Putting Employees in the “Penalty Box” Could Have Courts Blowing the Whistle on You

While the National Hockey League’s Capitals are in Washington D.C. celebrating their Stanley Cup win, a Prosecutor’s Office in New Jersey may be in hot water for putting an employee in the penalty box following complaints about department misconduct.

Last month, the Appellate Division held that the transfer of an employee to a “less desirable” position can be considered an act of retaliation that violates the Conscientious Employee Protection Act (CEPA). This is true even if the employee’s primary terms and conditions of employment – compensation, hours, and physical location – remain unchanged after the transfer.

Jeffrey Scozzafava, a detective with the Somerset County Prosecutor’s Office, had been assigned to the forensic Crime Scene Investigation Unit since his hire in 2007.  In 2015, after he complained about the mishandling of evidence and deficient casework in his unit, he was transferred to the fugitive squad. Scozzafava brought a claim for retaliation against his employer. The Prosecutor’s Office argued that he did not suffer an adverse employment action because Scozzafava’s rank, position, pay and benefits remained the same, and it arguably improved his scheduled working hours.  Therefore, the Prosecutor’s Office argued, the move was a lateral transfer and not a demotion.

The Appellate Division disagreed and held that there was more to the analysis than merely ensuring that an employee is not terminated, suspended, or demoted after making a complaint, and that all of the attendant circumstances surrounding the employment action will be closely examined.

Scozzafava had previously been a forensic detective with the New Jersey State Police, and had 12 years of extensive training and experience in the forensic field prior to his employment with the Somerset County Prosecutor’s Office. He was a member of numerous forensic professional associations, devoted time as an instructor, and was qualified as an expert in various courts.  His abrupt transfer to the fugitive squad deprived him of using and building upon his twenty years of expertise in the forensic field.

The Court acknowledged that “not every employment action that makes an employee unhappy constitutes an actionable adverse action,” but held that under the circumstances of this case, the transfer was “objectively demeaning” to Scozzafava. It certainly did not strengthen the employer’s argument that when asked for the reasoning behind the transfer, Scozzafava’s lieutenant told him “everybody does time in the penalty box.”

Scozzafava also claimed that his transfer to the fugitive squad offered fewer opportunities to earn overtime pay. While the lower court found that the potential for overtime was “too nebulous” to be considered as part of an employee’s compensation, the higher court suggested that this could be independent grounds for the finding of a retaliatory act.  It has already been established by the New Jersey Supreme Court that “any reduction in an employee’s compensation” is considered an adverse employment action, and the Appellate Division suggests that reduced opportunities for overtime, standing alone, would qualify as a reduction in pay.

Bottom Line:  Here, the employer was well aware that its transfer of Scozzafava was not neutral, and the purpose was admittedly to put Scozzafava “in the penalty box.”  The new standard emerging from this decision expands the inquiry into the type of employment action that is considered retaliatory.  In addition to a review of the standard terms and conditions of employment – compensation, benefits, hours, and job title, the employee’s skills, training, and job history will be examined to determine whether the transfer is truly lateral, or whether it instead could be considered “objectively demeaning” – a phrase the Court twice repeated in its decision.  If it can be, and it comes on the heels of an employee objection or complaint about conduct that the employee reasonably believes is unlawful, the employer could face exposure for an act of retaliation. It is important to carefully review any management decision that could appear as if the purpose of the employment action is to bench an employee for not being a team player. A job transfer intended to be punishing will likely be flagged by the courts.

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