Epperson v. Wal-Mart Stores, Inc.

Citations: 373 N.J. Super. 522; 862 A.2d 1156; 22 I.E.R. Cas. (BNA) 129; 2004 N.J. Super. LEXIS 447

Court: New Jersey Superior Court Appellate Division; December 20, 2004; New Jersey; State Appellate Court

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Josefina Epperson filed a complaint against Wal-Mart Stores, Inc., alleging multiple causes of action stemming from her termination. After Epperson presented her case, Wal-Mart succeeded in dismissing her claims for malicious prosecution and wrongful termination. The court found that the trial judge incorrectly interpreted the law regarding malicious prosecution, and determined that a jury could have found sufficient evidence to support Epperson's claim. Consequently, the court reversed the dismissal of her malicious prosecution claim and remanded for a new trial. However, the court upheld the dismissal of the wrongful termination claim, ruling that it was derivative of the malicious prosecution claim. If Epperson were to prove wrongful termination, she would need to establish all elements of her malicious prosecution claim, and the damages would overlap, risking jury confusion without providing additional relief. The court emphasized that the trial judge was required to accept all evidence presented by Epperson as true when granting the involuntary dismissal. Evidence included that Epperson, employed by Wal-Mart for nearly ten years, reported theft allegations to her supervisors and the police, including details of her interactions with a fellow employee involved in selling stolen property.

Tanner requested the plaintiff to bring a stereo into the store, which she declined due to Dan's presence. The stereo remained in her car's trunk. The plaintiff attempted to contact Oliveira through Jim Black, a loss prevention employee, but was unsuccessful. Later, she saw Oliveira and Black at Wal-Mart, explained the situation, and they retrieved the stereo, confirming it belonged to Wal-Mart. Tanner reassured the plaintiff about cooperating with the police, and she reported the incident to the loss prevention hotline. Subsequently, Michelle Wilson advised against purchasing another stereo from Dan. Plaintiff met with Chuck McDowell, Wal-Mart's district manager of loss prevention, who asked her to report to work on her day off. Upon arrival, she was taken to the police station, where she refused to sign a Miranda form. During an interrogation conducted by Oliveira, she was accused of stealing stereos, denied wrongdoing, and was ultimately arrested. McDowell terminated her employment, and she was charged with shoplifting, which led to two court appearances. The charges were dismissed due to insufficient evidence. On November 15, 2000, the plaintiff filed a lawsuit against Wal-Mart and Franklin Township, later dismissing claims against Franklin Township and some claims being dismissed before trial. The case went to trial in October 2003, where the judge granted an involuntary dismissal of the malicious prosecution and wrongful discharge claims after the plaintiff rested. The jury found in favor of Wal-Mart on the false imprisonment claim, and the plaintiff appeals the dismissal of the malicious prosecution and wrongful discharge claims.

A civil action for malicious prosecution requires proof of four elements: (1) the defendant initiated a criminal action against the plaintiff; (2) the action was motivated by malice; (3) there was a lack of probable cause; and (4) the action ended favorably for the plaintiff. Each element must be proven for the claim to succeed. In this case, the trial judge found insufficient evidence regarding the first element but did not fully address the others. Wal-Mart claimed the plaintiff did not demonstrate a lack of probable cause or malice, focusing on the first element, which the judge interpreted as unmet because a police officer signed the complaint, not a Wal-Mart representative. The judge dismissed the plaintiff's argument that Wal-Mart could still be liable if it encouraged or instigated the prosecution. However, legal precedent indicates that liability can arise from any active involvement in the prosecution process, not just from signing the complaint. The appellate court criticized the trial judge's narrow interpretation of the first element, citing broader definitions from legal treatises and other case law, emphasizing that liability could extend beyond just the signers of the complaint. Ultimately, the appellate court concluded that the trial judge erred in determining that the lack of Wal-Mart's signature was determinative of the first factor.

The jury could reasonably infer that Wal-Mart encouraged and pressured the Franklin Township police to prosecute the plaintiff based on evidence presented, including Wal-Mart's presence during the plaintiff's interrogation and its participation in that process. The trial judge's dismissal of the malicious prosecution claim stemmed from a misunderstanding of the first factor of the claim. However, Wal-Mart also contended that the plaintiff did not provide sufficient evidence regarding the second factor (absence of actual malice) and the third factor (absence of probable cause). Despite some weaknesses in the evidence, the plaintiff's testimony indicated that the criminal case was dismissed for lack of evidence, allowing the jury to infer a lack of probable cause.

While there was no direct evidence of Wal-Mart's malice, such malice could be inferred from the circumstances, including potential motives to deflect attention from a theft by others and to gain leverage in a wrongful termination case. Wal-Mart's argument regarding the absence of direct evidence of malice was unpersuasive, as malice can often be established through circumstantial evidence. The plaintiff needs to demonstrate both malice and lack of probable cause, with some courts suggesting that lack of probable cause can imply malice if the accuser lacked a genuine belief in the accused's guilt, indicating an improper purpose behind the prosecution.

Malice is not a strict requirement in cases of serious abuse of authority, as established by legal precedent. Courts have recognized that evidence of one factor can be relevant to proving another, particularly regarding the relationship between lack of probable cause and malice. In a specific case involving a plaintiff who reported shoplifting by co-employees and was subsequently prosecuted without probable cause, the jury could infer that the employer, Wal-Mart, acted improperly. The court found the evidence sufficient to deny a motion for involuntary dismissal and called for a new trial on this claim.

The document notes that while the law generally does not favor malicious prosecution actions due to concerns about deterring reasonable criminal prosecutions, it supports holding accountable those who recklessly initiate such proceedings without any basis. If a plaintiff proves the necessary elements of malicious prosecution, they may be entitled to damages for financial losses, including lost wages, as long as these losses are foreseeable outcomes of the prosecution.

