When enacted in 1986, New Jersey’s Conscientious Employee Protection Act was intended to protect any employee who discloses to a supervisor or a public body, or refuses to participate in, any deception or misrepresentation which may defraud various parties, including patients, customers, employees, or government entities.
Over time, New Jersey courts interpreted CEPA as protecting an employee who reports illegal or unethical workplace activities of employers. During oral argument of the potentially groundbreaking Lippman v. Ethicon, held on January 20, New Jersey’s Supreme Court questioned whether CEPA protects an employee who, in the course of providing advice and counsel as part of her normal job duties, successfully persuades her employer to avoid a potentially unlawful course of conduct — but is then summarily fired because the employer perceives her to be a “roadblock” to its otherwise unlawful plans. If the questions posed by the Court are any indication, then companies with New Jersey-based employees should brace themselves for yet another significant expansion of CEPA.
The Lippman case
Dr. Joel Lippman served as Ethicon, Inc.’s chief medical officer and worldwide vice president of medical affairs. His job involved reviewing possible adverse effects of Ethicon products and serving on the company’s quality board, where he was part of a committee responsible for reviewing and making decisions regarding product safety.
After his employment was terminated in 2006, Lippman claimed he was a whistleblower because he was fired as a result of various recommendations he made to upper management as part of his role as CMO and quality board member. In rejecting this assertion, the trial court found that Lippman’s very job duties required him to raise concerns implicating the health and safety of the general public and, therefore, his push for recalls of allegedly dangerous products could not rise to the level of an “objection” or other protected activity that would trigger CEPA’s protection.
The appeals court was subsequently asked to either adopt or reject the argument that a category of so-called “watchdog” employees are exempt from the protection of CEPA. The Appellate Division held that an employee’s job title or responsibilities are not dispositive of whether the employee presents a CEPA claim. Indeed, a so-called “watchdog” is just another “employee” under the auspices of CEPA. Yet the appellate court went one step farther and reversed the trial court, holding that CEPA protects employees hired to be in-house whistleblowers — even when they are simply performing the tasks that they were hired and paid to perform.
What is the fate of the ‘roadblock’?
A theme raised by the Supreme Court during oral argument was whether a company can lawfully fire an employee who, through discussion and debate as a normal part of her job duties, successfully convinces her employer to avoid potentially unlawful conduct. To frame the issue, the Court posed the example of a (fictitious) employee hired and paid to provide accurate advice to upper management concerning potential violations of a law or rule or mandate of public policy. The company, wishing to dump toxic waste in a river, asks the employee for advice on whether it can lawfully do so. The Court’s fictitious employee does not “oppose” the employer’s “practice” but provides reasonable advice and sound counsel that successfully persuades the company not to violate the anti-pollution law. After adhering to the employee’s advice, however, the company fires her for the sole reason that it deems her to be a “roadblock” to the company’s albeit unlawful desired course of future conduct. Does CEPA protect the so-called “roadblock” from discharge in retaliation for her advice and counsel? The Supreme Court appeared interested in answering that question in the affirmative.
What’s next for New Jersey employers?
It is perfectly normal (and oftentimes expected) for the “roadblock,” like other employees, to advocate strong opinions within the company about legal affairs, business strategy, and the public welfare. Internal, debate-based decision making is an important and effective method of compliance control and risk management. To succeed, robust discussion and even contentious debate is expected. Such interaction may even descend into a power struggle over methodology, best business practices, and institutional influence. But at the end of the day, the “roadblock” is an employee like any other who must respect and, at times, accede to the demands of the employer — unless those demands are to engage in acts that are unlawful. It stands to reason that only unlawful demands fall outside the scope of regular employment.
Yet, the Supreme Court appears poised to dispense with CEPA’s requirement that an employee “object” to an unlawful corporate practice, telegraphing that the statute also should cover any employee who is fired after counseling—and successfully convincing—a company to avoid the possibility of future unlawful conduct as part of her normal job functions. Under the potentially geometric expansion of CEPA, everyday employees who regularly investigate alleged misconduct and monitor corporate compliance with applicable laws, rules, and regulations will necessarily be transformed into “whistleblowers” simply by working in their chosen profession. Indeed, any “roadblock” who debates or questions or renders advice about a potential violation of law or public policy during the normal course of her daily work will be deemed to be engaging in “protected” activity. In addition to a flood of CEPA claims, another unintended consequence of such an expansion of the statute is the creation of at-will employees who cannot be the subject of an adverse employment action without simultaneously triggering a potential CEPA violation—regardless of their performance. Such “untouchable” employees, who do not accept criticism or are fiscally irresponsible or ignore feedback or cannot get along with coworkers or are under-performing are not engaging in protected activity; yet the Supreme Court has intimated that any “roadblock” employee should be able to assert a CEPA claim so long as she is performing her normal job duties.
Whether the Supreme Court rejects the well-developed precedent allowing employers the right to disagree with their employees, even “roadblock” employees, without triggering CEPA remains to be seen. The Court’s final decision on this important issue is eagerly awaited.