Rules of Engagement

This post was written by: Yesenia Francisco, Law Clerk

Benjamin N. Cardozo School of Law, Class of 2012

A recent U.S. Supreme Court case has broadened the scope of individuals who may be able to raise a claim of retaliation.In Thompson v. North American Stainless, (2011), the Court unanimously held that Title VII of the Civil Rights Act of 1964 (“Title VII”) creates a cause of action for third-party victims of retaliation.

 

The plaintiff, Eric Thompson, and his fiancée had been employed by North American Stainless (“NAS”).  Thompson’s fiancée filed an Equal Employment Opportunity Commission discrimination complaint against NAS, and three weeks later, the company fired Thompson.  Thompson ultimately sued, alleging that NAS retaliated against him as a result of his fiancee’s complaint against the company.

 

The Court had little difficulty in finding that based on the facts presented, NAS’ termination of Thompson violated Title VII’s anti-retaliation provision, which prohibits an employer from discriminating against any of his employees because he has made a charge under Title VII. 42 U.S.C. § 2000e-3(a). The Court reasoned that Title VII’s anti-retaliatory provision must be construed to cover a broad range of employer conduct. Furthermore, Title VII prohibits any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.

 

Under this broad standard, the Court concluded that it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.” Id.

 

In deciding the second issue of whether a third party can sue for retaliation under Title VII, the Court determined that an employee constitutes a “person aggrieved” and is eligible to bring a Title VII challenge when that person “falls within the zone of interests” protected by the statute. Because Thompson was an employee of NAS and the purpose of Title VII is to protect employees from their employers’ unlawful conduct, the Court found that Thompson was within the zone of interests sought to be protected by Title VII. The Court declined to adopt a bright-line test for which relationships would be covered under this standard. In an attempt to provide at least some guidance, Justice Scalia noted that while the termination of a close family member will almost always meet this standard, retaliation against a mere acquaintance may not.

 

Although it does not establish a bright-line test for third-party retaliation claims, this decision could have an impact upon employees’ incentives to file discrimination claims as well as the frequency of employers’ retaliation on third parties. In creating an independent cause of action for retaliation on behalf of friends and family members who have not engaged in protected activity, the opinion expands the group of employees who can actually file Title VII claims.  It is now likely that employers will now take extra precautions when taking adverse employment action against any worker closely related, married or engaged to an employee who has engaged in protected activity.

Statutory Claims Under CEPA

Numerous employment statutes, such as the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e-2(a), the Age Discrimination in Employment Act, the Americans with Disability Act, and the New Jersey Worker=s Compensation Statute, N.J.S.A. 34:15-1 et seq., OSHA regulations, etc. have separate provisions that provide for a retaliation claim if the employee has a reasonable belief that he/she is subject to the protections of the statute, alleges a violation of the statute, and is then subjected to a retaliatory adverse action by the employer.

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Common Law Retaliation Under CEPA

In New Jersey, the Supreme Court allows for common law retaliation for a termination that occurs because the employee complained of a violation of public policy that differs from CEPA in certain respects.  Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72 (1980).  Some of the critical differences is that CEPA has a one year statute of limitations compared to the two year statute for Pierce claims.  CEPA does not require a written complaint whereas Pierce claims seem to so require.  The public policy requirements under Pierce claims are more strictly construed than under CEPA.  Some courts have construed Pierce to require an actual complaint to an outside agency whereas CEPA protects employees who threaten to make a complaint but do not actually make the complaint.

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Who is covered by CEPA?

Prior to the very recent case of D’Annunzio v. Prudential Ins. Co. of America, — A.2d —-, 2005 WL 3789960 (App. Div. 2006), in most cases, independent contractors, were not covered under CEPA similar to the LAD.  The Appellate Division expanded CEPA’s coverage to include not only common law employees, but also many independent contractors.  The Court held that the definition of “employee” under CEPA is broader than the definition under the LAD, and rejected the analysis set forth in Pukowsky v. Caruso, 312 N.J.Super. 171, 711 A.2d 398 (App.Div.1998)  The Court set forth a broad new test for determining whether a person is to be considered an “employee” for purposes of CEPA.

As a result, we hold that independent contractors are not necessarily excluded and that only the first (“the employer’s right to control the means and manner of the worker’s performance”), second (“the kind of occupation-supervised or unsupervised”) fourth (“who furnishes the equipment and workplace”) and seventh (“the manner of termination of the work relationship”) factors contained in Pukowsky, supra, 312 N.J.Super. at 182-83, 711 A.2d 398, have relevance, and we conclude that those factors provide an appropriate guide for identifying those workers who fit CEPA’s definition of “employee.”

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Our holding is particularly compelled by CEPA’s primary purpose, which is to encourage workers to voice concerns about the unlawful activities of employers and co-workers. CEPA exhibits no particular interest in regulating the terms of the employer-worker relationship, except to preclude retaliation, when the worker acts in the interests of the health, safety and welfare of the public.

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What is CEPA?

The Conscientious Employee Protection Act, NJSA 34:19-1, et seq. (“CEPA”) is a powerful statute, enacted almost 20 years ago, in the State of New Jersey that protects employees who are subjected to adverse employment actions based on taking part in protected whistleblower activity.

CEPA is a specific statute that contains highly scrutinized criteria that must exist for an employee to be successful in presenting a whistleblower claim.  The statute includes the following elements:

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

a. Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship, that 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, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality of patient care; or

(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;

b. Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation promulgated pursuant to law by the employer, or another employer, with whom there is a business relationship, 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, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into the quality of patient care; or

c. 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.

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