By Elizabeth Zuckerman, Esq.

The Conscientious Employee Protections Act (“CEPA”), at N.J.S.A. 34:19-2e, defines “retaliatory action” as “the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.” Thus, the statutory language specifies that conduct less concrete than “discharge, suspension or demotion” may constitute retaliatory action. But what type of action short of discharge, suspension or demotion is necessary to establish retaliation in a CEPA case? Particularly in light of the Supreme Court’s recent decision inBurlington Northern & Santa Fe Railway Co. V. White, 126 S.Ct. 2405 (2006), it should now be clear that a claim arises under CEPA when an employee, in retaliation for “blowing the whistle,” is subjected to ahostile work environment such that a reasonable person could be deterred from engaging in the whistle-blowing activity.

The issue of what constitutes adverse employment action for purposes of pursuing a retaliation claim arises in a variety of settings including under the LAD, CEPA, Title VII and the First Amendment. Currently, there is no uniform definition of “adverse employment action”, nor any cogent explanation as to why the phrase should be treated differently depending upon the statutory framework encompassing the retaliation claim.

In Bostic v. AT&T of the Virgin Islands, 166 F.Supp.2d 350 (D.V.I. 2001), Judge Orlofsky addressed the very issue of what constitutes “adverse employment action” and persuasively cautioned against incorporating a “materially adverse” standard. Judge Orlofsky noted that “[t]he EEOC and the Third Circuit have taken different views on what can constitute an “adverse” employment action.” Id. at 360. The Third Circuit requires an employer’s reprisal to be “materially adverse”, while the EEOC explicitly rejects that standard, finding unlawful “any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter the charging party or others from engaging in protected activity.” Ibid. The Court went on,

Nor is the difference between the two standards merely semantic. [citation omitted] It is easy to imagine scenarios — and Bostic’s claim is plausibly one of them — in which a reasonable person might be deterred from engaging in protected activity even in the absence of serious and tangible employment consequences.

Id. at 360. By way of example of such retaliation, the Court mentioned the putting of an employee under surveillance after he files a claim (one of the forms of retaliation alleged by Cokus).

Judge Orlofsky also noted a policy reason for adopting the EEOC’s standard:

The “materially adverse” standard may be sensible for discrimination claims, where the main harm is to the individual bringing the complaint. A retaliating employer, however, can effectively silence the complaints of many future employees, each of whom might be the victims of “materially adverse” discrimination. Thus, the harm §2000e-3(a) guards against is not discrimination; it is intimidation.

Id. at 361. As the Court noted:

Today’s psychologically and sociologically sophisticated employers know many ways to control and shape a workforce beyond the relatively blunt instruments of firing and demotion. [citations omitted] To ignore the fact that an employer can manipulate seemingly trivial features of the workplace, such as an employee’s sense of teamwork and group approbation, to create highly effective barriers to complaint is to blink at reality.

Id. at 361-362. Unfortunately, Judge Orlofsky ultimately felt constrained to follow Third Circuit precedent.

The case of Kadetsky v. Egg Harbor Township Board of Education, et al, 82 F.Supp.2d 327 (D.N.J. 2000), is a perfect example of the unsettled (and unsettling) approach to retaliation claims. There, the District Court distinguished between the adverse employment action needed in a First Amendment retaliation claim and the adverse employment action needed in a CEPA claim. For the First Amendment claim, the Court recognized:

While it is true that the majority of cases involving First Amendment retaliation involve an actual discharge, transfer, demotion or like action, the case law indicates that “retaliatory harassment could, under certain circumstances, constitute an ‘adverse employment action’ which is actionable under the rubric of a First Amendment cause of action”. Id. at 337.

The test is whether the retaliatory harassment is “of such magnitude as to ‘deter a person of ordinary firmness from the exercise of his or her First Amendment rights’.” Ibid.

However, the Kadetsky court applied a wholly different standard to plaintiff’s CEPA count. The Court relied on Keelan v. Bell Communications Research, 289 N.J. Super. 531 (App. Div. 1996) for the notion that a “completed action” is necessary to state a claim for retaliation. Kadetsky at 340. Although the Court understood that something less than “discharge, suspension or demotion” could constitute adverse employment action under CEPA, it dismissed plaintiff’s CEPA claim because it found plaintiff was not subject to any “lasting prejudice”.

It is illogical to take the same phrase — “adverse employment action” — and the same set of facts, and find retaliation under one theory but not under another. If the employee is subjected to retaliatory harassment such that, if unremedied, he or she would be deterred from blowing the whistle, a cause of action under CEPA must arise.

