JEFFREY SAUTER VS. COLTS NECK VOLUNTEER FIRE COMPANYNO. 2 (L-2637-13, MONMOUTH COUNTY AND STATEWIDE)

Citations: 451 N.J. Super. 581; 170 A.3d 351Docket: A-0354-15T1

Court: New Jersey Superior Court Appellate Division; September 13, 2017; New Jersey; State Appellate Court

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Jeffrey Sauter, a volunteer firefighter, appealed a summary judgment that dismissed his complaint against Colts Neck Volunteer Fire Company No. 2 and several individual officers, including his brother. Sauter argued that the fire company's vote to terminate his membership violated the Conscientious Employee Protection Act (CEPA). The appellate court affirmed the trial court's decision, stating that Sauter did not qualify as an employee of Fire Company No. 2 under CEPA. 

The facts indicate that Colts Neck's fire department operates with two all-volunteer companies, supervised by an Executive Fire Council. Volunteers can earn benefits through the Emergency Services Volunteer Length of Service Award Program (LOSAP), which provides limited tax-deferred income based on active service, with specific point requirements for eligibility. Sauter's relationship with the fire company was contentious; he previously sued the company in 2004 after an eighteen-month suspension, claiming retaliation for his complaints about a bid process, which was settled for $10,000. He later sought additional reimbursement for attorney fees related to that suit, which led to a vote by the membership to partially reimburse him.

The fire company received legal advice indicating that reimbursing the plaintiff for his attorneys' fees would threaten its 501(c)(3) tax status, leading to the company's decision to stop payments to him. Concurrently, Fire Company No. 2 discovered that its treasurer had embezzled approximately $300,000, prompting the company to file a fidelity insurance claim. After being informed of the denial of reimbursement, the plaintiff accused the fire company of submitting a fraudulent claim regarding the embezzlement. His allegation centered on the failure to disclose a letter he had sent to the Monmouth County Prosecutor in 2003 concerning a previous complaint, which was dismissed without further action. A lawyer, who first raised concerns about the legality of reimbursing the plaintiff, submitted the fidelity claim.

Following these events, the plaintiff reported to the Executive Fire Council that Fire Company No. 2 allowed members to dispose of household trash in its dumpster, which he had done himself. He requested a legal opinion on whether this practice endangered the fire department's tax-exempt status. Subsequently, several members, including the plaintiff's brother, filed a formal complaint against him, alleging disrespectful behavior and attempts to sabotage the insurance claim. The membership committee initially terminated the plaintiff's membership but later suspended him pending an investigation after members requested he be allowed to defend himself. After sustaining the charges against him, the committee voted again to terminate his membership. The plaintiff's appeal to the general membership resulted in a vote against his reinstatement.

In response, the plaintiff filed a lawsuit claiming violations of the Conscientious Employee Protection Act (CEPA), the Law Against Discrimination (LAD), and defamation. Defendants moved for summary judgment on all counts, and the plaintiff withdrew his LAD claim. Judge Gummer granted summary judgment dismissing the remaining claims, ruling that the plaintiff was not an employee entitled to CEPA protections, relying on statutory language and relevant case law, including a prior similar case against the fire company.

Plaintiff contends that the court erred by determining he was not an employee under the Conscientious Employee Protection Act (CEPA) and by relying on non-precedential cases. He further argues that public policy necessitates an expansion of CEPA, similar to the expansion of the Law Against Discrimination (LAD). The court rejects these arguments, clarifying that CEPA, enacted in 1986, aims to protect employees who report illegal or unethical workplace activities. The statute builds on the Supreme Court's decision in Pierce v. Ortho Pharmaceutical Corp., which established a common law cause of action for at-will employees wrongfully discharged for refusing to violate public policy. CEPA creates an exception to the at-will employment doctrine by prohibiting retaliatory actions against employees who disclose or refuse to participate in unlawful acts. The statute broadly defines an employee as any individual performing services under an employer's control for remuneration. Despite plaintiff's claim that receiving LOSAP benefits qualifies him as an employee, the court disagrees, emphasizing the importance of legislative intent revealed through statutory language. Ultimately, the statute seeks to empower employees to report misconduct without fear of retaliation.

The court emphasizes the importance of interpreting statutory language within the broader context of the statute, rather than focusing solely on individual words. In the case at hand, the plaintiff, who provided firefighting services for Colts Neck under the direction of Fire Company No. 2, meets part of the definition of 'employee' under the Conscientious Employee Protection Act (CEPA) as one who performs services under an employer's control for compensation. The central issue is whether the plaintiff's services qualify as being performed "for wages or other remuneration" in a traditional employer-employee relationship.

