Volunteers Not Protected By New Jersey's Whistleblower Law, Says Court

A New Jersey appeals court recently ruled that a volunteer firefighter was not an "employee" of the volunteer fire company from which he was expelled, rejecting his whistleblower claim and strictly interpreting the state's statute. The September 13, 2017 ruling should offer guidance to New Jersey employers regarding whether true "volunteers" are protected under the state's Conscientious Employee Protection Act, commonly known as "CEPA" (Sauter v. Colts Neck Volunteer Fire Company No. 2).

Rocky Relationship Leads To Legal Claims

The Colts Neck Fire Department consists of two volunteer companies, aptly named Company No. 1 and Company No. 2. The Companies are overseen by an Executive Fire Council comprised of representatives from each Company and members or designees of the Township Committee. The Township maintains workers' compensation and liability insurance for volunteer firefighters, and also provides them with reduced fees for certain municipal permits and licenses as further incentive to serve.

Jeffrey Sauter, a full-time employee of the Monmouth County Sheriff's Office, joined Fire Company No. 2 when he was still in high school and served for over 20 years. He had a somewhat contentious relationship with his Company. In 2004, he filed a whistleblower claim against the Company after being suspended for 18 months, claiming the suspension was in retaliation for his complaints about the bidding process for renovations to the Company's fire hall - after his brother was denied the contract. Sauter and the Company settled the suit for $10,000.

But Sauter would not let the matter lie. He maintained the settlement failed to make him whole for his legal fees, which he claimed exceeded the settlement by some seven or eight thousand dollars. Several years later, he filed a formal request for his legal fees, and the general membership of the Company voted to reimburse him. After the vote, however, the Company obtained legal advice that the reimbursement would jeopardize the Company's 501(c)(3) tax status, and consequently did not make the reimbursement.

At about the same time, the Company discovered that its recently deceased long-time treasurer had embezzled about $300,000. The Company made a claim under its fidelity policy, but after Sauter was notified the Company would not be reimbursing him for his legal fees from the 2004 lawsuit, he wrote to the fidelity carrier directly and claimed the Company's proof of loss of the embezzlement was...