                                                      SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

                            Tonique Griffin v. City of East Orange (A-32-14) (074937)

Argued December 2, 2015 -- Decided June 22, 2016

PATTERSON, J., writing for a unanimous Court.

         In this appeal, the Court addresses whether the trial court erred in barring the testimony of a witness who
claimed that her superiors directed her to lie to the person investigating sexual harassment claims.

         In October 2009, plaintiffs Tonique Griffin, Virginia Best, and Rosalyn Walker, employees of the City of
East Orange (City), each filed internal reports alleging that they were sexually harassed by Obed Prinvil, a
supervisor. The City Council retained an outside attorney, Dina Mastellone, to conduct an independent
investigation. Mastellone interviewed plaintiffs, Prinvil, and other City employees, including Corletta Hicks, a
personal friend of Griffin and an aide to the City’s then-Mayor, Robert Bowser (Mayor Bowser). Hicks, who had no
personal knowledge of any of the alleged incidents, informed Mastellone that Griffin and Best “have always been a
mess,” and that Griffin had a relationship with Prinvil and filed her complaint in an effort to “take money from the
City.” Hicks also portrayed Prinvil as a “phenomenal” and cautious director, who always acted professionally.
Mastellone concluded that none of the three complainants had been sexually harassed or subjected to a hostile work
environment based on their gender.

         Plaintiffs sued the City, and others, under the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49,
alleging hostile work environment sexual harassment, quid pro quo sexual harassment, and retaliation. The City
asserted that it took reasonable care to promptly correct any harassing behavior and that it implemented, applied, and
disseminated effective anti-harassment policies and procedures. Subsequently, Hicks filed a separate, unrelated
complaint against the City with the federal Equal Employment Opportunity Commission (EEOC), and a later LAD
action against the City, Mayor Bowser, and another individual.

          During Hicks’s deposition in plaintiffs’ case, she admitted that Mayor Bowser had instructed her to
undermine Griffin’s credibility and build up Prinvil’s character in her interview with Mastellone. Plaintiffs
consented to the City’s request that Hicks be barred from testifying about her EEOC complaint and lawsuit against
the City and Mayor Bowser, but the City subsequently asserted that plaintiffs should not be permitted to discuss
Hicks’s allegation that Mayor Bowser had corrupted the investigation because that allegation also was connected to
her separate litigation. The trial court agreed, ruling that the evidence would not be relevant to any issue other than
plaintiffs’ claims for punitive damages and barring plaintiffs from presenting Hicks’s testimony on any subject.

         At trial, the City substantially relied on Mastellone’s investigation. At the close of evidence, the trial court
granted the City’s motion for a directed verdict as to the quid pro quo sexual harassment claim and plaintiffs’
punitive damages claim. The remaining issues were submitted to the jury, which returned a verdict of no cause as to
all claims. Judgment was entered in favor of the City.

         Plaintiffs appealed, and the Appellate Division affirmed the trial court’s evidentiary determinations,
including its decision to bar Hicks’s testimony. The panel agreed with the trial court that Hicks’s testimony was not
relevant because she did not work in the same department as Prinvil and two of the plaintiffs. It further ruled that,
even if her testimony were relevant, it would have been unduly prejudicial. The Court granted certification, limited
to the question of “whether the trial court erred in barring the testimony of a witness who claimed that her superiors
directed her to lie to the person investigating plaintiffs’ claims of sexual harassment.” 220 N.J. 265 (2015).

HELD: The trial court erred when it barred the testimony of a witness who claimed that her superiors instructed her
to lie to the person investigating sexual harassment claims because the testimony was relevant to plaintiffs’ claims
for compensatory and punitive damages arising from hostile work environment sexual harassment, satisfied an
exception to the hearsay rule, and its relevance was not substantially outweighed by the risk of undue prejudice.

1. A trial court’s evidentiary determinations are entitled to deference and are reviewed for an abuse of discretion.
The Court’s analysis of the trial court’s evidentiary ruling begins with the question of whether the excluded evidence

                                                           1
was relevant under N.J.R.E. 401, and requires analysis of the connection between the statements that Hicks
attributed to Mayor Bowser and plaintiffs’ claims for compensatory and punitive damages arising from alleged
hostile work environment sexual harassment. (pp. 14-17)

2. Here, plaintiffs asserted two distinct theories of employer liability for hostile work environment sexual
harassment, first claiming that the City was directly liable for negligence, an analysis of which requires
consideration of whether City officials made a commitment that sexual harassment would not be tolerated and took
concrete steps to eradicate it. Plaintiffs’ second claim, that the City is vicariously liable for Prinvil’s alleged
conduct, similarly hinges on the conduct and attitude of the City’s senior management. As an affirmative defense to
plaintiffs’ claim of vicarious liability, the City relied on its implementation of effective anti-harassment policies and
procedures, arguing that it took reasonable steps to prevent sexual harassment and to respond to plaintiffs’
allegations and emphasizing Mayor Bowser’s leadership in its anti-discrimination initiatives. Like the hostile work
environment sexual harassment claims, plaintiffs’ claims for punitive damages also compelled an assessment of the
manner in which the City’s upper management addressed the alleged conduct. (pp. 17-21)

3. Although Hicks did not witness the incidents alleged in plaintiffs’ claims, her testimony directly related to the
attitude of the City’s upper management toward sexual harassment in general, and its response to plaintiffs’
allegations in particular. Were the jury to believe Hicks’s account of her conversation with Mayor Bowser, it might
have concluded that the City’s most senior official materially interfered in the independent investigation of
plaintiffs’ claims. This would have supported plaintiffs’ hostile work environment sexual harassment claims under
both the direct and vicarious liability theories, undermined the City’s affirmative defense, and strengthened
plaintiffs’ punitive damages claims. Consequently, the proffered evidence is directly relevant to plaintiffs’ hostile
work environment sexual harassment claims. (pp. 21-23)

