(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued February 27, 1995 -- Decided July 11, 1995
COLEMAN, J., writing for a unanimous Court.
In January 1981, Schering Corporation (Schering) hired William B. Young, a veterinary doctor, as
Manager of International Clinical Research and Technical Services in its Animal Health Division. In
November 1986, Dr. Young was promoted to Director of Schering's Worldwide Clinical Research and
Technical Services. In January 1988, Dr. Edwin S. Brokken became Dr. Young's immediate supervisor.
Dr. Young complained to Dr. Brokken that Schering had an "unrealistic priority" of funding by
investing in research and development of Florfenicol, a veterinary drug. Dr. Young believed that Florfenicol
would not receive Food and Drug Administration approval because studies had substantiated that
Chloramphenicol, an analogue of Florfenicol, is associated with a form of anemia in humans and was banned
worldwide for use in food for animals. Dr. Young disagreed with Dr. Brokken's decision to concentrate
research on Florfenicol rather than Netobimin and Flunixin because he believed research on Florfenicol
violated Schering's policies and federal regulations. Dr. Young's employment was terminated in August 1988.
The parties do not agree on the cause of Dr. Young's termination.
Dr. Young filed a complaint against Schering and Dr. Brokken, alleging violations of the
Conscientious Employee Protection Act (CEPA) and common-law claims of malicious interference with an
advantageous business relationship, harassment, intentional infliction of emotional distress, unjust work
evaluation, wrongful discharge, and loss of present and future salary, Count I; common-law wrongful
discharge and a denial of severance pay in violation of Schering's personnel policies, Count II; and
defamation, slander, and malicious interference with prospective employment opportunities, Count III. Dr.
Young sought, among other things, reinstatement to his former position, injunctive relief and monetary
damages.
In October 1989, the trial court dismissed all common-law claims alleged in Count I and the breach
of implied employment contract claims alleged in Count II on the ground that the CEPA waiver provision,
N.J.S.A. 34:19-8, precluded Dr. Young from pursuing those claims. The court preserved the CEPA claim
and the Count III claims of defamation, slander and malicious interference with prospective employment
opportunities against Dr. Brokken, individually.
On March 27, 1990, the trial court dismissed the CEPA claims, without prejudice. On February 10,
1992, Dr. Young filed an amended complaint alleging Schering and Dr. Brokken terminated him in
retaliation for warning them that test results of Flunixin should be reported to certain governmental agencies
where Schering allegedly marketed the drug. Dr. Young alleged that Schering failed to report the test results
to those agencies and to respond to Dr. Young's warnings to research a safe dose of Flunixin. On May 10,
1992, the trial court dismissed the amended complaint for, among other things, the expiration of the one-year
statute of limitations.
On July 25, 1994, the Appellate Division affirmed the dismissal of the amended complaint, finding that it was an entirely new claim and, as such, did not relate back to the original complaint. The Appellate Division also affirmed the dismissal of the CEPA claim, concluding that there is no remedy under CEPA for the discharge of employees who simply disagree with the employer's lawful research decisions. The court also concluded the dismissal of the common-law claims alleged in Count I was proper because those claims
sought the same remedy as the CEPA claim and, therefore, were waived under CEPA's waiver provision.
The court determined, however, that the waiver provision does not extend to the Count II and Count III
claims for severance pay, defamation, slander or malicious interference with prospective employment
opportunities. The court considered those issues collateral to Dr. Young's CEPA claim because they did not
require the same proofs nor did they require proof of a retaliatory motive.
The Supreme Court granted certification.
HELD: The scope of the waiver provision of the Conscientious Employee Protection Act (CEPA) does not
prevent an employee from proceeding with his or her common-law tort and contract claims that are
sufficiently distinct from the CEPA claim.
