A fair amount of buzz has been generated by some recent nonbinding, unpublished decisions that purport to somehow overrule decades of Supreme Court and Appellate Division precedent, as well as usurp the Legislature’s authority by erroneously importing into our whistleblower law a nonexistent exception that excludes from its protection employees who blow the whistle within the scope of their job duties. These cases fly in the face of the very purpose of CEPA, leave whistleblowing employees without protection, increase the likelihood that otherwise conscientious employees will refrain from blowing the whistle out of fear that they will lose their jobs and, as a result, expose society to harm that would otherwise have been cured by an employee’s whistleblowing.

CEPA, which has often been described as "the most far-reaching whistleblower statute in the nation," was enacted "to protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct." Yurick v. State, 184 N.J. 70, 77 (2005); Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998). Because "CEPA must be considered ‘remedial’ legislation," it "should be construed liberally to effectuate its important social goal." Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 431 (1995).

CEPA prohibits employers from retaliating against employees who disclose, threaten to disclose, object to or refuse to participate in conduct that they reasonably believe violates the law. N.J.S.A. 34:19-3. The statutory definition of "employee" includes "any individual who performs services for and under the control and direction of an employer for wages or other remuneration." N.J.S.A. 34:19-2(b). Therefore, CEPA protects all employees who blow the whistle on unlawful conduct — not just those who do so with regard to activities that fall outside of their duties. This point is particularly significant because tenets of statutory construction require courts to abide by unequivocal statutory language when interpreting legislative intent. Higgins v. Pascack Valley Hosp., 158 N.J. 404, 418-19 (1999).

If legislative intent and unequivocal statutory language are not enough, there is ample further support for the proposition that there is no "job duties" exception to CEPA. For example, decades of binding precedent make clear that employees blowing the whistle within the scope of their job duties are entitled to CEPA’s protections:

Donnelson v. DuPont Chambers Works, 206 N.J. 243, 256-57 (2011);

Maimone v. Atlantic City, 188 N.J. 221 (2006);

Mehlman v. Mobil Oil Corp., 153 N.J. 163 (1998);

Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405 (1995);

Turner v. Associated Humane Societies, 396 N.J. Super. 582 (App. Div. 2007);

Parker v. M&T Chemicals, 236 N.J. Super 451 (App. Div. 1989);

Hernandez v. Montville Twp. Bd. of Educ., 354 N.J. Super.467, 473 (App. Div. 2002), aff’d 179 N.J. 81 (2004).

Additionally, the supposed "job duties" exception was first conceptualized and discussed by the U.S. Supreme Court in Garcetti v. Ceballos, 547 U.S. 410 (2006). In that case, a deputy district attorney filed a Section 1983 claim contending he was retaliated against for objecting to the state’s reliance on an affidavit, which contained misrepresentations, to obtain a search warrant. The court noted that free speech cases require finding that (i) the employee was speaking as a citizen (rather than as an employee), (ii) on a matter of public concern. In the end, the court found that the Section 1983 case could not proceed because the employee spoke as a prosecutor fulfilling his job responsibility about how to proceed in a matter, rather than as a citizen speaking for First Amendment purposes.

In Garcetti, the Supreme Court was careful to note, however, that its holding was not intended to exclude employees who blow the whistle within the scope of their job duties from the protections afforded by whistleblower laws. Specifically, the court noted that "dictates of sound judgment are reinforced by the powerful network of legislative enactments — such as whistleblower protection laws … available to those who seek to expose wrongdoing…. These imperatives … protect employees and provide checks on supervisors who would order unlawful or otherwise inappropriate actions."

Despite the Supreme Court’s directive, the Appellate Division, two years later, legislated from the bench when it unnecessarily implied, in dicta and without any legal support, that such an exception may exist. Massarano v. N.J. Transit, 400 N.J. Super. 474 (App. Div. 2008). The plaintiff in Massarano was a security manager who disclosed that schematics for sensitive areas such as bridges had been discarded in bins accessible to the public. The Appellate Division held that the plaintiff was not entitled to the protections of CEPA because "disposal of the documents [in the manner complained of] … was not a clear violation of a statute, regulation or public policy."

Moreover, the court found that: "[n]othing in the record" led to the conclusion that the defendants "retaliated against the plaintiff for reporting the disposal of documents." Thus,the Appellate Division denied the plaintiff relief because there was no legal or evidentiary basis for illegal retaliation — not because the alleged protected activity was within the scope of her duties. In passing, however, the Massarano court mentioned that even if the complained of disposal "violated public policy, plaintiff’s reporting … did not make her a whistle-blower … [because] plaintiff was merely doing her job … by reporting her findings." Thus, the holding of Massarano is extremely limited, and the "job duties" language is nothing more than dicta.

