Article by Capehart Scatchard

By Ralph R. Smith, 3rd, Esq.

In 2010, the New Jersey Supreme Court in the case of Quinlan v. Curtiss-Wright held that, under certain circumstances, an employer could not fire an employee for stealing confidential documents from the company if the reason for the theft was to use those documents to support an employee’s lawsuit claiming discrimination under the New Jersey Law Against Discrimination (“LAD”).  The basis for this ruling was that doing so could be considered wrongful retaliation for the employee’s pursuit of a possible LAD discrimination lawsuit.  One issue, however, left unresolved as a result of the Quinlan decision was whether an employee could separately face the possibility of criminal prosecution due to the wrongful theft of company confidential materials.  This past June, an answer to that question was finally provided by a divided New Jersey Supreme Court.

By virtue of a 6-1 decision in the case of State v. Saavedra, an employee can indeed be criminally prosecuted for theft of confidential employer documents, and the LAD does not shield the employee’s wrongful conduct from possible criminal prosecution.  The Defendant in Saavedra worked as a clerk for the North Bergen school board’s child study team.   She sued the board and board officials claiming that she was a victim of gender, ethnic and sexual discrimination.  Saavedra eventually told her attorney in her case that she was in possession of hundreds of documents belonging to the school board, some of which were document originals.  Many of the documents taken by the Defendant were highly confidential, containing sensitive information about parents’ banking records and student psychological reports.  After information about this theft was conveyed by Saavedra’s counsel to the lawyers for the board, the board reported Saavedra’s theft to the Hudson County Prosecutor’s office, who thereafter instituted a grand jury investigation.  The grand jury ultimately charged Saavedra with second-degree official misconduct and third-degree theft.

Defendant sought to quash the indictment on the grounds that Quinlan immunized her from criminal prosecution because of the ultimate purpose for which the stolen documents were taken.  In making this argument, Defendant relied on the seven part test created in Quinlan that was designed to balance the rights of employees to a workplace free from discrimination and harassment against the rights of an employer to operate a business and safeguard confidential documents.  The Supreme Court rejected the Defendant’s reliance on the Quinlan standard as grounds to quash the indictment.  According to the Court, Quinlan was never meant to be a decision that authorized the use of self-help to obtain materials to aid in the prosecution of a discrimination case.  Rather, it was designed to address the narrower question as to when an employer could terminate an employee and not run afoul of LAD’s anti-retaliation requirements.  Although the motive for taking the documents did not supply grounds for quashing an indictment under Quinlan, the Court nevertheless determined that an employee could use either a claim of right or justification defense against the indictment premised upon the articulated reasons for the theft.

The court’s decision in Saavedra will certainly give employee’s reason to pause before removing confidential documents to aid the prosecution of a discrimination lawsuit, which is obviously a positive outcome for employers, and the decision likewise reaffirms the unequivocal right that an employer has to protect its confidential materials, and where appropriate, to seek redress for wrongful employee theft through the criminal process.  Nevertheless, with the Quinlan decision now being reaffirmed by the Court, an employer must still proceed with caution in determining whether it can terminate an employee for theft of documents and not violate LAD’s anti-retaliation provisions.  Given such complexities, employers confronted with such issues should seek legal counsel before terminating an employee in such circumstances.