An Employer's Response Guide to Whistleblower Claims

Posted by Jason Shinn on April 25, 2012

Whistle.jpgRetaliation against company employees who report inappropriate or illegal action create significant legal risks for employers under whistleblower protection statutes.

Employers, however, can significantly increase their chances of disposing of a whistleblower protection claim if proper policies are in place and by appropriately responding to such reports. The following provides an overview of a whistle blower protection claim. 

Who is a Whistleblower?

Under Michigan's Whistleblowers’ Protection Act, a whistleblower is an employee, or a person acting on behalf of an employee, who (i) reports; or is about to report; (ii) verbally or in writing; (iii) a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body. MCL 15.362.  

A successful whistleblower protection claim may entitle a plaintiff to reinstatement, payment of back wages, full reinstatement of fringe benefits and seniority rights, actual damages, or any combination of these remedies. A court may also award the complainant all or a portion of the costs of litigation, including reasonable attorney fees. MCL 15.364

Establishing a Whistleblower Protection Claim.

To establish a whistleblower protection claim, an individual must show that he or she:

  1. Was engaged in protected activity, which includes reporting to a public body a violation of a law, regulation, or rule, being about to report such a violation to a public body, or being asked by a public body to participate in an investigation;
  2. Was discharged or discriminated against; and
  3. A causal connection exists between the protected activity and the discharge or adverse employment action.

Defending Against a Whistleblower Protection Claim - Timing is Everything. 

The last element of a whistleblower protection claim - a causal connection - often provides employers the opportunity to successfully argue that the complained of adverse employment action had no “causal connection” to the protected activity. 

A temporal relationship, standing alone, is not enough to demonstrate a causal connection between the protected activity and any adverse employment action. Instead, a whistleblower protection plaintiff must show something more than merely a coincidence in time between protected activity and adverse employment action.

Examples of "something more" between the protected activity and the adverse employment action that Courts have accepted include:

  • Showing that the employer was upset about any protected activity.
  • Evidence that after engaging in any protected activity, plaintiff was treated differently than before;
  • Showing that the employee's job duties were altered; or
  • The employee was threatened to stop making complaints.

In other words, the decision to take action against the employee must be connected to the protected activity.

Avoid Turning Employee Complaints into Whistleblower Ammunition

Before taking an adverse employment action, employers must examine employee conduct and a broad range of potential legally protected activities in the workplace. To further minimize or eliminate the risks of a whistleblower protection claim, employers should consider the following: 

  1. Before an employer takes an adverse employment action against an employee, it should first determine if that employee was engaged in protected activities shortly before the termination decision. If so, the employer must next determine if there is a causal link between the termination and the employee’s participation in any such collateral civil rights matter.
  2. It is critical for employers to identify the person responsible for making the adverse employment decision. 
  3. Once this identification take place, the next question is whether the person involved in the decision making had knowledge of the employee’s alleged protected conduct or activities. 

Taken together, this analysis will hopefully show that when the adverse employment decision was made the person making the decision had no knowledge of the protected conduct. Follow this link for additional recommendations for responding to a whistleblower protection claim. 

Without this link, an employer should be able to show there is no causal connection between the protected activity or conduct and the adverse employment decision. Conversely, such analysis may alert the employer to potential liability and shift the litigation strategy to settlement negotiations in order to minimize further litigation costs.  

Avoiding Whistleblower Claims - It's All in the Employer's Response

Posted by Jason Shinn on July 06, 2011

Knife Behind Back.jpgThe alleged (mis)handling of an employee's complaints of wrong-doing by her former employer offers insight on how to avoid a subsequent whistleblower claim or, at least, be in a better position to defend against such claims. 

Specifically, a Metro Detroit Employment Law firm was recently sued for violating (ironically) various employment laws. The law firm and named defendants were also alleged to have violated Michigan's computer crimes statute, MCL 752.791-97, which forms the basis for a whistleblower claim.

The Complaint filed in Wayne County Circuit (PDF) alleges that the defendant law firm's named partner and defendant stole computer records consisting of client information from his former law firm prior to departing to start a competing venture.

The computer statute generally targets computer intrusion crimes and traditional crimes committed through the use of computers, such as theft. Plaintiff, however, did not assert an actual claim under Michigan's computer statute and, instead, used the alleged violation as the cornerstone for her whistleblower claim, i.e., she was "about to report" the Defendants' violation of the Michigan computer statute to unspecified public bodies, which was one of the reasons she was fired.  

Under Michigan's Whistleblower’s Protection Act (WPA), MCL 15.362 et seq., employers are restricted from discharging, threatening, or otherwise discriminating against an employee because that employee reports or is "about to report" a violation or suspected violation of a federal or state statute or regulation to a public body. Where a claim is based on an "about to report" theory, the plaintiff must show by clear and convincing evidence that he or she was about to report, verbally or in writing, the violation or suspected violation of a state or federal law to a public body.  

The Take Away

While it remains to be seen how this litigation actually resolves, the Complaint offers a number of "rookie" employment law mistakes that employers should avoid. Consider for example, the employer is alleged to have no employee handbook and no Discrimination or Harassment policies in place. 

But an important "take-away" for employers is how to limit or otherwise avoid a subsequent Whitsleblower claim. In that regard, companies should consider the following points:

  • Have policies in place that encourage the reporting of complaints;
  • Take all complaints seriously and investigate all concerns;  
  • Employers should encourage a reporting employee to document as many details of the alleged violation as possible so that the investigation is focused on the actual complaint. Such documentation has the added benefit that if the employee later claims retaliation, there will be a record of the reported conduct, which will be difficult to later modify or expand by the employee's lawyer; 
  • Policies should expressly state that employees who report suspected violations will not be subject to retaliation in any manner and that any retaliation will not be tolerated; 
  • Document all steps taken in the investigation process;
  • Document a conclusion: Either the existence of a compliance issue or the absence of one; and
  • If a violation occurred, document and follow through with corrective action.

While there certainly is no "silver bullet" for avoiding whistleblower claims, by being proactive and taking these steps, employers will better able to avoid such claims or, at least, put the employer in a better position to defend a subsequent whistleblower claim in the future.