1. CEPA was enacted in 1986 to protect from retaliatory action employees who "blow the whistle" on
organizations engaged in illegal or harmful activity. The waiver provision of CEPA is far from clear;
therefore, the Court must rely on other rules of statutory interpretation. The Court looks to legislative intent
and other canons of statutory construction. Where the Legislature's intent is remedial, a court should
construe a statute liberally. Statutes in derogation of the common law and exceptions to a statutory scheme
should be construed narrowly. Courts should avoid a literal interpretation of individual statutory terms or
provisions that would be inconsistent with the overall purpose of the statute. (pp. 6-10)
2. CEPA should not be literally read because the Legislature did not intend to penalize former employees
by forcing them to choose between a CEPA claim and other legitimate claims that are substantially, if not
totally, independent of the retaliatory discharge claim. The Legislature intended to provide a comprehensive
and effective cause of action for retaliatory discharge. Passage of such remedial protection would be
weakened or compromised if it would foreclose a legitimate cause of action arising from the same underlying
factual circumstances but, nonetheless, not include or involve the retaliatory conduct that is essential to the
CEPA claim. Further, any statutory constriction of common-law remedies compels the narrow construction
of the waiver provision. (pp. 10-12)
3. It must be inferred that the Legislature intended that the waiver provision prevent an employee from
pursuing both statutory and common-law retaliatory discharge causes of action. In addition, the internal
structure of the waiver provision supports its narrow application. Moreover, as an exception to the general
or remedial scheme of CEPA, the waiver provision must be construed narrowly. The Legislature intended
for the waiver to mean that a former employee forfeits his or her common-law retaliatory-discharge cause of
action when he or she "institutes" a CEPA cause of action. Parallel claims based on those rights, privileges
and remedies are also waived because they present multiple or duplicative claims based on retaliatory
discharge. Construing CEPA's waiver clause consistent with the Legislature's inferred intent, and consistent
with the express remedial purpose of the entire CEPA statute, convinces the Court that the waiver provision
applies only to those causes of action that require a finding of retaliatory conduct that is actionable under
CEPA. The waiver exception does not apply to those causes of action that are substantially independent of
the CEPA claim. (pp. 12-15)
4. Dr. Young's Count II claim for severance pay and his Count III common-law damages claims under
theories of defamation, slander, and malicious interference with prospective employment opportunities do not
fall within the waiver provision. Those claims are not substantially related to the retaliatory discharge claim;
they do not resemble the alleged CEPA violations nor do they require the same proofs needed to
substantiate the CEPA claim. (pp. 15-19)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN and STEIN join in
JUSTICE COLEMAN's opinion. JUSTICE GARIBALDI did not participate.
SUPREME COURT OF NEW JERSEY
A-
113 September Term 1994
DR. WILLIAM B. YOUNG,
Plaintiff-Respondent,
v.
SCHERING CORPORATION AND
DR. EDWIN S. BROKKEN,
Defendants-Appellants.
Argued February 27, 1995 -- Decided July 11, 1995
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
275 N.J. Super. 221 (1994).
Jerrold J. Wohlgemuth argued the cause for
appellants (Apruzzese, McDermott, Mastro &
Murphy, attorneys).
Arnold S. Cohen argued the cause for
respondent (Balk, Oxfeld, Mandell and Cohen,
attorneys).
The opinion of the Court was delivered by
COLEMAN, J.
This wrongful termination of employment case requires us to
determine the scope of the waiver provision of the New Jersey
Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-8.
The Appellate Division held that the statutory waiver does not
preclude an employee from pursuing common-law claims that are
sufficiently distinct from a CEPA claim. 275 N.J. Super. 221
(1994). The Appellate Division, however, affirmed the dismissal
of the CEPA claim and the related common-law claims. We denied
plaintiff's petition for certification.
139 N.J. 184 (1994). We
granted defendant's cross-petition, ibid., to determine whether
the waiver provision in CEPA requires dismissal of all of
plaintiff's common-law tort and contract claims. We hold that
the scope of the CEPA waiver provision does not prevent an
employee from proceeding with his or her common-law tort and
contract claims that are sufficiently distinct from the CEPA
claim.
In January 1981 Schering Corporation (Schering) hired plaintiff William B. Young, a veterinary doctor, as Manager of International Clinical Research and Technical Services in its Animal Health Division. Schering promoted Dr. Young to Director of that department in April 1984 and to Director of its Worldwide Clinical Research and Technical Services in November 1986. In January 1988 defendant Dr. Edwin S. Brokken became Dr. Young's immediate supervisor.
