Port Authority Not Subject to Worker-Friendly New Jersey Whistleblower Law, State Court Rules

The Port Authority of New York and New Jersey is not subject to suit under New Jersey’s expansive whistleblower statute, the Conscientious Employee Protection Act, the New Jersey Appellate Division has held. Sullivan v. Port Auth. of N.Y. & N.J., 2017 N.J. Super. LEXIS 33 (App. Div. Mar. 15, 2017).

Often called the most employee-friendly whistleblower law in the country, CEPA (N.J.S.A. 34:19-1 to -14) protects employees from retaliation for opposing or disclosing any unlawful activity. Sullivan establishes a new precedent and carves out an express limitation to CEPA’s expansive protections.

Factual Background

Brian Sullivan was a police inspector employed by the Port Authority. He primarily was responsible for developing and administering the evaluation and examination process for police officers seeking promotion to the rank of sergeant. In June 2012, he tendered his resignation and retired from the Port Authority after the Port Authority human resources department determined that he failed to report improper conduct and other improprieties associated with the examination process. Sullivan maintained he was pushed out because, in 2011, he reported to his superior, the Chief and Director of Public Safety, that he confronted an officer who had obtained photographed copies of an examination to become a sergeant in the Port Authority’s police department.

In August 2012, Sullivan served a notice of claim on the Port Authority, alleging violations of the New York Whistleblower Law (NYWL), N.Y. Lab. Law § 740, and the New York Civil Service Law. N.Y. Civ. Serv. Law § 75(b). On May 15, 2013, he filed a complaint in the Superior Court of New Jersey, Hudson County, alleging retaliation and civil conspiracy in violation of CEPA, and sought reinstatement and damages. At the close of pretrial discovery, the Port Authority moved for summary judgment, which the trial court granted.

Unique Employer Organization

On appeal, the Appellate Division affirmed summary judgment for the Port Authority, finding “New York and New Jersey did not mutually intend to consent to suit against the Port Authority under CEPA.”

The Court described the formation of the Port Authority in 1921 as a bi-state compact entered into between New York and New Jersey and approved by Congress. The Court acknowledged that “[t]he Port Authority is not the agency of a single state but rather a public corporate instrumentality of New Jersey and New York” and “[n]either state may unilaterally impose additional duties, powers, or responsibilities on the Port Authority.” The bi-state compact expressly prohibits unilateral action by one state without the consent of the legislature of the other state. Only where the laws of both states are “complementary or parallel” can the laws of one state be applied to the other. In other words, the laws of New York and New Jersey must be “substantially similar” to apply to the Port Authority and impliedly alter the express provisions of the compact.

Applying this reasoning, the Court found CEPA and the NYWL are not substantially similar so as to impliedly alter the compact. While both contain a one-year statute of limitations, the Court found CEPA is more expansive than the NYWL, which requires proof of an actual and substantial present danger to the public health or safety and does not apply to the same broad class of employees. Additionally, CEPA permits recovery of punitive damages and an assessment of civil fines, and provides for a jury trial, while the NYWL does not.

The Court concluded that because CEPA and the NYWL are not complementary or parallel, applying CEPA to the Port Authority would impermissibly subject the agency to single-state legislation. It further noted the lack of complementary or parallel legislation only further evidenced that New York and New Jersey did not mutually intend to consent to suit under CEPA. This decision precludes employees of the Port Authority from filing CEPA claims in the future.