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The New Jersey Whistleblower Statute
What You Should Know

The Conscientious Employee Protection Act (CEPA) has been described as one of the most far reaching whistleblower statutes in the country.  It applies to the entire private sector and can even apply to a person seemingly employed as a private contractor.  The New Jersey Statute at N.J.S.A. 34:19-1 et. seq. gives far ranging remedies to employees who report activities of employers (or co-employees) which are either against the public policy of this State or are illegal.  An employee who incorrectly or mistakenly reports a wrongdoing is normally protected under CEPA as long as their belief is reasonable.  Specifically, CEPA provides:

34:19-3. Retaliatory action prohibited

  An employer shall not take any retaliatory action against an employee because the employee does any of the following:

  a. Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship, that the employee reasonably believes:

  (1) is in violation of a law, or a rule or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or

any governmental entity, or, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality of patient care; or

  (2) is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity;

  b. Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation promulgated pursuant to law by the employer, or another employer, with whom there is a business relationship, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity, or, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into the quality of patient care; or

  c. Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes:

  (1) is in violation of a law, or a rule or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity, or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care;

  (2) is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity; or

  (3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment. 

The Supreme Court has made it clear that CEPA is limited to whistleblowing that serves a public purpose as opposed to that affecting only the employer-employee relationship.  To state a case under CEPA an employee must allege that he was engaged in an activity protected by CEPA, he was subjected to an adverse employment decision, and that there was a causal relationship between the two. The adverse employment decision or retaliatory action is defined in N.J.S.A. 34:19-2 as follows:

"Retaliatory action" means the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.

There are specific notice provisions for “Public Employees” (City, State, or Governments workers) to take advantage of the protections of the CEPA Statute. Supervisors must be given a reasonable opportunity to correct the problem.  Employers are required to post notices of employee’s rights and obligations under CEPA and to use other appropriate means to keep employees so informed.  The civil action under CEPA must be commenced within one year of the violation.

It is most important for employers to know that New Jersey is generally a pro-employee State and that the rights of employees are vigorously protected by the courts.  Employers beware!