Soon thereafter, Dr. Young complained to Dr. Brokken that Schering had an "unrealistic priority" of funding by investing in research and development of Florfenicol, a veterinary drug. Dr. Young believed Florfenicol would not receive Food and Drug Administration approval because studies had substantiated that Chloramphenicol, an analogue of Florfenicol, is associated with idiosyncratic aplastic anemia [a peculiarly, individualized decrease in red-blood cells] in humans, thereby causing a worldwide ban on its use in food for animals. Dr. Young
disagreed with Dr. Brokken's decision to concentrate research on
Florfenicol rather than Netobimin and Flunixin because he
believed research of Florfenicol violated Schering's policies and
federal regulations. Dr. Young's employment was terminated in
August 1988. The parties disagree over what caused the
termination.
Dr. Young filed a complaint against Schering and Dr. Brokken
on February 2, 1989. He alleged in Count I violations of CEPA
and common-law claims of malicious interference with an
advantageous business relationship, harassment, intentional
infliction of emotional distress, unjust work evaluation,
wrongful discharge, and loss of present and future salary. In
Count II, plaintiff alleged common-law wrongful discharge and
denial of severance pay in violation of Schering's personnel
policies. In Count III, plaintiff alleged defamation, slander
and malicious interference with prospective employment
opportunities. The relief plaintiff sought by the complaint was
reinstatement to his former position, injunctive relief and
monetary damages, among other things.
In October 1989 Schering and Dr. Brokken succeeded in
dismissing all common-law claims alleged in Count I and the
breach of implied employment contract claims alleged in Count II
on the ground that the CEPA waiver provision, N.J.S.A. 34:19-8,
precluded plaintiff from pursuing those claims. The court
preserved the CEPA claim and the Count III claims of defamation,
slander and malicious interference with prospective employment
opportunities against Dr. Brokken individually for his alleged
ultra vires conduct.
On March 27, 1990, the trial court dismissed the CEPA claims
for failure to state a claim upon which relief could be granted.
R. 4:6-2(e). That dismissal was without prejudice to filing an
amended complaint. In dismissing the CEPA claim, the trial court
in part reasoned:
Even accepting as true and viewing in the
light most favorable to Young, all
allegations in his complaint and all
reasonable inferences that can be drawn
therefrom . . . these averments do not set
forth a cause of action under N.J.S.A. 34:19-3a [and] c(1) or c(3) of CEPA. What Young
has "disclosed" to Brokken and Schering
officials, is his own disagreement with the
choice made by both Brokken and Schering, to
research the marketability potential of
Florfenicol as opposed to Flunixin and
Netobimin. He does not allege that he, in
his oral and written communications,
confronted Brokken or senior colleagues, with
a particular law, rule, or regulation that
would be violated by the decision to pursue
the Florfenicol research, nor does Schering's
decision, which this court believes to be a
company policy decision, violate public
policy.
[Young, supra, 275 N.J. Super. at 227.]
Approximately twenty months after the Count I CEPA claim was dismissed, Dr. Young filed an amended complaint on February 10, 1992, alleging Schering and Dr. Brokken terminated him in retaliation for warning them that test results of Flunixin should be reported to the governmental agencies of the United States, the United Kingdom and Canada where Schering allegedly marketed Flunixin. He alleged that Schering failed to report the test
results to those countries and to respond to Dr. Young's warnings
to research a safe dosage of Flunixin. On May 29, 1992, the
trial court dismissed the amended complaint because the one-year
statute of limitations had expired, see N.J.S.A. 34:19-5, and
because the doctrine of laches had been violated. The court
stated that "not only [is the amended complaint] a distinct claim
from the one originally raised, but it is one which is almost
entirely contradictory to the thrust of his first allegation."
The judge found no reasonable basis for the delay in filing the
amended complaint.
On July 25, 1994, the Appellate Division affirmed the
dismissal of the amended complaint because it did not relate back
to the original complaint. Young, supra, 275 N.J. Super. at 229.
