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CEPA and the Objectively Reasonable TestJonathan M. Carrillo

The Conscientious Employee Protection Act (CEPA), N.J.S.A. 34-19-1 et seq., is designed to protect whistleblowers who disclose employer or co-worker activities that pose a threat of public harm. The offensive activity must be more than a harm that only affects the aggrieved employee. See Mehlman v. Mobil Oil Corp., 153 N.J. 163, 188 (1998).

CEPA is a powerful and expansive statute, but it certainly is not limitless, and it is important for employers, counsel and defendants in CEPA cases to understand and appreciate its limits. Perhaps the most important restraint on CEPA claims is the requirement that a plaintiff demonstrate he reasonably believed that his employer's conduct violated either a law, rule, or regulation, or a clear mandate of public policy. See Dzwonar v. McDevitt, 177 N.J. 451, 462 (2003).

Not every “whistleblower” is protected under CEPA. Instead, our courts require that “whistleblowers” have an “objectively reasonable belief” of violative conduct. An employee’s subjective belief is not enough to sustain a claim under CEPA. In Dzwonar, the New Jersey Supreme Court set forth the “objectively reasonable belief” test, which assesses whether a plaintiff’s claim is valid.

To determine whether a plaintiff “reasonably believed” his employer’s actions violated some law or regulation, courts will engage in a two-part inquiry: first, the court must identify a specific law or regulation that plaintiff believed was or would have been violated by the defendant. Once this law or regulation has been specifically identified, the court must then determine as a matter of law whether plaintiff’s belief was objectively reasonable. To do this, the court must determine whether there was a “substantial nexus” (in other words, a “close relationship”) between the complained-of conduct and this specific law. If there is, then the plaintiff’s belief is said to be objectively reasonable.

It is helpful to first identify the complained-of conduct, on one hand, and then identify the alleged law violation, on the other hand. Once these two concepts are identified, the court will then ask whether a “substantial nexus” exists between the two.

In Dzwonar, the plaintiff, who believed her employer’s executive board’s failure to accurately record its meeting minutes violated the Labor Management Reporting and Disclosure Act (LMRDA), blew the whistle on her employer. The Court was charged with determining whether it was objectively reasonable for the plaintiff to believe that the complained-of conduct violated some law. The Court engaged in the same two-prong inquiry.

The Court first identified, on one hand, the complained-of conduct: an alleged failure to accurately record minutes of the executive board’s meetings. The Court then determined, on the other hand, the alleged law violation. In Dzwonar, there were two alleged law violations. First, the plaintiff asserted that she reasonable believed that defendant’s conduct violated the LMRDA’s section 101(a)(1), which forbade an entity from denying rights to participate in meetings to certain members, but not others. Second, the plaintiff asserted that she reasonably believed that defendant’s conduct violated the LMRDA’s section 101(a)(2), which forbade an entity from denying rights to meet and assemble freely with other members.

As to the plaintiff’s belief that defendant’s conduct violated 101(a)(1), the Court reasoned that there was no “substantial relationship” between a failure to accurately record meeting minutes and denying rights to participate in meetings because the conduct didn’t actually deny members any rights to attend or participate in meetings. It only limited the amount of information that would be relayed to members who did not participate in the meetings. As such, no “substantial nexus” (close relationship) existed between the two, and the plaintiff’s belief was, as a matter of law, objectively unreasonable.

As to the plaintiff’s belief that defendant’s conduct violated 101(a)(2), the Court reasoned that there was no “substantial relationship” between a failure to accurately record meeting minutes and denying rights to meet and assemble freely with other members because the plaintiff failed to point to any particular conduct that would demonstrate that the defendants foreclosed any member’s “free speech and assembly protections.” As such, no “substantial nexus” existed between the two, and the plaintiff’s belief was, as a matter of law, objectively unreasonable.

CEPA plaintiffs often try and push the boundaries and expand CEPA’s protections. It is important for defense attorneys to push back and challenge plaintiffs to demonstrate that their belief that a violation has occurred is objectively reasonable. Despite the liberal pleading standard, filing a motion to dismiss is a good way to push the plaintiff to articulate why his belief that the employer violated a relevant law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy, is objectively reasonable. A subjective belief, even if sincere, is not enough to sustain a CEPA claim.

In addition, defendants should force plaintiffs to demonstrate a “substantial nexus” exists between the complained of conduct and the identified law plaintiff claims he reasonably believed was violated. Plaintiffs who throw the proverbial kitchen sink in their complaints and cite laws willy-nilly in the hopes the court will allow the case to continue should be challenged since this practice dilutes the statute’s intended purpose. CEPA’s purview is wide, but employers, defendants, and counsel are wise to understand its limitations and push back when appropriate.