New Jersey Whistleblower Law: An Overview of CEPA

New Jersey Whistleblower Law: An Overview of CEPA

The Conscientious Employee Protection Act (“CEPA”) is among the country's broadest and most far-reaching whistleblower statutes. At its core, CEPA protects employees from retaliation, including being fired, demoted, suspended, passed up for a promotion, or harassed, due to an employee objecting to something he believed violated the law.


It applies not only to the private sector but likewise covers state and local government employees and may additionally provide coverage to those who are designated as independent contractors. See D’Annuzio v. Prudential Ins. Co. of Am., 192 N.J. 110 (2007) (finding that individuals considered independent contractors under the common law may be covered by CEPA).


The Act defines an “employee” as: “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, as wages or other remuneration are required, volunteers are not typically considered employees for purposes of the Act. See Sauter v. Colts Neck Volunteer Fire Co., 451 N.J. Super. 581 (App. Div. 2017) (holding that a volunteer firefighter was not an employee and therefore not entitled to CEPA protection, despite his receipt of a small award for service).


As for employers, the Act is similarly far-reaching. The Appellate Division and the United States District Court of the District of New Jersey have held that liability under CEPA may extend not only to an employer but to individual employees or supervisors acting with the employer’s authorization. See Ivan v. County of Middlesex, 595 F.Supp.2d 425 (D.N.J. Jan. 21, 2009); Brennan v. Palmieri, 2008 WL 5233782 (D.N.J. Dec. 12, 2008); Zelkina v. Orlioukova, 2009 WL 417282 (App. Div. 2009). But see Nance v. City of Newark, 2008 WL 508598 (D.N.J. Feb. 28, 2008) (denying reconsideration of ruling that found individual defendants not to be liable under CEPA in their individual capacities.)


Protections Against Retaliation

As CEPA is designed to protect employee “whistleblowers,” the statute precludes employers from taking adverse employment action against an employee who discloses, objects to, or otherwise refuses to participate in actions reasonably believed by the employee to either be illegal or a violation of public policy.


Consequently, even if the action was not illegal or a violation of public policy, the employee is still protected if he can identify the law or clear expression of public policy believed to have been violated; and he proves that his belief was objectively reasonable. Mehlman v. Mobil Oil Corp., 153 N.J. 163, 193-94 (1998) (noting that “[t]he object of CEPA is not to make lawyers out of conscientious employees but rather to prevent retaliation against those employees who object to…conduct that they reasonably believe to be unlawful or indisputably dangerous to the public health, safety or welfare.”).


Nevertheless, the New Jersey Supreme Court has made it clear that CEPA is limited to whistleblowing that serves a public purpose. Thus, internal rule violations are not protected. Id. at 188 (“[T]he offensive activity must pose a threat of public harm, not merely private harm or harm only to the aggrieved employee.”) Smith v. TA Operating LLC, 2011 U.S. Dist. LEXIS 93450 (D.N.J. Aug. 19, 2011) (plaintiff’s alleged reporting of another employee who brought a personal vehicle in for gas and repairs was not protected activity; alleged violations of employee handbook not protected.)


What Must Be Established to State a Claim

To state a prima facie case under CEPA, a plaintiff must establish four (4) things: 1) that he reasonably believed that his employer’s conduct was a violation of either the law or a clear expression of public policy; 2) that the reporting employee performed a whistleblowing activity protected by CEPA; 3) a retaliatory action was taken against him; and 4) a casual connection exists between the retaliatory action and the whistleblowing activity.


