On June 9, 2011 the NJ Supreme Court decided an important case under NJ's whistleblower law, commonly known as CEPA. (If you really must ask, it's short for “Conscientious Employee Protection Act.”) The case is Donelson v. DuPont Chambers Works.
CEPA has been around since 1986 and has a well-established history of decisional law through the courts. The Donelson case involves a new twist on CEPA, never before addressed by the Court, and it drew the attention of the National Employment Lawyers Association/New Jersey (an organization of plainitffs' lawyers), and the Academy of New Jersey Management (self-evident), both of which filed friend of the court briefs. Taking diametrically opposed positions, as you might expect.
The narrow but important issue the court decided was “whether recovery for economic losses associated with back and front pay requires proof of actual or constructive discharge” in a CEPA case. The twist here was that the plaintiff went out on disability after making his complaint about safety conditions in the workplace, following a period in which he claimed that he was subjected to harsh retaliatory treatment, and never returned.
DuPont claimed that either an actual or constructive discharge of the plaintiff from his employment should be required to support an award of back and front pay. The Supreme Court formulated the issue this way:
The question presented in this case is whether, under CEPA, an employee who becomes the victim of employer retaliation for engaging in statutorily protected whistle-blowing activities and who becomes psychologically disabled due to that retaliation can pursue a lost-wage claim without having to prove a constructive discharge.
The Court answered the question in the affirmative, holding that the plaintiff had a valid cause of action under CEPA.
At the same time, the Court declined to address whether the same approach would apply in a case under the NJ Law Against Discrimination [LAD], noting that the statutes are worded differently and take different approaches.
This decision clearly favors employees over employers. How should employers respond so as to protect themselves as best they can? The basics of CEPA compliance still apply: distribution of the annual notices required by the statute and training for mangers and employees. Conduct proper, thorough, and prompt investigations of employee complaints. There may be other strategies available to help minimize the financial damage in case this situation arises in your business.