CEPA and “Watchdog” Employees

Lippman v. Ethicon, Inc., 432 N.J. Super. 378 (App. Div. 2013).  Today’s opinion under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (“CEPA”), written by Judge Fuentes, reversed a summary judgment in favor of the defendant employer.  Relying in part on Massarano v. New Jersey Transit, 400 N.J. Super. 474 (App. Div. 2008), the Law Division had held that because “it was [plaintiff’s] job to bring forth issues regarding the safety of drugs and products,” he did so, and defendant did not agree with his views, plaintiff had “failed to show that he performed a whistle-blowing activity.”  Judge Fuentes rejected this “incorrect legal assumption that an employee’s job title or employment responsibilities should be considered outcome determinative in deciding whether the employee has presented a cognizable cause of action under CEPA,” and expressly disapproved Massarano to the extent that it stated or implied such a notion.  “Watchdog” employees are entitled to the same CEPA protections that all other employees have.  After reviewing at length the factual background, and applying the de novo standard of review applicable to summary judgment decisions, the panel then held that there were material disputes of fact that precluded summary judgment.

Judge Fuentes distilled the panel’s holding into a four-part test for what “watchdog” employees must show.  “First, the employee must establish that he or she reasonably believed that the employer’s conduct was violating either a law, government regulation, or a clear mandate of public policy.  Second, the employee must establish that he or she refused to participate or objected to this unlawful conduct, and advocated compliance with the relevant legal standards to the employer or to those designated by the employer with the authority and responsibility to comply.  To be clear, this second element requires a plaintiff to show he or she either (a) pursued and exhausted all internal means of securing compliance; or (b) refused to participate in the objectionable conduct.  Third, the employee must establish that he or she suffered an adverse employment action.  And fourth, the employee must establish a causal connection between these activities and the adverse employment action” (emphasis in original).

For appellate practitioners, this opinion restates several principles of note.  First, Judge Fuentes observed that, as an alternative basis for affirmance, defendant raised certain other arguments, without having cross-appealed.  Judge Fuentes reminded us that “[a]s respondents, defendants can raise alternative arguments in support of the trial court’s judgment without filing a cross-appeal.  Chimes v. Oritani Motor Hotel, Inc., 195 N.J. Super. 435, 443 (App. Div. 1984).”  That same principle applies in federal court, as discussed here.

Second, Judge Fuentes noted that defendant had made a particular argument in a footnote.  The panel decided to “take this opportunity to reaffirm Judge Pressler’s condemnation of the practice of raising legal arguments in footnotes as ‘wholly inappropriate’ and in clear violation of Rule 2:6-2(a)(5) [requiring legal arguments to be raised in point headings].  Almog v. Isr. Travel Advisory Serv., 298 N.J. Super. 145, 155 (App. Div. 1997), appeal dismissed, 152 N.J. 361 (1998).”  As discussed here, an opinion by Judge Alvarez earlier this year reiterated that point.

Third, in “declin[ing] to endorse” Massarano, Judge Fuentes cited “Judge Stern’s perspicacious admonition that ‘an appeal to [the Appellate Division] should not turn on the Part or judges to which the matter is assigned. . . .  However, each judge must decide an issue as he or she believes appropriate after giving due deference to any precedent available.’  Hellwig v. J.F. Rast & Co., Inc., 215 N.J. Super. 247, 254 (App. Div.), (Stern, J.A.D., concurring).”  Unlike in the Third Circuit, where a panel decision binds subsequent panels and cannot be disagreed with except by an en banc court, Appellate Division panels are free to disagree with the rulings of other panels, though that does not happen often.  Any such square disagreeement is potential fodder for a petition for certification to the Supreme Court, under Rule 2:12-4.