ThinkingRemember the movie Minority Report starring Tom Cruise? The premise of that movie was that in the future a special police task force (the “pre-crime division”) could identify wrongdoers who would go on to commit crimes and charge them before those unlawful acts actually occurred. A similar science fiction plot recently made its way to the Michigan Supreme Court except it involved Michigan’s Whistleblowers’ Protection Act (WPA) and whether employees are protected if the employee reports future unlawful activity by an employer.

The Michigan Supreme Court was not interesting in expanding the WPA to cover future conduct. In other words, the Court concluded that an employee cannot bring a claim under Michigan’s WPA if the employee is only reporting or going to report future, planned or anticipated unlawful conduct by the employer.

In the case, Pace v. Edel-Harrelson (2-1-2016), the plaintiff worked for a nonprofit entity that provided services to survivors of domestic violence and the homeless. The plaintiff claimed that she was wrongfully terminated in violation of the WPA. Plaintiff alleged that her manager represented that she intended to use grant money to purchase a stove for the manager’s daughter. Plaintiff further alleged that the manager suggested that Plaintiff should cover up the unauthorized purchase by documenting it in the name of a client. After Plaintiff had reported her manager’s plan to the executive director, Plaintiff was terminated and she filed a whistleblower lawsuit.

Michigan’s Whistleblowers’ Protection Act

Michigan’s WPA restricts employers from discharging, threatening or otherwise discriminating against an employee who “reports or is about to report” to a public body, “verbally or in writing, a violation or a suspected violation of a law or regulation or rule.”

But the Michigan Supreme Court concluded what the WPA does not cover is reporting future misconduct. In other words, an employee must, at least, have a belief that the violation of law has occurred or is ongoing Having a good faith and reasonable belief that a violation of the law will take place in the future or is being actively planned is not enough.

Because plaintiff reported [her manager’s] announced intention to buy a stove with unauthorized grant funds, which constituted an expression of an intent to act in the future, not an accomplished or ongoing act, plaintiff has not established conduct that qualifies as ‘a violation or a suspected violation of a law’ under [Michigan’s WPA]. Consequently, plaintiff did not engage in ‘protected activity’ under the WPA as a matter of law.

Accordingly, the Michigan Supreme Court reversed the decision of the Court of Appeals, which had found in favor of the plaintiff.

Take Away for Employers

This is a decision where I think the right result was reached by the Court, but it is a result that you do not necessarily have to like. Take for instance the disastrous decisions leading up the deplorable situation involving Flint and its water. Under the reasoning of the Court, an employee who may have believed that environmental laws or regulations

Under the reasoning of the Court, an employee who may have believed that environmental laws or regulations would be violated by improperly using the Flint River for the city’s water supply would not have been protected under the WPA until the violation actually occurred. Such a result is despicable public policy, but it is consistent with the Court’s reading of the plain language of the Michigan’s WPA. And to change that language is a meaningful job for the Michigan legislature, which means it is a likely a job that is not going to get done.

Michigan’s Whistleblower Protection Act remains one of the more complicated and nuanced statutes that employers and employees face. And while the case discussed above is obviously a favorable decision for employers, it is not a silver bullet against whistleblower lawsuits. Instead, it is important for companies to respond carefully to employee complaints before taking an adverse employment action. This is because it may not be entirely clear if an initial report concerns a suspected future violation or a suspected existing violation. This fine line may be the difference between having a subsequent lawsuit dismissed or spending money and resources in on-going litigation.

For more information about complying with Michigan’s Whistleblowers’ Protection Act, contact employment attorney Jason Shinn. He routinely works with employers to lead workplace investigations and in offering pre-termination assessments focused on avoiding later claims that a termination was discriminatory or unlawful. These assessments have proven an invaluable tool for avoiding costly employment discrimination litigation and liability.