Whistleblowing May Not Be Limited to Claims About Employer Wrongdoing in New Jersey

The New Jersey Conscientious Employee Protection Act (“CEPA”) was designed to protect whistleblowing employees who have the courage to stand up to illegal or wrongful conduct by their employer.  As the courts have consistently held, the initial focus in a typical CEPA case is on the whistleblower’s prima facie case burden to establish that he/she had an objectively reasonable basis to believe that the employer did something wrong by either violating a law or engaging in conduct incompatible with a clear mandate of public policy.

In an unreported opinion issued in March 2013, however, the United States District Court for the District of New Jersey found that CEPA can be implicated even where there is no claim or contention that the employer did anything wrong.  In Stapleton v. DSW, Inc. (2013 U.S. Dist. LEXIS 38502), the plaintiff employee believed that a store customer was mistreating her young child by, among other things, not changing her dirty diaper, and decided to “blow the whistle” on the customer by turning her in to the New Jersey Division of Child Protection and Permanency (the “Division”) out of concern for the child’s health and wellbeing.  The plaintiff employee gave the customer’s name and address to the Division after obtaining that information from the customer’s transaction with the store.  In doing so, the plaintiff violated the company’s perfectly lawful policy prohibiting the unauthorized disclosure of confidential customer information.  When the employer learned of what had happened, it discharged the plaintiff for violating its non-disclosure policy, and she filed suit under CEPA.

Not surprisingly, the company moved to dismiss the lawsuit on the grounds that the plaintiff was not a protected “whistleblower” because she did not allege that the company had done anything wrong or illegal.  Indeed, the plaintiff had blown the whistle on the customer, not the company.  This is where it gets interesting.  In denying the company’s motion, the District Court noted that CEPA not only protects employees who object to illegal activity, but also those who refuse to follow a policy or practice which they reasonably believe is incompatible with a clear mandate of public policy.  Unlike most CEPA cases, the court in Stapleton focused on the conduct of the employee – not the employer – and concluded that she was protected under CEPA by virtue of the fact that she acted pursuant to the public policy that encourages individuals to report child abuse.  In this circumstance, the court determined that the company’s policy prohibiting the disclosure of the customer’s identity was incompatible with the State’s clear mandate to protect the health and welfare of children, and that the plaintiff was therefore engaged in protected “whistleblowing” under CEPA when she refused to “participate in” or follow that policy in order to help the Division identify the customer.

While the court’s CEPA analysis is subject to debate – there was no allegation that the employer had engaged in wrongful or illegal conduct – the plaintiff would appear to have a claim for wrongful discharge in violation of public policy where the New Jersey Child Protection Law provides immunity to employees reporting child abuse, and the New Jersey courts have held that employer policies on confidentiality must yield to matters of child safety.  Nevertheless, this opinion should serve as a caution to employers and counsel alike that the courts often take an expansive view of the protections provided under CEPA.

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