On July 17, 2013 the New Jersey Supreme Court decided Battaglia v. United Parcel Service, A-86/87-11 which clarified the standard for retaliation claims brought under New Jersey Law Against Discrimination (LAD) and the Conscientious Employee Protection Act (CEPA). The LAD prohibits an employer from retaliating against an employee who opposes discrimination. CEPA prohibits retaliation for whistle-blowing, making it unlawful for an employer to retaliate against an employee for objecting to conduct he believes is unlawful, fraudulent or criminal. In Battaglia, the plaintiff alleged that UPS violated both of these laws by demoting him in retaliation for reporting inappropriate conduct.

Battaglia overheard his supervisor making derogatory comments about women to a group of men. He confronted his supervisor about the comments and met with the division’s management regarding the incident. Battaglia also reported to his supervisor that he thought high level employees were misusing the company credit card to pay for alcohol at lunch and not returning to work. At trial, Battaglia admitted that when he made this report he did not believe the credit card misuse was fraudulent. Battaglia then wrote a vague anonymous letter to the company about “unethical” behavior, which prompted an internal investigation. The investigators suspected the letter was submitted by Battaglia. Plaintiff was later demoted and he sued UPS alleging that the demotion was in retaliation for his complaints, although UPS claimed it was for poor behavior and insubordination.

The jury found for Battaglia under the LAD and CEPA, awarding him $1,000,000, although the judge reduced the award to $705,000 dollars after removing the award for future emotional damages. The parties cross-appealed. The Appellate Division reversed the LAD verdict because there was no identifiable victim of discrimination. The Appellate Division reasoned that because no employee was actually discriminated against by the supervisor’s derogatory comments about women, there was no violation of the LAD, and therefore Battaglia’s report could not be protected activity.

The NJ Supreme Court reversed the Appellate Division. The Supreme Court held that under the LAD, an employee who alleges retaliation need only demonstrate a good faith belief that the conduct violates the LAD. In other words, it did not matter that there was no woman specifically discriminated against by the supervisor’s comments. Reporting behavior which is believed to violate the LAD is protected activity, even if it there is no plaintiff that could actually prove discrimination.

The NJ Supreme Court also vacated the CEPA award. It held that plaintiff’s CEPA claim was based on insufficient evidence. Battaglia’s complaints were vague, non-specific, and did not indicate that he believed fraudulent activity was occurring. His complaints about extended lunches and drinking alcohol on lunch are minor violations of internal company policies, and reporting such behavior does not fall within CEPA’s whistleblower protections. In order to substantiate a CEPA claim, a plaintiff must have a reasonable belief that the complained of activity is actually occurring and is unlawful, fraudulent or criminal.