August 29, 2019

Supreme Court Rules on CEPA Action

In a case involving the Conscientious Employee Protection Act at N.J.S.A. 34:19-1 et. seq., the New Jersey Supreme Court recently held that a plaintiff is not required to precisely cite a statutory source of perceived criminal activity when bringing a claim under N.J.S.A. 34:19-3(c)(2), and upheld a jury verdict on that claim.  The Court did uphold the Appellate Division’s reversal of plaintiff’s claim related to his alleged protected activity of reporting fraudulent timekeeping because it was unsupported by sufficient evidence. Sergeant First Class Chiofalo v. State, – N.J. – (2019).

Plaintiff, Frank Chiofalo, was a member of the New Jersey State Police.  He filed a Complaint under CEPA against his employer and certain supervisors alleging he was subject to retaliation for engaging in protected activity related to two incidents: (1) a claimed refusal to destroy internal police documents; and (2) accusing a superior of not reporting his vacation time.  The trial Court denied the defendant’s summary judgment motion, but the Appellate Division reversed and dismissed the case.

The plaintiff appealed to the Supreme Court which upheld the dismissal of plaintiff’s claim for fraudulent time keeping but reversed the dismissal of plaintiff’s claim for retaliation for refusing to destroy documents.

The Supreme Court noted that plaintiff’s claim was brought under N.J.S.A. 34:19-3(c)(2).  While the Court noted that precedent has expressed that when a plaintiff brings an action pursuant to N.J.S.A. 34:19-3(c) the trial court must identify a statute regulation rule of public policy that closely relates to the complaint of conduct, the Court pointed out that it was unaware of any holding that explicitly imposed this requirement on plaintiff’s proceeding under Section (c)(2).  See generally, Dzwonar v. McDevitt, 177 N.J. 451 (2003).

The Court noted that there is no authority placing any express or implied obligation on a plaintiff to identify some legal source rendering activity fraudulent under the Section (c)(2).  While it noted the better practice is to identify a statutory or other basis for claiming objected-to behavior is criminal or fraudulent, the Court acknowledged that criminal or fraudulent activity is often apparent and commonly recognizable.  This distinguishes it from claims under Sections (c)(1) and (3) which refer to violations of a more general law or a rule or regulation promulgated pursuant to law or of a clear mandate of public policy.

The Court concluded by stating that it does not expect whistleblower employees to be lawyers.  However, while there are areas where conduct is so obviously criminal that one need not pinpoint a specific statute to avoid dismissal of a CEPA claim, the Court noted that if a defendant questions the source of law relied upon by the plaintiff, that source should be provided.  It noted that the defendant never argued that the CEPA claim was deficient for plaintiff’s failure to identify a specific law, rule, regulation or public policy that was violated by the alleged acts.  Noting that it is unfair to reassess summary judgment based on arguments that were not advanced, the Supreme Court upheld the trial Court’s denial of the summary judgment claim as to the destruction of documents.