Plaintiff Moseley is an employee of Defendant Pepco Energy Services, Inc. (PES). He has been employed...

    

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Plaintiff Moseley is an employee of Defendant Pepco Energy Services, Inc. ("PES"). He has been employed by PES or its corporate predecessors for over twenty-five years. PES, a subsidiary of Defendant Pepco Holdings, Inc. ("PHI"), provides deregulated energy and energy-related services for residential, small business, and large commercial customers. In 1998, Thomas Herzog held the position of Vice President of CTS. *** In or around 2002, CTS merged with Potomic Electric Power Company, Inc., and each company became a subsidiary of PHI. Following the merger, according to Plaintiff, he continued to work for PHI, still as Maintenance Manager at Midtown Thermal, until December 31, 2009. Following the 2002 merger with PHI, employees were required to complete an annual ethics survey. By March of 2007, Plaintiff and two co-workers had discussed their respective observations of Herzog's conduct, which they deemed questionable and possibly unethical. Specifically, they felt that Herzog improperly used company assets and improperly hired immediate family members and friends who did not appear on the payroll. The three decided to disclose this information on PH's annual "Ethics Survey." The three planned to reveal that Herzog employed his daughter, Laurie, as his secretary in the summer of 2005 and the beginning of 2006 without posting the position first and in violation of PHI's anti-nepotism policy. Next, Herzog hired his girlfriend's daughter as his secretary after his daughter had gone back to school. Plaintiff believed this was in violation of Company policy because the position again was not posted. Herzog also hired his son as a project manager, again through a third party independent contractor, Walter Ratai. Plaintiff thought this was wrong because (1) Herzog circumvented the Company's hiring process, (2) it violated Company policy, and (3) Herzog's son was being paid S75.00/hr, which was more than Plaintiff was making. using the Company's Eagles' tickets for personal use. Finally, Herzog had leased a new SUV with Company funds, but which was not approved by the Company. In addition, Plaintiff had learned that Herzog was improperly [After the surveys were completed, an] investigation ensued. Following the investigation, effective on or about May 10, 2007, Herzog was escorted out of the building. *** On March 8, 2008, Plaintiff received his annual performance evaluation ***: for the first time in twenty-three years, Plaintiff's performance review was negative. Plaintiff feels that this negative performance review was a further act of retaliation for his disclosure of Herzog's conduct. On or about June 11, 2008 the Plant/Operations Manager position was posted ***. Plaintiff applied for the position, but it was offered to [another person]. Plaintiff alleges that he "was not promoted to the position of Plant/Operations Manager despite his experience performing the job for the previous two and a half years, qualifications for same and seniority, as a direct and proximate result of his prior complaints and/or disclosures regarding the Herzog illegal conduct and activities." The New Jersey Legislature enacted the Conscientious Employee Protection Act (CEPA) to "protect and encourage employees to report illegal or unethical workplace activities." *** CEPA prohibits a New Jersey employer from taking "retaliatory action" against an employee who objects to "any activity, policy or practice which the employee reasonably believes" is in violation of applicable law. *** "To prevail on a claim under this provision, a plaintiff must establish that: (1) he reasonably believed that [the complained-of] conduct was violating a law or rule or regulation promulgated pursuant to law; (2) he objected to the conduct; (3) an adverse employment action was taken against him; and (4) a causal connection exists between the whistleblowing activity and the adverse employment action. The first element of the prima facie case [a case sufficient to be sent to the jury] under CEPA is that the Plaintiff reasonably believed that the complained- of conduct (1) was violating a "law, rule, or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity"; or "(2) is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity." Although Defendants have argued that Plaintiff merely disclosed a violation of Company policy, Moseley has testified that in March 2007, he reported what he believed to be "unethical conduct, misappropriation of company funds, and theft" by his direct supervisor. *** Moreover, a plaintiff need not demonstrate that there was a violation of the law or fraud, but instead that he "reasonably believed" that to be the case. The facts in this case support an objectively reasonable belief that a violation of law or fraudulent conduct was being committed by Plaintiff's supervisor. [Emphasis added.] Regarding the causal connection between Plaintiff's whistleblowing activity and the negative adverse employment actions taken against him, Plaintiff stresses that he was employed by the Defendants for twenty-five years without a negative employment evaluation or any form of discipline until immediately after he disclosed the wrongful conduct of his supervisor. Not only did Plaintiff then receive a negative performance evaluation, but the posted position of Plant Manager was given to [another], despite [the other's] alleged past negative history and despite that Plaintiff asserts he had been acting in that job for over two years. Plaintiff contends that this is sufficient evidence of pretext. The Court is unable to find as a matter of law that Defendants' inferences prevail or that a jury could not reasonably adopt a contrary inference of retaliation. There are questions of fact as to how much the individuals responsible for Plaintiff's negative performance evaluations knew about Plaintiff's complaints. "[A] finding of the required causal connection may be based solely on circumstantial evidence that the person ultimately responsible for an adverse employment action was aware of an employee's whistle-blowing activity." Because jurors may infer a causal connection from the surrounding circumstances, as well as temporal proximity, the Court will not grant summary judgment. [Emphasis added.] *Defendants' motion for summary judgment is hereby DENIED. Legal Reasoning Questions 1. Using duty-based ethical principles, what facts or circumstances in this case would lead Moseley to disclose Herzog's behavior? 2. Using outcome-based ethical principles, what issues would Moseley have to analyze in making the decision to report Herzog's behavior? What would be the risks to Moseley? The benefits? 3. Under the Business Process PragmatismTM steps, what alternatives might Moseley have had in this situation? 