Yikes! NJ discrimination victims may tack on a whistleblower claim

Consider this scenario:

Employee believes he is being discriminated against. Employee complains to Human Resources. HR investigates, but is unable to substantiate the employee’s claims. Employee nonetheless sues his employer, alleging discrimination. While the lawsuit is pending, the employer fires the employee for reasons it claims are unrelated to the pending action.

whistleb.gifAccording to a recent unpublished NJ decision, the employee could have both a discrimination claim and a whistleblower claim under New Jersey’s Conscientious Employee Protection Act (CEPA).

Ain’t that some sh!t!

More on this important decision and the impact it may have on employers, after the jump…

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The case is Hester v. Parker, a copy of which is available here.

In December 2005, Terry Hester, then the Director of Facilities/Operations for the Winslow Township Board of Education, complained to human resources that another Board member had discriminated against him in violation of his civil rights. In May 2007, Mr. Hester filed a complaint in New Jersey Superior Court alleging that the Board had discriminated against him in violation of the New Jersey Law Against Discrimination (LAD). In August 2007, the Board fired Mr. Hester.

After the firing, Mr. Hester amended his complaint to include a CEPA retaliation claim. On summary judgment, the lower court dismissed the CEPA claim. Mr. Hester appealed.

A civil complaint = whisteblowing?!?

Among other things, a plaintiff alleging a CEPA violation generally must prove that he disclosed to a supervisor or a public body an activity, policy or practice of the employer that the employee reasonably believes violates the law or a rule or regulation promulgated pursuant to law.

Mr. Hester argued that he engaged in a whistleblowing activity by filing both an internal complaint with the Board and subsequently filing a civil complaint. The defendants took issue with the latter. Drawing from a federal court decision which held that filing a Charge of Discrimination with the EEOC amounts to a whistleblowing activity, the court sided with Mr. Hester:

The May 2007 civil complaint filed by plaintiff disclosed that the Board allowed Caucasian employees to be subjected to unduly harsh criticism. He also claimed his termination was unwarranted, and such conduct constituted reverse racial discrimination in violation of federal and state law. Having initiated a lawsuit in state court, plaintiff disclosed actions to a public body [the Superior Court of NJ], which if proved, constitute illegal activity of a public employer. Plaintiff argues that the remedial nature of CEPA and the liberal construction afforded to CEPA by the courts of this state militates holding that filing a civil complaint against an employer alleging racial discrimination satisfies the disclosure to a public body requirement of the statute. Under the facts of this case, we agree.

Accordingly, the appellate court held that Mr. Hester should have the chance to present his CEPA claim to a jury and, therefore, reversed the lower court’s entry of summary judgment for the defendants.

What should employers take away from this case?

In the majority of civil actions involving alleged LAD violations, the plaintiff has already been terminated by the time he initiates the civil action against his former employer. In those instances, the CEPA claim is a non-issue.

Then again, the fact pattern above does surface from time-to-time. Does that mean that every LAD case involving a post-complaint termination creates a potential CEPA claim? No, according to the Hester Court:

The Court has recognized that not every dispute between an employer and employee that leads to termination of an employee provides a cause of action under CEPA….An employee who invokes the powerful remedial forces of CEPA must also engage in whistle-blowing activities. Thus, we hesitate to hold that every employee who invokes an established dispute resolution procedure…When, however, an employee complains of illegal activity in the workplace, the employer does not remedy the situation, and the employee thereafter files a complaint alleging violation of clearly mandated standards, such as discrimination based on race, gender, religion, or sexual preference, the filing of the complaint may be a “whistle-blowing activity” as it is an attempt to draw attention to and obtain a remedy for a perceived wrong or improper conduct.

This suggests that an employee must complain internally before filing a complaint in order to have a shot at an LAD-cum-CEPA claim. Also, keep in mind that a former employee who alleges a CEPA violation still has to prove it. If an employer proffers a legitimate, nondiscriminatory reason for taking adverse conduct against an employee, the burden will shift to the employee who will have the ultimate burden of both production and persuasion to show that the employer’s proffered reason is pretextual (i.e., motivated by discrimination).

h/t Harrison Lee (Blank Rome)