New Jersey Employment Lawyer Blog
A decision from New Jersey’s Appellate Division recognizes that New Jersey’s whistleblower law, the Conscientious Employee Protection Act (“CEPA”), can apply to employees who work in other states.
Stephanie Halliday worked for Bioreference Laboratories, Inc., a company that provides diagnostic testing and related services. Bioreference’s headquarters is in Elmwood Park, New Jersey. However, Ms. Halliday worked for it at a laboratory in Houston, Texas.
Ms. Halliday objected to her supervisors that Bioreference was violating federal safety and health regulations and the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) in Texas. Specifically, she emailed an employee in the company’s Quality Systems (“QS”) Department in New Jersey to report significant deficiencies with the performance of the staff in the Houston laboratory that caused her to lack confidence that patients’ test results would be valid.
In response, several Bioreference employees came from New Jersey to train employees at the Houston lab. According to Ms. Halliday, one of those employees “castigated” her for raising those issues, told her to be a “team player” and not to report deficiencies to QS, but instead she should initially report any issues to him and her immediate supervisors.
The following month, Bioreference’s chief compliance officer, who is based in New Jersey, visited the Houston lab for annual compliance retraining. During that visit, Ms. Halliday expressed concerns about compliance issues.
Approximately six months later, Bioreference instructed Ms. Halliday to sign QC documents, but she refused to do so because they covered dates before she began working for the company. Ms. Halliday alleges she was told that the same employees in New Jersey who were involved with her complaints six months earlier had asked to have her sign those documents.
Bioreference employees in New Jersey and Texas then decided to place Ms. Halliday on a performance improvement plan (“PIP”) relating to concerns about her job performance that it had been documenting for several months. However, an employee in Houston instead decided to terminate her employment. The decision to fire Ms. Halliday was approved by employees and an employment lawyer in New Jersey.
Ms. Halliday sued Bioreference, alleging it fired her in violation of CEPA. However, the trial court dismissed her claim, finding Texas law applied to her case rather than CEPA because she lived and worked exclusively in Texas and the ultimate decision to fire her was made in Texas.
In Halliday v. Bioreference Labs., the Appellate Division found there are factual disputes relevant to whether Texas or New Jersey law applies.
The appellate court concluded that CEPA is broad enough that it could apply to Ms. Halliday because she is an employee of a New Jersey corporation that is headquartered in New Jersey. In other words, CEPA is not limited to employees who live or work in New Jersey.
The Appellate Division further rule that, to determine whether CEPA applies to a particular case, a court must apply the “most-significant-relationship test.” Under that test, there is a presumption the law of the state where the injury occurred (meaning Texas) applies. However, that presumption can be overcome if New Jersey had the most significant relationship with the case when considering: “(1) where the injury occurred, (2) where the conduct causing the injury occurred, (3) where the parties are located and incorporated, and (4) the place where the relationship between the parties is centered.
The Appellate Division found the lower court failed to sufficiently analyze all four of those factors, and there are unresolved factual disputes about whether the third and fourth factors support applying New Jersey law which made it improper for the trial court to rule that Texas law applies. Accordingly, the Appellate Division sent the case back to the trial court to determine which state’s law applies after considering all four factors, and evaluating them “according to their relative importance with respect to the particular issue” in Ms. Halliday’s claims.