Are You A Whistleblower If Reporting Illegal Conduct Is “Part Of Your Job”?

New Jersey’s Whistleblower Statute: What You Need To Know

What if you are a corporate auditor or compliance officer? Can your employer terminate you because you report illegal or fraudulent conduct as part of your normal job duties?

The New Jersey employment whistleblower statute, known as the Conscientious Employee Protection Act (CEPA), is one of the broadest and most comprehensive in the nation. Under the express language of the law, it is unlawful to terminate any employee who reports, complains about, or opposes illegal or fraudulent conduct by an employer or co-workers.

Massarano vs. New Jersey Transit

The New Jersey Appellate Division’s decision in the case of Massarano v. N.J. Transit, 400 N.J. Super. 474 (App. Div. 2008) then both came as shock and created a great deal of mischief. The Massarano case involved a Security Manager who reported that a supervisor working under her “saw some schematics that were discarded in a bin on the loading dock of the Newark building” and thus merely “informed [an upper manager] of the discarded documents.” The Court could have simply decided and dismissed the case on the grounds that the Plaintiff did not actually report “illegal” conduct and therefore was not a “whistleblower”. Instead, the Court based its decision on the grounds that the Plaintiff was “merely doing her job” in reporting the discarded documents.

Employees Who Report Illegal Conduct As Part Of The Job

The employment management bar seized upon this language in the Massarano case to now argue that any employee who reported illegal conduct “as part of the job” could not be considered a “whistleblower” under the CEPA statute. Coupling that argument with the further argument that every employee has an obligation as part of their jobs to report illegal conduct, employment defense attorneys attempted to effectively gut the heart of the entire whistleblower law.

The situation did not get any better when another Appellate Division panel issued an unpublished opinion in the White v. Starbucks Corp., 2011 WL 6111882 (App. Div. 2011) case.   In White, the plaintiff was a District Manager who simply reported deficiencies in her own stores that she was directly responsible for addressing and correcting in her capacity as the District Manager. For example, she reported that she (1) discussed missing merchandise with one of her store managers, (2) discussed unsanitary conditions with another of her store managers, (3) was dealing with alcohol consumption and the electronic transmission of porn by employees under her supervision, and (4) was correcting “improper configuration of table and chairs” at another store.  The Court could have dismissed the case on the simple grounds the Plaintiff was not doing a good job in handling her own stores. However, relying the earlier Massarano decision, the Court dismissed the case on the grounds that the Manager’s reports fell “within the sphere of her job-related duties.”

The Most Recent NJ Decision Gives Some Clarity

Clarity, however, has now been restored in the most recent Appellate Division decision in Lippman v. Ethicon, Inc., 432 N.J.Super. 378 (App. Div. 2013), which has expressly disavowed the prior Massarano precedent. Lippman involved a Vice President of Clinical Trials for a pharmaceutical company who expressed concerns about the safety of a hormone replacement product. This time, the Court rejected the “just doing your job” defense. Pointing to the language of the whistleblower law itself, the Court held that “CEPA will protect from retaliation those employees whose core function and duty is to monitor the employer’s compliance with the relevant laws, regulations, or other expressions of a clear mandate of public policy.” The court ruled that these “‘watchdog’ employees are entitled to the protections against retaliation that the Legislature intended to apply to all employees.” As the court explained, given the broad remedial purposes of CEPA and the clear statutory language, an “employee’s job title or employment responsibilities” are not “outcome determinative in deciding whether the employee has presented a cognizable cause of action under CEPA.”

In short, under the most recent court decision in New Jersey, even “watchdog” employees such as auditors and compliance officers are protected under the CEPA whistleblower statute for doing their jobs.