FOR EDUCATIONAL USE ONLY
45 S. Tex. L. Rev. 543
South Texas Law Review
Summer 2004
Articles
*543 PRIVATE SECTOR WHISTLEBLOWING AND THE EMPLOYMENT-AT-WILL DOCTRINE: A
COMPARATIVE LEGAL, ETHICAL, AND PRAGMATIC ANALYSIS
Frank J. Cavico [FNa1]
Copyright © 2004 South Texas Law Review, Inc.; Frank J. Cavico
I. Introduction ...........................................................
II. Whistleblowing in the Private Sector: An Overview .....................
III. The Employment-At-Will Doctrine: The General Rule and Rationales .....
IV. Statutory Whistleblowing Exceptions ...................................
A. Introduction .........................................................
B. Statutorily Required Wrongdoing ......................................
C. Employee Complicity in Wrongdoing ....................................
D. Immoral and Unethical Conduct ........................................
E. Mixed Motives ........................................................
F. The Public Policy Requirement ........................................
G. The Good Faith Requirement ...........................................
H. The Reasonableness Requirements ......................................
I. Actual v. Suspected v. Prospective Wrongdoing ........................
J. The Erroneous Whistleblower ..........................................
K. Notice to Employer ...................................................
L. Employer Opportunity to Remedy .......................................
M. Verbal or Written External Notice ....................................
N. Employer Interference with Employee Disclosure .......................
O. Reporting to Whom ....................................................
P. Reporting by Whom ....................................................
Q. Anonymity of Reporting Employee ......................................
R. Causation ............................................................
S. Remedies and Damages .................................................
T. Sanctions for Wrongdoing by Whistleblowing Employee ..................
U. Preemption and Exclusivity ...........................................
V. Conclusion ...........................................................
V. The Common Law "Public Policy" Whistleblowing Exception ................
A. Introduction .........................................................
B. Sources of Public Policy .............................................
C. Clear Establishment and Articulation of Public Policy ................
D. Whistleblowing as Public Policy ......................................
E. Predicate for Whistleblowing .........................................
F. Duty to Report Illegal Activity ......................................
G. Employee Complicity ..................................................
H. Disclosing Fellow Employees' Violation of the Law ....................
I. Good Faith or Reasonable Belief in Wrongdoing ........................
J. Private v. Public Interest ...........................................
K. Internal v. External Whistleblowing ..................................
L. Termination before External Whistleblowing ...........................
M. Employer's Knowledge of Whistleblowing ...............................
N. The Causation Requirement ............................................
O. Statutes of Limitations ..............................................
P. Contract v. Tort .....................................................
Q. Remedies and Damages: Contract v. Tort ...............................
1. Contract Remedies and Damages ......................................
2 Tort Remedies and Damages ...........................................
R. Conclusion ...........................................................
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VI. Elements, Standard of Proof, Burden of Persuasion, and Role of Court
and Jury ................................................................
A. Elements .............................................................
B.
Standard of Proof .......................................................
C. Burden of Persuasion or Production ...................................
D. Role of Court and Jury ...............................................
VII. Corporate Ethics Codes and Codes of Conduct: Whistleblowing
Provisions ..............................................................
