HR Legalist

Attention New Jersey Employers: Whistleblowers Are More Common Than You May Think

When you think about whistleblowers, you might think of Edward Snowden, who recently exposed the NSA’s surveillance program.  While high profile cases often garner the most attention, whistleblowing statutes afford protections to all employees who report or object to illegal activity or misconduct even on a smaller scale.  If you have operations in New Jersey, your employees may be able to claim legal protection under the New Jersey Conscientious Employee Protection Act (“CEPA”).  CEPA prohibits employers from taking any retaliatory action against whistleblowers, and provides a cause of action for money damages and equitable relief (i.e., reinstatement).  Retaliatory action is defined broadly to include not only termination, suspension or demotion, but also “other adverse employment action taken against an employee in the terms and conditions of employment.”

Types of Whistleblowers Protected by CEPA

CEPA protects three categories of employees:

• Employees who disclose or threaten to disclose to a supervisor or to a public body activities that the employee reasonably believes to be in violation of the law, or fraudulent or criminal.
• Employees who provide information to, or testify before, any public body conducting an investigation into a violation of a law, rule or regulation.
• Employees who object to or refuse to participate in any activity, policy or practice which the employee reasonably believes violates the law, is fraudulent or criminal, or is contrary to a clear mandate of public policy.

Since CEPA was enacted, New Jersey courts have clarified and expanded its protections in several ways:

• An employee bringing a CEPA claim need not show that his or her employer actually violated the law or a clear mandate of public policy.  An employee only needs to show a “substantial nexus” between the complained-of conduct and a law or public policy.
• An employee who bases his/her claim on an alleged violation of public policy must connect the alleged violation to the public health, safety, welfare or protection of the environment.  This additional requirement has not been applied to claims involving violations of laws, rules or regulations.
• An employee who “blows the whistle” on a co-worker is protected by CEPA, even if the offending co-worker was not acting in furtherance of the employer’s business.
• According to a recent state appellate ruling, Lippman v. Ethicon, Inc., 432 N.J. Super. 378, 75 A.3d 432 (App. Div. 2013), employees who are required as part of their job to report or object to misconduct are protected under CEPA, provided that their reports or objections are supported by a reasonable belief of wrongdoing.

How to Protect Your Organization from Whistleblower Claims

While there is no foolproof way to avoid a whistleblower retaliation claim, employers can reduce risk and limit potential liability by considering the following best practices:

• Include a whistleblower policy in your employee handbook.  The policy should direct employees to make reports of wrongdoing to a designated contact person with no involvement in evaluating the employee’s performance or issuing discipline.  Direct supervisors should be instructed to promptly refer complaining employees to the contact person.
• Employers with ten (10) or more employees must annually post and distribute notices informing employees of their rights under CEPA, and identifying a contact person to receive complaints.  A form of notice complying with the requirement is available here.  Employers should obtain signed acknowledgements of the notices.
• Employees should be encouraged to make all complaints in writing to the designated contact person.  If an oral complaint is made, the contact person should document it in writing immediately, and have the complaining employee sign and date the written complaint after reviewing it.
• Conduct a prompt, thorough, confidential, and well-documented investigation of the alleged wrongdoing.  If possible, the complaining employee’s supervisor and other individuals responsible for evaluating performance and issuing discipline should have no involvement in or knowledge of the investigation or the allegations.