Newsletter April 2017

Newsletter April 2017



Hyderally & Associates, P.C. April 2017 Newsletter

Whistleblower Protections

Both New Jersey and New York have enacted what are commonly referred to as “whistleblower” laws. The basic premise of a whistleblower law is to protect an employee who reports illegal or fraudulent activity by their employer from the threat of retaliation by said employer. For example, an employee who reported misconduct by a supervisor and was subsequently demoted or terminated, may have a viable claim based on a violation of one or more relevant whistleblower laws.

There are numerous federal whistleblower laws. The Whistleblower Protection Act of 1989, provides protection to whistleblowing employees of the federal government. Additionally, the federal Clean Air Act; Comprehensive Environmental Response, Compensation and Liability Act (CERCLA); Energy Reorganization Act; Safe Drinking Water Act; Solid Waste Disposal Act; Toxic Substance Control Act; and Water Pollution Control Act all contain protections for an employee who complains about safety or health hazards either in the workplace, or to the environment, caused by an employer.

On the state level as well, most states provide some form of protection for whistleblowing employees, be it by statute or common law. In order to qualify for protection, most Whistleblower laws generally require that a whistleblowing employee has a good-faith belief that his or her employer is engaged in misconduct. However, the parameters of that misconduct, and thereby, what is included in the definition of protected activity under the whistleblowing law, varies widely from state to state. Some states’ whistleblower laws broadly define protected activity and are more inclusive, while other states, provide a narrower definition, thus, making it considerably more difficult to fall under the law’s protections. Not all disclosures of misconduct are the same, and a report of a certain type of illegal conduct by an employer may be included in one state’s whistleblower law but not in that of another. Thus, it is imperative that a potential whistleblower claimant analyze his or her claims under the specific whistleblower law of his or her state.

 

By Ty Hyderally, Esq. and Isaac Graff, Esq.


Hyderally & Associates, P.C.

Whistleblower Laws of New Jersey and New York Compared

The whistleblower laws of New Jersey and New York provide a prime example of the differences that exist between the various state whistleblower laws mentioned in the preceding article. In general, New Jersey’s whistleblower law, is broader and provides more protection to whistleblowing employees than New York’s law.

New Jersey’s whistleblower law is the Conscientious Employee Protection Act (“CEPA”).  New York’s is referred to, aptly, as the New York Whistleblower Law (“NYWL”). N.Y. Lab. Law § 740 – 741.  The most significant difference between the respective laws lies in their parameters for what kind of whistleblowing activity falls under the laws’ protections.  The NYWL requires a showing that the activity, policy, or practice of the employer which was disclosed by the employee “creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud[.]” N.Y. Lab. Law § 740(a)(2).  Thus, if an employee reports illegal activity by its employer, but that illegal activity does not create a substantial danger to the public safety, the employee will not be protected by the NYWL.  Notably, reporting things like financial misconduct or discrimination by an employer, likely will not be protected by the NYWL because they do not endanger the public safety.

CEPA, in contrast, affords much broader protections to whistleblowing employees.  CEPA requires a whistleblowing employee to show only that “he or she reasonably believed that his or her employer’s conduct was violating either a law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy[.]”  Dzwonar v. McDevitt, 177 N.J. 451, 462 (N.J. 2003).  Thus, the disclosure of any activity an employee reasonably believed violated a law or regulation is protected by CEPA.  No showing that the employer’s conduct created a threat to public safety is required.

There are procedural differences, as well as differences regarding some of the remedies available under CEPA as opposed to NYWL; however, the most significant difference between the two laws, without question, is how they fundamentally define the whistleblowing activity they seek to protect. CEPA protects an employee disclosing, basically, any unlawful activity, while NYWL offers much narrower protections of only those disclosing an activity that threatens the public safety.

 

By Ty Hyderally, Esq. and Isaac Graff, Esq.


Hyderally & Associates, P.C.

