In a recent decision, Zungoli v. United Parcel Service, Inc., the United States District Court for the District of New Jersey held that an employee's refusal to use United Parcel Service, Inc.'s ("UPS") web-based systems, based on concerns that the systems did not adequately protect his personal, confidential information, is protected whistleblowing activity under the New Jersey Conscientious Employee Protection Act ("CEPA"). This decision is significant for all employers because it represents the wide variety of "complaints" that may be deemed protected activity under New Jersey law, making it difficult for employers to distinguish between addressing ordinary employee concerns and statutorily-protected whistleblowing activity.
Relevant Facts
The plaintiff, Sean Zungoli, worked for UPS from May 1989 until his termination in November 2006. At the time of his termination, Zungoli was a senior telecommunications analyst.
In January 2006, due to concerns regarding his performance, Zungoli was placed on a list of employees whose performance was deemed "Less Than Expected." Around that same time, Zungoli voiced concerns that a company website, www.UPSer.com, did not provide adequate security to protect employees' personal information. Of concern to Zungoli, UPS informed employees that they had no reasonable expectation of privacy when using UPS portals, and UPS did not have a user authentication system to protect confidential information for most users, including Zungoli. Shortly thereafter, in May 2006, Zungoli raised similar concerns about UPS's web-based Talent Management System ("TMS"). Ultimately, Zungoli refused to use the systems based on his concerns that specific identifying information would not be protected. At no time did Zungoli state that he believed the systems were illegal or that they violated any public policy.
Based upon his failure to register with and utilize UPSer.com and TMS, Zungoli's supervisor recommended that UPS discipline Zungoli. In August 2006, Zungoli received a low rating on "Mission Skills" due to his failure to use the web-based portals. Thereafter, on November 16, 2006, UPS terminated Zungoli's employment, based on concerns about poor performance.
Zungoli subsequently filed suit against UPS alleging, among other claims, that UPS wrongfully terminated and retaliated against him in violation of CEPA. UPS moved for summary judgment, arguing that Zungoli's CEPA clam failed as a matter of law.
The Decision
To establish a retaliation claim under CEPA, a plaintiff must prove the following elements: (1) that he reasonably believed that his employer's conduct was violating either a law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy; (2) that he engaged in "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. The court noted that, as a threshold determination, a court must determine whether there is a substantial nexus between the complained-of conduct and a law or public policy identified by the court or the plaintiff. If the court finds that such a nexus exists, it becomes a question for a jury to determine whether the plaintiff actually held such a belief and whether that belief was objectively reasonable.
In denying UPS's motion for summary judgment on Plaintiff's CEPA claim, the court held that Zungoli engaged in whistleblowing activity by voicing his concerns that his personal information might be compromised by using UPS' web-based systems. Specifically, the court found that, because it is the public policy of the State of New Jersey that citizens have a reasonable expectation and a right to maintain the confidentiality of identifying information, Zungoli's stated concerns were "in line with" New Jersey public policy concerning public safety. As further evidence that Zungoli's activity was protected and that a substantial causal nexus existed between Zungoli's complaints and a law, rule, or mandate of public policy, the court pointed to New Jersey's Identity Theft Protection Act ("ITPA"), which calls for protecting financial data against interception and restricting access to social security numbers to prevent identity theft. Furthermore, the court found that a causal nexus existed between Zungoli's voiced concerns and his termination, due to the low performance rating that he received based upon his failure to utilize the portals.
In sum, the court determined that Zungoli alleged sufficient facts to support his CEPA claim such that genuine issues of material fact remained for a jury to determine whether he reasonably believed that he was being asked to participate in conduct violative of a law, rule, regulation or public policy mandate, and whether UPS retaliated against him for refusing to engage in such conduct.
Implications
The Zungoli decision is instructive for all employers to consider in addressing concerns raised by employees. The essential purpose behind CEPA has been to encourage employees to report legitimate concerns relating to illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct or retaliating against employees for raising such concerns. While CEPA does not require a plaintiff to know, with legal certainty, the precise contours and components of the law or public policy that has purportedly been violated, it ordinarily requires a plaintiff to do more than simply convey to his employer his own personal concerns.
In Zungoli, the plaintiff appeared more concerned with protecting the confidentiality of his own personal information—rather than conveying a more general concern about perceived unlawful or unethical conduct on UPS's part—and simply stated that he would not use the systems, believing them to be insecure. Accordingly, the court's finding that Zungoli engaged in protected activity is noteworthy because it appears to expand the definition of what constitutes whistleblower activity.
Under Zungoli, it now appears that all an employee needs to do is verbalize an objection to an employer's policy or procedure and he may be protected as a whistleblower. It remains to be seen whether the New Jersey Supreme Court will adopt the Zungoli court's view of what constitutes "whistleblower" activity. However, it is advisable for employers to review and perhaps refine their policies and procedures relating to the handling of employee complaints and to proceed with caution when an employee complains about a policy or procedure without stating that he or she believes the policy or procedure is illegal or unethical. In particular, employers may now need to caution managers and supervisors about taking any adverse action based upon any complaint—however minor—raised by an employee.
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