4. Since Hicks’s proposed testimony about her alleged conversations with Mayor Bowser included out-of-court
statements offered to prove the truth of the matter asserted therein, the hearsay rule, N.J.R.E. 801(c), is implicated.
Thus, the Court also considers whether the evidence at issue is admissible under N.J.R.E. 803(b), which provides for
an exception to the hearsay rule for a statement by a party-opponent. Since Mayor Bowser, a senior official in the
City’s organizational structure, was the City’s agent when he allegedly spoke with Hicks about her interview with
Mastellone and the alleged statements directly concerned his responsibilities as Mayor, the hearsay statements in
Hicks’s proposed testimony fall within the exception and are admissible. (pp. 23-25)

5. Hicks’s testimony also is not barred under N.J.R.E. 403, which allows for the exclusion of relevant testimony if
its probative value is substantially outweighed by the risk of undue prejudice. Had plaintiffs been permitted to call
Hicks as a witness, subject to the City’s cross-examination, her testimony about Mayor Bowser could have been
accepted as true or rejected as incredible by the jury. Hicks’s highly relevant testimony is not inadmissible merely
because it could have negatively impacted the defense, and the trial court’s decision to bar her testimony was an
abuse of discretion. Thus, the Court reverses the Appellate Division’s judgment affirming the trial court’s dismissal
of plaintiffs’ claims for compensatory and punitive damages arising from alleged hostile work environment sexual
harassment, and remands those claims to the trial court for a new trial. (pp. 25-29)

          The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART, and the
matter is REMANDED for further proceedings consistent with this opinion.

        CHIEF JUSTICE RABNER, JUSTICES ALBIN and SOLOMON, and JUDGE CUFF (temporarily
assigned) join in JUSTICE PATTERSON’s opinion. JUSTICES LaVECCHIA and FERNANDEZ-VINA did
not participate.




                                                           2
                                     SUPREME COURT OF NEW JERSEY
                                       A-32 September Term 2014
                                                074937

TONIQUE GRIFFIN,

    Plaintiff-Appellant,

         v.

CITY OF EAST ORANGE,

    Defendant-Respondent,

         and

OBED PRINVIL, ADMINISTRATOR
REGINALD LEWIS, and CLAUDE CRAIG,

    Defendants.

VIRGINIA BEST and ROSALYN WALKER,

    Plaintiffs-Appellants,

         v.

CITY OF EAST ORANGE,

    Defendant-Respondent,

         and

OBED PRINVIL, ADMINISTRATOR
REGINALD LEWIS, and CLAUDE CRAIG,

    Defendants.


         Argued December 2, 2015 – Decided June 22, 2016

         On certification to the Superior Court,
         Appellate Division.

         Charles P. Cohen argued the cause for
         appellants.

                                1
         Avis Bishop-Thompson argued the cause for
         respondent (DeCotiis, Fitzpatrick & Cole,
         attorneys).

         Deborah L. Mains submitted a brief in
         support of amicus curiae New Jersey
         Association for Justice (Costello & Mains,
         attorneys).

    JUSTICE PATTERSON delivered the opinion of the Court.

    This appeal arises from a judgment in favor of the

defendant employer in a sexual harassment case.    We review the

Appellate Division’s determination affirming the trial court’s

decision to bar the testimony of a fact witness.

    Plaintiffs Tonique Griffin (Griffin), Virginia Best (Best)

and Rosalyn Walker (Walker), employees of the City of East

Orange (City), alleged that they were sexually harassed by a

supervisor.   In the wake of plaintiffs’ internal reports of the

alleged harassment, the City retained an attorney to conduct an

investigation of their claims.   Corletta Hicks (Hicks), an aide

to the City’s then-Mayor, Robert Bowser (Mayor Bowser), and a

close friend of Griffin, made statements to the investigator

that undermined Griffin’s allegations and supported the

credibility of the alleged harasser.   The investigator relied in

part on Hicks’s statements in rejecting plaintiffs’ contention

that, by virtue of the supervisor’s harassment, they were

subjected to a hostile work environment.



                                 2
    Plaintiffs filed complaints under the New Jersey Law

Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, alleging

hostile work environment sexual harassment, quid pro quo sexual

harassment, and retaliation, and seeking compensatory and

punitive damages.     During discovery, Hicks testified at her

deposition that Mayor Bowser spoke with her before she was

interviewed by the investigator, directing her to make negative

comments about Griffin and to praise the supervisor accused of

harassment, and that pursuant to his instructions, she provided

the investigator with misleading information.

    The trial court barred Hicks from testifying at trial on

the ground that her proposed testimony was irrelevant to

plaintiffs’ claims.     The court granted a directed verdict

dismissing some of plaintiffs’ claims, and the jury rejected the

remaining claims.     An Appellate Division panel affirmed the

trial court’s judgment.    We granted plaintiffs’ petition for

certification.

    We hold that the trial court erred when it barred

plaintiffs from presenting Hicks’s testimony to the jury.       Mayor

Bowser’s alleged instructions to Hicks were directly pertinent

to plaintiffs’ claims for compensatory and punitive damages

arising from hostile work environment sexual harassment, and

therefore met the relevancy standard of N.J.R.E. 401.     The

hearsay statements attributed to Mayor Bowser constituted

                                   3
statements by a party’s agent or servant offered against the

party, and were thus within the exception to the hearsay rule

prescribed by N.J.R.E. 803(b)(4).    Moreover, N.J.R.E. 403 did

not warrant the exclusion of Hicks’s testimony, because the

probative value of the testimony was not substantially

outweighed by the risk of undue prejudice.