It was an entirely new claim. Id. at 229-30. The Appellate
Division also affirmed the dismissal of the CEPA cause of action
alleged in Count I because CEPA does not provide a remedy for the
discharge of employees who simply disagree with the employer's
lawful research decisions. Id. at 237. The Appellate Division
also concluded that dismissal of the common-law claims alleged in
Count I was proper because they sought the same remedy that
plaintiff sought in the CEPA claim. As such, they were deemed
waived under CEPA's waiver provision, N.J.S.A. 34:19-8. Id. at
237-38. However, the court determined that CEPA's waiver
provision does not extend to the Count II and III claims of
severance pay, defamation, slander or malicious interference with
prospective employment opportunities. It deemed those issues
collateral to Dr. Young's CEPA claim because they require
different proofs and do not require proof of a retaliatory
motive. Id. at 238-40.
II
Schering and Dr. Brokken contend that the Appellate Division misconstrued CEPA's waiver provision and incorrectly preserved Dr. Young's Count II contractual claim for severance pay and his Count III common-law tort claims under theories of defamation, slander and malicious interference with prospective employment opportunities. They argue that those claims depend on a showing that Dr. Young was terminated in retaliation for his opposition to their research-funding decisions; therefore, those claims are waived by the institution of a CEPA claim. They suggest that a contrary interpretation of the waiver provision would result in duplicative claims.
Dr. Young argues that the severance-pay claim is based on contractual obligations that are unrelated to the retaliation claim, and the Count III tort claims are based on Dr. Brokken's conduct after the dismissal. Dr. Young asserts that Dr. Brokken falsely told former colleagues and prospective employers that plaintiff was fired because of irregular expense reports. See Erickson v. Marsh & McLennan Co., Inc., 117 N.J. 539, 562-66 (1990). He argues that the post-employment conduct is not part of the retaliatory discharge claim and thus not covered by the waiver provision.
CEPA was enacted in 1986 to protect from retaliatory action employees who "blow the whistle" on organizations engaged in illegal or harmful activity. Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 417-18 (1994). N.J.S.A. 34:19-3 defines the class of employee actions protected by CEPA, and it provides:
An employer shall not take any retaliatory actions against an employee because the employee does any of the following:
a. Discloses, or threatens to disclose to a
supervisor or to a public body an
activity, policy or practice of the
employer or another employer, with whom
there is a business relationship, that
the employee reasonably believes is in
violation of a law, or a rule or
regulation promulgated pursuant to law;
b. Provides information to, or testifies
before, any public body conducting an
investigation, hearing or inquiry into
any violation of law, or a rule or
regulation promulgated pursuant to law
by the employer or another employer,
with whom there is a business
relationship; or
c. Objects to, or refuses to participate in
any activity, policy or practice which
the employee reasonably believes:
(1) is in violation of a law, or a rule
or regulation promulgated
pursuant to law;
(2) is fraudulent or criminal; or
(3) is incompatible with a clear mandate or
public policy concerning the public
health, safety or welfare or protection
of the environment.
The waiver provision in CEPA that controls this case is
located at N.J.S.A. 34:19-8 and provides:
Nothing in this act shall be deemed to
diminish the rights, privileges, or remedies
of any employee under any other federal or
State law or regulation or under any
collective bargaining agreement or employment
contract; except that the institution of an
action in accordance with this act shall be
deemed a waiver of the rights and remedies
available under any other contract,
collective bargaining agreement, State law,
rule or regulation or under the common law.
There is a dearth of legislative history and case law
explaining CEPA. The scant history that is available was
described in Abbamont, supra, 138 N.J. at 417-18:
That law protects "whistle blowers," "who,
believing that the public interest overrides
the interest of the organization he [or she]
serves, publicly `blows the whistle' if the
organization is involved in corrupt, illegal,
fraudulent, or harmful activity." Ralph
Nader et al., Whistleblowing: The Report of
the Conference on Professional Responsibility
vii (Ralph Nader et al., eds., 1972). As the
bill's sponsor stated, CEPA's enactment is
"important to all New Jersey workers who are
concerned about working in a safe environment
with honest employers." Linda Lamendola,
Safeguards Enacted for "Whistleblowers", The
Star Ledger, Sept. [9], 1986, at 1. When
signing the whistleblower law, Governor Kean
explained CEPA's purpose:
It is most unfortunate--but
nonetheless, true--that
conscientious employees have been
subjected to firing, demotion or
suspension for calling attention to
illegal activity on the part of his
or her employer.
