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The New Jersey Appellate Division says there is no bar to whistleblower claims by employees who participate in the illegal conduct about which they complain. The pro-plaintiff ruling also reinforces the notion that firing an employee for blowing the whistle on wrongdoing can create a cause of action under the state’s Conscientious Employee Protection Act even when there were legitimate reasons to fire the employee. The Sept. 27 per curiam opinion, in Donofry v. Autotote Systems, Inc. A-3755-98T5, has not been published, but two lawyers outside the case, one who represents plaintiffs and one who defends corporations, say it is noteworthy. The three-judge panel affirmed Atlantic County Superior Court Judge John Himmelberger’s finding for Donald Donofry, who was fired from his job as general manager at the Atlantic City Racetrack operation of Autotote Systems Inc. That company transmits simulcasts of horse races to Atlantic City, N.J., casinos. Donofry claimed he was fired because he complained to senior managers that technicians working at his facility were not licensed by the state Casino Control Commission as required by law, thus necessitating admissions to the commission that prompted disciplinary action and threatened Autotote’s casino license. During a bench trial, the judge awarded $250,000 in compensatory damages, denied punitive damages and awarded $146,516 in counsel fees. Appellate Division Judges Stephen Skillman, Barbara Wecker and Arthur Lesemann affirmed all three decisions. Defense lawyer Kenneth Oettle, a partner with Sills Cummis Radin Tischman Epstein & Gross in Newark, N.J., declines to discuss the case except to say his client is considering whether to ask the state supreme court to review the decision. Before the appellate panel, Oettle pointed out that Donofry, as an Autotote manager, had a role in allowing the unlicensed employees to work in the operation. That role should preclude recovery, Oettle argued. But, the judges said, “we are not aware of any New Jersey case holding that plaintiff’s participation in the unlawful conduct he reports is a per se bar to a whistleblower claim.” When an employer defending such a suit contends that the employee’s unlawful conduct by itself caused the firing, “the employee’s conduct surely will be part of the picture from which a fact finder will determine whether the employer acted with a retaliatory motive,” the judges added. “But it is not the whole picture.” Donofry’s lawyer, John Donnelly, of Atlantic City’s Levine, Staller, Sklar, Chan, Brodsky & Donnelly, says the decision “put the nail” in the idea that an employee complicit in wrongdoing is precluded from making a claim. Martin Aron, a partner at Short Hills, N.J.’s Edwards & Angell who represents corporations in employment litigation, agrees. He says the ruling seems analogous to pro-plaintiff decisions that after-acquired evidence of an employee’s wrongdoing is not a bar to a CEPA claim but can affect the plaintiff’s recovery. A lawyer who represents plaintiffs, Christopher Lenzo, of counsel to Woodbridge, N.J.’s Wilentz, Goldman & Spitzer, says the issue of plaintiff complicity can affect a lot of potential CEPA claimants among middle managers. “They are put in a very difficult position of ‘do I rock the boat and blow the whistle on this or do I go along with it,’ ” he says. The impact is greatest on companies’ legal compliance officers, he says. “They are caught between a rock and a hard place because their job is to make sure there is compliance, but they are also employed by the people who are often motivated by factors other than what the law allows,” Lenzo says. The appeals court also declined to adopt the defense suggestion that plaintiffs be required to prove so-called but-for causation: The plaintiff would not have been fired anyway for a lawful, nonretaliatory reason. Autotote presented evidence that it had legitimate reasons to fire Donofry. The appeals panel also rejected arguments that Himmelberger failed to support his ruling that there was a causal connection between Donofry’s complaints and his firings. The typical findings in successful plaintiffs’ cases say the whistleblowing was a “determinative factor” in the firing. Himmelberger said it was a “substantial factor” and the appeals court said, in effect, that was good enough.

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