Nonetheless, the dicta in Massarano has been adopted and recharacterized as a "holding" by the Appellate Division and the District Court of New Jersey in a series of unpublished intellectually dishonest decisions:

• Gianfrancesco v. Laborers Int’l Union of N. Am. Local 594, 2013 WL 244905 (D.N.J. Jan. 22, 2013). Plaintiff’s disclosure of wrongdoing and illegalities discovered during an audit in which he participated, and his objection to the use of nonunion and illegal workers, did not constitute protected whistleblowing because they were within the scope of his job duties;

• Tayoun v. Mooney, 2012 WL 5273855 (N.J. App. Div. Oct. 26, 2012). Plaintiff’s disclosure of public employees’ bribery and unethical conduct, and objection to another employee’s on-the-job drinking, was not protected whistleblowing because they were "a regular part of plaintiff’s supervisory job responsibilities"; and

• White v. Starbucks, 2011 WL 6111882 (N.J. App. Div. Dec. 9, 2011). Plaintiff’s disclosure about theft, food safety, unsanitary conditions and a customer’s physical assault was not protected whistleblowing because her job duties included "ensuring that employees adhere[d] to legal and operational compliance requirements."

Massarano and its progeny provide the perfect example of one of the "loser’s rules" articulated by Judge Nancy Gertner in The Yale Law Journal. 122 Yale L.J. Online 109 (2012). In "Loser’s Rules," Judge Gertner explains that because judges do not write opinions when denying summary judgment but write detailed decisions when granting it, the resulting available case law leads to a "skewed evolution of discrimination law" that disproportionately favors defendant-employers. This occurs because "[t]he body of precedent detailing plaintiffs’ losses grows." Ultimately, "[t]he way judges view these cases [also] fundamentally changes." The phenomenon articulated by Judge Gertner is exactly what is at work with regard to the nonexistent "job duties" exception. Courts have seized on the dicta, resulting in unpublished case law that creates nothing more than a legally unsupported, nonprecedential trend. That dangerous trend will ultimately become law unless courts start taking note of binding precedent, the unequivocal statutory language of CEPA and the policy underlying CEPA, as well as begin acknowledging the existence of countless denials of summary judgment on this very issue. In fact, this author’s firm has survived summary judgment motions concerning the "job duties" exception in at least three separate cases — none of which resulted in written decisions.

Lastly, employees often learn of unlawful workplace conduct by virtue of their exposure to such conduct in the normal scope of their duties, and allowing employers to retaliate against those employees with impunity undermines the public policy underlying CEPA. If this legally unsupportable exception takes hold, a corporation’s pollution-control technician, whose employment is terminated because he complained about the employer’s dumping of toxic chemicals in a river in violation of EPA regulations, will not be entitled to CEPA’s protections. Further, a human resources employee who is fired for objecting to a corporate officer’s widespread gender discrimination also will be bereft of any protection. Additionally, an auditor who is fired from a publicly traded company for objecting to the company’s use of accounting loopholes and poor financial reporting to hide considerable debt from shareholders will also not be protected. Further, the SEC enforcement officer whose employment is terminated after refusing to ignore what is likely a Ponzi scheme by an investment securities firm claiming to achieve results that are mathematically and legally impossible will not be protected. Isn’t this the very type of whistleblowing that CEPA is intended to protect? Isn’t there a great benefit to society when such whistleblowing brings to light those unlawful activities?

And what about those employees who do not disclose or object, but rather refuse to participate in unlawful conduct within the scope of their jobs? Should those employees be bereft of any legal protections for simply trying to do the right thing? For example, what about the company officer who is fired for refusing to certify fraudulent Medicaid submissions that, if approved, will defraud the government and taxpayers of significant sums of money? Should we also leave that employee without any legal protection because it is his job to sign off on those forms? That is preposterous. And the employee’s refusal to participate — just like all of the examples of employees who object to or disclose unlawful conduct — is the very type of conduct that CEPA was intended to protect and encourage, even if the whistleblowing occurs within the scope of the employees’ job duties.

The recent unpublished decisions touting the nonexistent "job duties" exception should be recognized for what they are — outliers, anomalies, cases that fly in the face of the intent, underlying purpose and unequivocal statutory language of CEPA, as well as decades of well-established, published and binding precedent.■

Next Week…

Insurance Law