    We therefore reverse the Appellate Division’s judgment

affirming the dismissal of plaintiffs’ claims for hostile work

environment sexual harassment, and remand the matter to the

trial court for a new trial on those claims.   We affirm the

Appellate Division’s judgment with respect to plaintiffs’

remaining claims.

                                I.

    In 2009, when plaintiffs’ allegations arose, Obed Prinvil

(Prinvil) was the Director of the City’s Property Maintenance

Department, working in City Hall.    Griffin, a zoning secretary

and clerk-typist, was assigned to the Policy Planning and

Development Division.   However, she was frequently asked to

assist with the work of the Property Maintenance Department, and

was supervised by Prinvil.   Best, a property maintenance

complaint investigator, worked in the Property Maintenance

Department.   She reported to two managers who reported to

Prinvil.   Walker served as a senior clerk-typist in the Tax

Collector’s Office; she did not work in the Property Maintenance

                                 4
Department or report to Prinvil, but conducted tax searches in

an area adjoining his office in City Hall.

       The three plaintiffs alleged that they were each subjected

to sexual harassment by Prinvil in separate incidents occurring

in City Hall in 2009.    According to Griffin, on October 15,

2009, when she was in Prinvil’s office to discuss a work issue,

he closed the door, grabbed her face with his hand, and kissed

her.    Best alleges that in May 2009, when she was in Prinvil’s

office to discuss a conflict that she had with another co-

worker, Prinvil kissed her.    Walker contends that at various

times, Prinvil told her that he was attracted to her, proclaimed

that he loved her, and inquired whether he and she could be

“more than just friends.”     She contends that in August 2009,

Prinvil attempted to kiss her while she was in his office.

       Prinvil testified that he never attempted to kiss any of

the three plaintiffs.    He and the City denied all of plaintiffs’

allegations of sexual harassment.

       According to Hicks, she and Griffin were longtime friends

who spent substantial time together outside of work.    By Hicks’s

account, she was acquainted with Best and Walker because of

their employment at City Hall, but did not know either co-worker

well.    Hicks did not claim to have personal knowledge of any of

the incidents described by plaintiffs; when those incidents

allegedly occurred, Hicks was employed as a research assistant

                                  5
in Mayor Bowser’s office, not in the Property Maintenance

Department.     However, Hicks and Griffin both stated that they

discussed the alleged incident between Prinvil and Griffin

shortly after it occurred.

    Griffin filed an internal complaint with the City on

October 20, 2009, describing not only her own allegations but

also those of Best and Walker.    Walker also filed her internal

complaint on October 20, 2009, and Best did the same two days

later.

    In the wake of plaintiffs’ allegations, the City Council

retained an outside attorney, Dina Mastellone (Mastellone), to

conduct an independent investigation.     Over the course of three

days, Mastellone interviewed Griffin, Best, Walker, Prinvil, and

five other City employees, and reviewed relevant documents.

    Several weeks after Mastellone’s interviews were conducted,

but prior to the completion of her investigative report, she was

asked by a representative of the City to interview Hicks.        In

that interview, Hicks stated that Griffin and Best “have always

been a mess.”    Hicks expressed her view that Griffin “preys on

older married men,” and said that she suspected that Griffin and

Prinvil had a “personal relationship.”     Hicks also told the

investigator that Griffin had serious financial problems, and

that her complaint was filed in an effort to “take money from

the City.”    Hicks reported that Griffin considered Best’s claims

                                  6
to be a fabrication, in an attempt to “jump[] on the gravy

train.”

    In her statements to Mastellone, Hicks portrayed Prinvil as

a “phenomenal director” who was cautious by nature.     She said

that Prinvil was in a perpetual “damage control state” and that

he acted professionally in the workplace.   Hicks stated that she

and Prinvil sometimes greeted one another with a hug, but that

he “has always drawn a space limitation with the hugs.”

    In the report of her investigation, Mastellone concluded

that it was more likely than not that Prinvil engaged in

inappropriate behavior with Griffin and Walker, but that he did

not conduct himself inappropriately with Best.   The investigator

stated that Prinvil was considered a professional and respected

manager.   She found that Griffin, Best, and Walker would

routinely greet Prinvil with a hug, and occasionally with a kiss

on the cheek.   The investigator concluded that none of the three

complainants had been sexually harassed, and that none of the

incidents subjected plaintiffs to a hostile work environment

based on their gender.

    In internal disciplinary proceedings, Prinvil was charged

with “inappropriate behavior in the workplace” and

“insubordination for failure to turn over departmental records,

as directed by the City Administrator and the Mayor.”     Prinvil

was suspended from his employment for three days.    On the same

                                 7
day that he approved the disciplinary charges against Prinvil,

Mayor Bowser reappointed Prinvil to a new term as Director of

Property Maintenance.

                                 II.

     In separate complaints consolidated for discovery and

trial, plaintiffs sued the City, Prinvil, and two other

individual defendants.1    As amended, plaintiffs’ complaints set

forth LAD claims against the City based on allegations of

hostile work environment sexual harassment, quid pro quo sexual

harassment, and retaliation.    Among other affirmative defenses,

the City asserted that it took reasonable care to prevent and

promptly correct any harassing behavior, and that it

implemented, applied, and disseminated effective anti-harassment

policies and procedures.

     After plaintiffs instituted their action, Hicks filed a

separate, unrelated complaint against the City with the federal

Equal Employment Opportunity Commission (EEOC).    She later filed

an action against the City, Mayor Bowser, and another individual

defendant, alleging LAD claims of gender discrimination, hostile

work environment sexual harassment, retaliation, and disparate




1 Prior to trial, the parties executed a stipulation dismissing
the claims against the individual defendants. The City was the
sole remaining defendant at trial.
                                  8
treatment, as well as claims based on alleged violations of her

rights to free speech and equal protection.

