If you thought employers already have enough on their plates to worry about—such as simply being able to stay afloat in this economy—one more matter should be added to the list: an expected uptick in whistleblower litigation related to COVID-19. This is especially true in New Jersey.
New Jersey has one of, if not, the broadest whistleblower protection laws in the country. The New Jersey Conscientious Employee Protection Act (“CEPA”) applies to all employers regardless of size. It protects employees and even certain independent contractors from retaliation for complaining about practices that violate a rule, regulation, law or clear mandate of public policy. It even covers employees who reasonably believe there is a violation when, in fact, there is none.
New Jersey employers with ten or more employees, regardless of what state they work in, are required to conspicuously post in the workplace and distribute annually a written or electronic CEPA notice in English, Spanish and other language spoken by a majority of the workforce, advising employees of their rights. The notice must provide the name and contact information of the person designated by the company to whom complaints should be directed.
Why is it inevitable that there will be a tremendous increase in the number of whistleblower complaints? When one considers the sheer number of layoffs, furloughs and other adverse employment actions taken against employees resulting from the pandemic and the difficulty these severed employees are having locating new employment, many will likely believe the best place for them to turn will be to sue their former employers.
This belief will also be fueled by federal and state agencies reminding employees to report violations to these agencies’ enforcement arms. For example, in OSHA’s recent Guidance relating to COVID-19, it reminds employees that it is against the law for an employer to retaliate against an employee who complains about unsafe working conditions. Considering the scarcity of certain personal protective equipment (“PPE”) and other safety products, complaints to OSHA will surely rise as employees return to work. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) also creates opportunities for whistleblowers to complain about a company’s misuse of stimulus funds. Likewise, under the federal False Claims Act, individuals are incentivized to report violations to the SEC relating to financial misconduct with the possibility of recovering ten to thirty percent of the recovery as a bounty.
The takeway: as with most employment matters, it is best to be proactive rather than reactive. Check now whether your company has a written whistleblower policy. Make sure it is posted and is distributed. Confirm that it clearly spells out how employees are to lodge complaints and be prepared to promptly and thoroughly investigate any allegations. Finally, be sure to document the non-retaliatory reasons for each termination decision as well as all decisions relating to rehiring.