New Jersey Supreme Court Rules That “Watchdog” Employees Can Be Protected As Whistleblowers

In 2014, we posted on this blog about a legal question that had yet to be definitively resolved in New Jersey: namely, whether whistleblowing employees are protected under the Conscientious Employee Protection Act (“CEPA”) when their job duties require them to monitor and report on the legality of their employer’s conduct. These “watchdog” employees include safety and compliance officers, auditors, and any employee who is tasked with monitoring the employer against legally-mandated standards (such as health and cleanliness) as part of his or her job.

As previously discussed, the employment defense bar seized upon decisions issued by New Jersey appellate courts to argue that watchdog employees are not covered by CEPA when the conduct the watchdogs complain about or report is the same conduct they were hired to monitor. This line of reasoning would allow an employer to hire, for example, a health and safety officer, then fire that officer as soon as she dared to suggest that the employer’s manufacturing process endangered workers’ health – in other words, for merely doing her job.

Luckily, the New Jersey Supreme Court has put an end to this specious line of reasoning in Lippman v. Ethicon, Inc., No. A-65/66 (July 15, 2015). The plaintiff in Lippman was a VP for a medical device company. In that capacity, he served on a “quality board”, created to review the safety of the company’s devices and to determine whether product recalls were warranted. He was terminated shortly after he advocated for the recall of a product he believed to be unsafe, then filed whistleblower claims against the company under CEPA.

In defending itself, the company argued that the plaintiff’s claims failed because he was a watchdog employee and therefore fell outside the scope of CEPA. The New Jersey appellate court disagreed, ruling that CEPA’s protections extend to watchdog employees. However, in a controversial move, the appellate court also ruled that watchdog employees had to prove an additional, tougher element than “regular” employees in order to bring a CEPA claim. Specifically, the appellate court found that watchdog employees had to show that they either refused to participate in the complained-of conduct, or that they exhausted all internal means of securing the company’s compliance.

On appeal, the Supreme Court of New Jersey affirmed the finding that CEPA protects watchdog employees, relying heavily upon the plain language of the law itself.  For instance, the Supreme Court noting that, in drafting CEPA, the legislature simply referred to “employees” without distinguishing between workers whose job duties include compliance and any other workers. Accordingly, the Court stated that it would not “read into” CEPA an exception for a discrete class of employees.

Just as importantly, the Supreme Court refused to adopt the appellate court’s heightened burden of proof for watchdog employees bringing CEPA claims. Again, the Court relied upon the plain language of the statute, noting – for example – that if the legislature wanted to require plaintiffs to exhaust all internal avenues before filing a CEPA claim, it could have spelled it out in the letter of the law. Since the additional obligations of refusing to participate in the complained-of conduct and exhausting all internal avenues of securing compliance were “nowhere found in [CEPA’s] statutory language”, the Court refused to “rewrite” this “plainly worded” statute.

The Lippman decision represents a commitment to extending CEPA’s whistleblower protections to all employees, regardless of their job duties. If you believe you have a whistleblower claim, contact our offices online or call us today for a free consultation.

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