    In a subpoena served on Hicks for a deposition and document

production in this case, plaintiffs sought documents regarding

Hicks’s EEOC complaint against the City and Mayor Bowser.

Defendants moved to bar plaintiffs from seeking information

about the EEOC complaint.    The trial court granted defendants’

application.    It ruled that Hicks’s deposition testimony in this

matter would not “relate[] to [Hicks’s] EEOC charge and

confidential sexual harassment investigation of Hicks’[s]

complaint.”

    Subject to the limitations imposed by the trial court,

plaintiffs deposed Hicks in this action.       During her deposition,

Hicks claimed, for the first time, that Mayor Bowser had spoken

with her prior to her interview with Mastellone.       She testified

that Mayor Bowser told her that he had instructed Prinvil to

“keep his hands to himself.”    Hicks said that the Mayor

instructed her to undermine Griffin’s credibility in her

interview with the investigator.       According to Hicks, Mayor

Bowser told her to “[d]iminish the bitch’s character.       You know

what to do.    You know how the game is played.    I want the bitch

out of here.    And make sure I’m not involved in it.    You know

what to do, Corletta.”    Hicks testified that she assured Mayor

Bowser, “[y]es sir, I got this.”

                                   9
    Hicks also testified in her deposition that she was

“advised” to “build up [Prinvil’s] character.”   She said that

she complied with that direction by accurately reporting to the

investigator that Prinvil had never said or done anything in her

presence that she considered to be unprofessional, and by

“conjur[ing] up” a statement that Prinvil was a “cautious man”

who was constantly in a “damage control state” and “always

[drew] a space limitation with the hugs.”

    Prior to the commencement of trial, the City moved to bar

Hicks from testifying at trial about her EEOC complaint and

lawsuit against the City and Mayor Bowser.   Plaintiffs consented

to that limitation, but contended that Hicks should be permitted

to testify before the jury about her interview with the

investigator in this matter.   The motion judge reaffirmed that

Hicks would not be permitted to testify about her separate

complaint and lawsuit against the City, but did not address any

other aspect of Hicks’s potential testimony.

    Prior to opening statements, the City again raised the

subject of Hicks’s proposed testimony.   The City’s counsel told

the trial judge that plaintiffs should not be permitted to

discuss Hicks’s allegation that Mayor Bowser had “corrupt[ed]”

the investigation, because that allegation was connected to

Hicks’s separate litigation against the City and Mayor Bowser.

In response, plaintiffs’ counsel argued that Hicks’s testimony

                                10
about Mayor Bowser’s purported statements was directly relevant

to plaintiffs’ hostile work environment and punitive damages

claims.

    The trial court ruled that the disputed evidence would not

be relevant to any issue other than plaintiffs’ claims for

punitive damages, which would not be considered until a later

phase of the case, if at all.     The court determined that any

instruction by Mayor Bowser to Hicks could not have affected the

investigative report, because that report was favorable to

Griffin.   The trial court, therefore, barred plaintiffs from

presenting Hicks’s testimony on any subject.

    At trial, the City substantially relied on Mastellone’s

investigation.    In her testimony, the investigator identified

Hicks’s interview as one of the factors on which she relied to

determine that Best was not credible and fabricated her

complaint.

    In his testimony, Mayor Bowser described the City’s

retention of the investigator and the investigator’s

conclusions.     In compliance with the trial court’s order,

Hicks’s allegation that Mayor Bowser had directed her to

disparage Griffin and promote Prinvil was not raised in the

direct or cross-examination of Mayor Bowser.

    Prior to Griffin’s testimony, plaintiffs’ counsel asked the

trial court to reconsider its ruling barring Hicks from

                                  11
testifying about her alleged conversation with Mayor Bowser.

Counsel cited the City’s reliance on Hicks’s statements in the

investigator’s report, and the fact that the jury had heard from

every witness interviewed by the investigator, other than Hicks.

The trial court denied plaintiffs’ application.

    At the close of the evidence, the trial court granted the

City’s motion for a directed verdict as to Walker’s quid pro quo

sexual harassment claim and plaintiffs’ punitive damages claim.

The remaining issues were submitted to the jury.    The jury

returned a verdict of no cause as to all claims, and the trial

court entered judgment in favor of the City.

    Plaintiffs appealed the trial court’s judgment.     An

Appellate Division panel affirmed the trial court’s evidentiary

determinations, including its decision to bar Hicks’s testimony,

as well as its directed verdict on Walker’s quid pro quo sexual

harassment claim and the punitive damages claims.    The panel

concurred with the trial court that Hicks had no relevant

knowledge, because she did not work in the City’s Property

Maintenance Department, and ruled that even if her testimony had

been relevant, it would have been unduly prejudicial.

    We granted certification, limited to the question of

“whether the trial court erred in barring the testimony of a

witness who claimed that her superiors directed her to lie to

the person investigating plaintiffs’ claims of sexual

                               12
harassment.”   220 N.J. 265 (2015).    We also granted the motion

of New Jersey Association for Justice (NJAJ) to appear as amicus

curiae.

                               III.

    Plaintiffs contend that the trial court’s evidentiary

ruling regarding Hicks gave rise to a manifest denial of

justice.   They argue that Hicks’s testimony would have been

central to the question of the City’s vicarious liability for

hostile work environment sexual harassment, because it

established that the City’s upper management was not committed

to addressing sexual harassment in the workplace, and actively

interfered with an independent investigation.     Plaintiffs assert

that the evidence was also relevant to their claim for punitive

damages.   In addition, they contend that Mayor Bowser’s alleged

statements were admissible under N.J.R.E. 803(b)(4), as a

statement by a party’s agent or servant offered against that

party.