The Act defines “retaliatory action” as “the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.” N.J.S.A. 34:19-2(e). As such, a retaliatory action is limited to formal personnel actions that affect on compensation or job rank or seriously intrude into the employment relationship. Hancock v. Borough of Oaklyn, 347 N.J. Super. 350, 360 (App. Div. 2002) (conducted alleged to have made plaintiff’s job “unpleasant” but did not affect her compensation or rank, was found to be insufficient to constitute proscribed retaliation); Aiellos v. Zisa, 2010 WL 421084 (D.N.J. Feb. 2, 2010) (the interrogation of an employee on two separate occasions did not constitute retaliatory action, as there was no effect on compensation or rank); Competello v. La Bruno, 2005 WL 1637907 (D.N.J. July 12, 2005) (limiting vacation days and changing shifts did not meet the standard); Buell v. Clara Maass Med. Ctr., 2008 WL 4191115 (App. Div. 2008) (one-day suspension with pay, being escorted out, locker cut open and searched and photo posted at security was not a retaliatory action, as emotional distress alone is not enough to constitute an adverse action).


Next, a claimant must show causation. Here, temporal proximity between the protected conduct and the adverse employment action falls short of establishing the casual element of a CEPA claim. Hancock supra. at 361 (App. Div. 2002) (holding “[t]emporal proximity, standing alone, is insufficient to establish causation.”). Instead, a plaintiff must show a “substantial nexus” between the whistleblowing activity and the adverse employment action. Dzwonar v. McDevitt, 177 N.J. 451, 463 (2003) (noting that “the trial court must make a threshold determination that there is a substantial nexus between the complained-of conduct and a law or public policy identified by the court or the plaintiff.”).


Further, causation has been found to be lacking where the employer was unaware of the plaintiff’s alleged whistleblowing activity. Dominguez v. Costco Wholesale Corp., 356 Fed. Appx. 611 (3d Cir. 2009) (summary judgment for lack of causation was affirmed, where there was a lack of evidence that managers who issued disciplinary notices knew of the investigations.).


Burdens of Proof

Once a plaintiff has successfully met his prima facie case, the burden then shifts to the employer to articulate a legitimate non-discriminatory reason for its actions. A plaintiff then must convince the factfinder that the adverse action was made with a retaliatory intent or that the employer’s proffered reasons were merely pretext. Fleming v. Correctional Healthcare Solutions, Inc., 164 N.J. 90, 100-01 (2000) (“[i]n order ultimately to prevail, plaintiff must prove that retaliatory intent motivated her employer.”).


Moreover, the Appellate Division and the District Court have held that a statement made after the litigation has started is not relevant to the employer’s intent regarding the alleged retaliatory action. Buell v. Clara Maas Med. Ctr., 2008 WL 4191115 (App. Div. 2008); Cuff v. Camden County School District, 2019 WL 1950400 (D.N.J. May 2, 2019).


CEPA Claim Procedure, Waiver of Other Claims, and Remedies

Internal Complaints

Before being able to enjoy the protections of CEPA, an employee must first, in normal circumstances, detail to a supervisor, in writing, the alleged wrongdoing, thus providing the employer with a reasonable opportunity to correct the problem. N.J.S.A. 34:19-4; Fleming v. Correctional Healthcare Solutions, Inc., 164 N.J. 90, 97 (2000) (within reason, an employee may complain to any supervisor, not just those designated by the employer).


However, in emergency situations, internal reporting is not required by the Act, nor is it required where an employee reasonably believes the conduct in question is already known to one or more supervisors. N.J.S.A. 34:19-4 (An employee is not required to give their employer notice when “the employee is reasonably certain that the activity, policy or practice is known to one or more supervisors of the employer or where the employee reasonably fears physical harm as a result of the disclosure provided, however, that the situation is emergency in nature.”); See Norenius v. Multaler, 2008 WL 4162878 (App. Div. 2008).


Prosecuting a Claim

The statute of limitations for a CEPA claim is one (1) year, and it does not benefit from the discovery rule. N.J.S.A. 34:19-5; Villalobos v. Fava, 342 N.J. Super. 38, 48-50 (App. Div. 2001) (noting that no case has found the discovery rule applicable to CEPA claims). However, where there is a continuing violation, the limitations period begins when the last act of retaliation occurs. Roa v. Roa, 200 N.J. 555 (2010); Kane v. Public Service Electric & Gas, 2019 WL 385769, *5 (App. Div. 2019). Additionally, the Third Circuit has held that the notice requirements of the Tort Claims Act do not apply to CEPA. Brennan v. Norton, 350 F.3d 399, 431-32 (3d Cir. 2003).


