NJ Judge Rules that NJ Casino’s Audit Committee is an “Employer” Under Whistleblower Statute

Superior Court Judge Stanley L. Bergman Jr. rejected the argument by two members of an Atlantic City casino’s audit committee to dismiss whistleblower claims brought against them for taking part in firing its general counsel for objecting to the submission of false information to state regulators.

The audit members tried to elude liability by arguing that they lacked authority over general counsel, Loretta Pickus, and could not be the decision makers in her termination from employment. The Court found otherwise stating that the auditors “aided the co-defendant employers by providing information that plaintiff claims caused her termination to upper management.”

The committee fell within the definition of an "employer" under the state's whistleblower statute — the Conscientious Employee Protection Act — according to the judge's written opinion. That definition includes "any person or group of persons acting directly or indirectly on behalf of or in the interest of an employer with the employer's consent."

"Based on the totality of the circumstances as noted above, the court finds that plaintiff has asserted facts which show she was, at a minimum, under some indirect control of the Independent Audit Committee for purposes of the CEPA statute," Judge Bergman said.

The judge pointed to Pickus' claims she was terminated four days after she appeared at a Jan. 23, 2020, committee meeting and complained about the committee's submission of false meeting minutes to the state's Division of Gaming Enforcement.

Pickus has alleged Ocean Casino told her she was being fired because "she should have been 'softer' and spoken 'less harshly'" in addressing the committee, according to her lawsuit.

Her dismissal also came about five months after Morowitz allegedly told DeVesa in an email that Pickus had "'[thrown them] under the bus in meeting with the [NJ]DGE yesterday,''' and that "'Bottom line, we now have a toxic relationship with Loretta,'" the judge noted.

"The court finds the above statements and the proximity of her termination shortly after the January 2020 meeting show a prima facie cause of action under CEPA and requires the denial of a dismissal of the CEPA claim against the movants at this point," Judge Bergman said.

Pinkus alleged that the minutes which were submitted to the DGE falsely stated that "the company's management did not consult the audit committee in January 2019 regarding Evans' appointment to the position of director of surveillance" and that "as such, the company had violated the audit charter, "according to the complaint. The minutes also stated the committee understood Evans' appointment to be temporary, the complaint said.

Pickus said she complained about the false minutes to Ocean Casino CEO Terry Glebocki and the DGE, the complaint said. Further, according to the complaint, her termination came four days after she attended the meeting and requested that the committee correct the minutes and take responsibility for the inaccurate submission to the division.

The complaint will proceed under the New Jersey Conscientious Protection Act, New Jersey’s whistleblower statute.

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