    The City counters that the trial court properly barred

Hicks from testifying because her testimony would have been

irrelevant and highly prejudicial.     It states that its primary

argument at trial was that the incidents described by plaintiffs

never occurred, not that the City had an effective sexual

harassment policy and took appropriate remedial action in

response to plaintiffs’ claims.    The City stresses that Hicks

                                  13
was not employed in the department in which the alleged

harassment occurred, that she was unfamiliar with the

environment in that department, and that she had no personal

knowledge of plaintiffs’ allegations.    The City asserts that the

admission of Hicks’s testimony would have been substantially

prejudicial to it, particularly in light of Hicks’s separate

litigation, and that the evidence was properly excluded under

N.J.R.E. 403.

    Amicus curiae NJAJ urges the Court to hold that Hicks’s

testimony was relevant and should have been admitted.     NJAJ

argues that the City raised an affirmative defense that it had

an effective anti-discrimination policy and remedial measures,

and that Hicks’s testimony would have directly undermined that

defense.    It urges the Court to reverse the Appellate Division’s

judgment.

                                 IV.

                                 A.

    When a trial court admits or excludes evidence, its

determination is “entitled to deference absent a showing of an

abuse of discretion, i.e., [that] there has been a clear error

of judgment.”   State v. Brown, 170 N.J. 138, 147 (2001) (quoting

State v. Marrero, 148 N.J. 469, 484 (1997)).    Thus, we will

reverse an evidentiary ruling only if it “was so wide off the

mark that a manifest denial of justice resulted.”    Green v. N.J.

                                 14
Mfrs. Ins. Co., 160 N.J. 480, 492 (1999) (internal quotation

marks and citation omitted); see also Marrero, supra, 148 N.J.

at 484; State v. Carter, 91 N.J. 86, 106 (1982).

                                  B.

    Our analysis of the trial court’s evidentiary ruling begins

with the question of relevancy, “the hallmark of admissibility

of evidence.”   State v. Darby, 174 N.J. 509, 519 (2002).

Relevant evidence is evidence “having a tendency in reason to

prove or disprove any fact of consequence to the determination

of the action.”   N.J.R.E. 401.   To decide whether evidence is

relevant,

            the trial court should focus on “the logical
            connection between the proffered evidence and
            a fact in issue[,]” N.J.R.E. 401, Comment 1
            (quoting State v. Hutchins, 241 N.J. Super.
            353, 358 (App. Div. 1990)), or “the tendency
            of evidence to establish the proposition that
            it is offered to prove,” State v. Wilson, 135
            N.J. 4, 13 (1994).

            [Green, supra, 160 N.J. at 492.]

    In accordance with N.J.R.E. 401, we consider the connection

between the statements that Hicks attributed to Mayor Bowser and

plaintiffs’ claims for compensatory and punitive damages arising

from alleged hostile work environment sexual harassment.

    To prove a LAD claim for hostile work environment sexual

harassment, a plaintiff has the burden to demonstrate that “the

complained-of conduct (1) would not have occurred but for the


                                  15
employee’s gender; and it was (2) severe or pervasive enough to

make a (3) reasonable woman believe that (4) the conditions of

employment are altered and the working environment is hostile or

abusive.”   Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587, 603-04

(1993).   “When the harassing conduct is sexual or sexist in

nature,” as “when a plaintiff alleges that she has been

subjected to sexual touchings or comments,” the first element

“will automatically be satisfied.”    Id. at 605.   However, a LAD

plaintiff is also compelled to prove that the harassing conduct,

“not its effect on the plaintiff or on the work environment,”

was “severe or pervasive.”   Id. at 606 (citing Ellison v. Brady,

924 F.2d 872, 878 (9th Cir. 1991)).   To satisfy the third and

fourth factors, a LAD plaintiff must show “that her working

conditions were affected by the harassment to the point at which

a reasonable woman would consider the working environment

hostile.”   Id. at 610.

     In this case, plaintiffs allege that the City should be

liable because they were sexually harassed by a supervisor.2     The




2For purposes of a LAD hostile work environment sexual
harassment case, an employee is a “supervisor” if he or she
either was authorized to undertake tangible employment decisions
affecting the plaintiff, or was authorized by the employer to
direct the plaintiff’s day-to-day work activities. See Aguas v.
State, 220 N.J. 494, 525-29 (2015). Although Walker did not
work in the Department managed by Prinvil, the City evidently
does not dispute Prinvil’s status as a supervisor for purposes
of any of the three plaintiffs’ LAD claims.
                                16
Court recognized in Lehmann that an employer can be held liable

for sexual harassment committed by a supervisor, consistent with

the principles of agency law set forth in Restatement (Second)

of Agency §§ 219(1)-(2) (hereinafter Restatement).   132 N.J. at

619-20.   Restatement § 219(2) provides:

          A master is not subject to liability for the
          torts of his servants acting outside the scope
          of their employment, unless:

          (a) the master intended the conduct or the
          consequences, or
          (b) the master was negligent or reckless, or
          (c) the conduct violated a non-delegable duty
          of the master, or
          (d) the servant purported to act or to speak
          on behalf of the principal and there was
          reliance upon apparent authority, or he was
          aided in accomplishing the tort by the
          existence of the agency relation.