The discussion highlights that the context of this case is unique, as the plaintiff and the employer are the same entity, complicating the usual standards for recovering lost wages. The court references a separate case, In re Kimberly-Clark Corp., where it was contended that lost wages should not be awarded if an at-will employer discharges an employee it maliciously prosecuted, given that the employee has no guaranteed right to future wages from an at-will employer.

Alabama law allows for the termination of at-will employees for any reason, including malicious ones, resulting in no expectation for future wages upon discharge (Hinrichs v. Tranquilaire Hosp., 1977). A majority of justices ruled that lost wages could be awarded in a malicious prosecution claim against an employer, distinguishing it from wrongful termination actions. The Chief Justice noted that Kimberly-Clark Corporation was both the employer and the malicious prosecutor, raising concerns about potential conflicts with the at-will doctrine. The resolution hinges on whether the plaintiff can prove that the malicious prosecution caused their employment loss. Dissenting justices criticized this position, arguing it undermines the at-will employment principle by suggesting employers could be liable for lost wages, even in malicious prosecution cases. They maintained that an employer's right to terminate an at-will employee negates any obligation to pay wages post-termination. The discussion highlights a philosophical divide regarding the rigidity of the employment at-will doctrine in Alabama, contrasting it with New Jersey's approach, which has recognized several exceptions to this doctrine, allowing for more nuanced legal outcomes.

An employer cannot terminate an employee for discriminatory reasons, in violation of the Law Against Discrimination (N.J.S.A 10:5-1 to -28), contrary to explicit contractual terms (Bernard v. IMI Sys. Inc.), or in retaliation for whistle-blowing activities protected under the Conscientious Employee Protection Act (CEPA) (N.J.S.A. 34:19-5). New Jersey recognizes wrongful termination claims based on public policy, as established in Pierce and further supported in Mehlman v. Mobil Oil Corp. Unlike jurisdictions adhering strictly to the employment at-will doctrine, New Jersey provides a more favorable environment for claims of lost wages in malicious prosecution cases against former employers. The potential for lost wage recovery in such cases remains unaddressed in New Jersey law. Despite the unusual nature of the situation, it is deemed plausible given current economic conditions. The distinction lies in New Jersey's exceptions to the at-will doctrine, allowing for remedies against employers to prevent oppression. In this case, even if Wal-Mart had grounds for termination, it could not maliciously prosecute the employee, and if the claim is upheld, Wal-Mart would be liable for damages. Evidence presented showed a causal connection between the employee's termination and the initiation of criminal proceedings, as her termination coincided with police interrogation, allowing for the possibility of lost wage recovery.

The determination of whether losses from a criminal proceeding are foreseeable or normal is left to the jury based on the evidence presented. The trial judge granted Wal-Mart’s motion to involuntarily dismiss the plaintiff’s wrongful termination claim, as this claim overlaps with the previously discussed malicious prosecution action and a CEPA claim dismissed due to statute of limitations. The plaintiff argues her termination was linked to her efforts to expose theft by a co-worker or part of a scheme to remove her from her job, which could relate to CEPA protections. However, she did not file the claim within the one-year limit set by N.J.S.A. 34:19-5, barring her from pursuing it as wrongful termination. 

The excerpt raises the question of whether a wrongful termination claim exists when an employee is terminated for being a victim of their employer's malicious criminal actions, particularly in light of the Pierce doctrine, which typically applies when an employee is discharged for defending public policy. It suggests inconsistency in allowing a claim when an employee complains about misconduct but not when they are merely victimized by that misconduct. The document references Giudice v. Drew Chem. Corp., which supports the idea of a claim for wrongful termination related to a complaint about malicious prosecution. 

Only one jurisdiction, Utah, has addressed this issue, permitting a claim for wrongful termination based on malicious prosecution by the employer. However, the current analysis indicates that a wrongful termination claim would require proof of malicious prosecution, rendering it redundant since it overlaps with the malicious prosecution claim. Additionally, any potential damages from a wrongful termination claim would not exceed those available under the malicious prosecution claim.

The trial judge's order for involuntary dismissal of the wrongful termination claim was upheld due to the potential for jury confusion, despite differing reasoning from the court. Conversely, the court reversed the involuntary dismissal of the malicious prosecution claim and remanded it for a new trial. The court noted that for the malicious prosecution claim, the requirement for a favorable termination of the criminal action was satisfied, as the prosecution had voluntarily dismissed the case against the plaintiff. 

The excerpt addressed the employment at-will doctrine, contrasting Alabama's strict adherence to it with New Jersey's evolving exceptions. While New Jersey has created exceptions to at-will employment, Alabama maintains that an employee can be terminated for any reason unless legislative change occurs. The plaintiff's testimony recounted her arrest and immediate termination by Wal-Mart's district manager after an interrogation by law enforcement, which she contended was unjustifiable. 

Additionally, the plaintiff's CEPA claim was dismissed because it was filed beyond the one-year statute of limitations, with no appeal made regarding that ruling.

Public policy against providing false information to law enforcement is established in New Jersey statutes, specifically N.J.S.A. 2C:28-4(a), which criminalizes knowingly implicating others with false information, and N.J.S.A. 2C:28-4(b), which addresses reporting non-existent incidents. The relevance of the plaintiff’s allegations against Wal-Mart in relation to these statutes is minimal; the key point is that the statutes reflect a public policy opposing conduct associated with malicious prosecution. While wrongful termination claims typically allow for reinstatement, which is also applicable in CEPA claims (N.J.S.A. 34:19-5(c)), the plaintiff has not sought reinstatement here. Consequently, her damage claim for malicious prosecution mirrors that of her wrongful termination claim.