Category Archives: Whistleblower Claims

If a Whistleblower is Just Playing the Same Old Tune, Does the Law Protect Him?

Some of the trickiest employment decisions can involve employees who have made accusatory complaints against the company they work for. Many state and federal laws protect “whistleblowers” who try to bring to light illegal behavior by their employers. But in many instances employers legitimately wonder whether the complaint was made in “good faith,” or just to stir up trouble, or even to give a soon-to-be-fired employee who was about to be fired for some other reason, an excuse to bring a lawsuit.

So, is the employee’s complaint of employer wrongdoing really whistleblowing if the company already knows about the alleged wrongdoing?  How can the employee really “blow the whistle” if someone else has blown it already?

An opinion issued by the Minnesota Supreme Court on August 9, 2017, answers this question favorably to the employee, expands the type of complaints that will be regarded as good faith whistleblowing, and may become the basis for more lawsuits by employees accusing employers of retaliating against them for reporting alleged wrongdoing.

Previously, under Minnesota’s Whistleblower Act, Minn. Stat. §§ 181.931-.935 (2016), an employee terminated for making a complaint of illegal conduct had to demonstrate that his complaint had been made in good faith, which meant not only that the employee believed in the report he was making, but also that his purpose was to “expose an illegality.” Since the you can’t “expose” something which is already known, Minnesota law did not protect employees who complained of illegal (or allegedly illegal) conduct that the employer already knew about.

But in 2013, the Minnesota Legislature amended the statute to provide a specific definition of “good faith,” which focused on the employee’s belief that his report was true, but said nothing about intending to expose an illegality. In Friedlander v. Edwards Lifesciences, LLC, et al., A16-1916 (Minn. Aug. 9, 2017) (“Friedlander”), the Minnesota Supreme Court held that the Legislature intended to get rid of the requirement of exposing an illegality, and that whistleblowing activity is protected even if it is just the same old tune that the employer had heard before.

Although the statute was amended in 2013, until Friedlander it was not clear whether the “expose an illegality” requirement remained part of the law, as that mandate did not appear in the text of the 2013 Whistleblower Act. In Friedlander, an employee sued his former employer in the federal court under the Minnesota Whistleblower Act, claiming that his superiors had been engaged in legal violations, which the employee had reported directly to the superiors prior to his termination. The employer moved to dismiss the lawsuit, arguing that because the employer reported the allegedly wrongful conduct to people who already knew about the conduct, he had not “exposed” the allegedly illegal conduct to anyone. The success of the employer’s motion therefore turned on whether the 2013 amendments eliminated the Whistleblower Act’s “expose an illegality” requirement. Because no court had yet addressed that issue, the Minnesota District Court referred the question to the Minnesota Supreme Court, which ruled unanimously in favor of the employee. In Friedlander, the Minnesota Supreme Court concluded that the 2013 amendments eliminated the “expose an illegality” requirement. Following Friedlander, a whistleblower’s report is made in “good faith” if the report is “not knowingly false or made with reckless disregard of the truth.”

Friedlander therefore simplifies what an employee has to prove in order to sue under the Whistleblower Act. It serves as a reminder to employers that firing an employee who has complained about possibly illegal activities at the company must be addressed with care. It remains perfectly legal to fire such employees for other, legitimate reasons, but not because their whistleblowing. Employers should therefore take care to ensure that any termination, demotion, pay cut, or other personnel action being considered for an employee who has reported actual or suspected illegal conduct is taken for legitimate business reasons, not because of the employee’s report.

Quirky Question # 227, New Bells and Whistles in Minnesota Statute

Question:

We have an employee who we have been planning to terminate because of performance issues.  This employee may have realized this was coming because he recently sent an email to a number of people claiming that our company policies violate the law.  We have been aware of these possible problems before his emails were sent and already have been working on correcting them.  We suspect this employee may have sent these emails simply to shield himself from termination.  We are concerned that we may be subject to a “whistleblower” claim if we terminate this employee.  Can we still fire him despite his emails? Answer→

Quirky Question # 175: In-House Counsel Barred From Qui Tam Action Against Former Employer

Question:

I know you have written in the past about former in-house counsel suing their former employers in connection with their terminations. We have a slightly different twist on that situation. Our former in-house counsel has filed a qui tam lawsuit against our firm based on information he learned while employed and his supposition about what occurred after his employment ended. He apparently does not think this violates any Rules of Professional Conduct. His conduct, however, seems questionable to us, since he learned the underlying facts during the period he was employed. Can you provide any guidance? Answer→

Unethical or Illegal? Quirky Question # 146

Quirky Question # 146:

One of our employees recently complained about certain company practices that she contended were unethical.  She did not contend the company engaged in illegal activity — just unethical conduct.  We pointed out to her that we did not want someone working for the company if she truly believed we were engaging in unethical practices.  Our anxiety about this situation was exacerbated when she told us she had reported the company’s practices to the press and a government agency.  We fired her.  She now contends that she was a whistleblower, protected by Minnesota’s Whistleblower statute.  Should we be concerned? Answer→

Sarbanes-Oxley, Quirky Question # 74

Quirky Question # 74:

We have been having some performance issues with one of our mid-level marketing managers.  In October, we placed him on a performance improvement plan.  He has not been meeting the expectations established by the plan.  We are scheduled to meet with him about his performance again next week, and it is very likely that we will be moving him toward separation from the Company.  Yesterday, this individual complained to his manager that he was uncomfortable with the way that accounting manages travel receipts.  He reminded his manager about the Sarbanes-Oxley Act and noted that he wanted management to know that he was “blowing the whistle” on this accounting practice.  When pressed for details about his alleged concerns, the employee either could not describe what he found objectionable about corporate accounting’s handling of travel receipts or how he believes the process should be done.  It is obvious to us that he has no idea what he’s talking about and that this is just another way to try to avoid being terminated as a result of his performance issues.  We are a publicly-traded Company, so, of course, we have internal reporting and investigation procedures in place.  Must we really take this feeble “Sarbanes-Oxley complaint” seriously? Answer→