First, retaliation is a broad term; you need not fire an employee to have retaliated against him. Retaliation also includes instances in which an employee is skipped for promotion, harassed, or otherwise mistreated because he blew the whistle.

Second, the term "employee" is very broad in the CEPA context. CEPA defines an "employee" as "any individual who performs services for and under the control and direction of an employee for wages or other remuneration." The NJ courts have construed this definition broadly, extending CEPA protection to independent contractors. The court has used a twelve factor test in determining whether the complainant was an employee or independent contractor but three considerations were found to be most crucial in the determination: (1) employer control; (2) the worker's economic dependence on the work relationship; and (3) the degree to which there has been a functional integration of the employer's business with that of the person doing the work at issue.

Third, the protection against retaliatory action provided by CEPA does not apply where an employee makes disclosure to a public body unless the employee first brings the activity, policy, or practice in violation of a law, rule, or regulation to the attention of a supervisor or employer, by written notice, and, second, affords the employer a reasonable opportunity to correct the activity, policy, or practice.

• Note, however, that the written notice requirement is waved where the employee is reasonably certain that the supervisor already knows about the violation or if the employee reasonable fears physical harm and the situation is an emergency, meaning that the employer's conduct was illegal or violated public policy, rather than errors in judgment by the employer.

Now, having some background, consider the following:

Fearing skin breakdown, a well respected and highly regarded hospital nurse complained, for 4 years, that the hospital staff improperly used diapers on bed bound and wheelchair residents who were incontinent. After his complaints when unanswered by his superiors, he complained to the New Jersey Department of Health. Subsequently, the nurse was fired for "substandard nursing practices as it pertains to charting the dispensing of narcotics", which the nurse admits to. However, the nurse contents that his firing was causally related to his whistleblowing activity as opposed to his poor charting; he further claimed that his disclosure was a protected activity under CEPA.

The nurse must establish the following four elements in order to make a successful CEPA claim:

1. He reasonably believed that his employer's conduct was violating a law, rule, regulation or a clear mandate of public policy;

2. He performed a whistleblowing activity;

3. An adverse employment action was taken against him; and

4. A causal connection exists between the whistleblowing activity and the adverse employment action.

Has the nurse made a successful CEPA case? Yes. There is a rational basis for a jury to conclude that the nursing home's reason for firing the nurse was merely a pretext, rather than a lawful, legitimate and non-retaliatory reason. The nurse need only show that his protected whistleblowing activity was a determinative or substantial motivating factor in the hospital's decision to terminate his employment.

Where a CEPA violation is found, the employee's potential relief is as follows:

• Injunction

• Reinstatement of the same or equivalent position

• Reinstatement of full fringe benefits and seniority rights

• Compensation for all lost wages

• Benefits and other remuneration

• Payment of the employee's reasonable costs and attorney's fees

What are the penalties for non-compliance?

Failure to comply with CEPA could result in a civil fine up to $10,000 for the first violation and up to $20,000 for any subsequent violations as well as unlimited punitive damages to patients, employees, and further employees caused by the activities, policies, or practices disclosed by the employee.

Bottom Line:

Follow your compliance program, which establishes procedures for:

• Corporate responsibility standards and a code of conduct to employees at all levels

• Establishes procedures for receiving and responding to complaints in a timely manner

• Encourages employees to come forward and lodge (even anonymous) complaints

• Suggests appropriate remedial action if retaliation occurs

If your facility does not have a comprehensive compliance program and you would like further information on how to establish one please contact one of our attorneys by calling the office at 609 454 5351. 

Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced in a press release dated December 19, 2011 from the Centers of Medicare & Medicaid Services (CMS). The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.  Under this initiative, operated by the CMS Innovation Center, Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs.

The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.