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In another win for the plaintiffs’ employment bar, a unanimous New Jersey Supreme Court ruled last week that corporate whistleblowers seeking damages for retaliation need not prove in every case that their claims vindicate a public policy. The decision in Estate of Roach v. TRW, Inc., A-74-99, reinstated a $704,800 jury award to Frank Roach, a TRW executive who claimed he was laid off for initiating an inquiry into whether a co-worker violated company policy. Roach died in February; his estate will be the beneficiary of the judgment. A New Jersey appeals court had thrown out the verdict on grounds there was no public interest in curtailing the co-worker’s behavior. But the high court said the Conscientious Employee Protection Act (CEPA) is remedial legislation that should be construed liberally. “We are satisfied that the Legislature did not intend to hamstring conscientious employees by requiring that they prove in all cases that their complaints involve violation of a defined public policy,” Justice Peter Verniero wrote for the Court in Roach. The lawyer who argued the case in the Supreme Court, Linda Kenney, says the decision is important because some trial judges and appellate division panels tend to interpret CEPA narrowly. “This opinion tells them to stop it,” says Kenney, of counsel in the Red Bank office of West Orange, N.J.’s Lucas Savits & Marose. It also shows that a court dominated by appointees of Gov. Christine Todd Whitman has stayed the liberal course when it comes to employment discrimination law, says Christopher Lenzo of Millburn’s Francis, Lenzo & Manshel. Lenzo sided with the plaintiff in an amicus brief on behalf of the National Employment Lawyers Association of New Jersey. When he was laid off in 1992 after nine years with TRW, Roach was told that his branch office in Fort Monmouth was being closed. However, Roach contended in a 1993 suit filed in Monmouth County Superior Court, the real reason for his firing was retaliation for complaining about a fellow employee. Roach had alleged that a co-worker had filed false expense accounts and failed to disclose a conflict of interest with a subcontractor working on a TRW defense contract, and that two co-workers had been promised a kickback by a company TRW was thinking of acquiring. During the trial in 1997 before Judge E. Benn Micheletti, TRW presented evidence that Roach was laid off because he had the lowest ranking job performance of the 37 people in his group. The jury found, however, that the company was liable to Roach for retaliating against him for reporting what he believed to be fraudulent or criminal activities. Under a section of CEPA, N.J.S.A 34:19-3c, employees are protected when they object to activities that they reasonably believe to be: 1) violative of a law or regulation, 2) fraudulent or criminal, or 3) incompatible with a clear mandate of public policy concerning public health, safety, welfare or protection of the environment. The appeals panel threw out the verdict on grounds that Roach had failed to prove the third prong of the statute, the public policy element. But the justices said, “We find no indication in the legislative history that section 3c.(3) was enacted for any other purpose but to encourage conscientious employees to disclose or object to activities encapsulated in this section. “Thus, we would pervert the legislative intent if we required employees to prove the section 3c.(3) elements, or to establish some other violation of ‘public policy,’ when asserting claims under other sections of the statute,” the Court said. “This seems to me to be the correct interpretation of the CEPA statute,” says the plaintiff’s trial counsel, Gregory Schaer, a former partner of Kenney’s who now heads a firm in Freehold. He says the decision also is important because the justices signaled a willingness to defer to juries in cases where there may be no direct evidence of retaliation, but there is a finding that the “surrounding circumstances” point to a connection between the complaints and the retaliation. The defense lawyer, Kenneth Kelly, a partner with Epstein, Becker & Green in New York, did not return a telephone call seeking comment. He argued before the court in May that CEPA was not intended as a mechanism for employees who complain about minor faults by a company in the hope of compensation for being discharged for other means. The court did caution that an employee’s reasonable belief that a law was being violated had to be truly reasonable. “For instance, if an employee were to complain about a co-employee who takes an extended lunch break or makes a personal telephone call to a spouse or friend, we would be hard pressed to conclude that the complaining employee could have ‘reasonably believed’ that such minor infractions represented unlawful conduct as contemplated by CEPA,” the Court said. The case will go back to Micheletti for a final judgment. Kenney says the judge awarded the plaintiff more than $200,000 in fees, representing trial-level work, plus a 25 percent enhancement for difficulty. Kenney says she will ask for the same enhancement for the appellate work. The original award, plus fees and interest, should bring the final judgment to about $1.2 million, she says. Kenney says it’s sad that Roach died of brain cancer in February after almost three years of pining for an affirmance of the jury verdict. She says that in an effort to cheer him up in his final days, she told him the Supreme Court had agreed to hear the case, even though it had made no such ruling. The day after he died, the certification petition was granted.

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