Major CEPA decision by Supreme Court of New Jersey Harms Employers

06.10.2011

In a bad decision for employers in New Jersey, decided June 9, 2011, the Supreme Court of New Jersey held that a whistle-blowing plaintiff who brings suit under the Conscientious Employee Protection Act (hereafter referred to as “CEPA”), is able to prove a lost wage claim even in the absence of proving constructive discharge if the plaintiff can show that he or she became psychologically disabled due to the employer’s alleged retaliation. Joseph A. Donelson v. DuPont Chambers Works (A-112-09). Justice Albin authored the majority decision, Justice LaVecchia and Hoens dissented, and Justice Rivera-Soto filed a separate, abstaining opinion. This decision is very important because New Jersey plaintiffs’ lawyers are notorious for advising their clients to stop coming to work and to go on disability leave as soon as they make their whistle- blowing allegations. Plaintiff John Seddon worked for Defendant DuPont Chambers Works for approximately 30 years. After filing complaints relating to unsafe conditions, Seddon was subjected to retaliatory actions by his immediate supervisor and DuPont, and was ultimately suspended. As a result of the suspension and actions of Dupont, Seddon alleged that he was made to feel “worthless” and “beaten,” and suffer anxiety attacks. Part of the conditions for returning to work mandated that Seddon work twelve-hour shifts in isolation, a requirement described as ‘torture.’ Soon after returning to work, Seddon took a six month leave of absence and never returned. He then filed a complaint alleging CEPA violations, and a jury returned a verdict in his favor awarding him $724,000 for the “economic losses he ha[d] suffered as a proximate result of DuPont’s violations of [CEPA],” and $500,000 in punitive damages. The court also awarded him $523,289 in counsel fees. The Appellate Division reversed, finding that Seddon was unable to show that he was actually or constructively discharged. The court noted that it could not be maintained that “[t]he employer’s conduct [was] ‘so intolerable that a reasonable person would be forced to resign rather than continue to endure it.’” Donelson v. DuPont Chambers Works, 412 N.J. Super. 17, 31 (App. Div. 2010) (citation and quotation omitted). The Supreme Court then granted certification “limited to the issue whether recovery for economic losses associated with back and front pay requires proof of actual or constructive discharge under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8.” The Supreme Court reversed, finding that the plain language of CEPA did not necessitate a showing of discharge, suspension, or demotion in order to show that that a retaliatory action has occurred. Under CEPA, an employer is prohibited from taking “retaliatory action” against an employee that engages in a protected activity. The Court noted that the definition of “retaliatory action” under N.J.S.A. 34:19-2(e) specifically encompasses “other adverse employment action taken against an employee in the terms and conditions of employment.” The Court then reasoned all that is needed to be shown for the requirements of a CEPA claim to be met is that the employer takes an adverse employment action, as reprisal, against the employee who is engaged in a protected activity, and that the employee has suffered harm as a result. The vigorous dissent maintained that this case involved a “constructive discharge claim … cloaked as a generalized CEPA retaliation claim” and that plaintiff should not have been allowed “backdoor access to front and back pay damages” without pleading constructive discharge. Practical Tips For Employers Based on Joseph A. Donelson v. DuPont Chambers Works: 
  • Require employees who are out on leave to provide doctor’s notes identifying the need for leave and any accommodations that would assist the individual in returning to work. Include in such requests the possibility of transfer (away from the offending party) as an accommodation.
  • Ensure that the individual has sought all forms of disability pay available to him/her in order to set off all damages claims and require the individual to set forth, typically under oath, the reason for the leave and inability to perform the functions of the job.
  • If there is a job-related injury associated with the injury, process it through your worker’s compensation carrier.
  • Investigate thoroughly all claims of harassment, discrimination and retaliation and promptly correct and prevent any such activity where and when it is found.
  • Provide all employees and management staff with appropriate training on anti-harassment and retaliation to provide company with an excellent defense.
  • Distribute annual CEPA notices.
For more information please contact John C. Petrella at jpetrella@genovaburns.com or Dena B. Calo at dcalo@genovaburns.com.