Before Judges Stern, Kestin and Wefing.
The opinion of the court was delivered by: Stern, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 29, 1999
On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Plaintiff appeals from the dismissal of his complaint alleging a retaliatory discharge in violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8. The dismissal was granted because plaintiff alleged retaliation for his report about co-employee, not employer, misconduct. Defendant County of Bergen and the individual defendants cross-appeal from the Judge's rejection of other grounds as a basis for dismissal of the complaint. The County also appeals from the denial of its motion for summary judgment on its third-party complaint against the State for the costs of defense and indemnification and the granting of the State's cross-motion to dismiss the third-party action. *fn1
Plaintiff contends that his claim under CEPA was improperly dismissed because he was discharged by Acting Prosecutor Charles Buckley for cooperating in the criminal investigation conducted by former Prosecutor John Fahy regarding alleged misconduct of two co-employees in the investigative unit of the Bergen County Prosecutor's Office. At all relevant times, N.J.S.A. 34:19-3 provided: *fn2 An employer shall not take any retaliatory action against an employee because the employee does any of the following:
a. Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer . . . that the employee reasonably believes is in violation of a law, or a rule or regulation promulgated pursuant to law;
b. Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation promulgated pursuant to law by the employer . . . ; or
c. Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes:
(1) is in violation of a law, or a rule or regulation promulgated pursuant to law; (2) is fraudulent or criminal; or (3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment. (Emphasis added.)
It is clear from reading the complaint and motion papers that plaintiff alleges he supplied "truthful" information about his co-employees after their arrest on theft charges at the direction of Fahy and plaintiff's then superiors. In the words of plaintiff's brief, "[h]e engaged in a protected activity when he gave a statement concerning illegal activity to an investigative body." It is not contested, therefore, that plaintiff's complaint alleged retaliatory action under subsection (b) of the statute. *fn3 The motion Judge found "no evidence of ratification, condonation of vicarious liability [for the co-employee's conduct] for which the employer would otherwise be responsible under CEPA." He therefore dismissed the complaint in light of Higgins v. Pascack Valley, 307 N.J. Super. 277 (App. Div. 1998), which held that CEPA did not provide a remedy for retaliation based on complaints relating to the conduct of a co-employee, as opposed to an employer. However, our opinion in Higgins was reversed by the Supreme Court after summary judgment was granted in this case.
In Higgins v. Pascack Valley Hospital, 158 N.J. 404 (1999), the "primary issue" was "whether the CEPA imposes liability on an employer for retaliating against a complaining employee when the employer was not complicit in the conduct of co-employees about which the employee complained." Id. at 409. The Court held "that the CEPA protects an employee who, with a reasonable basis, complains to his or her employer about the misconduct of co-employees, even in the absence of employer complicity in the misconduct." Id. at 410. The Court explained that "CEPA establishes a statutory exception to the general rule that an employer may terminate an at-will employee with or without cause" and "codified the common-law cause of action . . . which protects at-will employees who have been discharged in violation of a clear mandate of public policy." Id. at 417-18. In determining that "CEPA's protection extends to an employee's complaints about . . . a co-employee," the Court interpreted the statute "to determine the Legislature's intent." Id. at 418. Significantly, the Court indicated:
A plain reading of the statute suggests that the CEPA covers employees who object to the conduct of co-workers. The term "any" in subsection "c" indicates that the statute applies regardless of the source of the activity, policy or practice. Although subsections "a" and "b" limit the statute's application to policies, practice and activities "of" or "by" "the employer," subsection "c" contains no such limitation. The omission of the phrase "of the employer" in subsection "c" is too obvious to ignore. . . . When "the Legislature has carefully employed a term in one place and excluded it in ...