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Supreme Court Clarifies Prima Facie Burden to Whistleblowers


The Employment and Labor Law Alert

October 9, 2003

In a unanimous decision, the New Jersey Supreme Court recently clarified the burden on employees in litigation under the Conscientious Employee Protection Act, N.J.S.A. Section 34:19-1 et seq. (CEPA). Although Dzwonar v. McDevitt, 177 N.J. 451 (August 12, 2003), does not dramatically alter employees’ burden in establishing prima facie cases, it does allow cases to be submitted to juries even where no specific violation of a statute, regulation or public policy mandate is identified.

In Dzwonar, Plaintiff was employed as an arbitration officer for Local 54 of the Hotel and Restaurant Employees International Union (“Local 54”). She was also an elected Executive Board member, serving as Recording Secretary, for Local 54. The Executive Board governs Local 54’s day-to-day operations. Shortly after Plaintiff was elected to the Executive Board, conflict arose between her and the other newly elected members. Specifically, Plaintiff asserted that actions taken by the Executive Board, such as hiring, payment of certain debts, and loan agreements, should, pursuant to Local 54 bylaws, be disclosed to Local 54 members for approval. Plaintiff provided several Union members with access to Executive Board minutes, although she was not authorized to do so. Approximately a year after being elected to Executive Board office, Plaintiff was discharged from her arbitration officer position for mishandling internal documents, including Executive Board meeting minutes, and for insubordination. Plaintiff continued to serve as Recording Secretary for the Executive Board and continued to vocally object to the Board’s practices.

As the result of her termination, Plaintiff instituted litigation against Local 54, and each of the Executive Board members, alleging that Local 54 discharged her in retaliation for expressing her opinion as to the Executive Board practices and for attempting to inform Local 54 members of union business. Specifically, she alleged that her termination was in retaliation for expressing her “reasonable belief” that the Executive Board, by failing to read its minutes at general membership meetings, was “denying the rank-and-file members the right to participate, deliberate, and vote in Union matters as prescribed by the Labor Management Reporting and Disclosure Act (LMRDA).” Plaintiff testified at trial, however, that she did not believe that the Executive Board actions themselves – the hiring, payments, and other actions which she asserted the membership should be informed about – were illegal.

Although a jury determined that Defendants had violated CEPA, and awarded Plaintiff $84,000 in damages, on appeal the Appellate Division concluded that federal labor law preempted the state CEPA claim, and set aside the jury verdict. Defendants filed a petition for certification to the Supreme Court, and were permitted to appeal.

The Supreme Court, recognizing that the prima facie CEPA case requires a four-pronged showing (reasonable belief of violation, whistleblowing activity, adverse employment action, and causal connection), evaluated a very narrow issue relative to the first prong of the prima facie test. To wit, what must a plaintiff show to demonstrate 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?” In analyzing a plaintiff’s burden under this first prong of the CEPA prima facie test, the Court noted that a plaintiff “need not show that his or her employer or another employee actually violated the law or a clear mandate of public policy.” Rather, the Court noted that a burden had been previously been imposed on trial courts, in reviewing CEPA claims, to find and enunciate the precise terms of a statute or regulation or public policy that would be violated by the facts alleged, if true.

The Dzwonar Court found, however, that CEPA’s goal of encouraging legitimate employee complaints is not furthered by requiring that the specific facts alleged by a plaintiff would if true actually violate a specific statute or regulation. Instead, the Court held that the trial court “must first identify a statute, regulation, rule, or public policy that closely relates to the complained of conduct. The trial court can and should enter judgment for defendant when no such law or policy is forthcoming.” Once such an identification has been made, “a plaintiff must set forth facts that would support an objectively reasonable belief that a violation has occurred.” To determine whether the plaintiff has sufficient evidence to present to a jury that he or she had an objectively reasonable belief, the trial court must determine whether there is a substantial nexus between the conduct alleged and the policy or law identified as being violated. If a court determines that such a nexus exists, then summary judgment is not available to the employer, and the jury will be charged with determining whether the plaintiff held that belief and whether it was in fact objectively reasonable.

Although this decision clearly lightens a CEPA plaintiff’s burden, by allowing a jury to hear a case in which plaintiff need not prove that a statute, rule or regulation actually would have been violated if the facts were as plaintiff alleged, it appears, nevertheless, to require the trial court to conduct inquiry into the statute, regulation, or clear mandate of policy which has allegedly been violated to determine if the conduct is sufficiently linked to the statute, regulation, or clear mandate of public policy. Thus, in evaluating Dzwonar’s claim, the Court found that the LMRDA section which Plaintiff alleged was violated by Defendants’ conduct in fact proscribed only denial of rights by discrimination and that Plaintiff’s claim did not concern a denial of rights, but rather merely reflected her assertion that the union members could be better informed and that the Board was taking action without full disclosure to its members. As such, Plaintiff’s claims concerned a disagreement as to disclosure of information and the adequacy of the Board’s internal procedures, and not an objectively reasonable belief that the LMRDA was being violated. The Court concluded that Plaintiff could make out the first prong of the prima facie case and thus could not establish a CEPA claim. Because of its decision relative to the prima facie case, the Supreme Court concluded that there was no need to address the issue of preemption by federal labor law as the Appellate Division had done.

The extent to which the Court’s clarifications on to the plaintiffs’ burden in proving the first prong of a CEPA claim will ultimately affect trial courts’ disposition of summary judgment motions must await future developments.