Appellate Division Holds That a Volunteer Firefighter is not an “Employee” Protected under CEPA

September 28, 2017

Francine Foner, Esq., Ty Hyderally, Esq.

The Appellate Division recently held that the definition of “employee” in the New Jersey Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1, et seq., explicitly excludes volunteers, because they do not perform services “for wages or other remuneration.”  In Sauter v. Colts Neck Volunteer Fire Co. No. 2, volunteer firefighter Jeffrey Sauter (“Sauter”) sued the fire company for which he volunteered, alleging that he was voted out in retaliation for his whistleblowing activities.  The Court never considered whether the fire company had in fact retaliated against Sauter, because as a threshold issue, it held that CEPA expressly excludes volunteers from its coverage.

The Court found that because only individuals who perform services with an expectation of receiving “wages or other remuneration” fit within CEPA’s definition of “employee;” therefore volunteers are not “employees,” because they have no such expectation.  Therefore, they are not protected by CEPA. Nor did the Court accept Sauter’s argument that the benefits he received as a volunteer constituted sufficient “other remuneration,” as  it found that such modest benefits were more in the nature of an “award” for his volunteer service.

The Appellate Division further opined that this was consistent with the intent of the statute to protect employees “who risk their livelihoods in reporting illegal activities in the workplace.” Id. at *12.  In contrast, a volunteer such as Sauter, the Court reasoned, was not at risk of losing his livelihood for reporting illegal activities, “for the simple reason that he was not ‘employed’ as a volunteer firefighter.” Id. at *18.  The Court further observed that independent contractors fall within CEPA’s definition of employee, because such individuals have an expectation of receiving compensation for services rendered, which would be at risk for reporting illegal conduct in the workplace.

The Court further squared its holding with the apparently conflicting holdings in cases under New Jersey’s Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1, et seq., finding that volunteer firefighters are considered “employees” under the LAD.  Despite the Court acknowledging that it has “on occasion, when appropriate” looked to the LAD in construing CEPA, it found that doing so was not appropriate in this instance, because the definition of employee is much broader under the LAD than under CEPA. The Court also noted that the LAD’s definition of employee, unlike that in CEPA, does not contain the qualification that “services be performed for wages or other remuneration.”

Further, the Court explained why its opinion remained consistent with the New Jersey Supreme Court’s adoption of a 12-factor test utilized in both LAD and CEPA cases to determine whether someone qualifies as an employee. Id. at *14, citing Pukowsky v. Caruso, 312 N.J. Super. 171 (App. Div. 1998) and D’Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 123 (2007). The Sauter Court observed that it has never suggested that an employer-employee relationship exists in the absence of compensation for services.  Thus, the Sauter decision effectively establishes that before consideration of the Pukowsky factors in a CEPA case, the threshold determination is whether or not the plaintiff receives compensation for his or her services.  If the plaintiff does not, the inquiry ends there and the CEPA claim is not available to the plaintiff.

However, the Supreme Court’s decision in D’Annunzio adopting the Pukowsky factors did not discuss making such a threshold determination prior to consideration of the Pukowsky factors. Rather, in D’Annunzio, the Supreme Court made observations which suggest that it may take issue with imposing this new threshold.  For example, the Supreme Court opined that “[t]he reference to ‘remuneration’ for services suggests that contracted providers also can meet the definition even though they are not paid ‘wages’ for their services, so long as a fitting ‘control and direction’ test is included in the review of the relationship. ‘Remuneration’ is defined as ‘the act of remunerating’ and therefore includes more than the payment of wages. Webster’s Encyclopedic Unabridged Dictionary of the English Language 1631 (2001). To ‘remunerate’ is ‘to pay, recompense, or reward for work, trouble, etc.’ and ‘to yield a recompense for work or services.’” Id. at 121, citing Webster’s at 1630-31. (emphasis added). In addition, the D’Annunzio Court stated that, “[t]he public at large benefits from a less restricted approach to who may sue under CEPA as an employee of a business enterprise. It is unlikely to us that the Legislature meant to sanction a restricted approach to CEPA’s reach.” Id. at 124.

Thus, it remains to be seen whether the New Jersey Supreme Court will hereafter address the Sauter Court’s interpretation of its ruling in D’Annunzio and its narrowing of who is an “employee” protected under CEPA.

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