Printer Friendly

Retaliating against the whistleblower.

It is hereby ordered that judgment is rendered in favor of the plaintiff, Sheldon H. Parker, on his claim of retaliation pursuant to the Conscientious Employee Protection Act...against defendants Atochem North America in the amount of $50,000. It is further ordered and adjudged that judgment shall and hereby is entered for the plaintiff, Sheldon H. Parker, on his claim of retaliation...againstAtochem North America in the amount of$17,500for punitive damages. It is further ordered that defendants Atochem North America shall pay to plaintiff's counsel attorney's fees and costs in the amount of $125,000.

ONLY A DECADE AGO, A judgment such as this was a rarity. Outside of narrowly prescribed circumstances, employers had little to fear from taking retaliatory action against an employee who "blew the whistle" on the company's alleged improper or illegal activity. In those bygone days, employers could deal with the whistleblower, who was regarded as disloyal or insubordinate, as they saw fit, which usually meant disciplining and, in some cases, dismissing the employee. Not so today. With the emergence of whistleblower laws, employers must proceed cautiously when dealing with employees who voice opposition to any of their practices or actions; the employer who fails to do so could face serious liability.

Protection of whistleblowing employees is a new concept under the law. The first state whistleblower statute was adopted only in 1981. Whistleblowing laws are part of a growing trend toward increased protection of individual employee rights and the erosion of the traditional "atwill" employment doctrine. Under the old at-will doctrine, an employee was regarded as serving at the will of the employer and could be terminated at any time for any reason. However, the trend toward greater employee rights has prevented employers from terminating employees for reasons once seen as permissible; one example of this is the firing of a whistleblowing employee. The underlying premise of whistleblower laws is that society should encourage and protect the ethical behavior whistleblowing embodies. And because of these new protections, increasing numbers of employees are encouraged to blow the whistle on their employers.

Laws Protecting Whistleblowers

ALTHOUGH whistleblowers enjoy considerable protection under the law, there is currently no comprehensive federal whistleblower statute that protects all private employees. However, in 1988 two bills proposing such a statute - S.2095 and H.R.4305 - were introduced in the Senate and House, respectively. The objective of these bills was to provide a uniform approach to whistleblower protection to counteract the numerous and conflicting state statutes. The Senate referred its bill to its Committee on Labor and Human Resources and then to the Subcommittee on Labor.

The House referred H.R.4305 to its Committee on Education and Labor. However, neither bill progressed past this point.

Despite the lack of a comprehensive federal whistleblower statute, there are several federal statutes that protect private employees within particular industries such as nuclear power, mining and railroads. Additionally, statutes such as the Occupational Safety and Health Act, Environmental Protection Act and National Labor Relations Act protect employees who engage in whistleblowing with respect to conduct prohibited by those acts. Further, the Whistleblower Protection Act of 1989 protects federal employees who disclose information that they believe constitutes a violation of law, gross mismanagement, a gross waste of funds, an abuse of authority, or a danger to public health or safety.

The lack of comprehensive protection on the federal level is more than compensated for by the wide array of state laws. Currently, approximately three-quarters of the states have whistleblower statutes. Even employees in states without whistleblower statutes are not necessarily without protection. For example, employees in the private sector have successfully prosecuted suits for breach of employment contract as well as for discharge in violation of public policy; in addition, government employees have successfully asserted wrongful discharge claims based on their constitutional right to free speech.

The state statutes vary considerably in reach and requirements for bringing a claim. Generally, however, whistleblower statutes provide protection to employees who disclose violations of law or threats to public health and safety. The purpose of such statutes is to encourage employees to make disclosures by eliminating the fear that their employers will retaliate. A few states have adopted multiple whisdeblower statutes to cover different types of employees and/or different types of disclosures; for example, Pennsylvania, New York and Connecticut have two, three and four statutes, respectively.