It is just as unfortunate that illegal activities have not been
brought to light because of deep-seated fear on the part of an
employee that his or her livelihood
will be taken away without
recourse.
[Office of the Governor, News
Release at 1 (Sept. 8, 1986).]
Defendants contend the waiver provision is unambiguous and should be accorded its plain meaning. Kimmelman v. Henkels & McCoy, Inc., 108 N.J. 123, 128 (1987); Renz v. Penn Cent. Corp., 87 N.J. 437, 440 (1981); Sheeran v. Nationwide Mut. Ins. Co., Inc., 80 N.J. 548, 556 (1979). Because we find the waiver provision is far from clear, we must rely on other rules of statutory interpretation. The Court has emphasized repeatedly that "[i]n the interpretation of a statute our overriding goal has consistently been to determine the Legislature's intent." Roig v. Kelsey, 135 N.J. 500, 515 (1994); accord Lesniak v. Budzash, 133 N.J. 1, 8 (1993).
Several other canons of statutory construction also inform our decision. Where the Legislature's intent is remedial, a court should construe a statute liberally. E.g., Brookins v. Murray, 131 N.J. 141, 149 (1993); Torres v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974). Statutes in derogation of the common law, however, are to be construed narrowly. Oswin v. Shaw, 129 N.J. 290, 310 (1992). Exceptions to a statutory scheme also should be construed narrowly. Service Armament Co. v. Hyland, 70 N.J. 550, 558-59 (1976); Hovbilt, Inc. v. Township of Howell, 263 N.J. Super. 567, 570 (App. Div. 1993), aff'd, 138 N.J. 598 (1994). Furthermore, a court should avoid a literal interpretation of individual statutory terms or provisions that would be inconsistent with the overall purpose of the statute. E.g., Suter v. San Angelo Foundry & Mach. Co., 81 N.J. 150, 160 (1979); Loboda v. Township of Clark, 40 N.J. 424, 435 (l963); Wene v. Meyner, 13 N.J. 185, 197 (1953).
We find the doctrine of probable legislative intent a more reliable guide than the overly literal reading of the waiver provision urged by defendants. See Amerada Hess Corp. v. Director, Div. of Taxation, 107 N.J. 307, 322 (1987), aff'd, 490 U.S. 66, 109 S. Ct. 1617, 104 L. Ed.2d 58 (1989). A literal reading of the statute should not be invoked because we are thoroughly convinced the Legislature did not intend to penalize former employees by forcing them to choose between a CEPA claim and other legitimate claims that are substantially, if not totally, independent of the retaliatory discharge claim. See State v. Haliski, 140 N.J. 1, 16 (1995); State v. State Troopers Fraternal Ass'n, 134 N.J. 393, 417-18 (1993).
One purpose of CEPA is to make it easier, not harder, for a former employee to prevail on a retaliatory discharge claim by allowing the employee to report the employer's illegal conduct to a supervisor or public body. The Legislature obviously intended to provide a comprehensive and effective cause of action for retaliatory discharge. The passage of such remedial protection would be weakened or compromised if it would foreclose a legitimate cause of action arising from the same underlying
factual circumstances but, nonetheless, not include or involve
the retaliatory conduct that is essential to the CEPA claim. It
would be paradoxical to interpret the waiver provision literally
to hold that although the employee has claims independent of a
time-barred CEPA claim, the mere filing of the CEPA claim
requires dismissal of all other claims. We reject defendant's
literal reading of the waiver provision because, as Judge Learned
Hand said, "[t]here is no surer way to misread any document than
to read it literally." Guiseppi v. Walling,
144 F.2d 608, 624
(2d Cir. 1944), aff'd sub nom., Gemsco, Inc. v. Walling,
324 U.S. 244,
65 S. Ct. 605,
89 L. Ed. 921 (1945).
Furthermore, CEPA is remedial legislation and should be
viewed "as a reaffirmation of this state's repugnance to an
employer's retaliation against an employee who has done nothing
more than assert statutory rights and protections and a
recognition by the Legislature of a preexisting common-law tort
cause of action for such retaliatory discharge." LePore v.
