Mehlman v. Mobil Oil Corp.
13 I.E.R. Cas. (BNA) 1441, 707 A.2d 1000, 153 N.J. 163 (1998)
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Rule of Law:
The Conscientious Employee Protection Act (CEPA) protects a New Jersey employee from retaliatory action by a New Jersey employer for objecting to a practice occurring outside of New Jersey, as long as the employee holds an objectively reasonable belief that the practice is incompatible with a clear mandate of public policy concerning public health, safety, or welfare, even if that policy protects non-New Jersey citizens.
Facts:
- Dr. Myron A. Mehlman, an expert toxicologist, served as Mobil Oil Corporation's Director of Toxicology, with international responsibilities.
- In September 1989, Mehlman gave a presentation on the health hazards of gasoline to managers at Mobil SeMyu Kabushiki Kaisha (MSKK), Mobil's Japanese subsidiary.
- During the presentation, an MSKK manager, Takashi Tsunemori, informed Mehlman that the benzene level in MSKK's regular gasoline was 5.7% or 5.8%, significantly higher than what Mehlman's data showed.
- Mehlman responded that such levels were 'very poisonous,' 'dangerous and toxic,' and insisted that MSKK must either 'reduce it or do not sell it.'
- Upon his return to the United States on October 7, 1989, Mehlman's superior immediately placed him on an indefinite special assignment, barring him from his office.
- Mobil had initiated an internal investigation into Mehlman's alleged misuse of company assets for his wife's business just days after the Japan trip was scheduled but before his statements about benzene.
- On November 2, 1989, Mobil officially terminated Mehlman's employment, citing the results of the internal investigation as the cause for his discharge.
Procedural Posture:
- Dr. Mehlman sued Mobil Oil Corporation in a New Jersey trial court, alleging his termination violated the Conscientious Employee Protection Act (CEPA).
- A jury found in favor of Mehlman, awarding him over $3.4 million in compensatory damages and $3.5 million in punitive damages.
- The trial court judge granted Mobil's motion for judgment notwithstanding the verdict (JNOV), concluding Mehlman had not proven the existence of a 'clear mandate of public policy.'
- Mehlman appealed the trial court's decision to the Appellate Division of the Superior Court of New Jersey.
- The Appellate Division reversed the trial court, reinstated the jury's full verdict and damages on the CEPA claim, and vacated a separate tort claim the trial court had substituted.
- Mobil Oil Corporation, as the appellant, then appealed the Appellate Division's decision to the Supreme Court of New Jersey.
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Issue:
Does the Conscientious Employee Protection Act (CEPA) protect a New Jersey employee from being fired by his New Jersey employer for objecting to a practice by the employer's foreign subsidiary that the employee reasonably believes is incompatible with a clear mandate of public policy concerning the public health of citizens of another country?
Opinions:
Majority - Stein, J.
Yes, CEPA protects an employee in this situation because the statute's purpose is to shield employees who report harmful activity, regardless of where that harm occurs. The court found that a clear mandate of public policy against selling gasoline with more than 5% benzene existed, and it was not necessary for this policy to be a specific New Jersey or Japanese law. The court's determination of a 'clear mandate' was based on a combination of sources, including a Japanese Petroleum Association guideline that functioned like a regulation, persuasive scientific evidence of benzene's health hazards, a Japanese environmental regulation on benzene in drinking water, and U.S. regulations demonstrating that concentrations over 5% were considered dangerous. The court also held that an employee does not need to know the specific source of the public policy when they object; they only need an objectively reasonable belief that the employer's conduct is harmful to public health and likely violates some public policy. The wrongful conduct under CEPA is the retaliatory discharge itself, which occurred in New Jersey, making the application of New Jersey law appropriate.
Dissenting - O'Hern, J.
No, the case should be remanded for a new trial because the trial court committed a fundamental error by failing to determine, as a matter of law, whether a clear mandate of public policy actually existed. The majority incorrectly conflates the employee's 'reasonable belief' with the actual existence of a 'clear mandate,' which must be 'clearly identified and firmly grounded' in sources like constitutions or statutes, not 'vague, controversial, [or] unsettled' policies. A guideline from a private industry group like the Japanese Petroleum Association establishes company policy, not public policy. Furthermore, acceptable benzene levels were an 'evolving process' in 1989, and there was no firmly established law in Japan or the U.S. that proscribed the conduct Mehlman objected to at that time. Without a clear mandate of public policy, the employee's claim, like the one in Pierce, should fail.
Analysis:
This decision significantly broadens the geographic scope of CEPA's protections, establishing that the 'public' in 'public policy' is not limited to the citizens of New Jersey. It allows whistleblower claims based on objections to an employer's conduct that harms people in other states or countries. The ruling also clarifies that the source of a 'clear mandate of public policy' can be a combination of foreign industry standards, scientific consensus, and regulations from other jurisdictions, rather than a single, explicit law from the location of the conduct. This lowers the bar for employees of multinational corporations based in New Jersey to bring whistleblower claims for conduct occurring anywhere in the world.
