A New Jersey appeals court has deflated a barrier to corporate compliance officers availing themselves of a state law protecting whistleblowers.
The judges parted company with their colleagues in Massarano v. New Jersey Transit, 400 N.J. Super. 474 (App. Div. 2008), who reasoned that compliance officers are only doing their jobs by reporting company wrongdoing.
"Under this line of reasoning, a plaintiff who reports conduct as part of his or her job is not entitled to the whistle-blowing protections" of the Conscientious Employee Protection Act, the judges said in Lippman v. Ethicon. "We respectfully disagree that this outcome is consistent with CEPA's broad remedial purposes."
Neil Mullin, a plaintiff employment lawyer not involved in the case, calls Wednesday's ruling "a much-needed correction" of Massarano, which "gutted CEPA by saying that anyone who has compliance responsibilities can never be protected as a whistleblower."
"Who knows more about public safety than a well-trained compliance officer?" Mullin says. "Those are the very people you want to protect."
The court reversed summary judgment for Johnson & Johnson in a suit by Dr. Joel Lippman, who had been the vice president of two J&J subsidiaries, Ortho-McNeil Pharmaceutical and Ethicon, from 1990 until 2006.
He says his firing that year was in retaliation for arguing against the release of or recall of seven products — ranging from the Ortho-Evra contraceptive patch to long-lasting Panacryl surgical sutures — which he alleged were defective and dangerous.
Ethicon and J&J countered that Lippman was fired over an improper sexual relationship with a subordinate, and they said Massarano barred the suit.
A Middlesex County trial judge dismissed the case on summary judgment, relying in large part on Massarano.
Appellate Division Judges Jose Fuentes, Jonathan Harris and Ellen Koblitz thought differently.
"Indeed, the facts of this case illustrate the gaping holes this line of reasoning creates in the wall erected by the Legislature to protect whistleblowers from retaliation," Fuentes wrote.
"Watchdog employees, like plaintiff, are the most vulnerable to retaliation because they are uniquely positioned to know where the problem areas are and to speak out when corporate profits are put ahead of consumer safety."
Fuentes said a compliance officer, like any professed whistleblower, need only meet the four-part test set out by the state Supreme Court in Dzwonar v. McDevitt, 177 N.J. 451 (2003):
• He must believe the employer is violating a law, regulation or clear mandate of public policy.
• He must have refused to participate in or objected to the illegal activity and urged compliance with the law.
• He must show that he or she was subjected to an adverse employment action.
• He must demonstrate that there was a causal connection between the adverse employment action and his or her protected activities.
Lippman's lawyer, Bruce McMoran of Manasquan's McMoran, O'Connor & Bramley, says the ruling "correctly interprets what CEPA provides for and it really puts Massarano in perspective."
Mullin, of Montclair's Smith Mullin, says it is likely that the Supreme Court will take the case if J&J appeals because there are now two published Appellate Division rulings that have reached a different conclusion as to whether compliance officers can be afforded CEPA protection.
Defense lawyer Francis Dee, of Morristown's McElroy, Deutsch, Mulvaney & Carpenter, did not return a call. Neither did officials from J&J.