4. Regardless of who wins this case at trial, in performing Step 5 (Evaluation) of the Business Process PragmatismTM procedure, what changes should the company take with regard to the complaint process? Plaintiff Moseley is an employee of Defendant Pepco Energy Services, Inc. ("PES"). He has been employed by PES or its corporate predecessors for over twenty-five years. PES, a subsidiary of Defendant Pepco Holdings, Inc. ("PHI"), provides deregulated energy and energy-related services for residential, small business, and large commercial customers. In 1998, Thomas Herzog held the position of Vice President of CTS. *** In or around 2002, CTS merged with Potomic Electric Power Company, Inc., and each company became a subsidiary of PHI. Following the merger, according to Plaintiff, he continued to work for PHI, still as Maintenance Manager at Midtown Thermal, until December 31, 2009. Following the 2002 merger with PHI, employees were required to complete an annual ethics survey. By March of 2007, Plaintiff and two co-workers had discussed their respective observations of Herzog's conduct, which they deemed questionable and possibly unethical. Specifically, they felt that Herzog improperly used company assets and improperly hired immediate family members and friends who did not appear on the payroll. The three decided to disclose this information on PH's annual "Ethics Survey." The three planned to reveal that Herzog employed his daughter, Laurie, as his secretary in the summer of 2005 and the beginning of 2006 without posting the position first and in violation of PHI's anti-nepotism policy. Next, Herzog hired his girlfriend's daughter as his secretary after his daughter had gone back to school. Plaintiff believed this was in violation of Company policy because the position again was not posted. Herzog also hired his son as a project manager, again through a third party independent contractor, Walter Ratai. Plaintiff thought this was wrong because (1) Herzog circumvented the Company's hiring process, (2) it violated Company policy, and (3) Herzog's son was being paid S75.00/hr, which was more than Plaintiff was making. using the Company's Eagles' tickets for personal use. Finally, Herzog had leased a new SUV with Company funds, but which was not approved by the Company. In addition, Plaintiff had learned that Herzog was improperly [After the surveys were completed, an] investigation ensued. Following the investigation, effective on or about May 10, 2007, Herzog was escorted out of the building. *** On March 8, 2008, Plaintiff received his annual performance evaluation ***: for the first time in twenty-three years, Plaintiff's performance review was negative. Plaintiff feels that this negative performance review was a further act of retaliation for his disclosure of Herzog's conduct. On or about June 11, 2008 the Plant/Operations Manager position was posted ***. Plaintiff applied for the position, but it was offered to [another person]. Plaintiff alleges that he "was not promoted to the position of Plant/Operations Manager despite his experience performing the job for the previous two and a half years, qualifications for same and seniority, as a direct and proximate result of his prior complaints and/or disclosures regarding the Herzog illegal conduct and activities." The New Jersey Legislature enacted the Conscientious Employee Protection Act (CEPA) to "protect and encourage employees to report illegal or unethical workplace activities." *** CEPA prohibits a New Jersey employer from taking "retaliatory action" against an employee who objects to "any activity, policy or practice which the employee reasonably believes" is in violation of applicable law. *** "To prevail on a claim under this provision, a plaintiff must establish that: (1) he reasonably believed that [the complained-of] conduct was violating a law or rule or regulation promulgated pursuant to law; (2) he objected to the conduct; (3) an adverse employment action was taken against him; and (4) a causal connection exists between the whistleblowing activity and the adverse employment action. The first element of the prima facie case [a case sufficient to be sent to the jury] under CEPA is that the Plaintiff reasonably believed that the complained- of conduct (1) was violating a "law, rule, or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity"; or "(2) is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity." Although Defendants have argued that Plaintiff merely disclosed a violation of Company policy, Moseley has testified that in March 2007, he reported what he believed to be "unethical conduct, misappropriation of company funds, and theft" by his direct supervisor. *** Moreover, a plaintiff need not demonstrate that there was a violation of the law or fraud, but instead that he "reasonably believed" that to be the case. The facts in this case support an objectively reasonable belief that a violation of law or fraudulent conduct was being committed by Plaintiff's supervisor. [Emphasis added.] Regarding the causal connection between Plaintiff's whistleblowing activity and the negative adverse employment actions taken against him, Plaintiff stresses that he was employed by the Defendants for twenty-five years without a negative employment evaluation or any form of discipline until immediately after he disclosed the wrongful conduct of his supervisor. Not only did Plaintiff then receive a negative performance evaluation, but the posted position of Plant Manager was given to [another], despite [the other's] alleged past negative history and despite that Plaintiff asserts he had been acting in that job for over two years. Plaintiff contends that this is sufficient evidence of pretext. The Court is unable to find as a matter of law that Defendants' inferences prevail or that a jury could not reasonably adopt a contrary inference of retaliation. There are questions of fact as to how much the individuals responsible for Plaintiff's negative performance evaluations knew about Plaintiff's complaints. "[A] finding of the required causal connection may be based solely on circumstantial evidence that the person ultimately responsible for an adverse employment action was aware of an employee's whistle-blowing activity." Because jurors may infer a causal connection from the surrounding circumstances, as well as temporal proximity, the Court will not grant summary judgment. [Emphasis added.] *Defendants' motion for summary judgment is hereby DENIED. Legal Reasoning Questions 1. Using duty-based ethical principles, what facts or circumstances in this case would lead Moseley to disclose Herzog's behavior? 2. Using outcome-based ethical principles, what issues would Moseley have to analyze in making the decision to report Herzog's behavior? What would be the risks to Moseley? The benefits? 3. Under the Business Process PragmatismTM steps, what alternatives might Moseley have had in this situation? 4. Regardless of who wins this case at trial, in performing Step 5 (Evaluation) of the Business Process PragmatismTM procedure, what changes should the company take with regard to the complaint process?

Answer rating: 100% (QA)

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