The Appellate Division recently affirmed a finding of whistleblower retaliation in a case involving two employees’ objections to their employer’s fraudulent billing practices.  A New Jersey jury found in 2012 that Defendants Advanced Pain Management Specialists, P.C. (“APM”), Amgad Hessein (“Hessein”), and Ashraf Sami (“Sami”), violated New Jersey’s Law Against Discrimination (“LAD”) and Conscientious Protection Act (“CEPA”), by retaliating against two employees for objecting to overbilling for patient care. Plaintiffs Samirah McDaniel (“McDaniel”) and Dolores Gilmore (“Gilmore”) worked for APM, which was headquartered in Union Township. Their duties included preparing patient bills.

Hessein and Sami, brothers, were a doctor and office manager, respectively, for APM. They blatantly overbilled Medicare and patients for services not rendered, including services allegedly performed when patients were not in the office, services allegedly performed when the doctor was out of the country, and services for which the office did not have the requisite equipment.

When McDaniel and Gilmore objected to and complained about these fraudulent practices, Defendants told them that they had to keep submitting the bills in order to keep their jobs. Patients eventually noticed and complained about the overbilling, but Defendants kept up their illegal scheme, which apparently gained them around $5 million. Gilmore and McDaniel continued to object, but also continued to submit the bills, for fear of losing their jobs.

Defendants then retaliated against the two employees by using racial epithets, not allowing them to use the restroom, and threatening to fire them if they did not prepare bills in the manner that Sami and Hessein demanded. Eventually, the retaliation became too much for McDaniel and Gilmore to bear, and they were forced to resign.

The jury found that Defendants had created a hostile work environment in violation of the LAD, retaliated against Plaintiffs in violation of CEPA, and constructively discharged the two employees. Trial Judge James Rothschild awarded counsel fees of more than $130,000, in addition to the jury award.

Judge Rothschild denied Defendants’ motion to vacate judgment, and Defendant Sami appealed that denial. On August 17, 2016, the Appellate Division affirmed Judge Rothschild’s denial of the motion to vacate judgment.

In doing so, the Court considered and rejected several arguments by Defendants:

• Sami incorrectly argued that the Appellate Division should decide whether the trial court’s decision was against the weight of the evidence. The Appellate Division rejected this argument, holding that the correct standard on a motion to vacate judgment was whether there was plain error. The Appellate Division found that there was no plain error, as the verdict was supported by evidence both of the Defendants’ overbilling and of their retaliation against McDaniel and Gilmore.

• Sami argued that Defendants’ motion to vacate judgment was wrongly denied by Judge Rothschild, because he misinterpreted CEPA. Sami contended that CEPA required the two employees to give written notice of their complaints, in order to be protected from retaliation. On a de novo review of the decision, the Appellate Division found that the portion of CEPA applying to private sector employers had no such requirement.

• The Appellate Division likewise rejected Sami’s argument that employees must “disclose the employer’s illicit action to a public authority,” in order to be protected under CEPA.

• Sami also submitted that Plaintiffs were “watchdog employees,” and, thus, were not eligible for CEPA’s protections. The Appellate Division rejected this argument soundly, finding it incorrect both legally and factually. It reviewed Lippman v. Ethicon, Inc., 222 N.J. 362, 370-71 (2015), which held that CEPA does protect such employees, and further found that Plaintiffs were not, in fact, watchdog employees.

• Further, the Appellate Court rejected Sami’s arguments pertaining to the counsel fee award.  Specifically, Sami argued that the counsel fees awarded were three times greater than the jury verdict, but should have been proportional to the verdict. The Appellate Division addressed this by finding that Judge Rothschild’s detailed analysis (under Rendine v. Pantzer, 141 N.J. 292 (1995)) had resulted in a fair award, and by pointing to the United States Supreme Court’s “explicit rejection of the argument that counsel fees must be proportional to the jury award,” in Riverside v. Rivera, 477 U.S. 561 (1986).

Conclusion

This is a strong case for workers who blow the whistle on their employers’ wrongdoing. It should prove instructive and helpful for plaintiffs, because the Appellate Division further confirmed and clarified the scope of CEPA and the process of awarding counsel fees.

By Jennifer Vorih, Esq. and Ty Hyderally, Esq.

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