Lax Adherence to Internal Company Policy Supports Cause of Action Under New Jersey’s Whistleblower Law

The Conscientious Employee Protection Act (CEPA), New Jersey’s whistleblower law, prohibits all public and private employers from retaliating against employees who disclose, object to, or refuse to participate in certain actions that the employees reasonably believe are either illegal or in violation of public policy. On March 7, 2019, the New Jersey Appellate Division in Cotto v. Newark Public Schools found that Newark Public School’s (NPS) alleged failure to adhere to its own internal policy was enough to support an employee’s cause of action under CEPA.

Facts

In 2009, Jose Cotto, a first-year World Language Teacher, alleged that one of his 8th grade special education students threatened to kill him, pointed a hairbrush at him “like a gun while miming pulling the trigger,” and told him he was calling his friends to assault him. Cotto believed the student was gang-affiliated, and had the student escorted out of his classroom. A clerk who worked in the school office called security and the Newark Police Department on Cotto’s behalf. Cotto was interviewed and provided a statement to the Newark Police Department. When the student was returned to his classroom, Cotto was disciplined by NPS for conduct unbecoming a teacher, for putting the student’s life in jeopardy and acting unprofessionally.

Cotto was terminated from his employment shortly thereafter for “insufficient” review ratings. Cotto was given the lowest possible ranking on his last evaluation which contradicted earlier evaluations given by his supervisor. Cotto appealed his termination to the Newark Board of Education, but the appeal was denied. Cotto thereafter filed a lawsuit under CEPA, alleging he “blew the whistle” on NPS’s illegal conduct by failing to address the student’s insubordination as required by the NPS’s written policies.

NPS’s Internal Policies

NPS had enacted two policies that the Appellate Division found persuasive to support Cotto’s CEPA claim. First, NPS’s Uniform State Memorandum of Agreement Between Education and Law Enforcement Officials (USM), addressed the school district’s relationship with the Newark Police Department. The USM, developed pursuant to the New Jersey Administrative Code, required school officials to report genuine threats to the police department. In addition, the Student Discipline Policy outlined that “acts which result in violence to another person or property or which pose a direct threat to the safety of others in the school,” as the student was alleged to have threatened here, required administrators to follow its own procedures and disciplinary options or responses.

The Student Discipline Policy required NPS to verify the offense, confer with the staff involved, and meet with the student. Thereafter, the administrators must immediately remove the student from school and notify the student’s parents. If the infraction constitutes a criminal offense, as it did here, the school must contact law enforcement.

Cotto asserted that the student’s return to his classroom and the failure to report the threat to the police violated NPS’s USM and Student Discipline Policy.

The Appellate Division’s Decision

The Appellate Division agreed with Cotto and found that it was reasonable for a jury to find that Cotto’s non-renewal of his contract was an adverse employment action caused by Cotto’s report to the police. Moreover, the Court found that Cotto clearly identified a clear mandate of public policy (public school safety) expressed in a law (New Jersey Public Employees' Occupational Safety and Health Act), and a rule or regulation promulgated pursuant to law (the Student Discipline Policy and USM), and set forth facts sufficient to demonstrate he reasonably believed NPS’s conduct was incompatible therewith. Thus, based upon those facts, a reasonable jury could conclude that Cotto objected to NPS’s conduct and thus could meet his prima facie burden to show he engaged in whistle-blowing activity protected by CEPA.

Bottom Line

This case should serve as an important cautionary tale that, at times, courts are persuaded that an employer that disregards its own internal policy has rendered itself in hot water. This is one of the many reasons it is imperative to work closely with Human Resources and legal counsel to administer discipline consistently. In addition, employers in industries that are regulated pursuant to any state or federal law, regulation, or code, must strictly enforce those policies.

While the plain meaning of CEPA was to protect a whistleblower employee that reasonably believes his or her employer has broken a law, rule or regulation, this decision expands the available sources for an employee to create a viable cause of action. Although internal policies do not typically support an employee’s CEPA claim, here the court was persuaded that the policy was required by law, and therefore essentially rendered it a law capable of supporting a CEPA claim.

All employers should work closely with legal counsel to ensure policies are in compliance with and accurately reflect the law, and that policies are administered consistently.