A. Introduction .........................................................
B. Codes of Ethics ......................................................
C. Conclusion ...........................................................
VIII. Ethical Examination of Whistleblowing ...............................
A. Introduction .........................................................
B. Ethical Egoism .......................................................
C. Utilitarianism .......................................................
D. Kantian Ethics .......................................................
E. Morally Required Whistleblowing ......................................
F. Conclusion ...........................................................
IX. Recommendations .......................................................
A. Introduction .........................................................
B. Business or Corporate "Wrongdoing" ...................................
C. Internal Channels and the "Chain of Command" .........................
D. Documentation and Evidence ...........................................
E. Anonymous Whistleblowing .............................................
F. The Whistleblower's Motive ...........................................
G. False Whistleblowing .................................................
H. Conclusion ...........................................................
X. Conclusion .............................................................
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*545 I. Introduction
Disclosing wrongdoing on the part of one's firm, commonly known as "blowing the
whistle," is one of the most difficult decisions that an employee will have to make. Such a
decision involves significant personal, practical, ethical, and legal ramifications. The
whistleblowing employee may find himself or herself exposed to great risk, personally as well
as legally. "Blowing the whistle" is especially problematic for an employee not contractually
protected with regard to his or her employment tenure, that is, an at-will employee. Of
course, notable modern and legal limitations have emerged to restrict the employer's
traditionally unencumbered power to discharge employees. Both federal and state lawmakers,
for example, have promulgated non-discrimination statutes. Other employment
circumstances, involving civil service, tenure,
collective bargaining agreements, unfair labor practices, and employee handbooks and
manuals have given rise to legally created restrictions on the employer's termination power.
Yet what legal doctrines have been developed to protect the employee, in particular, the very
legally exposed employee-at-will, who wants to do the "right" thing, and who thus is
contemplating "blowing the whistle" on his or her firm's wrongdoing?
Whistleblowing recently has received prominent coverage in the news, as well as in legal,
business, and academic circles as part of the heightened post-Enron business ethics debate.
According to the National Whistleblower Center [FN1] in Washington, D.C., a non-profit,
whistleblowing advocate organization, approximately one-half of the whistleblowers who
responded to its survey stated that they were *546 terminated after reporting unlawful
conduct; moreover most of the others said they confronted unfair discipline or harassment at
the workplace. [FN2] The Center thereby concluded in a current report that most employees
who expose wrongdoing in the workplace suffer some form of retaliation, but that many still
lack the legal right to protect themselves. [FN3] The Center also has promulgated a Model
Whistleblower Protection Act. [FN4]
This article consequently will focus on that one very current, controversial, and
consequential private sector employment activity "whistleblowing" in the context of private
sector employment, as well as the distinguishing feature
thereof, the employment-at-will doctrine. The article will examine closely the practice of
whistleblowing from legal, ethical, and practical perspectives; and attempt to ascertain as
precisely as practicable within the confines of an article, the nature and degree of protection
available to whistleblowing employees.
In the legal analysis, the article will first examine the new federal whistleblowing law,
which is part of the Sarbanes-Oxley Act of 2002, commonly known as the "Public Company
Accounting Reform and Investor Protection Act," [FN5] which grants certain whistleblower
protection to employees of publicly traded companies who provide evidence of fraud. The
article then will examine selected state whistleblowing statutes, chosen for their general
applicability to the private sector, as well the Model Act developed by the National
Whistleblower Center. In addition, the article will examine recent state and common law,
whistleblowing decisions decided under the "public policy" doctrine. The article will compare
and contrast the new federal statute, the state statutes, the Model Act, and the common law
cases. As will be seen, there are many statutory laws, both federal and state affording
whistleblowing employees a degree of protection. However, many of these statutes are very
narrowly focused, including the new federal statutes, as well as many of the state statutes.
They thus provide only the most limited legal protection. The U.S. Congress has not yet
promulgated any type of *547 general
whistleblowing legislation that would protect all employees, private or public, in the same
manner and extent its federal anti-discrimination laws. Yet some state legislatures have
promulgated more general, private sector whistleblowing statutes. These more
comprehensive types of state statutes are a focal point of this article's legal analysis. Most
states have created statutory and/or common law exceptions to the traditional employmentat-will doctrine; and thus have afforded employees a cause of action for wrongful discharge
when they are discharged for "blowing the whistle" on illegal, or conceivably immoral,
business and corporate activities or actions which contravene the state's "public policy." There
is, therefore, a veritable patchwork of whistleblowing laws, federal and state, general and
specific, statutory and common law, that provide varying degrees of protection to the private
sector employee. It is clearly beyond the scope of this article, or for that matter any article of
this type, to cover all these whistleblowing laws. Nevertheless, this author, by focusing on the
new federal statute, the more comprehensive state statutes, as well as recent judicial
interpretations of the common law, "public policy" doctrine, hopes to make a modest
contribution to legal education and practice.
