People who believe that their employers have engaged in illegal or unethical behavior should be able to come forward without fear of losing their jobs or facing other forms of retaliation. New Jersey employment law offers broad protections for whistleblowers who report alleged wrongdoing by their employers and engage in other protected activities. At the federal level, numerous statutes include whistleblower protections in specific industries or for specific types of claims. The Sarbanes-Oxley Act of 2002 (SOX), for example, protects employees of publicly-traded corporations who report alleged fraud or violations of securities laws. The U.S. Supreme Court recently agreed to hear a case involving a dispute over who has the burden of proving “retaliatory intent” in SOX whistleblower cases.
New Jersey’s Conscientious Employee Protection Act (CEPA) prohibits employers from “tak[ing] any retaliatory action” against an employee for numerous protected activities. These may include the following:
– Reporting or threatening to report activities that the employee reasonably believes are illegal, unethical, or fraudulent;
– Cooperating with investigations or hearings regarding suspected illegal acts by the employer;
– Testifying in connection with such investigations;
– Objecting to activities or policies that the employee believes are unlawful, fraudulent, or against public policy; and
– Reporting an alleged violation of CEPA.
While CEPA applies to all employers in New Jersey, the whistleblower protection provisions in SOX only apply to employers that are also publicly-traded corporations governed by the Securities Exchange Act of 1934 and Securities and Exchange Commission (SEC) regulations. The statute’s list of protected activities is similar to CEPA’s list, except that it only applies to reports and investigations related to certain types of fraud, including wire fraud, bank fraud, and securities fraud, as well as violations of SEC regulations and other securities laws.
The case before the Supreme Court, Murray v. UBS Securities, LLC, involves alleged retaliation against a former employee. According to the appellate court decision, the plaintiff reported to his supervisor that he believed that the company was committing fraud on its shareholders. About a month later, the defendant terminated his employment.
The plaintiff won at trial. On appeal, the defendant claimed that the trial court’s jury instructions were in error because they did not state that the plaintiffs must prove that the defendant acted with “retaliatory intent.” The plaintiff argued in response that, under SOX, he only had to show that his whistleblowing contributed to the defendant’s decision to fire him. If he could do that, the burden of proof would shift to the defendant to show, by clear and convincing evidence, that they would have taken the same adverse action with or without the whistleblowing.
The Second Circuit ruled in the defendant’s favor. It held that the trial court erred and that the plaintiff has the burden of proving intent to retaliate. In his petition to the Supreme Court for certiorari, the plaintiff argues that this creates a circuit split. Numerous federal whistleblower protection laws use similar language as SOX, but other circuits have reached different conclusions about the burden of proving retaliatory intent. The court granted certiorari on May 1, 2023.
Workers in New Jersey and New York have legal options when their employers violate their rights under federal or state law. If you believe that your employer has engaged in retaliation or other unlawful acts, a knowledgeable and experienced employment attorney can help you assert your rights and make a claim for damages. Please contact the Resnick Law Group at 973-781-1204, 646-867-7997, or online today to schedule a confidential consultation with a member of our team.