In Baliko v. International Union of Operation Engineers, Local 825, 322 N.J. Super. 261 (App. Div. 1999), in the context of the NJLAD, defendants argued that since plaintiffs lost no days of work, were not demoted and were not denied promotions, they could not satisfy the fourth prong of the Lehmann v. Toys ‘R’ Us test, i.e. that “the conditions of employment are altered and the working environment is hostile or abusive”. Id. at 272. In rejecting that argument, the Appellate Division quoted the New Jersey Supreme Court’s conclusion in Taylor v. Metzger, 152 N.J. 490 (1998): “evidence of specific, tangible adverse changes in the work environment is not required in order to state a LAD racial harassment claim. ‘[A] loss of a tangible job benefit is not necessary since the harassment itself affects the terms or conditions of employment’.” Id. at 507, (citation omitted). The Appellate Division further buttressed its conclusion with reference to the Supreme Court’s ruling in Faragher v. Boca Raton, 118 S.Ct. 2275, 2293 (1998), in which the Court held a claimant need not prove the harassment culminated in “a tangible employment action, such as discharge, demotion or undesirable reassignment”, in order to state a claim under Title VII. Why, then, should more be needed to establish a claim under CEPA?

In Sunkett v. Misci, 183 F.Supp.2d 691 (D.N.J. 2002), the District Court identified what it believed to be the differences between retaliation claims under the First Amendment, CEPA and NJLAD. On the issue of what constitutes retaliation under CEPA, the Court first looked to the definition of retaliatory conduct under CEPA. Noting the second half of that definition references “terms and conditions of employment”, and recognizing the same phrase is used in Title VII, the Court applied the Third Circuit’s requirement of a “materially adverse” act by the employer, which it understood to be “a considerably more demanding standard than for free speech.” Id. at 716.¹ Thus, the Court found the incidents which supported plaintiffs’ free speech claim may not suffice to defeat summary judgment under CEPA. However, the Court found that, with certain exceptions not relevant here, “an NJLAD claim is identical to a free speech claim”.Id. at 717.

The above cases point out the inconsistencies surrounding retaliation jurisprudence. The same inconsistencies among the Federal Circuit courts persuaded the United States Supreme Court to grantcertiorari in Burlington Northern & Santa Fe Railway Co. V. White, 126 S.Ct. 2405 (2006). In Burlington, Sheila White brought a Title VII action, claiming sex discrimination and retaliation. The retaliation claimed by Ms. White was that her employer changed her job responsibilities and suspended her without pay for 37 days, although she was ultimately reinstated and awarded back-pay. The Court found that the anti-retaliation provision of Title VII, unlike the substantive provision of the statute which prohibits discrimination, does not contain a requirement that the retaliation affect the terms and conditions of employment. Thus, the Court concluded that the “scope of the anti-retaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm.” Id. at 2414. The Court went on to address the question of how harmful the actions must be to constitute retaliation. It held that a plaintiff must show that a “reasonable employee” would have found the challenged action “materially adverse”.Id. at 2415. However, the Court defined “materially adverse” as conduct that might well have “dissuaded a reasonable worker from making or supporting a charge of discrimination.” Ibid., quoting Rochon v. Gonzales, 438 F.3d 1211, 1219 (C.A.D.C. 2006).

Using the “reasonable person” and “materially adverse” standard, the Court affirmed the verdict in favor of White on her retaliation claim, even though White suffered no discharge, suspension, demotion or ultimate loss of pay. The Court noted that some job responsibilities are less desirable than others and a good way to discourage an employee from bringing discrimination charges is to require her to spend more time doing less desirable duties. The Court also found that, although White eventually received backpay, she and her family had to live without income for 37 days and were forced to suffer the uncertainty of not knowing when, if ever, White could return to work. In an interesting concurring opinion, Justice Alito disagreed with the majority’s ruling that the retaliation need not affect the terms and conditions of employment, arguing instead that a retaliation claim under Title VII requires a showing of an “adverse employment action”. But, Justice Alito agreed that the reassignment and suspension without pay, even though eventually remedied, were sufficient to satisfy the materially adverse employment action test. Id. at 2421-2422.

The Burlington Northern case should set the record straight once and for all that retaliation can include far more than “completed action”. Contra Keelan v. Bell Communications Research, 289 N.J. Super. 531, 539 (App. Div. 1996). Nor should it any longer matter whether the retaliatory conduct has an effect on compensation or job rank. Contra Hancock v. Borough of Oaklyn, 347 N.J. Super. 350, 360 (App. Div. 2002), certif. dismissed 177 N.J. 217 (2003); Zamboni v. Stamler, 847 F.2d 73, 82 (3d Cir. 1987), cert. den. 488 U.S. 899 (1988). And adverse employment action can be found even when the employer rescinds a retaliatory action and makes the employee whole. ContraBeasley v. Passaic County, 377 N.J. Super. 585, 607 (App. Div. 2005). Rather, as the Appellate Division realized in Nardello v. Township of Voorhees, 377 N.J. Super. 428, 438 (App. Div. 2005) (quoting Green v. Jersey City Bd. of Educ., 177 N.J. 434, 448 (2003): “‘Many separate but relatively minor instances of behavior directed against an employee that may not be actionable individually but that combine to make up a pattern of retaliatory conduct’ may constitute an adverse employment action”.

