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Whistle-blowers win big in New Jersey Supreme Court

by on
in Employment Law,Human Resources

The New Jersey Supreme Court has delivered a powerful blow to New Jersey employers that find themselves in the crosshairs of a Conscientious Employee Protection Act (CEPA) lawsuit. It ruled in June that whistle-blowers who suffer retaliation that causes psychological damage can collect lost wages—even if they weren’t fired, but quit instead.

The likely result, according to some attorneys: An uptick in the number of whistle-blowing employees who simply stop coming to work and file workers’ compensation claims for stress or other mental injury.

The lawsuit was brought by John Seddon, who worked at DuPont’s Chambers Works plant in Salem County for about 30 years. After he complained about alleged unsafe conditions, he said his supervisors “tortured” him by making him work 12-hour shifts by himself. He was also suspended for a short period of time.

He then left work on a six-month leave of absence and never returned.

Seddon did, however, file a retaliation lawsuit under CEPA, alleging that DuPont made him feel “worthless.” A jury concluded his suffering was worth $724,000 in lost wages and another $500,000 in punitive damages.

DuPont appealed the decision, first winning a reversal in the appellate division.

Seddon appealed to the New Jersey Supreme Court, which reinstated the jury award. The justices concluded that CEPA retaliation includes more than discharge, demotion or other concrete adverse actions.

It said employees can sue for lost wages and other damages if they quit and allege some form of harm, including psychological or mental damage. And employees who quit because of psychological distress can still sue.

Advice: Treat whistle-blowing complaints just as you would any other discrimination or harassment complaints. Investigate the allegations, fix any problems and follow up with the employee to make sure there’s no retaliation. Tell the employee to report any problems right away, and then regularly check back with him.

Remind supervisors and managers about the danger of retaliation. Warn them that the company won’t tolerate such action and that you will be following up with the employee. Explain that retaliation is anything that would dissuade a reasonable employee from complaining in the first place.

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