A unanimous New Jersey Supreme Court decided in Longo v. Pleasure Productions, Inc. (A-37-11) that in CEPA cases, a jury considering a punitive damages claim must be charged with an upper management instruction.  That is, a jury must consider whether, by clear and convincing evidence, upper management was complicit in the alleged egregious wrongful conduct.

The significance of this holding to employers is that the Court held that the proper standard for punitive damages in a CEPA case is the more stringent clear and convincing standard, rather than the preponderance of the evidence standard.  Employers should nevertheless continue to train upper management to comply with company policies to properly recognize, assess and address wrongful conduct and avoid complacency in inappropriate conduct.