New Jersey's statute is typical. Applying to employees in both the private and public sectors, it prohibits an employer from retaliating against an employee who provides information to, or testifies before, a public body investigating a violation of law by the employer. Additionally, it prohibits retaliation in situations where an employee discloses a practice of the employer that the employee reasonably believes is in violation of the law. Finally, it prohibits an employer from retaliating against an employee who objects to, or refuses to participate in, an employer practice that he or she reasonably believes is in violation of the law, is fraudulent or criminal, or is incompatible with a dear mandate of public policy. Although New Jersey protects both private and public sector employees, some states protect one or the other but not both.

Winning a Suit

GENERALLY, TO PREVAIL in a whistleblower suit, employees must prove that they made a protected disclosure, that the employer took adverse employment action against them - such as discharge, suspension or demotion - and that this action would not have been taken had it not been for the disclosure. However, some state statutes pose significant difficulties for employers that wish to take legitimate action against problem employees. In Texas and South Carolina, for example, the employer is presumed to have retaliated against the employee when the adverse action occurs not later than 90 days or within one year, respectively, of the disclosure. The employer can rebut this presumption by showing that the adverse action was taken for a legitimate, nondiscriminatory reason and would have been taken even in the absence of the disclosure. There is no denying, however, that such a presumption is tremendously helpful to the employee since it relieves him or her of the burden of establishing a causal connection between the disclosure and the adverse action.

South Carolina goes even further: That state provides a list of only five legitimate reasons for which an employer may take adverse action against a whistleblower. Such reasons are: willful or habitual tardiness or absence from work, disorderly behavior or intoxication while at work, destruction of the employer's property, malingering, and embezzlement or larceny of the employer's property. Employers should realize that these kinds of presumptions and limitations can effectively tie their hands when they attempt to deal with a troublesome employee who has, or claims to have, engaged in whistleblowing activity. In fact, some whistleblower laws could help an employee at risk of termination to blackmail his or her employer; by threatening to engage or claiming to have engaged in whistleblowing activity, the employee can effectively shield him or herself from disciplinary action.

Therefore, employers should be aware that taking any action against a whistleblower must be carefully considered and possibly even postponed to avoid any suspicion of retaliation, even if the action was pre-planned or wholly coincidental.

A cursory look at the factual context of recent cases reveals the problems that can befall employers who fail to recognize the circumstances that support a whistleblower claim. For example, a Michigan employer was sued by an employee after it discharged her for alleged unsatisfactory job performance. The woman claimed, however, that she was let go in retaliation for telling the city health department that the employer's furnace was defective, an act which resulted in the shutdown of the furnace and the issuance of a violation notice to the employer. The court determined that the woman had a claim under Michigan's whistleblower statute because she engaged in protected activities as defined by the state's act, was subsequently discharged, and because a causal connection existed between the protected activity and the discharge. Two specific facts led the court to infer the existence of this causal connection. First, the employee had earlier complained to the employer about the furnace, but the employer refused to remedy the situation. Second, the employee was discharged only three days after the employer learned that she was responsible for the health department's inspection.

In another case, a Kansas employer was sued by an employee after the company discharged him for alleged inadequate documentation of his qualifications for the job. However, the employee claimed that he was discharged in retaliation for notifying the employer of safety problems at the plant. The court found sufficient evidence to support the employee's claim that he had been discharged in retaliation for whistleblowing. This evidence included the company's failure to give the employee any warning of his impending discharge, its failure to treat similarly another employee who was unable to meet the prerequisites for employment, the short time period of only 48 hours within which the employee was told he must document his qualifications or face discharge, and the company's refusal to rehire the employee when, two weeks later, he was able to document his qualifications. Interestingly, the employee had been discharged on another occasion earlier that same year. This discharge occurred on the same day that he voiced concerns about potential safety problems. On this occasion, he was rehired after he protested.