National Tool & Mfg. Co.,
115 N.J. 226, 228 (quoting LePore v.
National Tool & Mfg. Co.,
224 N.J. Super. 463, 470 (App. Div.
1988)), cert. denied,
493 U.S. 954,
110 S. Ct. 366,
107 L. Ed.2d 353 (1989).
CEPA also constitutes a partial codification of the prior
common-law prohibition against the retaliatory discharge of at-will employees, principally articulated in Pierce v. Ortho
Pharmaceutical Corp.,
84 N.J. 58 (1980), and implemented in
subsequent cases. See Maher v. New Jersey Transit Rail
Operations,
125 N.J. 455, 472 (1991); Young, supra, 275 N.J.
Super. at 234; Parker v. M & T Chemicals, Inc.,
236 N.J. Super. 451, 457 (App. Div. 1989). In addition, the common-law cause of
action for retaliatory discharge of an employee covered by a
collective-bargaining agreement, LePore, supra, 224 N.J. Super.
at 472-73, has been codified by CEPA by broadly defining
"employee" to include union and nonunion employees alike.
N.J.S.A. 34:19-2(b). Thus, any statutory constriction of common-law remedies compels us to construe the waiver provision
narrowly.
Although the enactment of CEPA did not abolish the Pierce common-law cause of action, Abbamont v. Piscataway Twp. Bd. of Educ., 238 N.J. Super. 603, 605 (App. Div. 1990), aff'd, 138 N.J. 405 (1994), we are persuaded that the Legislature intended that the N.J.S.A. 34:19-8 waiver prevent an employee from pursuing both statutory and common-law retaliatory discharge causes of action. It thus sought to curtail essentially cumulative remedial actions. The CEPA cause of action benefits the employee because notification or threatened notification to a public body or a supervisor of illegal employer conduct is sufficient. N.J.S.A. 34:19-3a. Under Pierce, however, there must be actual notification to a governmental body of illegal employer conduct. Because CEPA defines the cause of action and concomitantly requires the waiver of Pierce and LePore-type claims, it
indirectly inhibits the expansion of the common-law cause of
action and, in that limited sense, is in derogation of the common
law. See Shaner v. Horizon Bancorp.,
116 N.J. 433, 454 (1989).
The internal structure of the waiver provision also supports
its narrow application. It states clearly, at the beginning,
that nothing in CEPA shall affect the legal rights, privileges
and remedies of an employee. N.J.S.A. 34:19-8. It then creates
an exception to the protected rights, privileges and remedies,
that CEPA does not affect. The exception provides that "the
institution of an action in accordance with this act shall be
deemed a waiver of the rights and remedies available under any
other contract, collective bargaining agreement, State law, rule
or regulation or under the common law." N.J.S.A. 34:19-8.
The Legislature was undoubtedly aware of the Court's
holdings in Pierce as well as the Court's invitation to the
Legislature to address the problem of retaliatory discharge of
employees. Pierce held that an at-will employee who has been
terminated in retaliation for doing or refusing to do an act
protected by "a clear mandate of public policy" has a common-law
cause of action against the employer that sounds in contract,
tort or both. Pierce, supra, 84 N.J. at 72. The sources of the
public policy Pierce recognized "include legislation;
administrative rules, regulations or decisions; and judicial
decisions" as well as a professional code of ethics in certain
instances. Ibid. In defining the Pierce cause of action, the
Court sent a strong message to the legislative and executive
branches of government by stating: "Absent legislation, the
judiciary must define the cause of action in case-by-case
determinations." Ibid.
Again in Lally v. Copygraphics,
85 N.J. 668, 670-71 (1981),
the Court suggested the need for legislative intervention in the
area of retaliatory discharge of employees. There the Court held
that despite the existence of a statutorily created
administrative remedy for terminating an employee for filing a
workers' compensation claim, see N.J.S.A. 34:15-39.1 to -39.2, a
judicial cause of action was not foreclosed. The Court invited
legislative consideration of retaliatory-discharge claims by
stating: "If the Legislature had wanted to foreclose a judicial
cause of action, it would have done so expressly." Lally, supra,
85 N.J. at 671.
We believe the Legislature intended for the waiver to mean
that a former employee forfeits his or her common-law
retaliatory-discharge cause of action when he or she "institutes"
a CEPA cause of action. The Legislature recognized, by the
language it used in the waiver exception, as did this Court in
Pierce, that the sources of law where a mandate of public policy
may be found are expansive. The Pierce cause of action is based
on contract or tort common-law principles or both. As an
exception to the general remedial scheme of CEPA, the waiver
provision must be construed narrowly.
