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NJ Supreme Court says contractors may qualify for whistle-Blower protection

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in Compensation and Benefits,Human Resources

The New Jersey Supreme Court has ruled that the Conscientious Employee Protection Act (CEPA) protects many independent contractors. The court said the law covers “any individual who performs services for and under the direction of an employer for wages or other remuneration.”

That includes those who may have signed independent-contractor agreements and work on their own, in addition to their time working for the employer.

Recent case: George D’Annunzio was a licensed chiropractor when Prudential Insurance recruited him to review and approve chiropractic treatment plans for accident victims. His independent contractor agreement stipulated he would devote at least 50% of his time to his own private practice.

But Prudential required D’Annunzio to come to its premises weekdays from 8 am to 1 pm. The company set up a rigid system complete with heavy paperwork. He had a cubicle with his name on the side, used specialty software and received extensive training on how Prudential wanted reviews conducted, including how many he should perform and how long they should take.

D’Annunzio raised questions about Prudential’s reluctance to pay legitimate medical bills and its use of nonmedical staff to approve medical care. Shortly after, Prudential terminated D’Annunzio’s contract. He sued, alleging whistle-blower status. His case was dismissed, but he appealed.

The New Jersey Supreme Court said he had a case. Noting that D’Annunzio appeared to be integral to Prudential’s medical review department operation and operated under tight restrictions, the court said he was more like an employee than an independent contractor. It reinstated his case. (D’Annunzio, et al., v. Prudential Insurance, et al., No. A-119, Supreme Court of New Jersey, 2007)

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