On September 4, 2013, the New Jersey Appellate Division in Lippman v. Ethicon, Inc., Docket No. L–9025–06, 2013 WL 4726834 (App. Div. September 04, 2013), reversed a ruling by the Superior Court, Law Division granting summary judgment to the defendant employers and dismissing plaintiff’s claim under New Jersey’s Conscientious Employee Protection Act (CEPA) on the grounds that the plaintiff had “failed to show that he performed a whistle-blowing activity” where plaintiff’s job responsibilities included alerting his employer to potential safety issues related to the defendants’ drugs and products.  In the Appellate Division’s view, an employee’s job title or job responsibilities should not be considered “outcome determinative”  when deciding whether a plaintiff has made out a cognizable claim under New Jersey’s Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19–1 to –8.

Background

Plaintiff Joel S. Lippman, M.D., brought a claim under CEPA, against his former employer, Ethicon, Inc., a subsidiary of defendant Johnson & Johnson, Inc. (“J & J”) alleging he was terminated after repeatedly raising concerns about the safety or efficacy of several different pharmaceutical drugs and medical products.  Plaintiff joined Ethicon in July 2000 as the Vice President of Medical Affairs.  In that position Plaintiff was responsible for “safety, ensuring that safe medical practices occurred in clinical trials of [Ethicon’s] products; … medical reviews, information from a medical standpoint; [and] medical writing.”  Defendants contended that when plaintiff expressed opinions regarding the safety of certain products; he was performing his “core job functions” and was not engaged in “whistle-blowing under CEPA.”  The defendants also argued that plaintiff’s termination was unrelated to his work on the various safety review boards, but was in fact due to evidence that plaintiff had engaged in a “inappropriate sexual relationship with a subordinate.”

In granting summary judgment to the defendants, the trial court relied on Massarano v. New Jersey Transit, 400 N.J.Super. 474, 477-79 (App.Div.2008), an earlier Appellate Division opinion which found the plaintiff was not engaged in whistle-blowing activities when she reported seeing important documents discarded in her employer’s dumpster on the grounds that plaintiff was just “doing her job as the security operations manager by reporting her findings and her opinion to.”  The trial court held that since Lippman’s core job responsibilities required him to monitor and report any concerns he may have had regarding the safety of defendants’ drugs or medical products, plaintiff “failed to show that he performed a whistle-blowing activity.”

Appellate Division Decision

The Appellate Division, however, reversed the trial court’s grant of summary judgment in defendants’ favor as inconsistent with “CEPA’s broad remedial purpose” and on the grounds that “‘Watchdog’ employees, like plaintiff, are the most vulnerable to retaliation because they are uniquely positioned to know where the problem areas are and to speak out when corporate profits are put ahead of consumer safety.”  In support of its ruling, the court explained that the defendants had set up various quality boards to function as open forums where employees could freely express their opinions regarding the safety of certain drugs and medical devices.

The Appellate Division went on to explain that “watchdog” employees would refer to employees who “by virtue of his or her duties and responsibilities, is in the best position to: (1) know the relevant standard of care; and (2) know when an employer’s proposed plan or course of action would violate or materially deviate from that standard of care.” Just because an individual’s job description includes the responsibility “to protect the public from exposure to dangerous defective medical products, CEPA does not permit the employer to retaliate against that individual because of his or her performance of duties in good faith, and consistent with the job description.”  Ultimately, the court reversed the trial court’s grant of summary judgment and remanded the case for further proceedings.

Takeaway

The Lippman decision is a troubling one for many reasons.  Regulators constantly exhort employers to instill a “culture of compliance” which requires hiring and encouraging “watch dog” employees to perform their job duties with both honesty and zeal.  Lippman undermines an employer’s incentives in this regard because it makes any such employee a potential plaintiff whistleblower within the meaning of CEPA.  In the absence of a more favorable ruling by the New Jersey Supreme Court, New Jersey employers — particularly those in regulated industries — should tread carefully when dealing with employees who meet the Lippman definition of “watchdogs”.