NJ CEPA and Equal Wage Claims Held Preempted by Federal Law

In a significant recent decision, a federal district court ruled that an employee’s claims under New Jersey’s whistleblower and wage discrimination statutes were preempted by the National Labor Relations Act (NLRA). 

The court, in Davis v. Benihana, Inc., determined that the plaintiff’s claims of retaliation and underpayment — ordinarily protected under New Jersey’s Conscientious Employee Protection Act (CEPA) and the New Jersey Law Against Discrimination (NJL:AD) — fell squarely within the scope of the NLRA and thus must be decided by the National Labor Relations Board (NLRB), not the state courts.

The plaintiff, Aaron Davis, a chef at the Benihana restaurant in Pennsauken, alleged that he suffered retaliation for engaging in discussions with a co-worker about allegedly unfair pay. After learning of the discussion, the manager called a meeting with all of the chefs, warning them that discussing pay in the workplace was a terminable offense. Davis spoke up, stating that an employer could not lawfully terminate an employee for that reason. Later the same day, he was fired.

Davis filed a lawsuit in state court under CEPA and the NJLAD, alleging illegal retaliation. Benihana removed the case to federal court and moved to dismiss on preemption grounds. The employer argued that the complained-of conduct was concerted activity aimed at improving workplace conditions, which is within the purview of the protections of NLRA Sections 7 and 8. The court agreed and dismissed, ruling that when conduct is “arguably” protected or prohibited by the NLRA, state law claims based on the same conduct are preempted to preserve the federal regulatory scheme and avoid conflicting rulings.

Davis argued that New Jersey’s whistleblower and wage discrimination laws qualify for the “local interest” exception to preemption. This exception allows some state claims to survive if they vindicate interests “deeply rooted in local feeling and responsibility,” such as violence, threats or malicious defamation. However, the court determined Davis’s claims were traditional labor issues that the NLRA was designed to regulate. Neither the whistleblower nor wage discrimination aspects involved the sort of egregious or locally-rooted misconduct that falls outside federal labor oversight, the court said.

The effect of the ruling is that employees may have to pursue their CEPA and wage discrimination claims at the NLRB, where remedies and procedure can be more limited and damages narrower. However, employees may still have avenues for state-court relief. Retaliation against a lone whistleblower may still support CEPA claims in state court. Similarly, wage discrimination claims unrelated to group advocacy might escape preemption, remaining viable under state law.

If you are an employee in New Jersey and believe you have been retaliated against for speaking out about violations of state laws, an experienced whistleblower and employment discrimination lawyer can analyze your circumstances and pursue your available legal remedies.

The attorneys of Deutsch Atkins & Kleinfeldt, P.C. in Hackensack, help workplace retaliation victims in New Jersey pursue legal relief and just compensation. To schedule a confidential consultation, call us at 551-245-8894 or contact us online.