    Here, plaintiffs asserted two distinct theories of employer

liability for hostile work environment sexual harassment, each

based on the agency principles of Restatement § 219(2).     The

first is a claim that the City was directly liable for

negligence under Restatement § 219(2)(b).   Plaintiffs’ direct

negligence claim requires proof that the City “failed to

exercise due care with respect to sexual harassment in the

workplace, that its breach of the duty of due care caused

[plaintiffs’] harm, and that [plaintiffs] sustained damages.”

Aguas, supra, 220 N.J. at 512.




                                 17
    This Court has identified five factors to be applied to a

claim that an employer is directly liable, on a negligence or

recklessness theory, for sexual harassment in the workplace:

          Those factors include[] the existence of: (1)
          formal policies prohibiting harassment in the
          workplace; (2) complaint structures for
          employees’ use, both formal and informal in
          nature; (3) anti-harassment training, which
          must   be  mandatory   for   supervisors   and
          managers, and must be available to all
          employees of the organization; (4) the
          existence of effective sensing or monitoring
          mechanisms to check the trustworthiness of the
          policies and complaint structures; and (5) an
          unequivocal commitment from the highest levels
          of the employer that harassment would not be
          tolerated, and demonstration of that policy
          commitment by consistent practice.

          [Id. at 513 (alteration in original) (quoting
          Gaines v. Bellino, 173 N.J. 301, 313 (2002)).]

    Accordingly, City officials’ express commitment and

concrete steps to eradicate sexual harassment -- or the lack

thereof -- are pivotal issues in plaintiffs’ direct negligence

claims.

    Plaintiffs’ second hostile work environment sexual

harassment claim, an allegation that the City is vicariously

liable for Prinvil’s alleged conduct pursuant to Restatement §

219(2)(d), similarly hinges on the conduct of the City’s senior

management.   Under their vicarious liability theory, plaintiffs

had the burden to show either that the alleged “harasser

purported to act on the employer’s behalf and” that “‘there was


                                18
reliance upon [his or her] apparent authority,’” or that “the

harasser ‘was aided in [his or her misconduct] by the existence

of an agency relation[ship]’ with his or her employer.”     Aguas,

supra, 220 N.J. at 514 (alterations in original) (quoting

Lehmann, supra, 132 N.J. at 619); see also Dunkley v. S.

Coraluzzo Petroleum Transporters, 441 N.J. Super. 322, 327-29

(App. Div. 2015), certif. denied, 224 N.J. 120 (2016).     Thus,

the attitude of City officials toward sexual harassment is at

the core of plaintiffs’ hostile work environment harassment

claim, under their theory of vicarious liability.

    Moreover, as an affirmative defense to plaintiffs’ claim of

vicarious liability under Restatement § 219(2)(d), the City

relied on its implementation of effective anti-harassment

policies and procedures.   See Aguas, supra, 220 N.J. at 524

(recognizing affirmative defense based on employer’s exercise of

reasonable care to prevent and correct promptly harassing

behavior, and employee’s unreasonable failure to take advantage

of preventive or corrective opportunities or otherwise avoid

harm); Gaines, supra, 173 N.J. at 320 (noting availability of

affirmative defense to vicarious liability claims if employer

implements effective anti-sexual harassment workplace policy);

Cavuoti v. N.J. Transit Corp., 161 N.J. 107, 120-21 (1999)

(recognizing defense for employers “who promulgate and support

an active, anti-harassment policy”); Lehmann, supra, 132 N.J. at

                                19
626 (stating importance of incentive for employers not only to

provide voluntary compliance programs, but to insist on

effective enforcement of such programs).

    In support of its affirmative defense to plaintiffs’

vicarious liability claims, the City argued that it took

reasonable steps to prevent sexual harassment, and to respond to

plaintiffs’ allegations when it learned of them.   The City

heavily relied on the information provided by its employees to

the investigator, and emphasized Mayor Bowser’s leadership in

the City’s anti-discrimination initiatives.    As a key defense to

plaintiffs’ vicarious liability theory, the City contended that

its senior management diligently worked to prevent and address

sexual harassment.

    Finally, plaintiffs’ claims for punitive damages for

hostile work environment sexual harassment compelled an

assessment of the manner in which the City’s upper management

addressed the conduct alleged by plaintiffs.    A “public sector

employer[] whose egregious conduct violates the LAD may be held

‘liable for punitive damages . . . only in the event of actual

participation by upper management or willful indifference.’”

Lockley v. Dep’t of Corr., 177 N.J. 413, 424 (2003) (quoting

Cavuoti, supra, 161 N.J. at 117); see also Aguas, supra, 220




                               20
N.J. at 529.3   Plaintiffs had the burden to prove the elements of

their claim by clear and convincing evidence.   Aguas, supra, 220

N.J. at 529 (citing Lockley, supra, 177 N.J. at 432); Lehmann,

supra, 132 N.J. at 624-25).   Their punitive damages claim for

hostile work environment sexual harassment, dismissed by

directed verdict prior to trial, thus implicated the conduct of

Mayor Bowser and others who comprised the City’s “upper

management.”

     In that setting, we consider the relevance of Hicks’s

testimony to plaintiffs’ hostile work environment sexual

harassment claims.   The trial court’s decision to bar plaintiffs

from calling Hicks as a witness was premised on her lack of

personal knowledge of the incidents of sexual harassment alleged

by plaintiffs, and her limited knowledge of the working

environment in the Department of Property Maintenance, to which

she was not assigned.   In the trial court’s view, Hicks’s

testimony bore no relationship to the issues before the jury,

with the exception of plaintiffs’ claim for punitive damages --




3 For purposes of plaintiffs’ punitive damages claims, the term
“upper management” denotes the officials “responsible to
formulate the organization’s anti-discrimination policies,
provide compliance programs and insist on performance (its
governing body, its executive officers),” among others.
Cavuoti, supra, 161 N.J. at 128; see also Aguas, supra, 220 N.J.
at 529-30.
                                21
a claim that would be considered only in the second phase of a

bifurcated trial, if it were decided at all.

