Blowing The Wrong Whistle – Close Scrutiny Of Code Of Ethics Dooms Nurse’s Lawsuit Under New Jersey’s Whistleblower Statute

New Jersey’s Conscientious Employee Protection Act (CEPA) is remedial legislation designed to protect employees who “blow the whistle” on illegal or unethical activity committed by their employers or co-workers.  To be sure, CEPA is a powerful anti-retaliation statute, providing an array of significant remedies to an aggrieved party.  However, as the saying goes, with great power comes great responsibility.  A recent decision by the Appellate Division, Hitesman v. Bridgeway, Inc. (decided March 22, 2013), highlights the important gatekeeping functions of trial courts in CEPA cases.  Click here for a copy of Hitesman.

Not every employee who “blows a whistle” is a “whistleblower” subject to the protections of CEPA.  An employee who lacks an objectively reasonable belief that his or her employer’s conduct violated a law or public policy or constituted improper quality of patient care cannot, as a matter of law, sustain a viable claim under CEPA.  The Supreme Court in Dzwonar v. McDevitt, 177 N.J. 451 (2003) provided the legal framework for trial courts to use to separate the proverbial wheat from the chaff in most CEPA cases.  First, the trial court must identify a law, rule, or regulation promulgated pursuant to a law or a clear mandate of public policy, that the plaintiff believed was violated by the employer’s conduct.  Next, the court must determine whether there is a “substantial nexus between the complained-of conduct and [the] law or public policy identified by the court or the plaintiff.”  If the trial court so finds, the jury then must determine whether the plaintiff “actually held a belief and, if so, whether that belief was objectively reasonable.”

In Hitesman, the plaintiff, a nurse who worked at a long-term nursing home facility, disclosed to government regulators “practices of Defendant that he reasonably believed constituted improper quality of patient care and violations of his professional code of ethics.”  He sued under CEPA after he was fired for admittedly violating the defendant’s confidentiality policy (improper disclosure of patient information).  The trial court allowed the plaintiff’s CEPA claim to proceed to a jury trial, and the jury found in the plaintiff’s favor on liability.  However, on appeal the Appellate Division reversed the jury’s verdict.

Applying the analytical framework in Dzwonar for determining whether the plaintiff has established a prima facie case under CEPA, the court in Hitesman found that the plaintiff had failed to proffer facts that would support an objectively reasonable belief that a violation of law or clear mandate of public policy by his employer had occurred.  The Appellate Division concluded that the plaintiff’s reliance on the American Nursing Association’s Code of Ethics (“Code”), his employer’s Employee Handbook and a Statement of Residents’ Rights, was misplaced because none of these documents constituted a source of law or public policy closely related to the conduct about which the plaintiff claimed he had blown the whistle.  While the section of the Code relied upon by the plaintiff provided guidance as to whether he had acted in compliance with the Code in expressing his concerns, nothing in the Code established any standards regarding patient care.  As a result, the court held that the plaintiff’s belief that his employer had acted in violation of the Code was not objectively reasonable as a matter of law.

The court in Hitesman also concluded that “generalized statements” in the employer’s Employee Handbook about a commitment to “the best quality of health care” and requirements that its employees comply with all applicable statutes, regulations and ethical standards were “far too vague” to provide a “high degree of public certitude in respect of acceptable versus unacceptable conduct.”  Thus, an employee’s reliance on generalized statements that the employer and its employees will comply with the law will not support a CEPA claim.

All too often, plaintiffs in CEPA cases cite a litany of broad and generalized legislative, ethical rule or code of conduct statements to challenge management decisions.  Do not let a plaintiff get away with the “throw everything at the wall to see what sticks” approach in CEPA cases.  Hitesman and Dzwonar require trial courts to engage in a rigorous analysis to determine whether the plaintiff had, as a matter of law, an objectively reasonable belief that the complained-of conduct violated a law or public policy.  Because CEPA does not shield a complainer who simply disagrees with an employer’s course of lawful conduct, close scrutiny of the complained-of conduct by the trial court is essential.  As the court in Hitesman explained, it is “not enough for an employee to rest upon a sincerely held – and perhaps even correct – belief that the employer has failed to follow the most appropriate course of action, even when patient safety is involved.”  Instead, the employee must have an objectively reasonable belief that a violation of relevant legal authority occurred.

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