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New Jersey appellate court reinforces limitation on whistleblower claims

4/7/25

By: Andrew W. Sheppard

In a recent reported decision, the Appellate Division of the Superior Court of New Jersey reaffirmed that New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (“CEPA”), does not apply to conduct that occurred after the whistleblower’s employment ended. 

In Noah Bank v. Lee, ___ A.3d ___, 2025 WL 967380 (N.J. Super. Ct. App. Div. Apr. 1, 2025), Noah Bank sued Lee, its former employee, for alleged breach of the confidentiality and non-disparagement provisions contained in the post-employment agreement she signed. The Bank claimed that Ms. Lee had retained the Bank’s confidential documents and used them to file separate lawsuits against the Bank. In response, Lee filed a counterclaim for violation of CEPA, alleging that the Bank filed its lawsuit in retaliation for her objection to illegal conduct. The Bank moved to dismiss the counterclaim for failure to state a claim, but the trial court denied the motion for procedural reasons. 

The Appellate Division reversed, holding that the trial court had erred in its interpretation of the procedural rules. The court went on to assess whether Lee had in fact stated a claim for violation of CEPA and held that she had not because the alleged retaliation occurred after her employment had ended. The court explained that CEPA protects employees, not former employees, and that post-employment conduct cannot subject an employer to liability under CEPA. In doing so, the court highlighted prior cases holding that post-employment blacklisting, slandering and interference with prospective employment opportunities do not violate CEPA. 

Noah Bank serves a reminder that CEPA, one of the strongest whistleblower statutes in the country, is not without limits. 

For more information on this topic, please contact Andrew Sheppard at andrew.sheppard@fmglaw.com or your local FMG attorney.