On July 15, the New Jersey Supreme Court released its opinion in the closely-watched employment law case Lippman v. Ethicon. The issue in the case was whether an employee performing activities as part of his or her core job functions, on that basis alone and without further conduct by the employee, can seek whistleblower protection under the Conscientious Employee Protection Act (CEPA) if they are fired?
The Facts
Dr. Joel S. Lippman, M.D. was employed by Ortho-McNeil Pharmaceuticals, Inc (OMP) and Ethicon, Inc., both subsidiaries of Johnson & Johnson, from 1990-2000 and 2000-2006 respectively. At Ethicon, Lippman served as the company’s World-Wide Vice-President of Medical Affairs and Chief Medical Officer. His job involved reviewing possible adverse effects of products that had been brought to Ethicon’s attention by others, and serving on the company’s Quality Board, which was responsible for reviewing and making decisions regarding product safety and efficacy.
In 2006 Ethicon fired Lippman. Ethicon asserts Lippman was terminated after it was discovered he had an inappropriate relationship with a coworker who later sued for harassment. Lippman claims Ethicon used the relationship as a pretext to fire him for whistle-blowing, and is seeking protection under CEPA.
The trial court granted Ethicon’s motion for summary judgment, finding that it was Lippman’s job to bring forward concerns, so his actions did not count as whistleblowing protected by CEPA. The appellate court reversed and remanded, holding that CEPA does protect employees who are hired to be in-house whistleblowers.
The NJ Supreme Court’s Ruling
The court focused on the text of the statute, noted the absence of language limiting its application, and concluded that CEPA should apply equally to all employees. The court indicated that it would be more appropriate for the legislature to address the policy concerns raised by the New Jersey Business and Industry Association and the New Jersey Civil Justice Institute in our joint amicus brief to the court.
Justice LaVecchia authored the opinion, which was joined by Chief Justice Rabner and Justices Albin, Fernandez-Vina, and Solomon. Justice Patterson and Judge Cuff, who has been temporarily assigned to the court, did not participate.
Analysis
This decision raises serious concerns for some employers. Framing internal, debate-based decision-making as whistleblowing that is actionable under CEPA changes the workplace dynamic.
The effect of the decision is likely to be especially pronounced in the pharmaceutical industry and other contexts where the potential risks of products must be carefully balanced against its benefit to consumers, and where the risk of over-deterrence can be at least as harmful to under-deterrence. Striking the appropriate balance is a complex and nuanced job, and businesses should be able to evaluate employees’ performance without fear of CEPA litigation.
Next Steps
The case has been remanded to the trial court for trial. NJCJI will be closely watching the case to see how the lower court actually implements the Supreme Court’s ruling.