In the ethical analysis, ethics as a branch of philosophy will be utilized to examine the
morality of whistleblowing. Initially, law will be distinguished from morality, and then morality
will be differentiated from ethics. Then two principal, traditional, ethical theories-Utilitarianism and
Kantian ethics--will be examined, and applied to the subject of whistleblowing in order to
render reasoned ethical conclusions as to the morality of whistleblowing. The moral
philosophy of ethical egoism also will be presented; and a discussion of that ethical theory in
the context of private sector whistleblowing, particularly at the corporate level, will be
provided.
In the pragmatic analysis, whistleblowing provisions in company codes of ethics and codes
of conduct will be examined to ascertain the practical employment ramifications of "blowing
the whistle." The codes will be compared and contrasted, and any relationship of the code
provisions to legal and ethical principles, especially ethical egoism, will be emphasized.
Finally, appropriate recommendations will be made based on the aforementioned legal,
ethical, and pragmatic analysis of whistleblowing; and concluding comments will be offered,
especially as to the necessity and/or desirability of a more comprehensive federal
whistleblower law.
*548 II. Whistleblowing in the Private Sector: An Overview
"Whistleblowing" for the purposes herein may be defined as an attempt by an employee of
a corporation or business firm to disclose what he or she believes to be wrongdoing in or by
the organization. "Wrongdoing" can entail not only conduct or conditions that the employee
believes are illegal, but also behavior that the employee considers to be immoral, as well as
conduct that the employee
believes is contrary to the public interest. Whistleblowing, moreover, can be internal to
the employee's immediate supervisors or "higher-ups" within the company's managerial
hierarchy, or external, that is, to "outsiders," such as a government regulatory agency, a
public interest organization, or to the media. According to one court's account, the term
"whistleblowing" derives from:
the act of an English bobby blowing the whistle upon becoming aware of the commission
of a crime to alert other law enforcement officers and the public within the zone of danger.
Like this corner law enforcement official, the whistleblower sounds the alarm when
wrongdoing occurs on his or her 'beat,' which is usually within a large organization. [FN6]
The "whistleblower," consequently, is the person, the employee for the purposes herein,
who makes known or attempts to make known, the wrongdoing. Such an employee, one
would hope and expect, would seek to "blow the whistle" for right and rightful, reasons; yet
one must not always assume that the whistleblowing employee is conscientious as well as
correct as to the underlying premise of wrongdoing, or that his or her motives are purely selfless and meritorious. Yet even when "purely" motivated and correct, the whistleblowing
employee runs the real risk of being branded as a "snitch," an "informer," or even a "traitor."
One court clearly recognized the "loyalty" conflict inherent in whistleblowing:
[w]e recognize that there is a tension between the obvious societal
benefits in having employees with access to information expose activities which may be
illegal or which may jeopardize health or safety, and accepted concepts of employee loyalty,
nevertheless we conclude that on balance actions which enhance the performance of our laws
or expose unsafe conditions, or otherwise serve some singularly public purpose, will inure to
the benefit of the public. [FN7]
There are numerous laws--federal and state, as well as statutory *549 and common law-that exist to protect the whistleblowing employee. Some statutes, such as the federal False
Claims Act or a state's version thereof, actually may provide a generous "bounty" by means of
a private enforcement action, to the whistleblowing employee for reporting his or her
employer's fraudulent claims for federal and state funds. [FN8] Many whistleblowing laws
protect employees in the public sector that "blow the whistle" on their government employers.
[FN9] Yet there now are several state statutes that protect private sector whistleblowers. The
statutes typically protect three types of "whistleblowing" conduct: (1) disclosure, where the
actual whistleblowing employee discloses or threatens to disclose employer wrongdoing; 2)
assistance, where the employee aids a governmental investigation of the employer; and 3)
objection, where the employee objects to and/or refuses to participate in the employer's
wrongdoing.