We hold that the waiver exception means, for purposes of
this case, that once a CEPA claim is "instituted," any rights or
claims for retaliatory discharge based on a contract of
employment; collective bargaining agreement; State law, whether
its origin is the Legislature, the courts, the common law or
rules of court; or regulations or decisions based on statutory
authority, are all waived. The waiver exception contains a list
of sources of law that may provide a bundle of rights protecting
employees from retaliatory discharge. Parallel claims based on
those rights, privileges and remedies are waived because they
represent multiple or duplicative claims based on retaliatory
discharge.
Construing CEPA's waiver clause consistent with the
Legislature's inferred intent, and consistent with the expressed
remedial purpose of the entire CEPA statute, convinces us that
the waiver provision applies only to those causes of action that
require a finding of retaliatory conduct that is actionable under
CEPA. The waiver exception does not apply to those causes of
action that are substantially independent of the CEPA claim.
Furthermore, our interpretation of the waiver exception is consistent with the holdings of other courts that the Appellate Division also found persuasive. Casper v. Paine Webber Group, Inc., 787 F. Supp. 1480, 1509 (D.N.J. 1992), and Flaherty v. The Enclave, 255 N.J. Super. 407, 413-14 (Law Div. 1992), are examples.
In Flaherty, the plaintiff sued after his position as security director for the defendant condominium association was
terminated. Flaherty, supra, 255 N.J. Super. at 410.
Plaintiff's complaint alleged that he was terminated wrongfully
after exposing an association board member's "wrongdoing." Id.
at 413. In addition to a CEPA claim, the plaintiff included
various common-law claims.
The court surmised that CEPA "was adopted to prohibit
retaliatory action by an employer against an employee who
discloses illegal activities on the part of the employer." Id.
at 411. Noting that laws should be construed in accordance with
legislative intent, it concluded that
[a] logical reading of CEPA would . . . be
that the "rights and remedies" referred to in
the [waiver clause] relate specifically to
the rights and remedies available if an
employee is wrongfully discharged as a result
of his or her disclosure activities. It
should not be read, however, to mean all
rights and remedies which arise out of the
employment relationship between plaintiff and
defendant.
[Id. at 412.]
The court concluded that plaintiff's claim for pre-termination compensation was not waived because it would be
"illogical to assume that the Legislature intended plaintiff to
waive his rights for compensation independent of proving a cause
of action under CEPA." Id. at 413. In addition, the court found
that plaintiff's wife's per quod defamation claim was not waived
because she could not file a CEPA claim. Id. at 414.
Similarly, the United States District Court for the District
of New Jersey determined in Casper, supra, that only those claims
directly alleging retaliatory discharge were waived by
plaintiff's decision to file a CEPA claim. 787 F. Supp. at 1509-10. There the court found the plaintiff's claim under the Equal
Pay Act (EPA),
29 U.S.C.A.
§206, and the New Jersey Law Against
Discrimination (NJLAD), N.J.S.A. 10:5-1 to -42, were not waived
by alleging a violation of CEPA because retaliatory discharge was
not an element of proof required to support those claims. The
plaintiff based her NJLAD and EPA claims on gender bias,
contending she was paid less than her male co-workers. Her CEPA
claim, however, was based on a memorandum that implied she would
blow the whistle on the employer's actions. Ibid. Accord
Catalane v. Gilian Instrument Corp.,
271 N.J. Super. 476, 493
(App. Div.), certif. denied,
136 N.J. 298 (1994).
Significantly, the waiver provision in CEPA is virtually
identical to the waiver provision in New York's Whistleblower
Law, enacted in 1984. N.Y. Labor Law § 740.7 (McKinney 1988).
The only case construing New York's waiver provision is Kraus v.
