Court Upholds Jury Verdict Against Employer for Retaliation

Gregory S. Schaer, a Monmouth County based New Jersey Employment Attorney located in Manalapan, represented the employee in a lawsuit against their employer alleging claims of retaliation.

In Roach v. TRW, Inc. , 164 N.J. 598 (2000), plaintiff, a former employee of TRW, sued his employer alleging that he was wrongfully terminated in retaliation for his complaints that his employer was allegedly engaged in illegal activities by accepting kickback payments. The employee made several reports to a Company hotline to comply with his obligations under the Company’s Code of Conduct but no action was taken on the complaints.

Several months after his complaints, the Company announced plans for a reorganization and the employee was notified that his group was to be combined with another group. As part of that reorganization, a group of nine (9) individuals, including the employee, received performance evaluations. The employee was subsequently notified that he was being laid off. The thirty-six (32) other employees who were evaluated were either retained by the Company or transferred to other positions, voluntarily resigned or were hired back as independent contractors for the Company.

The employee filed a Complaint against the employer alleging violations of CEPA. At trial, the employee presented evidence to prove that the employer’s decision to terminate his employment was motivated, in part, by his complaints about his co-employees in violation of the New Jersey whistleblower law. The jury awarded the employee $629,000 in lost wages and $75,000 for pain, suffering and emotional distress.

On appeal, the Appellate Division set aside the jury’s verdict finding that the whistleblower law did not extend protection to employee’s complaints about co-employee’s action that harmed that employer. The Supreme Court granted plaintiff’s Petition for Certification but summarily remanded the case back to the Appellate Division to reconsider the appeal in the view of a recent decision finding that certain complaints about co-employee activity were protected under the New Jersey whistleblower law. The Appellate Division affirmed its earlier decision, concluding that the new case was inapplicable because the employee’s complaints did not “implicate the public interest”.

On appeal again to the Supreme Court of New Jersey, the court held that the whistleblower law did provide the employee with protection and that the jury verdict in the employee’s favor was appropriate.

In a precedent setting decision, the court held that the New Jersey whistleblower statute known as CEPA is designed to protect employees who blow the whistle on illegal or unethical activity committed by their employer or co-employees. Consistent with CEPA’s broad and remedial purpose, the court held that the New Jersey Legislature did not intend to require that employees prove in all cases that their complaints involved violations of a defined public policy.

The court held that the New Jersey CEPA statute protects employees who complain about activities that fall into three basic categories: activities that the employee reasonably believes are in violation of some specific statute or regulation, are fraudulent or criminal, or are incompatible with policies concerning the public health, safety or welfare or the protection of the environment.

The court held that where the employee complained about activities that are either illegal or fraudulent, it is not necessary for the employee to also demonstrate that the activities are incompatible with policies concerning the public health, safety or welfare or the protection of the environment.

The Company also argued that verdict was not proper because the individual that made the decision to terminate the employee did not even know about the employee’s complaints when he made a legitimate business decision to reorganize the employee’s workgroup and terminate the employee.

However, the court found that the jury could have reasonably concluded that the lay-off decision was motivated by the employee’s allegations concerning his co-employee’s conduct and could have inferred that in deciding to terminate the employee, the decision-maker relied upon a “tainted” evaluation prepared by the employee’s manager who was aware of the employee’s complaints.

The court found that the jury could have also taken into account the fact that the employee’s office remained open and that other employees slated for possible dismissal were transferred or received a different job at the Company, were hired by as independent contractors, or voluntarily resigned.

The court also clarified that in order to have a claim for whistleblowing under the statute, it is not necessary that the employee demonstrate that an illegal activity actually occurred. Rather, the court clarified that an employee has the basis for a legal claim where they have been subjected to retaliation as a result of complaints of illegal or fraudulent activity so long as they had a reasonable belief that there was a violation of law or fraudulent activity that was occurring. The court emphasized, however, that the statute is intended to protect those employees whose disclosures fall sensibly within the statute, it is not intended to spawn litigation concerning trivial or benign employee complaints.

Finally, the court held that that employee’s supervisor was made aware of the co-employee’s alleged improper conduct and, rather than conduct an independent investigation, discussed the matter with one of the subjects of the complaint and essentially dismissed the allegations. In addition, the court noted that the hotline attorneys did not respond or even look into the employee’s allegations that co-employees were engaging in fraudulent behavior, possibly arranging kickbacks, and padding accounts.

The court held that based upon those facts, the jury had a basis to find that the employer had ratified the alleged employee conduct, thereby treating the complained about activities as the employer’s own conduct giving rise to a claim under the statute.

To speak with an experienced New Jersey Employment Law Attorney, contact the Law Offices of Gregory S. Schaer, LLC, conveniently located in Monmouth County, New Jersey.