Appeal Sought on Scope of New Jersey’s “Whistle-Blower” Statute

Introduction

In a case of particular interest to New Jersey employers, the New Jersey Supreme Court has been asked to review an appellate ruling that an employee who reported violations of law to her superiors was not a “whistle-blower” because her reporting was required as part of her job duties. A decision by the Supreme Court will have a substantial impact on the scope of New Jersey’s whistle-blower statute, the Conscientious Employee Protection Act (“CEPA”) .

Factual Background

In White v. Starbucks, plaintiff Kari White was employed as a district manager in Starbucks’ Upper Mid-Atlantic Region, where she was responsible for the overall management of six Starbucks locations including some in New Jersey. According to the job description for plaintiff’s position, she was responsible for, among other things, “ensuring that employees adhere to legal and operational compliance requirements.” Prior to formally assuming her management role, plaintiff participated in a six-week training period, where she received instruction in retail management and compliance with public health laws. She also received and reviewed a manual titled “Starbucks Food Safety, Store Cleanliness and Store Condition Standards.”

Plaintiff’s Alleged “Whistle-Blowing” Activities

Throughout her six-week training period and subsequent employment, plaintiff notified her supervisors about various alleged violations of law and company policy, including: (1) stolen merchandise from a Hoboken store where plaintiff had trained; (2) the lack of thermometers in refrigerated food and beverage cases; (3) unsanitary conditions within the Newark store; (4) alcohol consumption by employees while on the job, the alleged physical attack of a customer, after-hours sex parties, and the electronic transmittal of a pornographic photograph between an employee and the Iselin store manager; and (5) inaccessible configuration of tables and chairs at one store.

Plaintiff’s Performance Problems

Separate and apart from plaintiff’s complaints to management regarding the incidents described above, many of her co-workers lodged complaints concerning her abrasive demeanor and performance issues. In addition, Plaintiff violated a company policy by suspending employees for longer than 48 hours. It was also alleged that, despite being instructed not to do so, plaintiff improperly questioned a store manager regarding his medical condition, which prompted her supervisor to warn plaintiff that her behavior “was a liability to Starbucks.” Following these complaints, two supervisors met with plaintiff to discuss her performance issues and future career with Starbucks. Plaintiff alleges that during these meetings, she again identified the violations of law she believed she had observed during her employment. According to plaintiff, she was given “a choice” to either resign or be terminated. Plaintiff chose to resign. Plaintiff thereafter filed a Complaint under CEPA alleging that Starbucks terminated her in retaliation for the complaints she made to management.

Appellate Division Decision

The New Jersey Appellate Division affirmed the trial court’s order granting summary judgment for Starbucks, finding that plaintiff failed to establish a prima facie CEPA claim, as the alleged whistle-blowing activities on which she based her claim fell within the scope of her job duties as a district manager, thus disqualifying her as a whistle-blower as a matter of law. In reaching this decision, the Appellate Division rejected the position advocated by plaintiff and the National Employment Lawyers Association/New Jersey (appearing as amicus curiae) – that plaintiff was not “merely” doing her job, but “was also objecting to numerous violations of the law.” Instead, the court agreed with Starbucks and the Employers Association of New Jersey (also appearing as amicus curiae), who argued that, if an employee is obligated to perform a whistle-blowing activity as part of her professional responsibilities, then she has no claim for relief against her employer.

In reaching this decision, and addressing the threshold issue of whether plaintiff qualified as a “whistle-blower” within the meaning of the statute, the Appellate Division relied on the seminal case of Massarano v. New Jersey Transit to conclude that she did not. In Massarano, the plaintiff, a security operations manager for New Jersey Transit, reported to her supervisor the improper disposal of sensitive schematics in an easily accessible loading-area trash bin. In rejecting Massarano’s CEPA claim, the Appellate Division held plaintiff did not engage in whistle-blowing activity; she “simply [made] a plea for help . . . Her job was to find security problems . . . and . . . fix them. And in an attempt to fix them going to somebody who allows her to take possession of the object that she believes is the source of the problem is hardly whistle-blowing.”

Conclusion

The Appellate Division’s decision in the White case reaffirms both the legislative history and underlying purpose of the CEPA statute to protect only those individuals who truly qualify as “whistle-blowers.” In addition, it strengthens an employer’s ability to defend against CEPA lawsuits when the plaintiff’s job duties and responsibilities require her to report possible violations of law to her supervisors. Although the decision does not address those specific categories or types of job positions which do not qualify as “whistle-blowing” under the statute, unless and until the New Jersey Supreme Court decides to hear further arguments on the scope and application of CEPA, an employee who, in the course of his or her job duties, reports a legal violation, does not qualify as a “whistle-blower” under CEPA.

To discuss any of your company’s employment-related needs, contact any attorney in the Gibbons Employment & Labor Law Department.

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