Generally speaking, these laws declare that the employer, including a private
sector employer, shall not discharge, discipline, or otherwise punish an employee for
"blowing the whistle" in the statutorily required manner. Some of these statutes are very
narrowly focused to particular types of complaints. [FN10] The new federal law, similar to
most state statutes, is an example of a more narrowly based and circumscribed whistleblower
statute. Of course, the new federal whistleblowing provisions are merely part of an extensive
legislative reform package, the centerpiece of which is the creation of the independent
Accounting Oversight Board. Nonetheless, because the federal whistleblower law is a very
new and significant part of the legislation, representing a material component to the postEnron business ethics reforms at the federal level, and are designed to punish corporate
criminals and to restore confidence in the marketplace and the economy. The federal
whistleblower law will be examined in detail throughout this article.
Other state statutes, which are one of the focal points of this analysis, offer more general
protections to the private sector *550 employee. In particular, this article will examine sixteen
comprehensive private sector whistleblower statutes from the following jurisdictions: Arizona,
California, Connecticut, Florida, Hawaii, Maine, Michigan, Minnesota, New Hampshire, New
Jersey, New York, North Dakota, Ohio, Rhode Island, Tennessee, and Virginia. These state
statutes will be compared and contrasted and the Model Whistleblower Act will be examined
as well in order to ascertain the degree of protection the National
Whistleblower Center deems appropriate for employees. However, although there are
many laws in place to protect private sector whistleblowing employees, these laws are only
activated when employees take, or threaten to take, affirmative action to "blow the whistle,"
and who do so in the manner required by their state statute. Since most private sector
employees typically are regarded as at-will employees, with very little contractual protection
for their jobs, a potential whistleblowing employee, who naturally may feel fearful about his or
her job prospects, will be looking most diligently for some form of whistleblowing protection,
either from his or her state's legislature or from the courts' common law holdings. Before
examining statutory and common "whistleblower" law, however, it is first necessary to restate
the basic principles of and ramifications to the conventional employment-at-will doctrine.
III. The Employment-At-Will Doctrine: The General Rule and Rationales
Traditionally, pursuant to the well-established, common law employment-at-will doctrine,
an employer-employee relationship in absence of a contract and of indefinite duration is
terminable at the will of either party. [FN11] Consequently, the employer summarily can
discharge the employee; and the employee can quit the employer's employ at any time.
[FN12] Moreover, the employer can terminate the *551 employee for any cause or reason, no
reason,
no good reason [FN13] or even, according to the common law, a morally bad reason.
[FN14]
Certain jurisdictions still adhere steadfastly to the traditional employment-at-will doctrine,
and thus are disinclined to create by judicial means "public policy" exceptions to the general
rule--for whistleblowing or otherwise. [FN15] In other like-minded jurisdictions, the
employment-at-will doctrine is strictly construed, and any exceptions thereto will be most
narrow indeed. [FN16]
However, today most jurisdictions, to varying degrees, recognize various types of
statutory and common law limitations on the employer's unfettered power to terminate an atwill employee. In some jurisdictions, there are many so-called "exceptions" to the
conventional doctrine that the practical validity of the general employment-at-will rule may be
seriously doubted. Nevertheless, the employment-at-will doctrine still remains the initial
precept for most jurisdictions in any examination of an employment law topic.
Yet a few jurisdictions, it is important to underscore, have totally abrogated the
employment-at-will doctrine and have enacted general wrongful discharge statutes. [FN17]
One very significant encroachment on *552 the still dominant conventional employment-atwill doctrine has occurred in recent years, and is based on the promulgation of state
whistleblower statutes, which grant varying degrees of legal protection to private sector, atwill whistleblowing
employees.
IV. Statutory Whistleblowing Exceptions
A. Introduction
Whistleblowing statutes affecting private sector employers and employees and protecting
employees, who report their employers' wrongdoing, are one of the focal points of this article.