Perhaps Sheila White in the Burlington Northern case can even provide some satisfaction, however belatedly, to Kathy Cokus. See Cokus v. Bristol Myers Squibb Co., 262 N.J. Super. 366 (Law Div. 2002), aff’d 362 N.J. Super. 245 (App. Div. 2003), certif. den. 178 N.J. 32 (2003). Kathy Cokus had a stellar work history at Bristol-Myers Squibb Co. (“BMS”) for more than 20 years until she reported financial improprieties occurring in her department. Upon learning of her participation in an internal investigation (that ultimately would lead to discharges, demotions and discipline of Ms. Cokus’ supervisors and co-workers), Ms. Cokus was shunned, spied on and threatened with termination. Her supervisor issued her a poor performance evaluation and instructed their shared secretary to avoid contact with Ms. Cokus. After nearly four months of hostile treatment, Ms. Cokus suffered a mental breakdown from which she never recovered. However, in assessing whether defendants’ conduct was “severe or pervasive”, the trial court refused to consider the cumulative impact of the hostile treatment by plaintiff’s co-workers and supervisors. Thus the trial court dismissed much of the hostile treatment because the conduct, viewed individually, was not unlawful.

The Court’s holding in Cokus misapplied Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587 (1993) and is at odds with the trial court’s ruling in Shepherd v. Hunterdon Developmental Center, 174 N.J. 1 (2002). InShepherd, the New Jersey Supreme Court considered whether plaintiffs’ retaliation claim under the New Jersey Law Against Discrimination (“LAD”) was sufficient to withstand summary judgment where the plaintiff was subjected to of a hostile work environment. Id. at 24. Applying the four-part Lehmann test, the Court surveyed the “contours” of the “severe or pervasive” requirement. Ibid. It stated:

Considering those contours here, many of plaintiffs’ allegations, standing alone, would be insufficient to state a cause of action. A supervisor’s coldness, lack of civility, or failure to provide employees with Christmas gifts or party invitations, although inhospitable and boorish, cannot qualify as “severe or pervasive” conduct under the LAD. . . . Similarly, without more, an employer’s filing of a disciplinary action cannot form the basis of a LAD complaint. . . . Viewed cumulatively, however, the acts alleged by plaintiffs are sufficient to present a hostile work environment claim to a jury. Id. at 25-26 (emphasis added).

The Cokus court also altered the Lehmann test in another important respect by requiring Cokus to show a “material change” in the conditions of her employment. The Lehmann test requires plaintiff to prove that a reasonable person would believe the conditions of employment have been altered and the working environment had become hostile or abusive. Lehmann v. Toys “R” Us, Inc., 132 N.J. 587, 603-04 (1993);Shepherd v. Hunterdon Developmental Center, 174 N.J. 1, 24 (2002). By adding the “material change” requirement, the Cokus court imposed too high a burden on plaintiff. In essence, although the court recognized that hostile work environment could be an adverse employment action under CEPA, it imposed a different standard for establishing hostile work environment under CEPA than under the LAD.

CEPA is remedial legislation which should be construed liberally to achieve its important social goal. See,e.g., Barratt v. Cushman & Wakefield of New Jersey, Inc., 144 N.J. 120, 126 (1996); Abbamont v. Board of Educ., 138 N.J. 405, 431 (1994). Remedial statues must be interpreted to give words the most extensive meaning to which they are susceptible. Metpark Inc. v. Kensharper, 206 N.J. Super. 151, 156 (Law Div. 1985). “Like LAD, CEPA promotes a strong public policy of the State: We view this legislation 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. . .’ .” Abbamont, supra at 431, quoting Lepore v. National Tool & Mfg. Co., 115 N.J. 226, 228.

A hostile work environment is, by its very definition, an accumulation of incidents over time which by their cumulative effect make it unreasonable for the victim to remain in the work environment. Caggiano v. Fontoura, 354 N.J. Super. 111, 126 (App. Div. 2002); see also Wilson v. Wal-Mart Stores, 158 N.J. 263, 272 (1999) (the accumulation of acts and conduct transforms the individual incidents of harassment into an actionable tort). For that reason, the New Jersey Supreme Court has mandated that trial courts consider the cumulative effect of incidents of harassment on the victim in determining whether a hostile work environment exists. Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587, 607 (1993); Shepherd v. Hunterdon Developmental Center, 174 N.J. 1 (2002); see also Cardenas v. Massey, 269 F.3d 251, 263 (3^rd Cir. 2001) (“the New Jersey Supreme Court requires a cumulative analysis of the incidents comprising an alleged hostile work environment”). Because retaliatory harassment affects the terms and conditions of employment, and because it may well deter a reasonable person from engaging in the protected conduct, it should be sufficient to state a claim whether under CEPA, NJLAD, Title VII or the First Amendment.