Articles Posted in Retaliation / Whistleblowing

Earlier this year, the United States Supreme Court ruled that an employee can pursue a retaliation claim under Title VII of the Civil Rights Act of 1964 based on being fired because his fiancée objected to discrimination by the same employer. Title VII is a federal law that prohibits employment discrimination based on gender, race, color, and national origin. It also prohibits employers from retaliating against employees who object to discrimination that violates Title VII.

Eric Thompson and his fiancée, Miriam Regalado, both worked for North American Stainless, LP (NAS). Ms. Reglado filed a claim of sex discrimination against NAS with the Equal Employment Opportunity Commission (EEOC). NAS fired Mr. Thompson three weeks after it learned that Ms. Reglado had filed her discrimination claim. Mr. Thompson eventually sued NAS, alleging it retaliated against him by firing him because his fiancée had filed a discrimination claim against it.

The District Court dismissed Mr. Thompson’s case, ruling that Title VII does not permit third party retaliation claims. That decision was affirmed on appeal. But in Thompson v. North American Stainless, LP, the United States Supreme Court disagreed, and instead ruled that Mr. Thompson has a valid retaliation claim under Title VII because “a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.”

The Supreme Court decided not to set a bright line rule on what type of personal relationship is enough to claim that a company retaliated against am employee based on someone else’s legally protected activity. It noted that a close family member will almost always meet the standard, but left open whether retaliation against an employee’s girlfriend, boyfriend, close friend, or trusted co-worker would be protected.

The United States Supreme Court’s decision in Thompson is similar to the New Jersey Supreme Court’s 1995 ruling in Craig v. Suburban Cablevision. Craig holds that the anti-retaliation provision of the New Jersey Law Against Discrimination prohibits an employer from retaliating against an employee’s close friends and relatives who work for the same company, since otherwise employers could discourage employees from complaining about discrimination by threatening, intimidating, or otherwise harming their friends or family.

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On April 14, 2011, New Jersey’s Appellate Division ruled that filing an employment discrimination lawsuit can be a protected “whistleblower” activity under the New Jersey Conscientious Employee Protection Act (CEPA). Among other things, CEPA prohibits New Jersey employers from retaliating against an employee because he discloses or threatens to disclose to a supervisor or a public body, an activity, policy or practice that he reasonably believes violates the law.

The case, Hester v. Parker, involves Terry Hester, the former Director of Facilities/Operations for the Winslow Township Board of Education (Board). Mr. Hester, who is Caucasian, complained to the Board’s Director of Human Resources that Patricia Parker, an African-American Board member, made racist and discriminatory comments about job candidates.

After the Board failed to address his internal discrimination complaint, Mr. Hester filed a lawsuit under the New Jersey Law Against Discrimination (LAD). However, the trial court dismissed his lawsuit.

But, in an unpublished decision the Appellate Division reversed. It ruled that both Mr. Hestor’s internal complaint and lawsuit alleging reverse discrimination could be considered protected “whistleblowing” under CEPA. The Court also concluded that a jury could find the Board’s decision to fire Mr. Hestor was retaliatory based on the fact that it gave him a negative performance evaluation only ten days after he filed his lawsuit, and the Superintendent recommended firing him only nine days after the Board received a copy of his lawsuit.

However, the Appellate Division made it clear that not every civil lawsuit or internal complaint to an employer is covered by CEPA. Rather, it ruled that a lawsuit is protected by CEPA only if (1) the employee complained about a violation of a mandatory legal standard like discrimination based on race, gender, religion, or sexual preference, and (2) the employee made an internal complaint before filing the lawsuit, but the employer failed to address it.

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As an employment lawyer, I am often asked whether an employee can take copies of documents from their job to help prove discrimination or retaliation. There is no simple answer to that question. Rather, as the New Jersey Supreme Court recognized last week in Quinlan v. Curtiss-Wright Corporation, the answer involves balancing the employee’s right to be free from discrimination and the employer’s obligation to protect confidential information.

In Quinlan, the New Jersey Supreme Court established 7 factors courts must consider when deciding whether an employee can sue for retaliation if he is fired for giving copies of confidential company documents to his employment lawyer. Those factors are:

1. How did the employee get the document? Documents obtained in the ordinary course of an employee’s job are more likely to be protected than documents obtained by rummaging through files or snooping in someone else’s office.