The court distinguishes between motivations for volunteering and the legal definition of an employee, asserting that an individual's subjective reasons for joining a role should not determine their status under CEPA. It acknowledges that many employees work for reasons beyond monetary compensation but still expect to be paid and protected under the statute. The court clarifies that its prior rulings did not extend CEPA protections to independent contractors but rather aimed to safeguard those in genuine employer-employee relationships, regardless of how they are labeled.

To assess this relationship, the court employs the Pukowsky test, which incorporates both common law right-to-control and economic realities factors. This twelve-factor test helps identify non-traditional workers who are essential to an employer's business and thus entitled to CEPA protections. The court notes that the nature of control over skilled workers may differ from that over traditional employees. The plaintiff asserts that his volunteer status and the benefits he receives under the Length of Service Awards Program (LOSAP) constitute sufficient remuneration to qualify him as an employee under CEPA.

Independent contractors are not explicitly excluded from CEPA's definition of 'employee,' while volunteers are. The analysis of the plaintiff's status under Pukowsky is unnecessary due to CEPA's clear exclusion of volunteers, but it reinforces the conclusion that the plaintiff does not qualify as an employee under the statute. Several Pukowsky factors indicate an employer-employee relationship, particularly those related to control and direction of work. However, other factors, including method of payment and intention of the parties, strongly suggest otherwise. The plaintiff, who served as a volunteer firefighter, was not compensated for his services and did not intend to establish an employment relationship. This intent aligns with case law indicating that the purpose of CEPA is to protect vulnerable employees, which the plaintiff does not qualify as, given his lack of remuneration and the absence of employment-related risks associated with his whistleblowing activities. Consequently, the plaintiff's situation differs significantly from cases involving actual employment, as there is no financial risk to whistleblowing within a volunteer organization.

The plaintiff, a volunteer firefighter, is outside the employment relationship typically addressed by the Conscientious Employee Protection Act (CEPA), which aims to protect vulnerable workers from employer retaliation. The statute's language regarding performing services "for wages or other remuneration" cannot be interpreted in a way that undermines its intent. The plaintiff argues for an expansion of CEPA similar to the broader application of the Law Against Discrimination (LAD), which classifies volunteer fire departments as employers for LAD purposes. However, the court emphasizes that CEPA and LAD serve distinct purposes and are worded differently, with CEPA specifically limiting protections to those compensated for their services. Although the LAD's definition of "employee" is broader, the court notes the inconsistency in classifying volunteer firefighters as employees under LAD but not under CEPA. The court reviews two cases cited by the plaintiff, particularly Blair, which involved unlawful employment practices related to membership policies in a volunteer fire department. The court affirms that the admission procedures in Blair were deemed discriminatory, but the brief nature of the opinion does not provide a comprehensive understanding of the facts involved.

Substantial credible evidence indicates that the exclusion of individuals from fire department membership was partially racially motivated. However, the finding that the fire department's facilities were public accommodations was reversed, concluding that the facilities serve only the members and not the general public. In the 1978 case of Hebard, the Division on Civil Rights ruled that the Basking Ridge Fire Company discriminated against Caroline Hebard by denying her membership due to its male-only policy. The court affirmed that the fire company functioned as both a public accommodation and an employer under the Law Against Discrimination (LAD), despite being a nonprofit organization. The decision referenced the municipal nature of the fire company, noting that it receives funding and workers' compensation from the township, effectively treating its members as employees. This ruling clarified that while volunteer firefighters could be classified as employees under the LAD, they would not be recognized as such under the Conscientious Employee Protection Act (CEPA). The evolving legal landscape surrounding public accommodations and employment suggests that if the cases of Blair and Hebard were decided today, the outcomes might be similar but could rely on different reasoning.

Fire companies may be classified as "places" of public accommodation under the Law Against Discrimination (LAD) but are not considered employers of their members. The court referenced Frank v. Ivy Club, which establishes that a private organization providing essential services to a public accommodation loses its private status and becomes subject to anti-discrimination laws. However, the court found no basis to classify the plaintiff as an employee of Fire Company No. 2 under the Conscientious Employee Protection Act (CEPA). The court upheld Judge Gummer's reliance on Judge Quinn's analysis from a similar prior CEPA claim against the same fire company, noting that unpublished opinions are not binding but can be persuasive. The parties acknowledged the non-precedential nature of the previous opinion, and the court found the reasoning compelling for its decision. Ultimately, the court determined that because the plaintiff is not an employee, any alleged retaliatory actions taken against him for his correspondence do not constitute a CEPA violation, leading to the affirmation of the judgment dismissing the complaint.