Articles Posted in Whistleblower Claims

“A constructive discharge occurs when the employer has imposed upon an employee working conditions ‘so intolerable that a reasonable person subject to them would resign.'” Daniels v. Mut. Life Ins. Co., 340 N.J. Super. 11, 17 (App. Div. 2001) (quoting Muench v. Twp. of Haddon, 255 N.J. Super. 288, 302 (App. Div. 1992)). It has been held that, “[t]he phrase ‘intolerable conditions’ conveys a sense of outrageous, coercive [,] and unconscionable requirements.” Jones v. Aluminum Shapes, Inc., 339 N.J. Super. 412, 428 (App. Div. 2001). Given this definition of constructive discharge, our Appellate Division in Moser v. The Streamwood Company, et. al., 2023 N.J. Super Unpub. LEXIS 1173 (decided July 13, 2023) issued an opinion finding that in a case brought under New Jersey’s whistleblowing statute, the Conscientious Employee Protection Act (CEPA), N.J.S.A., 34:19-1, et. seq., a Plaintiff/employee may pursue a constructive discharge claim at trial where an, “… employer’s repeated insistence, in the face of plaintiff’s objections, that she engage in actions she reasonably believed were in violation of LAD leading up to, and in conjunction with, the comment that induced plaintiff to resign.”

Plaintiff Moser worked for the Streamwood Company (Streamwood) as an assistant property manager. While plaintiff worked for Streamwood, she reported to codefendant Scott Leonard, Streamwood’s regional manager and son of Streamwood’s founder and owner. Moser alleged Leonard instructed plaintiff to check “no” on all housing screening form questions asking whether the form was being completed as a Section 8 housing application. Plaintiff believed checking “no” on the forms, as instructed, would make her complicit in violating New Jersey’s Law Against Discrimination (“LAD”), N.J.S.A., 10:5-1 to -49, which prohibits housing discrimination against prospective Section 8 tenants. When Moser continued to resist marking the boxes “no” on the housing screening forms, Leonard ominously forewarned Moser that “things don’t look good for you.”  Thereafter, Moser began experiencing acute anxiety and went on medical leave.

After her medical leave ended, Moser resigned her position with Streamwood. Thereafter, she filed a lawsuit alleging that she was constructively discharged as a result of her whistleblowing activities.  The trial court granted summary judgment to the defendants dismissing the lawsuit on a finding that, inter. alia., the facts underlying Plaintiff’s resignation did not as a matter of law rise to the level of outrageousness, coerciveness and unconscionability required to pursue a constructive discharge claim under CEPA. Moser appealed arguing that reasonably minded jurors could differ whether the hostility she claimed to have endured following her alleged whistleblowing activities rose to the level of outrageousness, coerciveness, and unconscionability necessary for a viable constructive discharge claim and therefore summary judgment was inappropriate under R. 4:46.

The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) signed into law by Governor Phil Murphy on February 22, 2021 brought new employment protections for job applicants and employees who lawfully use cannabis recreationally while not at work, namely, employees cannot be subject to an adverse employment action simply because a blood or urine test comes back positive for marijuana use.  Prior to enactment of CREAMMA, protections in the workplace for those using marijuana was limited to those possessing a medical marijuana card pursuant to the Jake Honig Compassionate Use Medical Cannabis Act (the Honig Act). Under the Honig Act, it is “unlawful to take any adverse employment action against an employee who is a registered qualifying patient based solely on the employee’s status as a registrant with the Cannabis Regulatory Commission” (“Commission”). An “adverse employment action” is defined as “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.” N.J.S.A., 24:61-3. Now that CREAMMA is the law, employees in New Jersey can no longer be denied employment or otherwise subject to an adverse employment action solely for using marijuana recreationally outside of work. Put differently, a failed drug test for marijuana by itself is an insufficient reason under CREAMMA for taking an adverse employment action against an employee. This means an employer would have to establish that the employee engaged in some conduct prohibited under the law, such as using marijuana at work, or being under the influence of marijuana at work, or otherwise unlawfully possessing selling or transporting marijuana in the workplace or during work hours.

Importantly the protections provided by CREAMMA apply with respect to all employees regardless of their job classifications or the nature of their job duties and responsibilities, including employees who work in safety-sensitive job positions. Furthermore, while CREAMMA preserves an employer’s right to conduct drug testing of its workforce it places a new obligation on employers to have employees suspected of using cannabis to undergo a physical evaluation by a person who has successfully attained certification as a Workplace Impairment Recognition Expert (WIRE) permitting him/her to determine the employee’s level of impairment while engaged in performing job duties. However, because the Commission has yet to adopt standards for a WIRE certification program no physical evaluation of an employee being drug tested in accordance with CREAMMA is currently permitted.

