Martin Bricketto’s recent article in Law360, “5 Dos And Don’ts For Employers After NJ’s Ethicon Ruling” vividly illustrates the struggle companies are going to have applying the New Jersey Supreme Court’s holding in Lippman v. Ethicon to real world situations.

 

In Lippman, the court ruled that the state’s whistleblower law, the Conscientious Employee Protection Act (CEPA), covers so-called “watchdog employees” whose job it is to bring forward compliance issues and other concerns. As Bricketto’s article suggests, the broadening of CEPA will have a real impact on employers’ relationships with watchdog employees.

 

First, it is clear that preventing litigation brought by watchdog employees has taken on increased importance. Nearly all the advice offered by employment law attorneys quoted in the article is grim:

 

“If somebody in a compliance position raises an objection or a concern, I don’t think that it’s safe to simply say, ‘No, we’re not going to do that,’ or, ‘I think you’re wrong, so I reject your recommendation,’” Parliman said. “I think you need to do a little bit more now, so you create a record as to the reason why the company disagrees with what the compliance person is raising or recommending.”
…

 

“Employers need to take painstaking steps to build a record to discipline/discharge a watchdog employee,” he said. “Failing to do so leaves open the door that the adverse employment action is being taken for retaliatory reasons. Given the status of the law, employers that don’t build a record have no chance of getting out on summary judgment and little chance at trial.”
…

 

“Disciplining or terminating a member of the judicially created subclass of ‘watchdog’ requires extreme patience,” Saloman said. “That employee is conceivably blowing the whistle every minute of every hour of every day on the job, so the smart employer can minimize risk by ‘firing slow.'”

 

“Take the time to fully — better yet, exhaustively — document the legitimate business reasons for the adverse action,” he said.

 

These “dos and don’ts” do not paint a business-friendly pro-watchdog (and thus pro-public safety) picture. Rather they suggest that watchdog employees must be handled with kid gloves.

 

One of those things that would be funny except that it’s not at all humorous, is that the employees tasked with ensuring their companies are not opening themselves up to CEPA claims are likely watchdog employees themselves. So, they are putting into place the rules that govern how they themselves are to be managed so that they won’t sue the company if they are fired.

 

None of the five tips from the article – Don’t Be Shortsighted, Do Put Policies in Writing, Do Provide More Explanation, Don’t Be Inconsistent, Don’t Rush – is that helpful to managers who must make decisions based on the information given to them by their watchdog employees, or those who are in the unfortunate position of having fire a watchdog employee who is underperforming or a bad fit.

 

NJCJI is closely monitoring this developing area of law. We welcome those with comments and insights into how this is playing out on the ground to contact Alida Kass, NJCJI’s chief counsel.