On November 10, 2010, New Jersey’s Appellate Division ruled that a civil service employee can bring a lawsuit alleging that discipline against him was retaliatory even if he did not appeal a Civil Service Commission decision upholding the discipline. In Racanelli v. County of Passaic, James Racanelli sued the County of Passaic, the Passaic County Sheriff’s Department, Passaic County’s Sheriff, and various other employees. He alleges they harassed him and otherwise retaliated against him in violation of New Jersey’s Conscientious Employee Protection Act (“CEPA”) because he reported numerous unlawful and inappropriate actions within the Sheriff’s Department. For example, he claims they transferred him to work at the county jail even though he was not trained to work there, and fired him in retaliation for his objections.

Mr. Racanelli appealed the County’s decision to fire him to the Civil Service Commission (“CSC”). The CSC handles administrative appeals of major discipline brought against permanent civil service employees. In this case, the CSC upheld Passaic County’s decision to fire Mr. Racanelli. Mr. Racanelli chose not to appeal that decision to the Appellate Division. Instead, he brought a separate retaliation lawsuit under CEPA. However, the trial court ruled that because Mr. Racanelli did not appeal the CSC’s decision upholding the discipline to the Appellate Division, he could not pursue a whistleblower case.

The trial court also found Mr. Racanelli’s claims were barred because he did not file a notice of claim under New Jersey’s Tort Claims Act. The Tort Claims Act requires that an individual with a personal injury claim against the state, a county, or a municipality must submit a formal notice of claim to the public entity. Failure to file a notice of claim within six months after the injury is generally a bar to bringing a lawsuit against a public entity.

On appeal, New Jersey’s Appellate Division disagreed with both of the lower court’s rulings. It held that an employee can sue under CEPA even if he did not appeal a Civil Service Commission decision upholding the discipline against him because an employee has “the discretion to pursue his retaliation claim in a judicial forum rather than in the administrative process.” This is similar to the decision in Winters v. North Hudson Regional Fire & Rescue, which ruled that a municipal employee can prove retaliation even if the Civil Service Commission upheld the discipline against him. But unlike Winters, the decision in Racanelli is published, meaning it is a binding legal precedent.

The Appellate Division also ruled that the notice of claim requirement of the Tort Claims Act does not apply to CEPA cases. New Jersey Courts have long recognized that, since the Tort Claims Act does not apply to intentional claims, it does not apply to cases under the New Jersey Law Against Discrimination, the anti-retaliation provisions of the Workers’ Compensation Act, and other civil rights claims. The Appellate Division applied the same reasoning to conclude that the notice of claim requirement does not apply to CEPA case.

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The False Claims Act is a federal whistleblower law. It allows individuals who have information about a company defrauding the federal government to bring lawsuits on behalf of the federal government. Someone who brings a case under the False Claims Act can receive between 15% and 25% of any money the government recovers.

On October 26, 2010, the United States Department of Justice announced that GlaxoSmithKline settled a case under the False Claims Act, and pleaded guilty to criminal allegations that it manufactured and distributed adulterated drugs. As part of the settlement, Glaxo is paying a $150 million criminal fine and a $600 million civil penalty to the government. Cheryl Eckard, the Glaxo employee who brought the False Claims Act case, will receive 16% of the $600 million civil penalty, meaning she is entitled to $96 million.

According to the Department of Justice’s press release, the case against Glaxo is part of the federal government’s efforts to combat health care fraud. The Justice Department further indicates that the United States has recovered “approximately $4.2 billion since January 2009 in cases involving fraud against federal health care programs,” and its “total recoveries in False Claims Act cases since January 2009 have topped $5.4 billion.”

Two weeks ago, the United States Equal Employment Opportunity Commission (EEOC) filed a retaliation lawsuit against New York based Fox News Network LLC, the company that owns and operates the Fox News Channel. According to the EEOC’s September 30, 2010 press release, the lawsuit alleges that Fox News retaliated against Catherine Herridge, one of its female news correspondents, after she complained about gender and age discrimination. The EEOC is a federal agency that helps employees enforce their rights under three anti-discrimination laws, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, and the Age Discrimination in Employment Act.