These statutes also can safeguard employees who are called upon to assist or participate in or
provide information to, some investigation, inquiry, or hearing regarding their employers'
involvement in illegality, [FN18] as well as protect employees who object to, or refuse to
participate in or execute the violation of a law, or refuse to assist in violating some law, rule,
or regulation. [FN19] The new federal statute also protects employees who assist in the
investigation of misconduct or participate in a proceeding, as well as those who disclose
information. [FN20]
The Model Whistleblower Protection Act similarly protects employees in the private sector
who not only disclose designated wrongdoing, but who also object to or refuse to participate
in such activity or who assist or participate in pertinent legal proceedings. [FN21] Private
sector employees who inform government agencies and officials of wrongdoing by their
employers most frequently are protected by state whistleblower legislation, and now, in
limited circumstances, by the new federal statute. The private sector employee's common
law right to "blow the whistle" thus has been codified in the federal as well as several state
whistleblower statutes. *553 It is important to note initially that some state courts construe
the statutory term "employee" very narrowly so as to exclude independent contractors of the
employer from the whistleblowing statute's protection. [FN22]
Regarding the key term "employer," some whistleblowing statutes are quite expansive in
their definition of the covered "employer," [FN23] whereas others are a bit narrower as to the
private sector employers covered. [FN24] The type of covered employers and employees in
the new federal statute can be ascertained merely by partially glancing at the title of the
statute, "Protection for Employees of Publicly Traded Companies." [FN25] The corpus of the
statute, however, specifically states that the protected employees are those who are
employed by a "company with a class of securities registered under Section 12 of the
Securities Act of 1934 . . . or that is required to file reports under Section 15(d) of the
Securities and Exchange Act of 1934." [FN26] The federal statute also prohibits retaliatory
actions by "any officer, employee, contractor, subcontractor, or agent of such company."
[FN27] The Model Act, as one would expect from an advocacy center, is very expansive as to
the definition of covered "employer" and protected employees, encompassing, of course,
private sector *554 employees. [FN28]
Some whistleblowing statutes are very specific and narrow as to the subject matter
predicate for whistleblowing; whereas others, which are one of the focal points to this article,
are phrased as more generally protective whistleblowing statutes. [FN29] The Model Act, as
will be seen, is a very comprehensive protective proposed statute. Regarding the new federal
statute, the intent of Congress as to the foundational subject matter for whistleblowing
protection can at once be detected from the full statement of the statute's title, "Protection for
Employees of Publicly Traded Companies Who Provide Evidence of Fraud." [FN30] Yet, the
type of fraud required, as will be seen, further narrows the protective scope of the new
federal statute, which although providing a significant new level of whistleblower protection, is
by no means equivalent to the general applicability of the federal anti-discrimination statutes.
Certain statutes are very specific as to the types of employer retaliatory personnel actions
that are proscribed; [FN31] whereas others, including the new federal statute, are more
generally stated. [FN32] The Model Act, again as one would expect, is very broad in its
definition of impermissible employer retaliatory actions. [FN33]
Whatever the reach of the relevant statute, one point, which cannot be emphasized
enough, and which is plainly evident from the case law, is that the wise whistleblowing
employee must comply strictly with the requirements of the
statute in order to secure its *555 protection. [FN34] One case will serve as an evident
example of a strict compliance admonition. In Doody v. Centerior Energy Corp., [FN35] the
plaintiff employee, a radiological engineer at a nuclear power plant, became concerned about
some of the safety precautions taken at the plant, in particular the exposure of workers to too
much radiation while they performed certain maintenance work, improper storage of
radioactive tools, and inadequate training. [FN36] The plaintiff reported these concerns to his
supervisor, and subsequently the plaintiff's employment at the plant was terminated, [FN37]
whereupon the plaintiff instituted a cause of action pursuant to the state's whistleblower
protection statute. The statute, however, required in part that the predicate for
whistleblowing be the disclosure of a criminal offense that was likely to cause "an imminent
risk of physical harm to persons" or a "hazard to public health or safety." [FN38] The court, in
rejecting the plaintiff's statutory cause of action, first noted that an employee must "strictly
comply" with the dictates of the state's whistleblower statute in order to claim its protections.
