A Review of Recent Developments Under CEPA
This article provides a brief synopsis of important developments under the New Jersey Conscientious Employee Protection Act of 1986 ("CEPA"), also known as New Jersey's whistleblower law. Over the summer our State Supreme Court rendered three important decisions under CEPA. The Court's decisions in Estate of Roach v. TRW, Inc. and DeLisa v. County of Bergen provide interpretive guidance regarding the basis for employer liability under the statute. Additionally, in Fleming v. Correctional Healthcare, the Court concluded that an employer violates CEPA by firing an employee for not following the chain of command when reporting illegal conduct.
CEPA prohibits employer retaliation because an employee does any of the following:
- Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer or another employer, with whom there is a business relationship, that the employee reasonably believes is in violation of a law, or a rule or regulation promulgated pursuant to law, or, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality of patient care;
- Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation promulgated pursuant to law by the employer or another employer, with whom there is a business relationship, or, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into the quality of patient care; or
- Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes: (1) is in violation of a law, or a rule or regulation promulgated pursuant to law or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care; (2) is fraudulent or criminal; or (3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment.
Remedies for violation of the statute include: injunctive relief, reinstatement, compensatory damages, (e.g., lost wages, benefits and other remuneration), punitive damages costs of suit and attorney's fees.
Several prior interpretations of the statute focused upon subsection (c)(3) which requires a plaintiff establish a "public harm:" a detriment to the public health, safety or welfare. In other words, a harm suffered solely by the employer did not meet this criteria and hence, subsection (c)(3) did not protect the employee-whistleblower.
The New Jersey Supreme Court expounded upon subsections (a) and (c) of the statute in the Estate of Roach v. TRW, Inc. In contrast to subsection (c)(3), CEPA's overall application is not limited to employee complaints which implicate a public interest or "harm" and consequently, a broader public policy violation does not need to be established by a whistleblower under the other subsections. The breadth of subsections (a) and (c) is counter-balanced by a "reasonable belief" requirement. This limits whistleblower protection to complaints regarding matters beyond minor infractions or trivial issues. Employers must exercise caution in reaching conclusions about the severity of an infraction or issue because failure to take corrective action may be deemed a ratification and adoption of the complained of conduct as its own, which in turn, exposes the employer to liability.
In DeLisa v. County of Bergen, the Court clarified that sub-section (b) of the Act applies to information or testimony provided by an employee about co-worker misconduct even though the misconduct did not involve a "violation . . . by the employer or another employer." The Court's analysis began by repeating its sweeping view of CEPA's statutory purpose: to provide the broadest protection to employees retaliated against for engaging in conduct protected under the statute. The Court also reiterated that the statute protects a complaining employee who has a reasonable basis for objecting to misconduct of an employer or a co-worker. Accordingly, the Court reasoned that it would be anomalous to protect an employee that objects to such conduct, yet not afford protection to that same employee if s/he testified before a public body investigating the conduct.
When confronted with a whistleblower complaint employers must not require rigid compliance with chain of command directives. The State Supreme Court made clear in Fleming v. Correctional Healthcare, that an employer can not terminate an employee for insubordination because she failed to follow the chain of command in reporting complaints about perceived unethical or illegal conduct. CEPA's purpose includes protecting employees who report such conduct to any individual defined by the statute as a supervisor: any individual who has the authority to direct and control the work performance of the affected employee, to take corrective action or who is designated by the employer on the notice required by CEPA. Thus, an employer can not limit the definition of supervisor under CEPA by requiring employees submit such complaints to their immediate supervisors. In contrast, an employer can "fire an employee, even a whistleblower, who is unreasonable in expressing his or her complaints. For example, a state employee who repeatedly called the Governor at the Governor's residence late at night to report violations of law at a state agency could justly be said to be insubordinate if requested not to do so. But to discipline an employee for going over the head of a supervisor allegedly involved in illegal or unethical workplace activity undermines the [statute]." Employers must remain cognizant that the chain of command defense, if applicable, would most likely be resolved by a jury.
Generally, employers do not provide management or supervisory personnel with training regarding the recognition, investigation or resolution of whistleblower complaints. Additionally, many organizations have not implemented a complaint process which addresses whistleblower issues or measures to prevent retaliation. All employees with supervisory responsibilities must learn to treat any such complaints seriously and to investigate same promptly. Management must be informed that in many instances the employee only needs to possess a "reasonable belief" to be protected, even if his or her belief is wrong. Whistleblowers should be provided with a means to raise retaliation complaints that assures expeditious notice to upper management and prompt effective remedial action.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.