Is An Employee’s Good Faith Complaint To A Corporate Ethics Hotline Protected Against Retaliation?

UPDATED WHISTLEBLOWER PROTECTION IMAGE 11-20-2015

Certain federal laws call for corporate employers to establish Ethics & Compliance programs.  These programs typically promise to investigate and not to retaliate against employees who make internal ethics complaints in good faith.  However, courts usually protect employees from retaliation only if the substance of their complaint is “protected” under federal or state whistleblower protection laws.  Can anything be done about this apparent gap in anti-retaliation protection?

The answer can differ based on which anti-retaliation law is relied upon.  In Kasten v. St. Gobain Performance Plastics Corp., 131 S. Ct. 1325 (2011), the U.S. Supreme Court broadly construed the anti-retaliation protections of the Fair Labor Standards Act.  The Court held that oral complaints under the FLSA were protected so long as “a reasonable objective person would have understood the employee” to have “put the employer on notice that [the] employee is asserting statutory rights under the [FLSA].”  Id. at 1335.

Under New Jersey’s “CEPA” Whistleblower Protection statute, N.J.S.A. 34:19-1 et seq., our State Supreme Court imposed a fairly strict standard of conduct in a case involving healthcare patient safety.  Such a whistleblower must point to violation of a measurable regulatory standard in order to be protected from retaliation.  Heitzman v. Bridgeway, Inc., 218 N.J. 8, 35 (2014).  This follows a countervailing State policy not to protect “at will” employees’ complaints from retaliation unless they raise a “clear mandate of public policy.” As the Court stated in Tartaglia v. UBS Paine Webber, Inc., 197 N.J. 81, 109 (2008):

We do not intend to suggest that we will elevate an employee’s expression of purely personal viewpoints to a level that will preclude termination.  An employer remains free to terminate an at-will employee who engages in grousing or complaining about matters falling short of a “clear mandate of public policy” or who otherwise interferes with the ordinary operation of the workplace by expressions of personal views on matters of no real substance.  Baseless complaints or expressions of purely personal views about the meaning of public policies will not meet the test for a “clear mandate” regardless of the manner or mode in which they are voiced. (emphasis added)

Even if no clear mandate of State public policy is invoked, federal laws mandating establishment of corporate Ethics & Compliance programs should be reviewed for possible anti-retaliation protections.  And, under State law, grounds to enforce an employer’s promise not to retaliate should be evaluated as claims for breach of implied contract (absent a clear and prominent disclaimer) and promissory estoppel.

Stay tuned for future blog posts as we continue to explore courts’ protection of whistleblower complaints.