     Although Hicks did not witness the incidents allegedly

involving Prinvil, her testimony directly related to the

attitude of the City’s upper management toward sexual harassment

in general, and its response to plaintiffs’ allegations in

particular.   Had Hicks testified, the jury could have found her

unreliable and discounted her accusation against Mayor Bowser.

Were the jury to believe Hicks’s account of that conversation,

however, it might have concluded that the City’s most senior

official materially interfered with the independent

investigation of plaintiffs’ claims.   Such a finding would have

supported plaintiffs’ hostile work environment sexual harassment

claims under both the direct and vicarious liability theories,

undermined the City’s defense to those claims, and strengthened

plaintiffs’ claims for punitive damages.

     Consequently, Hicks’s testimony, if allowed at trial, would

have had the requisite “tendency in reason to prove or disprove

[facts] of consequence to the determination” under N.J.R.E. 401.

We find the proffered evidence to be directly relevant to

plaintiffs’ hostile work environment sexual harassment claims.4


4 We do not find Hicks’s testimony to be relevant to the two
remaining claims, for quid pro quo sexual harassment and
retaliation, which were pled in plaintiffs’ complaints. Neither
claim was the focus of the trial. Hicks did not claim to have
                                22
    Accordingly, had Hicks testified at trial as she did at her

deposition, her testimony would have met N.J.R.E. 401’s

relevancy standard as to one of plaintiffs’ three LAD claims:

their claims for compensatory and punitive damages based on

alleged hostile work environment sexual harassment.

                                 C.

    Our determination of relevancy does not entirely resolve

the question of admissibility.    Hicks’s proposed testimony about

her alleged conversations with Mayor Bowser included out-of-

court statements “offered in evidence to prove the truth of the

matter asserted,” and therefore implicates the hearsay rule.

N.J.R.E. 801(c).   Under our Rules of Evidence, hearsay is

inadmissible “except as provided by these rules or by other

law.”   N.J.R.E. 802.   Accordingly, we consider an issue not

reached by the trial court or the Appellate Division:     whether

the evidence at issue is admissible under N.J.R.E. 803(b), which




personal knowledge of conversations between Prinvil and any of
the plaintiffs, let alone evidence that plaintiffs were
subjected to threats of adverse employment action if they did
not accede to Prinvil’s alleged demands, or that they suffered
retaliation. Moreover, Hicks’s testimony about comments of
Mayor Bowser’s did not relate to either quid pro quo sexual
harassment or retaliatory adverse employment actions against
plaintiffs. Thus, our determination that Hicks’s testimony
would have met the relevance standard of N.J.R.E. 401 is limited
to plaintiffs’ compensatory and punitive damages claims arising
from alleged hostile work environment sexual harassment.
                                 23
provides for an exception to the hearsay rule for a statement by

a party-opponent.

    Because Mayor Bowser is not a party to the litigation, the

relevant subsection is N.J.R.E. 803(b)(4).   That rule provides

that a hearsay statement made by a “party-opponent” will not be

excluded by the hearsay rule if it constitutes “a statement by

the party’s agent or servant concerning a matter within the

scope of the agency or employment, made during the existence of

the relationship[.]”   N.J.R.E. 803(b)(4); see also Spencer v.

Bristol-Meyers Squibb Co., 156 N.J. 455, 461-63 (1998) (stating

requirements of N.J.R.E. 803(b)(4)); In re Op. 668 of the

Advisory Comm. on Prof’l Ethics, 134 N.J. 294, 300 (1993)

(same); Biunno, Weissbard & Zegas, Current N.J. Rules of

Evidence, comment 4 on N.J.R.E. 803(b)(4) (2016).   Thus, the

alleged statements made by Mayor Bowser are admissible if he was

an agent of the City at the relevant time, and if his statements

concern a matter within the scope of his agency or employment.

See N.J.R.E. 803(b)(4); Spencer, supra, 156 N.J. at 461-63.

    Mayor Bowser was the City’s agent when he allegedly spoke

with Hicks about her interview with the investigator.     Based

upon undisputed evidence adduced at trial, the Mayor was the

senior official in the City’s organizational structure.     At

trial, Mayor Bowser testified that he had the authority to

discipline a department manager such as Prinvil in the event

                                24
that he sexually harassed another employee, that he used that

authority to approve disciplinary charges against Prinvil, and

that he was Hicks’s supervisor.

    Moreover, the alleged statements concerned a matter within

the scope of Mayor Bowser’s agency for, or employment with, the

City.    According to Hicks, her conversation with the Mayor took

place in his office as they strategized about an interview,

initiated by the City, to be conducted by the City’s outside

investigator with its employee.    Mayor Bowser’s alleged

statements related to Prinvil and Griffin, both City employees.

Those statements directly concerned his responsibilities as

Mayor.

    Thus, the hearsay statements in Hicks’s proposed testimony

meet both requirements of N.J.R.E. 803(b)(4), and are within an

exception to the hearsay rule.

                                  D.

    Finally, we consider the City’s argument that even if

Hicks’s testimony were relevant under N.J.R.E. 401 and not

subject to exclusion under the hearsay rule, it nonetheless

should be barred pursuant to N.J.R.E. 403.    That rule authorizes

a trial court to exclude relevant evidence “if its probative

value is substantially outweighed by the risk of (a) undue

prejudice, confusion of issues, or misleading the jury or (b)

undue delay, waste of time, or needless presentation of

                                  25
cumulative evidence.”   N.J.R.E. 403.      The party seeking the

exclusion of the evidence must demonstrate that one or more of

the factors listed in N.J.R.E. 403 substantially outweighs the

probative value of the evidence.       See, e.g., State v. Wakefield,

190 N.J. 397, 434 (2007), cert. denied, 552 U.S. 1146, 128 S.

Ct. 1074, 169 L. Ed. 2d 817 (2008); State v. Koskovich, 168 N.J.