In both of these cases, the courts regarded the close proximity in time between the protected disclosure and the adverse action as evidence of employer retaliation. Indeed, as noted above, in some states proximity in time will result in a statutory presumption of retaliation, which the employer must rebut. Therefore, in circumstances in which an adverse action follows arguably protected activity, employers should gather documentary evidence in order to disprove the charge of retaliation.

Some State Regulations

SINCE STATE STATUTES vary considerably, actions that would constitute violations of the whistleblower law in one state may not be violations in a different state. For example, while New Jersey protects an employee only when the employee makes the disclosure, a few states such as Maine and Minnesota also protect the employee when the disclosure is made by someone acting on the employee's behalf. Further, New Jersey is one of just a few states that protect an employee who makes a disclosure about a company that has a business relationship with his or her employer.

States also vary widely when defining to whom an employee can make a disclosure and still obtain statutory protection. For example, Delaware public employees are protected only if they make their disdosure to the office of auditor accounts. New Jersey, on the other hand, requires only that disclosures be made to a public body, while Illinois does not specify to whom disclosures should be made. States also vary with respect to the method by which protected disclosures must be made. Some states such as Arizona, Indiana and Wisconsin require that the disclosure be in writing. Others, however, such as Hawaii, Maine and Pennsylvania, recognize either verbal or written disclosures.

Like New Jersey, states such as California, Maryland and Pennsylvania require that an employee reasonably believe that the employer has engaged in misconduct or, alternatively, that an employee act in good faith in order to obtain statutory protection. Other states are less willing to protect an employee solely on the basis of the employee's reasonable belief or good faith. For example, Indiana requires that, in order to qualify for protection, an employee must make a reasonable attempt to verify the accuracy of the information prior to making the disclosure. Several states such as Kentucky, Wisconsin and Kansas do not protect an employee who knowingly discloses false information; in Arizona, an employee who knowingly makes a false disclosure is subject to a civil penalty of up to $25,000 and dismissal from employment.

Many states such as New York, New Jersey and Ohio require an employee who wishes to make a disclosure to first notify the employer to allow it a reasonable opportunity to remedy the situation. Ohio requires an employee to orally notify his or her supervisor and follow up with a written report. If the employer does not remedy the situation or make a reasonable and good faith effort to do so within 24 hours, the employee may then file a written report with the appropriate public office or agency. The employer must later advise the employee in writing that the situation has been corrected or that the employee has made efforts to do so. If the employee wishes to make a disclosure that relates to a criminal violation of an environmental law, the employee may bypass the employer and directly notify, either orally or in writing, the appropriate public official.

Most states require employers, in turn, to give employees notice of their rights and obligations under the whistleblower statute. Generally, the statutes require employers to post these rights in a conspicuous place such as on a poster or some other form of notice. Oklahoma goes a step further by requiring state employers to provide a copy of the statute to each state employee; Nevada goes further still and requires the director of the department of personnel to distribute a written summary of the statute to each state employee on a yearly basis.

Generally, whistleblower statutes prohibit employers from taking any adverse employment action against an employee who makes a protected disclosure. Alaska provides further that a public employer may not disqualify an employee from eligibility to bid on contracts with the public employer or receive land under a law of the state. Nevada's statute is more specific than most and provides that any retaliatory action would include denying the whistleblowing employee adequate personnel to perform his or her job duties, frequently replacing or switching the employee's staff members, moving the employee to an undesirable office and refusing to assign meaningful work.

Generally, the various states allow an employee who is subject to retaliation to take administrative and/or civil action against the employer. In states such as California and New Hampshire, however, a public employee must first make a good faith effort to exhaust any available administrative remedies before taking further action.

Most statutes expressly provide a limitations period within which an employee must bring an action against the employer or be forever foredosed from doing so. Although state limitations periods vary greatly, many of them, including those of Ohio, Pennsylvania, New Jersey, New York and South Carolina, fall within a range of 180 days to two years.