Appellate Division Rules that the Port Authority is Not Subject to CEPA Claims

These differences between CEPA and the NYWL were put under the microscope in a recent New Jersey Superior Court Appellate Division ruling.  The Appellate Division ruled on March 15, 2017 that the Port Authority of New York and New Jersey is not subject to CEPA claims because of the stark differences between CEPA and the NYWL. Sullivan v. Port Auth. Of N.Y. & N.J., 2017 N.J. Super. LEXIS 33 (March 15, 2017).

Appellant Brian Sullivan, a police sergeant with the Port Authority, was terminated in June, 2012 after notifying a supervisor of improper conduct related to the administration of evaluations of police officers being considered for promotion. In May, 2013, Sullivan filed a claim in New Jersey Superior Court alleging retaliation in violation of CEPA.

The Superior Court granted summary judgment in favor of the Port Authority based on a finding that the Port Authority does not provide for unilateral state action under CEPA. Upon appeal, the Appellate Division agreed and affirmed the Superior Court’s holding.

The Port Authority is a bi-state agency that has waived its sovereign immunity since 1951. However, the Port Authority “expressly prohibits unilateral action by one state without the concurrence of the legislature of the other state.” Id. at *8. See also N.J.S.A.32:1-8 (2017). Despite that, the Port Authority may be subject to unilateral action by one state, when the two states’ laws are “complimentary or parallel[.]” Sullivan, N.J. Super. at *9.  Thus, one state’s law may be applied to the Port Authority if it is “substantially similar” to that of the other state. Id. Absent a substantially similar law, “the court must determine whether the bi-state agency impliedly consented to unilateral state regulation.” Id. (citation omitted).  Therefore, the Court had to determine if CEPA is substantially similar to New York’s Whistleblower Law, N.Y. Lab. Law § 740 (2017).

To find that the laws are substantially similar, the two state’s “legislatures must 'have adopted a substantially similar policy that is apparent in their respective statutes.” Id. at *10. (internal quotations and citations omitted).  Factors relevant to this determination “include: (1) the scope of the comparative laws; (2) the filing limitations period; (3) the types of remedies and damages available; and (4) the right to trial by jury.” Id.  In its analysis, the court found that New Jersey’s CEPA provides much broader protections to New Jersey employees than does New York’s Whistleblower Law. Id. at 12.  In particular, the court focused on the difference discussed in the preceding article – that CEPA does not require a showing that the activity, policy, or practice which was disclosed by the employee “creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud[.]” N.Y. Lab. Law § 740(a)(2).  Thus, the court found that CEPA’s protections extent to a much broader class of actions than the NYWL. Allowing the claim to proceed would “constitute an impermissible unilateral expansion of the Port Authority's liability.” Sullivan, N.J. Super. at *12.  The court also noted that the remedies available under each law differ. Id. Under CEPA, an employee may be awarded punitive damages and an assessment of civil fines, remedies not available under the NYWL. Id.  Lastly, CEPA permits trial by jury whereas the NYWL does not. Id.  In its conclusion, the court held that “[t]here is no evidence that New York and New Jersey mutually intended to consent to suit under CEPA” and, absent substantially similar laws, the Port Authority is not subject to suit under CEPA. Id. at *13-14.

Despite an employee’s inability to bring a CEPA claim against the Port Authority, the agency adopted an internal whistleblower policy in March, 2015. This policy protects employees from adverse action as a result of reporting misconduct, objecting to or refusing to participate in misconduct, and for cooperating with a public investigation. Employees may report misconduct anonymously and whistleblowers who feel they were the victim of adverse action may report the action which will trigger an internal investigation. Employees whose claims are substantiated may be reinstated to their former position.

 

By Ty Hyderally, Esq. and Isaac Graff, Esq.



These articles are for informational purposes only. They do not constitute legal advice, and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice with regard to your particular set of facts. This newsletter may constitute attorney advertising. This newsletter is not intended to communicate with anyone in a state or other jurisdiction where such a newsletter may fail to comply with all laws and ethical rules of that state of jurisdiction.

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    Leslie A. Farber
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    Vanessa Kelly