manager Michael Savage.
Court documents said that Savage told Longo, “You’re a great sales rep and I hate to do this, but I got to let you go.” He continued, “Your complaints about (Kercheval) caused a commotion and we like a nice laid-back environment around here.”
Longo then filed suit against Kercheval and East Coast News among others, alleging her bosses ignored her repeated complaints that a co-worker was sexually harassing and threatening her.
The court determined that for the company to be forced to pay punitive damages, the jury has to determine that upper management was either involved in egregious conduct or willfully indifferent to it.
The jury should have been instructed on how to identify the upper management of the company as well as how to determine whether or not any members of upper management were involved in the egregious conduct, the court’s opinion said.
The lack of this instruction constitutes a “fundamental flaw” in the case.
This could have led to an unjust verdict, the court said, as the jury did not consider the role of upper management, even though upper management has to be involved to award punitive damages.
“If the jury found that the conduct of Kercheval (who was clearly not an upper management employee) was especially egregious, it might have improperly awarded punitive damages against East Coast,” the decision said.
The court also found that the jury was not properly instructed to award punitive damages based on the “clear and convincing evidence” standard, which requires a higher threshold of proof than the “preponderance of evidence” standard used to award the economic and emotional damages.
It is not yet clear when the new trial will be scheduled.
Contact Brendan McGrath at (609)989-5731 or bmcgrath@njtimes.com.
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