Mary Stapleton was an assistant manager at a DSW store in Cherry Hill, N.J., this past March when a woman and her mischievous 22-month-old daughter came to try on some shoes. A sales associate soon informed Stapleton that the toddler was busy painting the store's shelves with DSW nail polish. When Stapleton approached the child to retrieve the nail polish, she found her mother was ignoring her. And from the strong foul odor she detected, it appeared she had been ignored for some time.

1. Shoe Store Worker Blows Whistle on
Employer After Termination
January 3, 2013
By Adam J. Glazer
Adam J. Glazer is a partner at Schoenberg, Finkel, Newman & Rosenberg LLC and an
adjunct professor at Northwestern University School of Law. A general service firm,
Schoenberg, Finkel dates back about 60 years in Chicago. Glazer maintains a broad
commercial litigation practice with an emphasis on preventing, and if not, then litigating
business disputes.
Mary Stapleton was an assistant manager at a DSW store in Cherry Hill, N.J., this past
March when a woman and her mischievous 22-month-old daughter came to try on some
shoes. A sales associate soon informed Stapleton that the toddler was busy painting the
store's shelves with DSW nail polish.
When Stapleton approached the child to retrieve the nail polish, she found her mother
was ignoring her. And from the strong foul odor she detected, it appeared she had been
ignored for some time.
The mother noticed neither Stapleton's interaction with the child nor the child
approaching other customers and pulling on their clothes for attention. This led
Stapleton to suggest to the mother that she change her daughter's diaper in the
restroom, but the mother refused, saying she lacked the necessary supplies. For the
next two hours, the mother shopped for shoes, while her unsupervised daughter
traipsed through the store in increasing need of a diaper change.
When the mother finally proceeded to the cash register to return previously purchased
merchandise and make a new purchase, the toddler threw several items onto the floor,
prompting the mother to threaten to hit her daughter when they got home. Based on
what she had seen, Stapleton decided the mother, who appeared confused, was
endangering the welfare of her child and had her reported to New Jersey's Division of
Child Protection and Permanency. In order to make the report, Stapleton needed to
access the mother's name and address collected while processing her return.
When the DSW human resources department learned that the mother's confidential
information had been accessed and provided to the state in violation of its conduct
code, Stapleton was terminated. Her subsequent protests that she acted in the best
interests of the child left DSW unmoved.

2. Convinced she was wrongfully terminated, Stapleton filed suit in October (from which
the description of facts is taken). DSW promptly removed the case to the U.S. District
Court in New Jersey. The case is Stapleton v. DSW Inc. No. 12-7406-JEI-JS.
The complaint alleges that by terminating Stapleton for breaching its policy of strictly
protecting customer information, DSW acted inconsistent with New Jersey's public
policy of protecting the welfare of children and violated the state's whistle-blower statute
known as Conscientious Employee Protection Act (CEPA). Available damages for a
proven CEPA violation include punitive damages and attorney fees.
When enacted, CEPA was described as "the most far-reaching 'whistle-blower statute'
in the nation." D'Annunzio v. Prudential Ins. Co. of America. 192 N.J. 110, 125, 927
A.2d 113 (2007). And as "broad, remedial legislation, the statute must be construed
liberally." Id. Yet, Stapleton's complaint asserts that DSW retaliated against her not for
reporting illegal conduct by DSW, but for reporting to the state an allegation of child
abuse by a third person.
New Jersey courts recognize that CEPA "covers action taken only with respect to the
employment relationship established between the employer and employee." Young v.
Schering Corp. 141 N.J. 16, 32, 660 A.2d 1153 (1995). It is designed to encourage
employees to bring to their employers' attention unsafe working conditions or illegal or
unethical conduct.
Unable to ensnare DSW in CEPA's framework under this rationale, Stapleton asserts
that a footwear company's benign policy of protecting customer information is
inconsistent with the state's interest in protecting the welfare of children. Stapleton
alleges her termination violates CEPA because it came in retaliation for her refusal to
abide by a company policy which she reasonably believed was incompatible with New
Jersey public policy.
DSW notes in its just-filed motion to dismiss that Stapleton never raised with her
supervisors any concern with its policy of protecting customer information until after her
termination. The argument follows logically that without blowing the whistle on a policy
alleged to violate the law during her employment, she could not have been terminated
for whistle-blowing. The motion also seeks dismissal based on Stapleton's failure to
bring her concerns to DSW (by written notice) before making her report with the state,
as New Jersey's statute requires.
Illinois has enacted its own Whistleblower Act to prevent employers from establishing
rules or practices that would inhibit employees from alerting authorities to an employer's
violation of state or federal law. 740 ILCS 174/1 et seq.
The act proscribes retaliation against employees who report such violations or who
refuse to participate in unlawful activities. Unlike in New Jersey, punitive damages are
not available in Illinois, but employers found in violation of the Illinois Whistleblower Act
may be liable for reinstatement, back pay with interest, compensation for any damages
shown to be a result of the act's violation and costs of litigation, including attorney fees.

3. Both the New Jersey and Illinois whistle-blower acts protect employees from retaliation
for making complaints based on reasonable cause, or from cooperating with state or
federal officials or with the employer's own investigation of allegedly unlawful activity.
Stapleton's current efforts notwithstanding, it appears that neither state currently offers
protection from termination by an employer for blowing a whistle against a third party.
While DSW's Rule 12(b)(6) motion seems well-taken and the federal court should be
expected to reject Stapleton's attempt to expand a whistle-blower statute beyond its
limited purpose, the case does highlight how even a ubiquitous corporate policy of
keeping customer information confidential can lead to litigation.
Of course, DSW undoubtedly recognizes that failing to properly protect its customers'
personal data would likely lead to more meritorious court challenges.
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