New Jersey's Conscientious Employee Protection Act, N.J.S.A. § 34:19-1 et seq. ("CEPA"), provides broad protection to a whistle-blowing employee who complains about the unlawful conduct of an employer or co-worker. This month, the New Jersey Appellate Division addressed the issue of whether the law also protects employees from retaliation for complaining about the unlawful conduct of a customer. In Aviles v. Big M, Inc., 2011 N.J. Super. Unpub. LEXIS 564 (App. Div. Mar. 8, 2011), the Court concluded that it does not.

The Law

CEPA bars an employer from retaliating against an employee for, among other things: (1) disclosing or threatening to disclose "an activity, policy or practice of the employer ... that the employee reasonably believes" violates the law; or (2) objecting or refusing to participate "in any activity, policy or practice" that the employee "reasonably believes" violates the law.

The Facts

The owner of Mandee, a chain of women's retail clothing stores, defendant Big M, Inc. ("Mandee"), hired Aviles in 1996 as a sales associate. In March 2007, Mandee promoted Aviles to store manager. In December 2007, a dressing room attendant informed Aviles that a customer "had been in the dressing room for an extended period of time, and was making noises in the dressing room that sounded like she was trying to remove security tags from the merchandise." When the customer left the dressing room, Aviles questioned her, but did not discover any concealed merchandise.

The customer later complained to Mandee's customer service department, alleging that Aviles had accused her of theft and said that "it was company policy to search her." Company investigators spoke to Aviles, who admitted confronting the customer and asking to search her handbag. Mandee's loss prevention policy allowed a store manager to detain or confront a suspected shoplifter only under certain circumstances, including when the manager "personally observe[s] the shoplifter conceal company owned merchandise," but it was clear that those circumstances had not been present here. Based upon the investigation, Mandee terminated Aviles' employment for violating Company policy by confronting the customer in the absence of the requisite circumstances.  

The Trial Court

Aviles filed a lawsuit asserting CEPA and other claims. Mandee moved to dismiss the CEPA claim on the pleadings. The court granted the motion. The parties proceeded with discovery on the remaining claims. Following discovery, Aviles filed a motion to reinstate the CEPA claim, which the court denied.

The Appellate Division

Aviles appealed the trial court's dismissal of, and refusal to reinstate, her CEPA claim. On appeal, Aviles argued that "her actions in confronting [the customer] who she believed was shoplifting, were protected pursuant to CEPA." Aviles further argued that "the protection afforded to employees by CEPA in reporting criminal actions of employers that has been interpreted as covering reporting of illegal actions of co-workers, should be extended to protect employees who report the wrongdoing of the employer's customer." The Appellate Division declined to extend CEPA's protections, noting that Aviles had cited "no authority that extends whistle-blower protection to reporting wrongdoing of third parties."

The Appellate Division explained, in any event, that Aviles could not base a whistle-blowing claim under CEPA upon her performance of her required job responsibilities. In other words, because she was supposed to stop shoplifting as part of her ordinary job responsibilities as store manager, she could not base a CEPA claim on her effort to stop shoplifting. The Court stated, a "plaintiff's job duties cannot be considered whistle-blowing conduct." The Appellate Division affirmed the trial court's dismissal of the CEPA claim.

  • Bottom Line

In our February 2011 Employment Law Newsletter, we reported on the decision of a federal court in New York extending the whistle-blower protection of the Sarbanes-Oxley Act of 2002 to employees who report fraudulent conduct or securities law violations by third parties. Given the New Jersey Appellate Division's decision in Aviles, it appears that CEPA does not offer similar protection. Notwithstanding Aviles, prudent employers should be cautious when taking any adverse action against a complaining employee - even if the complaints pertain only to a customer's misconduct - because New Jersey courts typically interpret and apply CEPA broadly and may revisit this issue in a future case in which the customer's culpability and the employee's whistle-blowing are clearer.

Click here for a link to the Aviles decision.