New Jersey’s Offer of Judgment Rule Inapplicable in CEPA and LAD Cases

Best v. C&M Door Controls, Inc., 2008 WL 3850775 (App Div., August 19, 2008) – Answering a question that has long been uncertain, the Appellate Division held that the Offer of Judgment Rule does not apply to CEPA or LAD actions, and thus does not permit a defendant in such cases to recover its attorneys’ fees from the plaintiff even after making a “successful” Offer of Judgment.  The Offer of Judgment rule permits a defendant to make a formal settlement offer (in the form of an actual recorded judgment), and if the plaintiff rejects the offer, and does not recover at least 80% of the offer at trial, the plaintiff is responsible for paying the defendant’s attorneys’ fees incurred after the date the offer was rejected.   In this case, the Court relied upon a 2006 amendment to the Offer of Judgment Rule, and concluded that the policies underlying New Jersey’s discrimination and whistleblower laws would be offended if an employee who wins her employment discrimination or retaliation case nonetheless could have to pay the wrongdoing employer’s attorneys’ fees.   

Note: This article appeared in the September 2008 issue of the New Jersey eAuthority.