When bringing a CEPA claim, a plaintiff may commence suit in any court of competent jurisdiction and has the right to trial by jury. N.J.S.A. 34:19-5. However, where there was an agreement to arbitrate, these clauses are enforceable in appropriate circumstances. See Littman v. Morgan Stanley Dean Witter, 337 N.J. Super. 134, 146-48 (App. Div. 2001); Fave v. Neiman Marcus Group, 2014 WL 1884337, at *5-6 (App. Div. 2014) (plaintiff’s claim that she did not read or understand the arbitration agreement that she signed was not enough to invalidate it.); But see Leodori v. Cigna Corp, 175 N.J. 293, 302-07 (2003) (employee’s assent to the arbitration provision in an employee handbook was not clear).


CEPA Waiver

One of the most significant considerations to be made when bringing a CEPA claim is its effect on other claims. As the full panoply of tort damages (injunctive relief; reinstatement of a former employee to the same or equivalent position; emotional distress; reinstatement of fringe benefits or seniority rights; compensation for lost wages and benefits; and punitive damages) is available under CEPA, once an action is instituted under CEPA, the employee’s rights and remedies under any other contract, selective bargaining agreement, state law, rule or regulation or under the common law will be deemed waived. Further, note that per quod damages have been rejected as being available under CEPA. Jones v. Jersey City Med. Ctr., 20 F.Supp. 2d 770 (D.N.J. 1998); Catalane v. Gilian Instrument Corp., 271 N.J. Super. 476 (App. Div. 1994).


Notwithstanding, the waiver provision applies only to substantially related claims based on the same conduct. It does not apply to substantially independent claims. Young v. Schering Corp., 141 N.J. 16, 29 (1995); See e.g. Falco v. Cmty. Med. Ctr., 296 N.J. Super. 298, 318 (App. Div. 1997) (noting “[a] claim must have a basis independent of the CEPA claim in order to be exempt from the waiver provision.”); Boyle v. Quest Diagnostics, Inc., 441 F.Supp. 2d 665, 671-72 (D.N.J. 2006) (claims for wrongful discharge and breach of the implied covenant of good faith and fair dealing were waived, whereas claims for breach of contract based on equitable estoppel for denial of promotion was not waived).


Significantly, the waiver provision is invoked merely by the institution of a CEPA action. Therefore a claim will not be saved merely because a court dismissed the underlying CEPA claim. Espinosa v. County of Union, 2005 WL 2089916, at *11 (D.N.J. Aug. 30, 2005), aff’d, 212 F. App’x 146 (3d Cir. 2007), cert. denied, 128 S. Ct. 144 (2007); But see Chadwick v. St. James Smokehouse, Inc., 2015 WL 1399121, at *11 (D.N.J. March 26, 2015) (no CEPA waiver until discovery is completed.).



As briefly mentioned above, the remedies available under CEPA are quite expansive. CEPA allows for reinstatement of a former employee’s same or equivalent position, lost wages and benefits; emotional distress damages; reinstatement of fringe benefits or seniority rights; and punitive damages. It is for this reason, as pointed out by the New Jersey Supreme Court, that the legislature in enacting CEPA “included a statutory provision that deems the filing of a CEPA complaint to be an election of remedies.” Tartaglia v. UBS PaineWebber Inc., 197 N.J. 81, 103 (2008). Therefore, as cautioned above, a plaintiff considering a CEPA claim must afford due consideration to CEPA’s waiver provision.



If you believe you have suffered an adverse employment action and wish to discuss your legal options, Farrell & Thurman, P.C., offers a variety of convenient ways to schedule a free, no-pressure consultation. You may do so directly on our website (Schedule A Consult), via phone (609-924-1115), or by email (Contact Us).