A Case Study for Employers on Whistleblower Laws

Whistleblower laws are generally designed to prohibit employers from taking retaliatory action against an employee because the employee engages in protected conduct. For example, an employer may not retaliate against an employee for disclosing the employer’s violation of laws or ethics, providing testimony about the employer, or refusing to engage in inappropriate conduct. In a recent decision, the New Jersey Superior Court considered whether an employee’s reliance upon a professional code of ethics not applicable to his employer is sufficient to support a claim under New Jersey’s whistleblower law, the Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1 to -8.  The court determined that CEPA protection did not apply because the employee improperly relied upon a code of ethics that did not govern the employer’s conduct and dismissed the employee’s suit.

 

In Hitesman v. Bridgeway Inc., 2013 N.J. Super. LEXIS 44 (App.Div. Mar. 22, 2013), Jason Hitesman, a registered nurse, was terminated by Bridgeway Care Center, a long-term care facility, after he called various governmental agencies and the media to report his concerns about Bridgeway’s response to what he considered an inordinate rate of infections among patients.  He sued, alleging Bridgeway violated CEPA.   Hitesman alleged he had an objectively reasonable belief, in part based on the American Nursing Association’s (“ANA”) Code of Ethics, that Bridgeway provided “improper quality of patient care.” A jury ruled in Hitesman’s favor on the issue of liability, but awarded no damages, and both parties appealed.

In order to make out a CEPA claim, Hitesman had to show that (1) he reasonably believed that his employer’s conduct violated either “any professional code of ethics” or a clear mandate of public policy; (2) he performed a “whistle-blowing” activity, (3) he was subjected to an adverse employment action, and (4) a causal connection exists between the whistle-blowing activity and the adverse employment action. See Dzwonar v. McDevitt, 177 N.J. 451, 462 (2003).

The sole issue facing the appellate court was whether Hitesman had established a reasonable belief that Bridgeway’s conduct violated a professional code of ethics.  The court decided that Hitesman had not met this standard and ruled that Hitesman’s belief that Bridgeway violated the American Nursing Association’s Code of Ethics was not “objectively reasonable” because the section of the Code at issue provided standards for employees to follow, and did not apply to Bridgeway as an employer.  

This case provides a valuable lesson for employers, especially those in highly regulated industries like healthcare.  When responding to whistleblowing allegations, employers should investigate and thoroughly document the investigation, the outcome, and any communications with the whistleblower.  Although employers should take comfort in this decision, which limits the application of whistleblower protection, Hitesman intends to appeal this decision so the holding may be reversed.

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