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Exonerated, gone anyway: You can independently assess misconduct

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in Employment Law,Firing,Human Resources

A New Jersey appeals court has upheld the termination of an employee even though a government agency cleared him of the alleged misconduct that led to his dismissal.

That means employers still have the right to make their own decisions about conduct and what they believe happened.

Casino cameras, commission

In Swan v. Boardwalk Regency Corporation (2009 WL 1228315, App. Div., 2009), Robert Swan worked as a security officer at Caesars Atlantic City, operating “eye in the sky” video surveillance equipment.

In June 2005, Swan was named in a complaint filed by the New Jersey Division of Gaming Enforcement (DGE) alleging that he, among others, had improperly used closed circuit television and security cameras at the casino to zoom in on “selected parts of the anatomy of several females.”

The casino concluded that Swan had engaged in misconduct and then fired him, citing the complaint and the negative publicity that it generated.

The DGE’s case against Swan went before the Casino Control Commission (CCC), which conducted an administrative law hearing.

Swan said his conduct and the surveillance techniques that he used were legitimate. He said he had to use the camera equipment to zoom in on employees and customers to ascertain their identities and read the name tags and credentials that employees wear on the casino floor.

The CCC agreed and exonerated Swan of any misconduct. In fact, the CCC concluded that Swan was performing his job as a “conscientious surveillance operator.”

Regardless, no reinstatement

But even after the CCC cleared Swan of wrongdoing, the casino did not reinstate him to his position.

Consequently, he filed suit against Caesars for alleged wrongful termination in violation of public policy. Swan also brought a false light/invasion of privacy claim, alleging that the casino had distributed a press release and other information creating the “false impression” that Swan used the camera equipment to “leer” at women who frequented the casino.

In New Jersey, casinos are required by law to use cameras for surveillance purposes. Swan argued that he was fired because he acted in furtherance of public policy, as set out in New Jersey law, requiring casinos to conduct video surveillance to prevent theft and gambling by underage people.

Is it retaliation?

In court, Swan used the CCC’s decision to bolster his point, arguing that the administrative finding that exonerated him should have likewise guided the court in finding that he was wrongfully discharged.

The appellate court disagreed with Swan’s contentions. The Appellate Division ruled that Swan was not fired in retaliation for using “state-mandated video monitoring equipment” or advancing the public policy of the State of New Jersey by monitoring gaming operations.

Instead, the court found the casino had terminated Swan because it believed that he was not properly carrying out his job duties and because the incident received unwanted media attention.

What it means for employers

The Swan case is noteworthy—and rather refreshing—because the appellate court saw fit to look behind the CCC decision and find that the termination was not unlawful or retaliatory.

It would have been easy for the court to conclude that the casino was wrong. After all, the CCC found that Swan had not engaged in any misconduct. Instead of taking such a simplistic approach, deferring to the CCC in a lockstep fashion, the court ruled that the casino “was entitled to independently assess [Swan’s] conduct and the situation” and upheld the employer’s decision.

The Swan court implicitly reinforced a long line of New Jersey and federal employment law cases upholding the so-called “business judgment rule.”

That principle acknowledges that courts should refrain second-guessing business or managerial decisions when evaluating employment claims, as long as there is no evidence of discrimination or retaliation.

The Swan decision may mark a shift in tone. The court has shown that it is unwilling to extend legal protections for employees that are based upon “whistle-blower” theories—even when the employee has been exonerated by an administrative agency.

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Shawn Barnes, a law student and summer associate at Genova, Burns & Vernoia, assisted in preparation of this article.

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