New Jersey Appellate Division Extends CEPA Protection to “Watchdog” Employees

By Samantha K. Sherman, Esq.
ssherman@pashmanstein.com

A New Jersey Appellate Division panel in a precedential decision broke with a line of cases that had denied whistleblowing protection under the Conscientious Employee Protection Act (CEPA) to employees if reporting wrongdoing was part of their job. In the view of the panel in Lippman v. Ethicon, Inc., No. A-4318-10T2, 2013 N.J. Super. LEXIS 140 (App. Div. Sept. 4, 2013), an employee’s job title or job responsibilities should not be considered outcome-determinative in deciding whether the employee has presented a cognizable cause of action under CEPA.

In 2008, an appellate panel had stated in Massarano v. N.J. Transit, 400 N.J. Super. 474, 491 (App. Div. 2008), that a security operations manager had not shown that she had performed a whistleblowing activity because in reporting that documents were being destroyed she was merely doing her job. Although subsequent plaintiffs argued that the Massarano language was dicta and contrary to the stated purpose of CEPA, courts began to follow the reasoning as law. Richardson v. Deborah Heart & Lung Ctr., 2010 N.J. Super. Unpub. LEXIS 1795 (App. Div. 2010); White v. Starbucks Corp., 2011 N.J. Super. Unpub. LEXIS 2982 (App. Div. Dec. 9, 2011), cert. denied, 210 N.J. 108 (2012).

The plaintiff in this case was Joel Lippman, M.D., a medical doctor and former Vice President of Medical Affairs at Ethicon, Inc., a subsidiary of Johnson & Johnson, Inc. Plaintiff’s job was to review and report on product safety, ensure safe medical practices, and provide medical reviews.  In that role, he repeatedly raised concerns about the safety or efficacy of various pharmaceutical and medical products. Plaintiff was terminated and filed a lawsuit alleging violation of the whistleblower protections under CEPA.

Relying in part on Massarano, the Law Division granted defendants’ motion for summary judgment, finding that plaintiff failed to show that he engaged in whistleblowing activities because it was his job to raise issues concerning the safety of drugs and products.    On appeal, plaintiff argued that the trial court misread the Massarano dictum as creating a class of employees who fell outside CEPA protections when the whistleblowing activity overlaps with their core job functions. The defendants, for their part, argued that the trial court was correct and alternatively argued that plaintiff was terminated as a result of his having an inappropriate sexual relationship with a subordinate.

The Appellate Panel reversed the lower court’s holding as inconsistent with CEPA’s broad remedial purposes and broad definition of “employee” under the statute, and because of its particular concern for “watchdog” employees, such as plaintiff.  According to the court, a “watchdog” employee is an employee “who, by virtue of his or her duties or responsibilities, is in the best position to: (1) know the relevant standard of care; and (2) know when an employer’s proposed plan or course of action would violate or materially deviate from that standard of care.”  As a result “[w]atchdog employees . . . are the most vulnerable to retaliation because they are uniquely positioned to know where the problem areas are and to speak out when corporate profits are put ahead of consumer safety.”

The Lippman Panel then altered the second prong of the general standard to establish a prima facie cause of action under CEPA.  Whereas an ordinary plaintiff must have performed a “whistle-blowing” activity, an employee who performs “watchdog” activities 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.” This new element requires a plaintiff to show that “he or she either (a) pursued and exhausted all internal means of securing compliance; or (b) refused to participate in the objectionable conduct.”

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