In 2007, Ms. Herridge made several internal complaints that she was experiencing disparate pay and unequal employment opportunities because of her gender and age, the EEOC announced. Fox News conducted an investigation, but found no evidence of age or gender discrimination. In the fall or summer of 2008, several months after Fox News completed its internal investigation, Ms. Herridge refused to sign a new employment agreement with Fox News because it referred to her discrimination complaints. Fox News ignored Ms. Herridge’s requests to remove that language from her contract, and ignored her other attempts to negotiate her employment agreement. As a result, instead of entering into a new guaranteed employment contract, Ms. Herridge became an employee at-will. It was not until June 2009, after Ms. Herridge filed a charge of discrimination with the EEOC and the EEOC investigated that Fox News finally removed the language about Ms. Herridge’s discrimination complaints from her employment contract.

According to the EEOC’s press release, the lawsuit is seeking money damages to compensate Ms. Herridge for Fox New’s retaliation, as well as punitive damages and an injunction to prevent Fox News from engaging in further retaliation against employees who oppose discrimination. Discussing the lawsuit, EEOC attorney Lynette A. Barnes stated that “[t]he anti-retaliation provisions of Title VII and other federal anti-discrimination laws are indispensable to the attainment of a workplace free of discrimination.” Ms. Barnes further indicated that “[e]mployers must take care that any action taken in response to a discrimination complaint is constructive and not retaliatory.”

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Among its numerous provisions, the new law contains important economic incentives and legal protections for certain financial whistleblowers. As a result, it creates new employment law rights for employees in both New York and New Jersey.

New Economic Incentives for Whistleblowers

With some limited exceptions, if a whistleblower brings new information about a violation of the Dodd-Frank Act to the attention of the Securities and Exchange Commission (“SEC”), and the SEC recovers a monetary sanction of more than $1 million, then the whistleblower will receive between 10% and 30% of the sanction the SEC receives. In deciding the percentage the whistleblower will receive, the SEC is required to consider: (1) how significant the whistleblower’s information was to the successful recovery; (2) how much assistance the whistleblower (and any lawyer representing the whistleblower) provided to the SEC; (3) the benefit of deterring employers from future violations of the Dodd-Frank Act by giving financial incentives to whistleblowers; and (4) other relevant factors the SEC will establish through rules and regulations.

Earlier this year, the New Jersey Supreme Court ruled that an employer can violate the New Jersey Law Against Discrimination if it retaliates against an employee after it fires him. The Appellate Division decision reached the same conclusion in 2008, as discussed in a previous article. The New Jersey Law Against Discrimination prohibits employment discrimination, including harassment and discrimination based on gender, race, age, disability and religion. It also includes a provision that makes it unlawful for anyone to retaliate against someone because they objected to another actual or apparent violation Law Against Discrimination.

The case, Roa v. LAFE, involved a husband and wife who worked for Gonzalez and Tapanes Foods, Inc. (G&T), a New Jersey corporation which does business under the name LAFE Foods. The wife, Liliana Roa, claimed G&T’s Vice President, Marino Roa, had been involved in extramarital affairs with two other G&T employees. Liliana’s husband, Fernando Roa, eventually told Marino’s wife about the affairs. According to Fernando and Liliana, Marino then began a campaign of harassment against them, attempted to make their work lives miserable and threatened to fire both of them. When Fernando told G&T’s President that Marino was sexually harassing company employees, G&T ignored his complaint. G&T eventually fired both Fernando and Liliana.

Fernando and Liliana sued G&T and Marino for firing them in retaliation for Fernando’s complaint of sexual harassment. However, they filed their lawsuit more than two years after G&T fired them. As a result, the trial court dismissed their case because it was filed after the New Jersey Law Against Discrimination’s two year statute of limitations had expired.

Q. What is the Conscientious Employee Protection Act?

A. The Conscientious Employee Protection Act (CEPA) is New Jersey’s whistleblower law. It is one of the broadest anti-retaliation laws in the country. It provides broad protection to employees who report illegal and unethical workplace activities. Its primary purposes are to encourage employees to report illegal and unethical workplace activities, and to discourage employers from engaging in illegal and unethical conduct.

Q. Who is protected by CEPA?