A major failing of CREAMMA is found in the fact that it does not expressly provide a private right of action for violations of the law. This means it appears an employee subjected to an adverse employment action for testing positive for marijuana use would have to claim a violation of another employment law which does permit an employee to sue in court.  For example, if an employee objected to being suspended by their employer for testing positive for marijuana because there was no evidence the employee used marijuana on the job or was under the influence of marijuana in the workplace, and then was fired for having done so, the employee maybe able to pursue a claim as a whistleblower under the New Jersey Conscientious Employee Protection Act (“CEPA”). CEPA is remedial legislation that, in relevant part, protects an employee from retaliation if he “[d]iscloses or threatens to disclose” to a supervisor or a public body an employer’s “activity, policy or practice” that the employee “reasonably believes” “is in violation of a law, or a rule or regulation promulgated pursuant to the law…” N.J.S.A. 34:19-3. A plaintiff in a CEPA case may receive compensation for lost pay and benefits, as well as mental distress damages. They can also win costs for the suit and attorney’s fees. Additionally, punitive damages, which are meant to punish the wrongdoer and deter them from any similar action in the future, are available when the employer has acted especially egregiously and/or outrageously. Damages available under CEPA are not capped by statute.

On October 28, 2021, New York State Governor Kathy Hochul signed Senate Bill S4394A (the “NY Amendments”) into law amending New York Labor Law Section 740: Retaliatory Personnel Action by Employers; Prohibition (the “Labor Law”) N.Y.L.L. 740, dramatically expanding the legal protections afforded to whistleblowing employees. The NY Amendments are set to take effect on January 26, 2022 and will make New York the latest state to follow New Jersey’s historic lead in enacting the most pro-employee whistleblower statutes in the United States.

In 1986, the New Jersey State Legislature enacted the Conscientious Employee Protection Act (“CEPA”) N.J.S.A. 34:19(1)-(8), considered at the time to be “the most far reaching ‘whistleblower statute’ in the nation.” Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998) (citing John H. Dorsey, Protecting Whistleblowers, N.Y. TIMES, Nov. 2, 1986, at 34). Specifically, “[T]he essential purpose behind CEPA” is to protect ‘whistleblowing’” activities that “benefit the health, safety, and welfare of the public,” by encouraging employees to report, or object to their employers’ unlawful misconduct. Feldman v. Hunterdon Radiological Assocs., 187 N.J. 228, 239 (2006). Additionally, CEPA protects all employees working in either the public or private sector, as well as independent contractors. D’Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 114 (2007).

The New Jersey State Legislature broadly intended for CEPA to effectuate preventative measures to deter companies from taking “retaliatory action” against employees who engage in conduct constituting “whistleblowing activity” as defined by the statutory language. Higgins v. Pascack Valley Hosp., 158 N.J. 404, 420 (1999). CEPA defines protected “whistleblowing activity” to occur when an employee:

The New Jersey Supreme Court recently addressed, among other issues, the question of whether a “suggested course of action” by a supervisor to a subordinate can suffice as a reasonable belief under New Jersey’s whistleblower law that the supervisor wants the subordinate to engage in conduct that violates law or public policy.  Allen v. Cape May County, 2021 N.J. LEXIS 392 (decided May 12, 2021). The unclear answer provided by the majority in Allen to this question is that it depends on the facts and circumstances underlying the communications between supervisor and subordinate. Justice Albin’s opinion in dissent (in part) was as equivocal.

Kim Allen (Allen) was the Purchasing Agent for Cape May County (County) under a renewable contract of employment. She reported to Gerald Thorton (Thorton), the County Freeholder Director. The story begins when a law firm named Capehart & Scatchard (Capehart) submitted a bid to represent the County in its workers compensation cases specifying only a proposed hourly rate rather than the County’s preferred per-case quote. Upon learning this, Jeffrey Lindsay, who as Director of Human Resources and Thorton’s stepson, oversaw the department that handled workers’ compensation matters for the County, approached Allen, and asked whether Capehart could fax a new proposal page to supplement the bid. Allen told Lindsay that it would be “illegal” to accept a substituted page (no page was ever switched out on the bid). Subsequent thereto, Allen told attorneys from a law firm named Ballard Spahr who were hired as independent investigators of an unrelated matter, about her exchange with Lindsay and how concerning it was to her. Ballard Spahr’s findings were submitted to the Freeholders in which the firm concluded that Lindsay had done nothing wrong.

Following this, the Freeholders nonrenewed Allen’s contract based on Thorton’s recommendation.  Thorton claimed he made this recommendation because a number of department heads had complained about Allen’s job performance. Consequently, Allen filed a wrongful discharge whistleblowing lawsuit under New Jersey’s Conscientious Employee Protection Act (CEPA) alleging that her response to Lindsay’s inquiry about Capehart’s bid proposal and her statement to the Ballard Spahr investigator about that inquiry constituted CEPA-protected conduct.

The law in New Jersey is clear that actual or constructive discharge is not a required element for recovery of economic losses due to employer’s retaliatory actions under New Jersey Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14; Donelson v. DuPont Chambers Works, 206 N.J. 243 (2011). Under CEPA, any retaliatory action on the part of the employer is a violation and therefore recoverable if the action(s) have proximately caused the injury to employee.  Donelson, 206 N.J.at 249 (referencing N.J.S.A. 34:19-5).  Also, where appropriate, “the court shall order compensation for all lost wages, benefits and other remuneration to the fullest extent possible.” Id. (emphasis added).  Such damage can include adverse employment capabilities due to mental unfitness for duty.  Id.  These protections exist to encourage whistleblowing on the part of employees and to protect those whistleblowers from any retaliation taken by their employers regardless of their employment status.  CEPA protects equally those who are discharged, who suffer a retaliatory hostile work environment, who suffer psychiatric distress forcing early retirement, and even those currently employed by the retaliating company who were retaliated against in some fashion for their whistleblowing actions.

