By:  Ty Hyderally, Esq., Francine Foner, Esq

Stephanie Halliday lived and worked in Texas for New Jersey-based Bioreference Laboratories, Inc. as the night clinical supervisor at its Houston laboratory. Halliday v. Bioreference Labs., 2022 N.J. Super. Unpub. LEXIS 1394, *5, 2022 WL 3051348.  Halliday alleged in her New Jersey Superior Court complaint that Bioreference terminated her in retaliation for Halliday objecting to violations of federal safety and health regulations at the Houston lab; she alleged that the termination was whistleblower retaliation in violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to – 14.  Bioreference moved for summary judgment dismissing Halliday’s complaint based upon its contention that Texas law, and not New Jersey law, applied. Bioreference further argued that, even if New Jersey law applied, Halliday had not presented sufficient evidence that her whistleblowing complaints were the cause of her termination. The court agreed with Bioreference and dismissed Halliday’s claims.

Halliday appealed to the New Jersey Appellate Division, which reversed the lower Court’s finding that Texas law applied. Rather, the Appellate Division found that the court’s findings of fact were inadequate to support application of Texas law, because it failed to make any findings concerning two critical factors to that determination— “the place where the conduct causing the injury occurred” and “the place where the relationship between the parties is centered.” Id. at *36-37. The Appellate Division also found that the lower court had failed to make sufficient factual findings and conclusions of law to support its decision that Halliday had failed to prove her termination was caused by her whistleblowing activities. Therefore, the Appellate Division vacated the lower Court’s order and remanded the matter to the lower court for further proceedings. Id. at *1-2.

Texas Law Does Not Necessarily Apply

The Appellate Division first explained the choice-of-law analysis which courts must use when there is a dispute over which state’s law should apply.  The Appellate Division observed that the first step in this analysis is to determine whether New Jersey’s CEPA law conflicts with Texas law.  The answer to this question is yes, because Texas law would provide support for only a portion of Halliday’s claims – that she was terminated for refusing to perform an illegal act. However, unlike CEPA, Texas law does not provide a cause of action for termination “in retaliation for objecting to, or disclosing to a supervisor, an activity, policy, or practice she reasonably believed violated a law, or rule or regulation promulgated pursuant to law.” See N.J.S.A. 34:19-3(a)(1).

Next, the Appellate Division found that CEPA is sufficiently broad to extend to Halliday as an employee of a New Jersey corporation that is also headquartered in this New Jersey. In reaching this conclusion, the Appellate Division observed that:

CEPA is the most “far reaching ‘whistleblower statute’ in the nation.” Battaglia v. United Parcel Serv., Inc., 214 N.J. 518, 555 (2013) (quoting Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998)). Our Supreme Court has explained “CEPA is ‘remedial legislation[]’ [that] ‘should be construed liberally to effectuate its important social goal’—’to encourage, not thwart, legitimate employee complaints.” Donelson v DuPont Chambers Works, 206 N.J. 243, 256, 20 A.3d 384 (quoting Dzwonar v. McDevitt, 177 N.J. 451, 463, 828 A.2d 893 (2003)).
Id. at *31

The Appellate Division also reviewed CEPA’s expansive definitions of “employer” and “employee” under CEPA. In addition, the Appellate Division acknowledged CEPA’s “broad remedial purposes” and its “obligation to construe the statute ‘liberally to effectuate its important social goal’ of ‘protect[ing] and encourag[ing] employees to report illegal or unethical workplace activities and to discourage . . . employers from engaging in such conduct.’” Id. at *32, citing Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 431 (1994). The Appellate Division therefore held, “we are convinced the Legislature did not intend to limit the statute’s protections to only employees who live and work in New Jersey.” Id.

However, the Court’s analysis did not end there. The Court then considered whether New Jersey had the “most significant relationship” with the parties  … based on an assessment of each state’s contacts.” Id. at *34. The Appellate Division acknowledged that the trial court had considered that “plaintiff resided in Texas and was hired and fired there, and all plaintiff’s actions, which she claimed resulted in her termination, concerned the practices and policies of the Houston laboratory.”  However, while the trial court found that the decision to terminate Halliday was made in Texas, the Appellate Division found that there was conflicting evidence in the record as to whether the decision to terminate Plaintiff was made in New Jersey or Texas. Therefore, the Appellate Division held that “there are genuine issues of material fact essential to a proper analysis of the contacts the court was required to consider under …. its choice-of-law analysis. A proper resolution of those fact issues could not properly be made on a summary judgment record. See R. 4:46-2(c).” Id. at 42.

Insufficient Findings of Fact to Determine Causation

The lower court had found that Halliday did not present evidence establishing a causal connection between her complaints and objections and her termination, and granted dismissal of her claims based upon this reason as well. Id. at 24-25. However, the Appellate Division also reversed this determination, because it found that the lower court did not support its decision on this point with adequate factual findings and conclusions of law.

Because of its conclusions that there were material factual disputes pertaining to which state’s law should apply and that the trial court did not provide adequate factual findings and conclusions of law regarding causation, the Appellate Division vacated the lower court’s order and remanded the matter for further proceedings consistent with its opinion.

This opinion is a welcome decision for employees who work in other states, but for New Jersey-based employers. Although the outcome of each case is dependent upon its particular facts, this opinion lends support for applying New Jersey’s strong CEPA protections to employees who suffer whistleblowing retaliation by New Jersey-based employers, even where the employees work and live outside of New Jersey.

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