New Jersey’s Conscientious Employee Protection Act Covers an Employee’s Refusal to Violate Professional Ethics

New Jersey’s Conscientious Employee Protection Act (“CEPA”) employees from being fired for objecting to or refusing to participate in conduct which the employee reasonably believes to be illegal or against public policy.  If the employee is wrongfully retaliated against, CEPA provides a remedy through litigation.   Also known as the “whistleblower law,” CEPA is one of the most strongest employee protection laws in the country.  However, since it was enacted in only 1986, courts continue to disagree as to the exact scope and extend of the law.

 

In the recent case of Trzaska v. L’Oreal USA, Inc., the employee, Steven Trzaska claimed that he was fired in retaliation for his refusal to take actions which he believed violated the Rules of Professional Conduct (“RPC”).  RPCs set forth the rules for ethical conduct which although must follow, and, in fact, an attorney may lose his license to practice law if certain rules are not followed.  In the Trzaska case, L’Oreal had issued a quota or mandate for Mr. Trzaska to prepare a certain number of patent applications.  Mr. Trzaska advised that he would not file any patent application unless he had a good faith believe that the product was patentable.  Mr. Trzaska was fired thereafter and he filed a lawsuit in the District Court.

 

The United States District Court for the District of New Jersey then dismissed Mr. Trzaska’s case in the early stages requiring that the RPCs did not meet CEPA’s requirements that the employee object to or refuse to participate in illegal conduct.  CEPA’s language

specifically states:

An employer shall not take any retaliatory action against an employee because the employee does any of the following:…

1. 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, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity, or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care;

(2) is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity; or

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

On appeal, the United States Third Circuit Court of Appeals found that the District Court had erred and that Mr. Trzaska’s objection and/or refusal to participate in conduct which would violate the RPCs constituted conduct which was incompatible with a clear mandate of public policy as set forth in CEPA.  The Third Circuit reasoned that a patent, “by its very nature is affected with a public interest” and RPCs violations (or reasonable beliefs thereof) in general are sufficient to form a CEPA complaint. Indeed, the Court stated that “[a]n employee cannot be terminated for refusing to violate or disregard ethical standards regulating his profession, as public policy in New Jersey requires that he follow them.”

It is the instruction by the employer to the employee directing the employee to perform acts in violation of RPCs which, in turn, violates a clear mandate of public policy and thus forms a sufficient CEPA claim.

McLaughlin & Nardi, LLC’s attorneys are experienced in representing both New Jersey employees and employers in whistleblower, retaliation and discrimination claims, and all aspects of their employment relationship, from hiring to firing, litigation and arbitration. To learn more about what we can do to help, please visit our website or contact one of our lawyers at (973) 890-0004.