New Jersey Appellate Division Judge Jack Sabatino/photo by Carmen Natale/ALM

The Appellate Division has ruled that New Jersey's ban on associational discrimination applies to the case of an Illinois resident whose employer allegedly denied him a promotion and ultimately fired him because of his wife's terminal cancer.

The appeals court reversed a decision by a trial judge who held that the laws of Illinois should apply to the case. That judge dismissed the case because Illinois law does not recognize a cause of action for associational discrimination.

Although New Jersey's Law Against Discrimination states in its preamble that it applies to “inhabitants” of this state, it can extend in appropriate circumstances to plaintiffs who live and work outside the state, Appellate Division Judge Jack Sabatino wrote in the published decision Thursday.

The appeals court ordered the case remanded for a review of choice-of-law factors set forth in the Restatement (Second) of Conflicts of Laws, as adopted and construed by the New Jersey Supreme Court. Those factors “strongly weigh in favor of applying New Jersey law, not Illinois law, to this failure-to-promote claim,” the appeals court said.

The suit was brought by David Calabotta, who claims he was passed over for a promotion because his wife was suffering from breast cancer.

According to the decision, he worked for Prince Agri Products Inc. of Quincy, Illinois, a subsidiary of Phibro Animal Health Corp. of Teaneck, which makes animal food additives. When he was hired in 2008, Calabotta signed various documents containing a provision that employment disputes would be governed by the laws of New Jersey, the court said.

The plaintiff's wife, Beth Calabotta, was diagnosed with breast cancer in 2008, and after a period of remission, the cancer recurred in 2014 and spread to other parts of her body, according to the suit, which claims Calabotta openly discussed his wife's health issues and prognosis with colleagues. Additionally, news reports in the Wall Street Journal and other publications discussed her illness, the court noted.

In 2016, Phibro underwent a reorganization and staff cuts, and Calabotta's responsibilities were reduced. He learned that some of his duties were reassigned to a new position at the company's headquarters in New Jersey, the decision said.

The suit claims that, when he asked if he would be considered for that position, his boss, citing his wife's illness, replied, “I did not think you would be interested.” Calabotta repeatedly expressed interest in that position but was not interviewed for the job and did not receive the promotion, he alleges.

In August 2016, Calabotta's employment was terminated based on an incident that arose at a national meeting of the American Dairy Science Association. The incident is not described in detail in court documents, but his superiors took issue with the manner in which Calabotta handled a problem involving a member of his staff, according to the decision.

Calabotta received $117,000 in severance pay. His wife died in March 2017.

Calabotta's suit claims Phibro Animal Health discriminated against him based on his association with a person with a disability when the company denied him a promotion and when they terminated his employment.

Bergen County Superior Court Judge Rachelle Harz dismissed the suit with prejudice in September 2017, holding that “the NJLAD does not apply to employees whose employment is based outside of New Jersey.” She based her ruling on a 1995 Appellate Division case, Buccilli v. Timby, Brown & Timby, which held that Pennsylvania law, not the NJLAD, governed a New Jersey resident's claims of discrimination by her Pennsylvania employer for whom she worked in Pennsylvania.

On appeal, Sabatino, joined by Appellate Division Judges Thomas Sumners Jr. and Stephanie Miterhoff, said the facts in Calabotta's case are distinguishable from the circumstances in Buccilli: Calabotta lived outside New Jersey and works in his state of residence, but sought a promotion in New Jersey.

The NJLAD's “broad and strong language” provides support for the plaintiff's claim that, subject to choice-of-law factors, he may bring claims under the New Jersey statute, despite the fact that he lived and worked elsewhere,” Sabatino wrote for the panel.

“The statute's plain language notably does not limit the definition of 'person' to New Jersey residents or employees,” Sabatino said.

The defendants pointed out that the statute's preamble contains language suggesting it governs “the rights and proper privileges of the inhabitants of the State” and seeks to ensure the general “welfare of the inhabitants of the State.” But the term “inhabitant” appears only in the preamble, and “it does not cloud our reading of the unambiguous and broader operative provisions of the NJLAD,” Sabatino wrote.

The decision expands the reach of the LAD to additional employees, “but it's going to be a factually sensitive analysis for each case,” said Kathryn McClure of Smith Eibeler in Holmdel, who represented Calabotta along with Mary Anne Sedey of Sedey Harper Westhoff in St. Louis.

Martin Aron of Jackson Lewis in Morristown, who represented Phibro Animal Health and individual defendants, said in an e-mail message, “while disappointed in the decision, Mr. Calabotta's claims are completely without merit regardless of whether they are considered under New Jersey or Illinois law.  The Company denies having engaged in any unlawful discriminatory behavior and intends to vigorously defend its interests.”