448, 486 (2001); State v. Morton, 155 N.J. 383, 453 (1998),

cert. denied, 532 U.S. 931, 121 S. Ct. 1380, 149 L. Ed. 2d 306

(2001).

     In this case, the N.J.R.E. 403 factor invoked by the City

is the risk of undue prejudice.    In pretrial motions, the City’s

prejudice argument was limited to a single issue:      Hicks’s

potential testimony about her unrelated EEOC complaint and

litigation against the City and Mayor Bowser.5      At trial,

however, the City objected on grounds of prejudice to all of

Hicks’s potential testimony, including her statements about

Mayor Bowser’s alleged instructions regarding her interview with

the investigator.   Although the trial court primarily relied on

the relevancy standard of N.J.R.E. 401 and did not conduct an

analysis under N.J.R.E. 403, it briefly mentioned prejudice as

an additional factor in its decision.       Accordingly, we determine




5 The trial court’s ruling that Hicks would not testify about her
separate EEOC complaint and litigation was consented to by
plaintiffs at trial, and is not before the Court in this appeal.
                                  26
whether the probative value of Hicks’s potential testimony about

her alleged conversation with Mayor Bowser is substantially

outweighed by the risk of undue prejudice.

       As this Court has observed, when a party challenges the

admission of evidence under N.J.R.E. 403, the question is not

whether the challenged testimony will be prejudicial to the

objecting party, “but whether it will be unfairly so.”

Stigliano v. Connaught Labs., Inc., 140 N.J. 305, 317 (1995);

see also Biunno, Weissbard & Zegas, supra, comment 5 on N.J.R.E.

403.   “Evidence claimed to be unduly prejudicial is excluded

only when its ‘probative value is so significantly outweighed by

[its] inherently inflammatory potential as to have a probable

capacity to divert the minds of the jurors from a reasonable and

fair evaluation’ of the issues in the case.”   Koskovich, supra,

168 N.J. at 486 (alteration in original) (quoting State v.

Thompson, 59 N.J. 396, 421 (1971)); see also State v. Long, 173

N.J. 138, 163-64 (2002).   As this Court noted in the context of

a dispute over evidence suggesting that a malpractice defendant

altered medical records,

           [t]o be sure, the alteration [of] evidence
           would have had a substantial impact on [the
           defendant chiropractor’s] case. But that is
           what happens when there is powerful and
           persuasive evidence. That does not mean, as
           [the defendant] has argued, that it should be
           excluded under N.J.R.E. 403. . . . The mere
           fact that “evidence is shrouded with unsavory


                                 27
          implications is no reason for exclusion when
          it is a significant part of the proof.”

          [Rosenblit v. Zimmerman, 166 N.J. 391, 410
          (2001) (quoting State v. West, 29 N.J. 327,
          335 (1959)).]

    In Kalola v. Eisenberg, 344 N.J. Super. 198, 210-11 (Law

Div. 2001), a dental malpractice case, the court considered

evidence of telephone calls allegedly made by the defendant

dentist to the plaintiff’s current treating dentist, who

criticized the work performed by the defendant.    The treating

dentist was expected to testify that during these calls, the

defendant asked him to “look at things differently,” and stated

that based upon his stature in the profession, he could “make

things really difficult” for the treating dentist.    Id. at 202

(internal quotation marks omitted).    The Law Division rejected

the defendant’s N.J.R.E. 403 challenge to the evidence.     Id. at

210-11.   It noted that if the telephone calls actually occurred

as reported by the witness, the jury could either construe them

as “impermissible retaliatory behavior” or an innocuous

expression of a professional’s “natural feelings of agitation in

the heat of the moment,” but that the evidence should not be

excluded as unduly prejudicial.    Id. at 211.

    This case warrants a similar conclusion.      Had plaintiffs

been permitted to call Hicks as a witness, subject to the City’s

cross-examination, her testimony about Mayor Bowser could have


                                  28
been accepted as true or rejected as incredible by the jury.       It

is not inadmissible, however, merely because it could have

negatively impacted the defense.      Hicks’s account directly

challenged the integrity of the information the City provided to

its independent investigator, and was highly relevant to

plaintiffs’ primary LAD claim.   Although the evidence was

potentially damaging, its probative value was not substantially

outweighed by a risk of undue prejudice.      Hicks’s testimony,

therefore, was not subject to exclusion under N.J.R.E. 403.

    In sum, we conclude that the trial court’s decision to bar

Hicks’s testimony about her alleged conversation with Mayor

Bowser, prior to her interview with the City’s investigator, was

an abuse of discretion.   That testimony should have been

admitted into evidence at trial.

                                 V.

    We affirm in part and reverse in part the judgment of the

Appellate Division.   We concur with the Appellate Division that

the trial court properly dismissed plaintiffs’ claims for quid

pro quo sexual harassment and retaliation under LAD.     We reverse

the Appellate Division’s judgment affirming the trial court’s

dismissal of plaintiffs’ claims for compensatory and punitive

damages arising from alleged hostile work environment sexual

harassment, and remand those claims to the trial court for a new

trial.

                                 29
     CHIEF JUSTICE RABNER, JUSTICES ALBIN and SOLOMON, and JUDGE
CUFF (temporarily assigned) join in JUSTICE PATTERSON’s opinion.
JUSTICES LaVECCHIA and FERNANDEZ-VINA did not participate.




                               30
