Who listens when the whistle blows?
WPA cases don’t always involve a firing
MCL §15.62 of Michigan’s Whistleblowers’ Protection Act (WPA) states that an employer “shall not discharge, threaten or otherwise discriminate against an employee regarding the employee’s compensation … privileges of employment because the employee … reports … any violation or suspected violation of the law or a regulation … to a public body …”
Although this wording seems pretty straightforward, many practitioners find themselves in murky water when litigating these types of employment law cases. Application of the statute is much more than a four-prong inquiry, as it may seem from the wording. Jennifer L. Lord, who is a partner at Pitt McGehee Palmer & Rivers in Royal Oak and a member of Michigan Lawyers Weekly’s Women in the Law Class of 2016, specializes in employment discrimination and whistleblower matters. She explains that one of the first questions to ask a client who wants to bring an employment discrimination suit based on the WPA is whether he or she quit or was terminated. Constructive termination Generally, in whistleblower matters the employee is terminated. The employer usually finds some reason for termination that is claimed to be wholly and completely independent from the employee’s report of their alleged wrongdoing. The employer tends to get the ball rolling through frequent write-ups or negative performance reviews. When there hasn’t been an actual termination or the employee resigns, a WPA claim can be brought on the argument that they were subject to constructive termination. Constructive termination occurs when the employer has made, or allows the making of, an employment environment so objectively and subjectively severe that the employee had no option but to quit. As Lord further explained, “middle of the road” cases (cases where the employer’s actions are not so blatantly severe that there is no subjective or objective question of fact) must be submitted to the jury, subject to the objective/subjective analysis. In Samaan v General Dynamics Land Systems (MiLW No. 01-92619, 15 pages), the plaintiff quit in lieu of being fired. Plaintiff, who had worked as an engineer for the defendant for over 30 years, claimed that he had never, until after he reported his employer’s alleged fraudulent activities, received a negative employment evaluation. Plaintiff alleged that the defendant was making false reports to the U.S. Army regarding the results of tests run on vehicles that were intended to be used in combat zones. Plaintiff reported his concerns to his superiors and, according to the Aug. 31, 2016, opinion, no corrective action was taken. Plaintiff then reported his concerns to the defendant’s Army Liaison. Thereafter, the plaintiff routinely received negative employment violations and he was later suspended without pay. The plaintiff resigned on July 1, 2011, because he allegedly received information from the defendant’s personnel department that it would be recommending his termination. In the above case, since the plaintiff was not actually terminated, he would have to prove constructive termination in order to prevail in a whistleblower action. The inquiry as to the existence of grounds for a claim of constructive termination is two-pronged, both objective and subjective. On the objective side, there is the average person standard; meaning, would an average person (an outsider considering the facts and circumstances) view the employer’s actions as so severe that they understand why the employee quit. On the subjective side of the inquiry, the question is whether an outsider would conclude that the employer’s conduct was so severe, that particular employee was compelled to quit. Given that the plaintiff quit and there was no allegation of “severe” behavior on his employer’s part, his matter would likely be dismissed upon a motion for summary disposition under MCR 2.116 (C)(8). Negative employment reviews and the knowledge of an alleged future termination do not rise to the level of severity that would neither pass the objective nor subjective standard. Most whistleblower actions are subject to mandatory arbitration, agreed to by the employee as a term of their employment. Arbitrations are governed by the Federal Arbitration Act (FAA) which, as stated in Samaan, supports the “federal policy favoring arbitration.” The general purpose of the FAA is not to impose mandatory arbitration of all claims; but to enforce privately negotiated arbitration agreements. There are two types of arbitration: labor relations arbitrations, which arise out of the breach of a clause contained in a collective bargaining agreement, and commercial arbitrations, which result from a breakdown of the parties’ working relationship. Labor relations arbitrations are subject to the jurisdiction of federal labor laws while commercial arbitrations fall under the auspice of the FAA. In Samaan, the parties submitted to mandatory commercial arbitration, which resulted in an award in favor of the defendant. The plaintiff appealed the arbitration award on several grounds but the 6th U.S. Circuit Court of Appeals affirmed it. A narrow approach Courts take a very narrow approach when reviewing arbitration awards. This view is one of the most stringent standards of judicial review in American jurisprudence. The reasoning is that, as stated inSamaan, the courts must refrain from reversing an arbitrator simply because the court disagrees with the result or believes the arbitrator made a serious legal or factual error. What this means is that, on appeal, most arbitration awards will not be vacated by the court. While the intended purpose of the FAA is to foster efficiency and expediency in the judicial system, many view its approach as the unceremonious disenfranchisement of American workers. The WPA, when read alone, provides employees with a level of protection not otherwise granted and is a clear motivator for employees to report employer wrongdoing, which could ultimately result in benefiting the overall public good. However, because Michigan is a pro-union state, federal labor laws are, generally, more frequently applied in matters that are subject to arbitration, including whistleblower cases. If you would like to comment on this story, email Agenique Smiley at agenique.smiley@mi.