Brandstetter,
586 N.Y.S.2d 269, 270 (N.Y. App. Div. 1992). The
court concluded that the "waiver only applies to those causes of
action relating to retaliatory discharge. In this case,
plaintiffs set forth causes of action sounding in tort which are
separate and independent from the cause of action to recover
damages for retaliatory termination of employment." Id.
We agree with the Appellate Division that plaintiff's claim for severance pay allegedly due and owing him under Schering's personnel policies pleaded in Count II and his common-law damages
claims under theories of defamation, slander and malicious
interference with prospective employment opportunities pleaded in
Count III do not fall within the waiver provision. Young, supra,
275 N.J. Super. at 238. Those claims are substantially unrelated
to the retaliatory discharge claim as they "do not resemble the
alleged CEPA violations and require different proofs than those
needed to substantiate the CEPA claim." Ibid.
Plaintiff's severance pay claim is a contractual cause of
action recognized in Woolley v. Hoffman-La Roche, Inc.,
99 N.J. 284, modified,
101 N.J. 10 (1985), and is independent of the
retaliatory discharge claim.
We agree with the Appellate Division's factual analysis in
determining why the Count III claims are not waived.
The claims of defamation, slander and
malicious interference with prospective
employment opportunities require different
proofs than those required to sustain the
CEPA claim and do not require a showing of
retaliation as does a CEPA claim. Plaintiff
will have to show the elements of defamation,
slander and malicious interference by Dr.
Brokken without regard to whether those
actions were done in retaliation for
plaintiff's disagreement with Schering's and
Dr. Brokken's research decisions. Even if
plaintiff can establish that Dr. Brokken
defamed and slandered him, or that Dr.
Brokken interfered with his prospective
employment opportunities, such conduct will
not constitute a violation of CEPA.
Additionally, Dr. Brokken's claimed interference with plaintiff's business opportunities cannot be considered a retaliatory action under CEPA because the Act covers action taken only with respect to the employment relationship established between the employer and employee. The language "other adverse employment action taken
against an employee in the terms and
conditions of employment" in N.J.S.A. 34:19-2e (emphasis added) does not include actions
which might affect an employment
relationship, or potential employment
relationship, between the employee and a
third party.
[Young, supra, 275 N.J. Super. at 239-40.]
The waiver provision raises several complex questions as to
the extent of its application and its interaction with other
sources of law.
Although the waiver provision does not use language of
estoppel, "institution of an action" may be susceptible of
meaning something other than the filing of a complaint as
contemplated by Rule 4:2-2. The meaning of "institution of an
action" could conceivably contemplate an election of remedies
with restrictions in which the election is not considered to have
been made until discovery is complete or the time of a pretrial
conference contemplated by Rule 4:25-1. Another question is
whether the statutory waiver is applicable if the CEPA claim is
withdrawn or otherwise concluded prior to judgment on the merits.
Cases involving mixed motives for retaliatory discharge, such as
racial, age and gender discrimination present additional
problems. Still another area involves cases implicating federal
laws, such as the Taft-Hartley Act,
29 U.S.C.A.
§§173(d) and
185, and the Federal Arbitration Act,
9 U.S.C.A.
§§1 to 15. See
Bleumer v. Parkway Ins. Co.,
277 N.J. Super. 378 (Law Div. 1994);
see also Maher, supra, 125 N.J. at 472-75 (holding that CEPA
claim was not preempted by the Railway Labor Act). Those and
other significant questions are not decided in this case.
Plaintiff's petition for certification sought to review some of
those issues, but it was denied. For present purposes, we
determine only that the Legislature did not intend the waiver
provision to apply to causes of action that are substantially
independent of the CEPA cause of action.
The judgment of the Appellate Division is affirmed.
Chief Justice Wilentz and Justices Handler, Pollock, O'Hern,
and Stein join in Justice Coleman's opinion. Justice Garibaldi
did not participate.
NO. A-113 SEPTEMBER TERM 1994
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
DR. WILLIAM B. YOUNG,
Plaintiff-Respondent,
v.
SCHERING CORPORATION AND
DR. EDWIN S. BROKKEN,
Defendants-Appellants.
DECIDED July 11, 1995
Chief Justice Wilentz PRESIDING
OPINION BY Justice Coleman
CONCURRING OPINION BY
DISSENTING OPINION BY