In Donelson, the plaintiff Seddon, was a long-term employee of DuPont Chambers Works, who after approximately 30 years of employment, reported concerns regarding the inadequate procedures the company employed in handling a particular hazardous substance.  After filing an OSHA complaint, DuPont subjected Seddon to disparate and hostile treatment. Seddon eventually suffered an emotional breakdown, was placed on disability and he eventually resigned from his job. Seddon did not claim nor was he found to have suffered a constructive discharge at the hands of his employer, yet nonetheless was entitled by the Court to the full spectrum of tort recovery. This is because “other adverse employment actions taken against an employee” may lead to the proximate causation of economic loss, and any such event may lead to the full spectrum of tort recovery.  Donelson, 206 N.J. at 257.  Seddon’s psychologist recommended time away from work and even filed the papers for disability leave. Hence, the court in Donelson held that in the circumstance where an employer’s retaliatory action proximately causes employee to suffer a documented mental incapacitation, that employee has a right to recover lost wages even in the absence of a constructive discharge.  Id. at 263.

Herbe v. Rutgers, 2020 N.J. Super. Unpub. LEXIS 2563 (App. Div. decided December 29, 2020) is a recently decided Appellate Division case which is a progeny of Donelson. Nurse Herbe was a Clinical Nurse Coordinator for University of Medicine and Dentistry of New Jersey. Herbe was assigned with her supervisor and a coworker to audit medical charts, but they refused to help her with the audit because they were busy writing an essay for the supervisor’s graduate school application. In fact, they had the temerity to ask Herbe to help them author the essay, but rather than do so, Herbe left the room they were all in without comment. Thereafter, Nurse Herbe reported her supervisor and her coworker to the employer, believing they were guilty of theft of time, plagiarism, fraud, and ethics rules. Almost immediately after reporting the misconduct, Plaintiff’s supervisor and coworker began to harass Herbe at work, calling her a “mole,” undermining Plaintiff’s supervisory authority of a new employee, and making demeaning comments about her weight, clothing, and jewelry. The harassment Herbe was forced to endure at work eventually placed her under the care of a psychologist who placed her on disability leave for an indefinite period of time. In response, the employer fired her.

As discussed in Mashel Law’s last blog posting, when a worker stricken with the coronavirus disease (COVID-19), or likely exposed to same, needs to take time off to recover from the effects of the virus or to quarantine themselves from spreading it to family and coworkers, he or she may find job protections under the New Jersey Law Against Discrimination (NJLAD), federal Family and Medical Leave Act, the New Jersey Family Leave Act and the New Jersey Paid Sick Leave Act.  Adding to this arsenal of legal relief against an employer who chooses not to provide a worker with medical leave in such a circumstance is the New Jersey Department of Labor and Workforce Development’s (“NJDOL”) recent adoption of temporary emergency new rules to be found at N.J.A.C. 12:70 which will codify New Jersey Governor Phil Murphy’s Executive Order No. 103 (2020) a/k/a the New Jersey COVID 19 Anti-Retaliation Law. These new rules prohibit an employer from terminating or otherwise penalizing an employee for requesting or taking time off from work based on the written or electronically transmitted recommendation of a medical professional licensed in New Jersey stating the employee needs time off for a specified period of time because the employee has, or is likely to have, COVID-19 or any other infectious disease, which may infect others in the workplace.

Proposed new rule N.J.A.C. 12:70-1.3 states that upon the expiration of a period of protected leave, an employee must be restored to the position the employee held immediately prior to the start of the protected leave, with no reduction in seniority, status, employment benefits, pay, or other terms and conditions of employment.  Additionally, this new section states that if the employee’s position has been filled, the employer must reinstate the employee returning from protected leave to an equivalent position of like seniority, status, employment benefits, pay, and other terms and conditions of employment.

Proposed new rule N.J.A.C. 12:70-1.4 prohibits an employer from discharging or in any way retaliating against or penalizing any employee because the employee requests or takes protected leave. Concurrently, the rule also addresses situations where failure of an employer not to reinstate an employee would not be deemed retaliatory if: (1) the employer conducts a reduction in force that would have affected the employee had that person been at work; or (2) the employee would have been impacted by the good faith operation of a bona fide layoff and recall system, including a system under a collective bargaining agreement that would not entitle the employee to reinstatement to the former or an equivalent position.  The remedies available for a violation of the New Jersey COVID 19 Anti-Retaliation Law is limited to the commencement of an administrative action before the NJDOL seeking reinstatement to the same or equivalent position.  A potential fine of up to $2,500 can also be assessed against a violating employer.