New Jersey's Conscientious Employee Protection Act Is Amended

Monday, November 1, 2004 - 00:00

Effective September 14, 2004, Governor James E. McGreevy signed into law new legislation that significantly impacts the manner in which New Jersey employers are required to give notice to their employees of New Jersey's Conscientious Employee Protection Act ("CEPA"), N.J.S.A. 34:19-1 et seq . Specifically, as amended CEPA now requires covered employers:

to conspicuously display and annually distribute to all employees, written or electronic notices of its employees' protections, obligations, rights and procedures under this act, and use other appropriate means to keep its employees so informed. Each notice posted or distributed pursuant to this section shall be in English, Spanish and at the employer's discretion, any other language spoken by a majority of the employer's employees. The notice shall include the name of the person or persons that the employer has designated to receive written notifications pursuant to section 4 of the Act [the notice and opportunity to correct section]

P.L. 2004, Ch. 148. (emphasis added). The annual distribution requirement, however, does not apply to "any employer who has less than 10 employees" Id.

Prior to the amendment, the notification provision contained in CEPA, which applies to nearly all New Jersey employers, required only that an employer "conspicuously display notices of its employees' protections and obligations under the act, and use other appropriate means to keep its employees so informed." The posted notice had to also "include the name of the person or persons the employer has designated to receive written notifications" of alleged wrongdoing before an employee who subsequently made a report to a public body would receive the protection of CEPA. That posting was not required to be in any particular language.

This requirement of a conspicuously posted notice remains; however, the obligation of the employer with respect to the notice has been expanded in two respects. First, the posted notice is now subject to a language requirement. Specifically, the posted notice must be in English, Spanish, and at the employer's discretion, any other language spoken by a majority of the employer's employees. Second, the required content of the notice was broadened by the amendment. Specifically, in addition to the "protections and obligations" of the employee, the notice must now also advise the employee of the " rights and procedures " afforded under CEPA. P.L. 2004, Ch. 148. (emphasis added)

In addition to significantly changing the requirements of the posted notice, the recent amendment to CEPA imposes an additional notice requirement upon every New Jersey employer with ten (10) or more employees. Each such New Jersey employer must now distribute annually a notice summarizing its "employees' protections, obligations, rights and procedures" under CEPA. The notice may be in written or electronic format, and, like the language requirement in the posted notice, the individual notice must be in English and Spanish, as well as at the employer's discretion, any other language spoken by a majority of the employer's employees.

Often described as one of the most far reaching whistleblower statutes in the nation, New Jersey's CEPA applies to nearly all private and public sector employers. Generally, CEPA makes it unlawful for an employer to take an adverse employment action against an employee who discloses, objects to or refuses to participate in an activity that the employee reasonably believes is illegal, fraudulent, criminal or incompatible with a clear mandate of public policy. Specifically, CEPA provides in relevant part:

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 is in violation of a law, or a rule or regulation promulgated pursuant to law, or, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality of patient care;

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, 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 or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care;

(2) is fraudulent or criminal; or

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

N.J.S.A. 34:19-3. CEPA only requires an employee to reasonably believe that he or she is "blowing the whistle" on either an illegal activity or a violation of public policy by the employer. Accordingly, an employee who mistakenly accuses his or her employer of wrongdoing is nonetheless protected so long as the underlying belief is reasonable. Absent an immediate threat of harm, however, an employee who intends to report alleged wrongdoing to a public body must give the employer written notice and allow the employer a reasonable opportunity to correct the alleged problem before the employee will enjoy the protection of CEPA. N.J.S.A. 34:19-4. An employer who violates CEPA may be held liable for lost wages and benefits, emotional distress damages, punitive damages, reasonable costs and attorneys' fees. N.J.S.A. 34:19-5. In addition, a court may order injunctive relief, reinstatement of the employee to the same or a equivalent position, and restoration of full fringe benefits and seniority rights. Id.

The recent amendment to CEPA likely had its genesis in the Enron, WorldCom and other accounting scandals that resulted in Sarbrnes-Oxley Act and the continuing public perception that corporate governance and operations need to be more closely monitored. The amendments appear to be aimed at ensuring that employees are enlisted in that monitoring process, by enhancing notification to them of the protections, obligations and rights they have under CEPA and the procedures in place to avail themselves of its provisions. As detailed above, the new CEPA legislation not only requires employers with ten (10) or more employees to distribute annually to their employees a notice of the employees' "protections, obligations, rights and procedures" under CEPA, but it also requires substantive changes to the pre-existing posting requirements for all New Jersey employers covered by CEPA. The immediate impact of the new legislation is that all New Jersey employers covered by CEPA will now have to develop new notices for conspicuous posting, ensuring that the language requirement and the broadened content requirement are incorporated in their notices so as to be in compliance with CEPA's recent amendment. In addition, the more than twenty percent (20% ) of New Jersey employers who employ ten (10) or more employees will also have to implement annual distribution procedures in compliance with CEPA's new requirements.

Tricia B. O'Reilly and Peter J. Pizzi are Partners of Connell Foley LLP, of New York City and Roseland, New Jersey, and practice in both the firm's Labor and Employment and Litigation practice groups. Mr. Pizzi is also Chair of the firm's Internet and Information Law practice group. Both authors would like to thank M. Trevor Lyons, an Associate with the firm, for his assistance in the preparation of this article.