January 1, 1900

y Andrew T. McDonald

As a matter of public policy, the New Jersey Legislature has carved out protections for employees who seek to expose, what they subjectively deem to be, improper conduct in the workplace. These protections are embodied in the Conscientious Employee Protection Act, or "CEPA." The New Jersey Supreme Court has interpreted CEPA to protect and encourage employees to report illegal or unethical workplace activities, and to discourage employers from engaging in such conduct. CEPA applies to atwill employees, contractual employees and employees covered by collective bargaining agreements, as well as, public employers and private employers. As such, employers need to educate their workforce, together with management, in order to avoid costly liability associated with violating the rights of any potential "whistleblower."

The Act

CEPA provides protection for employees who disclose employer conduct reasonably believed to be unlawful. Additionally, the CEPA protects those who give testimony or provide information to a public body investigating misconduct, or object to or refuse to participate in an act reasonably believed to be illegal or against public policy. The whistleblower must demonstrate a reasonable belief that a statute, rule, regulation or a clearly mandated public policy regarding public safety, health, or welfare will be violated by the conduct in question. To be successful in a CEPA claim, the law requires an employee to perform a whistleblowing activity. This whistleblowing activity includes providing the employer with notice of the violation, and a reasonable opportunity to correct the conduct. Providing notice is not required if the employee is reasonably certain that a supervisor knows of the illegal conduct, or the employee reasonably fears physical harm as a result of the disclosure.

Proofs

The whistleblower is required to demonstrate that he or she was subjected to adverse employment action as a result of whistleblowing. An employer cannot discipline an employee who objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes to be illegal or against public policy. The judiciary continues to define what constitutes an adverse employment action. However, it is clear that discharge from employment, suspension and demotion are disciplinary acts that constitute "retaliatory action" under CEPA.

Many affirmative defenses found in the New Jersey Tort Claims Act, available to public employers for claims brought by an employee, do not apply to claims brought under CEPA. The CEPA claim must be filed within one year of the violation and the claimant has a right to a jury trial. If the employee is successful in a CEPA claim, the employer is strictly liable for equitable relief such as reinstatement and restoration of back pay. Moreover, the employer will be liable for punitive damages in the event that upper management participated in the violation, or was willfully indifferent to the employee’s complaint. Punitive damages are directed at deterring future discriminatory conduct by the employer by economically punishing the employer. Other relief available to the employee is an injunction to restrain continued violation of the act, compensation for lost benefits, and payment of reasonable costs and attorney’s fees.

It should become apparent that violating the rights of a whistleblower could be an expensive endeavor. As the Legislature and Judiciary seek to overcome the victimization of employees in order to protect those who are especially vulnerable in the workplace from the improper or unlawful exercise of authority by employers, employers need to seek proper counsel to educate themselves and their workforce in order to avoid the propensity for whistleblowing, and to refrain from violating the rights of a whistleblower.

Andrew T.McDonald is an associate in the Administrative Law/Government Procurement Practice Group. He concentrates his practice in Administrative Law and Corporate Litigation including Public Procurement and Environmental Litigation with a particular emphasis on administrative, environmental and regulatory compliance.