The New Jersey Appellate Division recently issued a published decision that reaffirms the analytical framework used for claims brought under New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (CEPA), by nonemployees, and also clarified that CEPA cases are always fact-intensive and thus rarely served by bright-line rules.
In Anna-Maria Obiedzinski v. Township of Tewksbury, et al., the New Jersey Appellate Division reversed a trial court’s determination that the plaintiff, Obiedzinski, was not entitled to CEPA protections when serving as the tax assessor for the Township of Tewksbury. The trial court relied on a 1997 Appellate Division case that found a tax assessor was not entitled to CEPA protections and read that case as establishing a bright-line rule. The trial court also relied on the fact that tax assessors have statutory protections in their job, meaning they generally are not at-will employees who can be subject to an adverse action without warning. This, according, to the trial court, meant that Obiedzinski could not “legitimately claim to have held a deep-rooted fear that her employment would be stripped away by her employer.”
The Appellate Division disagreed and reversed. The Court initially reviewed first principles of CEPA. The statute is meant to protect employees from adverse actions after the employee reasonably believes that their employer is violating a law, rule, regulation or public policy, and the employee subsequently performs a whistle-blowing activity. The statute broadly defines employee to “mean any individual who performs services for and under the control and direction of an employer for wages or other remuneration.” Against these principles and further case law, the Court held that the New Jersey Supreme Court has never endorsed a per se rule that would exclude a municipal tax assessor from CEPA protection; rather, the relevant analysis focuses on the “reality of [the] plaintiff’s relationship with the party against whom the CEPA claim is advanced.”
The Appellate Division also reviewed New Jersey Supreme Court precedent on this issue. For example, one case found that the plaintiff who was a shareholder-director of a radiology group could be considered an employee for CEPA purposes given its broad definition, and adopted a fact-intensive, (non-exhaustive) six-factor test to determine the outcome. And in a different case, the New Jersey Supreme Court adopted a twelve-factor test to determine whether the plaintiff was an employee or independent contractor. And finally, a third case found that a tenured public defender who could only be removed for good cause was in fact an employee for CEPA purposes.
In light of its reading of precedent, the Appellate Division vacated the grant of summary judgment and remanded the case back to the trial court for a fact-intensive analysis of the working relationship to determine if Obiedzinski is entitled to CEPA protection. Although this case is largely reaffirming principles already in the law, it serves as a cautious reminder to employers that CEPA is a broad and expansive statute that will cover most workers in this state. Even if an employer retains someone to be an independent contractor, that will not categorically bar a CEPA claim; instead, courts will require a fact-intensive analysis to determine whether CEPA applies.
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