Statutory Remedies

MOST STATES provide a host of remedies to an employee who successfully prosecutes a whistleblower claim, including reinstatement to the same or an equivalent position, reinstatement of full fringe benefits and seniority rights, compensation for lost wages, and payment by the employer of the employee's reasonable costs and attorney's fees.

Additionally, several states expressly provide that an employee who initiates an action under the whistleblower statute will retain his or her other rights and remedies. New York and New Jersey, however, provide that an employee who files a whistleblower claim waives his or her rights and remedies available under any contract, collective bargaining agreement, law, rule, regulation or under the common law. Based on this provision, employers have argued that a whistleblower claim requires the employee to waive all other rights and remedies arising out of the employment relationship. However, at least one court in New Jersey has rejected that argument, finding that the election of remedies provision in the New Jersey statute pertains only to other claims for wrongful termination based on the employee's disclosure of wrongdoing.

Generally, a person who retaliates against a whistleblower is subject to a civil fine. A few states such as Pennsylvania and Oklahoma go further and provide that a state official guilty of retaliation is subject to the loss of his or her position.

AVOIDING WHISTLEBLOWER CLAIMS

SINCE EMPLOYEES WHO blow the whistle and report improper activity enjoy numerous protections under the law, employers must take proactive steps to reduce the risk of whistleblower activity. First, employers need to become sensitive to situations that could provide a basis for such a claim. There are several situations in which an employee may qualify for whistleblower protection.

Examples include an employee who makes a concerned statement to a supervisor, a worker who refuses to comply with the employer's instructions and an employee who reports a suspected impropriety to outside officials. If any of these situations occurs, employers must realize that any adverse action taken against the employee may be construed as a violation of the whistleblower law.

To ensure that any actions the company takes are in accord with the applicable whistleblower statutes, employers must become familiar with their state's law. Obviously, an employer who does business on a national level faces a heavier burden and must grapple with the wide-ranging dissimilarities among the various state statutes.

However, no matter how many state statutes come into play, employers need to become knowledgeable about their rights and obligations, In particular, the employer should learn about the types of employees and disclosures to which the statutes apply, to whom an employee must make a disclosure, by what means the disclosure must be made, what notice requirements are applicable to both the employee and the employer, and the applicable limitations periods. By becoming familiar with the laws, employers will become aware of both their rights and those of their employees.

Employers should also establish an in-house complaint procedure through which employees can voice their concerns and complaints. By having complaints aired internally instead of to outside authorities, the employer can attempt to remedy any existing problems or, in cases where no difficulties are found, demonstrate to the disgruntled employee that his or her allegations are unfounded. The employer may also be better prepared to defend a claim and to diffuse negative publicity in the event that the employee later goes to a public authority.

The complaint procedure should be easy to use and non-threatening. Management must take pains to assure employees that no retaliatory action will be taken against them should they file complaints. Management should also take employee's concerns seriously and process them efficiently and effectively in order to inspire confidence in the procedure. Finally, the procedure should be well publicized among employees in order to encourage its use.

In the event that an employee makes a protected disclosure to an outside authority, the employer should refrain from taking any action that might be viewed as retaliatory. Rather, the employer should gather all of the facts regarding the disclosure and analyze them in light of the applicable whistleblower statutes. Only then will the employer be able to make an informed decision as to how to deal with the disclosing employee without running afoul of the whistleblower laws.
COPYRIGHT 1992 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:includes article on avoiding whistleblowing claims
Author:Egler, Theresa Donahue; Edwards, Erica L.
Publication:Risk Management
Date:Aug 1, 1992
Words:3139
Previous Article:Ergonomics in the office.
Next Article:Structured settlements in today's climate.
Topics:


Related Articles
Accommodating would-be whistleblowers: Sarbanes-Oxley's Section 301 requires companies to establish effective procedures for handling whistleblower...
"Whistle ... and you've got an audience.".
Whistleblower Act.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters