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Defining an adverse action under CEPA

a.Defining an adverse action

There have been a plethora of recent cases that define adverse actions in contradictory fashions. Like the analysis under the LAD, “adverse action" will often be decided on a case by case basis. CEPA defines adverse action as discharge, suspension, demotion, or other adverse employment action taken against an employee in the terms and conditions of employment. It is this third category that lends to contradictory interpretation by the courts. The issue of what constitutes an adverse action is still one that must be examined closely to survive summary judgment.

In a very recent opinion, the U.S. District Court for the District of New Jersey held that constructive discharge constitutes an adverse action under CEPA.DeWelt v. Measurement Specialties, Inc., 2007 U.S. Dist. LEXIS 11373 (D.N.J. 2007) The Plaintiff, Robert L. DeWelt, questioned the propriety of the company’s financial reporting. He did not suffer retaliation for whistleblowing, and was in fact promoted after raising his concerns. id., at 8. But he did continue thereafter to find fault with the company’s practices, and eventually “resigned from his position at Defendant, Measurement Specialties, Inc. (“MSI"), rather than sign what he believed to be fraudulent and misleading financial statements . . . " id., at 1. Because he “was being required to participate in the fraud," Plaintiff argued that this “created an intolerable condition sufficient to give rise to a constructive discharge." id., at 9. The Court found that “(i)t is clear that “other adverse employment action taken against an employee," as contemplated by N.J.S.A. 34:19-2(e) includes constructive discharge . . . ," and rejected Defendants’ motion for summary judgment. id., at 8-9.

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