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Whistle(blow) While You Work: New Jersey Supreme Court Rules That “Watchdog” Employees Are Protected Under CEPA

On July 15, 2015, the New Jersey Supreme Court settled the debate over whether employees who are responsible for monitoring and reporting employer compliance may seek whistleblower protection under New Jersey’s Conscientious Employee Protection Act, N.J.S.A. § 34:19-1 et seq. (“CEPA”), and if so, under what circumstances. Ultimately, the court in Lippman v. Ethicon held that CEPA protects such “watchdog employees.”

Plaintiff Joel Lippman was employed by Ethicon. His position involved determining whether medical products were too dangerous for distribution, and if so, whether a recall was required. In 2006, Ethicon discharged Lippman for a sexual relationship with a subordinate. Lippman sued, claiming that in fact he was fired in retaliation for blowing the whistle on Ethicon’s distribution of seven products he viewed as dangerous or defective.

The trial court dismissed the matter on summary judgment, concluding that Lippman failed to distinguish his job duties from whistleblowing activities, and therefore could not prove he was fired for whistleblowing. The trial court relied on Massarano v. New Jersey Transit, in which the Appellate Division held that a security operations manager who alerted the company to confidentiality issues could not sue under CEPA because she “was merely doing her job as the security operations manager by reporting her findings and her opinion.”

In Lippman, however, the Appellate Division overturned the trial court’s decision and expressed its disagreement with the Massarano holding. The court reasoned that watchdog employees are “the most vulnerable to retaliation because they are uniquely positioned to know where the problem areas are and to speak out when corporate profits are put ahead of consumer safety.” The appellate court did, however, place an enhanced burden of proof on Lippman, requiring that he prove as part of his prima facie case that he had exhausted all internal means of compliance or refused to participate in the conduct at issue prior to filing a CEPA claim.

Both parties appealed this decision. Ethicon challenged the appellate court’s holding, while Lippman challenged the enhanced burden of proof for watchdog employees. The New Jersey Supreme Court affirmed the Appellate Division’s holding, but modified it to remove the enhanced burden of proof that had been applied to Lippman as a watchdog employee. The court held that CEPA does not limit its definition of “employees” to those with certain job duties, and therefore applies to all employees equally. Additionally, the court held that an enhanced burden of proof for watchdog employees is “nowhere found in the statutory language” and cannot be applied to them absent legislative amendment.

This decision poses significant challenges for employers, particularly those in industries that typically employ workers to monitor compliance, such as the pharmaceutical industry. Such individuals are employed for the very purpose of bringing concerns or potential issues to the attention of the company, and as such may engage in activity that is protected under CEPA simply by performing their jobs. To succeed on a claim, however, such individuals would still have to prove that they suffered an adverse employment action (such as termination or demotion), and that the adverse action occurred because of the protected activity.

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Kristine Feher, Greenberg Traurig Law Firm, New Jersey, Labor and Immigration Litigation Law Attorney
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Kristine J. Feher is an experienced employment litigator and trial attorney, whose practice focuses on representing employers and managers in employment discrimination and wrongful discharge cases arising under employment laws such as Title VII of the Civil Rights Act, the pregnancy Discrimination Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the New Jersey Law Against Discrimination, the Conscientious Employee Protection Act, the Family Medical Leave Act, and the New Jersey Family Leave Act. In addition, she litigates claims for...

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Micala Campbell Robinson, Greenberg Traurig Law Firm, New Jersey, Labor and Employment Law Attorney
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Micala Campbell Robinson focuses on employment discrimination and wrongful discharge arising under state and federal laws, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Law and the New Jersey Law Against Discrimination. She has defended employers before the Equal Employment Opportunity Commission (EEOC) and state fair employment practice agencies. Micala also has experience in breach of contract and related tort actions, consulting agreements, restrictive covenants, and trade secret litigation.

In addition, Micala counsels clients on a number of employment matters, including wage and hour compliance, sexual harassment training, internal investigations, use of criminal background checks in employment decisions, and employment-based immigration.

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Courteney Caine Employment Attorney
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Courteney Lario Caine focuses her practice on representing employers and managers in employment disputes arising under employment laws, including Title VII of the Civil Rights Act, the Pregnancy Discrimination Act, the ADEA, the ADA, the FMLA, the Conscientious Employee Protection Act, the New Jersey Law Against Discrimination, and the New Jersey Family Leave Act. Courteney has extensive litigation experience defending discrimination, wrongful discharge, and wage-and-hour cases in state and federal courts.

Courteney also counsels clients in a variety of employment matters including...

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