[FN39] The court then explained its refusal:
[Plaintiff employee] did not present any evidence the he believed that the safety concerns
he raised involved an imminent risk of harm to the workers at the plant. Furthermore,
[plaintiff employee] did not present any evidence that the activity at the . . . plant posed a
threat to the health or safety of the
public. Because [Plaintiff employee] believed that [defendant employer] committed a
criminal violation that would pose a potential risk to the health and safety of the workers at
the plant and not an imminent risk of harm to them, he did not strictly comply with [the state
statute]. [FN40]
B. Statutorily Required Wrongdoing
The requisite wrongdoing in the state statutes typically centers on the private sector
employer's violation of, or noncompliance with, federal and state constitutional law [FN41]
and federal and state statutory *556 law. [FN42] Most statutes extend the scope of coverage
to federal and state agency rules and regulations. [FN43] Finally, some states provide
coverage as well to county codes and municipal ordinances. [FN44] One statute merely
requires a "violation of law, rule, or regulation." [FN45] However, case authority exists
construing a governor's executive order as well as the order from a county commission as not
equating to the statutorily prescribed "law." [FN46]
The wrongdoing required in the federal statute, one recalls, is "fraud." Yet, the federal
statute does not protect "blowing the whistle" on all types of fraud. Fraud is, as the first year
law student learns, a very expansive and nebulous legal doctrine, covering in its common law
formulations, deceit, that is, intentional misrepresentation, negligent misrepresentation, as
well as
"honest" or good faith misrepresentations. Fraud is also a statutory legal wrong pursuant
to a wide variety of federal and state statutes. Thus Congress, perhaps fearful of inundating
businesses with a torrent of whistleblowing claims, carefully and precisely limited the types of
"fraud" reporting by employees protected by the statute. Specifically, the fraudulent conduct,
the predicate for federal whistleblowing protection pursuant to the new statute, must involve
fraud which *557 amounts to a violation of federal securities law, including specified
Congressional securities law, or any rule or regulation of the Securities and Exchange
Commission, or "any provision of Federal law relating to fraud against shareholders." [FN47]
Disclosing a state "blue sky" or tort fraud violation thus is not covered; and for that matter
"blowing the whistle" on any fraud committed by a non-publicly traded company is not
covered either, at least not by the new federal statute. To compare, one whistleblowing
predicate in the Model Act is the typical, general legal one, that is, whistleblowing based on
the "violation of a law, or a rule or regulation promulgated by law." [FN48]
The alleged unlawful conduct, in order to be a statutorily contemplated "wrongdoing"
predicate, must not be merely minor infractions of the law, according to one court. [FN49]
The state whistleblower statute, the court explained, was not intended to spawn litigation
regarding the most trivial or benign employee complaints. [FN50] Larceny, however, has been
deemed to be a
violation of law within the meaning of a state whistleblower statute. [FN51]
Absent a violation of some prescribed, specific, material, "legal" law, the courts will deny
protection under the whistleblower statutes. [FN52] *558 If an issue is deemed by the courts
to involve merely the employer's or business's internal management practices or problems,
the likelihood of a statutory whistleblowing violation is diminished considerably. [FN53] As to
the new federal statute, since the statute is so precisely and legalistically phrased to begin
with, one can safely predict that the federal courts will interpret the statute in a constricted,
"plain reading," legal manner.
This "legal" law, moreover, as construed by some courts, must be violated by the
employer and not the employer's employees, that is, the co-workers of the sanctioned
whistleblowing employees. [FN54] Yet at *559 least one statute specifically states that a
"fellow employee" of the whistleblowing employee can carry out the law violated. [FN55]
Other states' courts have interpreted their whistleblower statutes to protect the employee
who informs on his fellow employees' wrongdoing. [FN56] One state appellate court explained
its expansive interpretation of its state's whistleblower act:
The statute does not state that the 'illegal activities' must be those of the employer.
Indeed, the statutory definition of 'illegal activities' is quite broad, including any violation of
the state and federal civil or criminal code, as well as violations of regulations pertaining to
public health, safety or
welfare. . . . Under these circumstances, we cannot construe the statute narrowly, limiting
it to claims of alleged illegal activities of the employer. [FN57]
One other statute, in addition, even protects the employee's report of wrongdoing by
another employer who has a business relationship with the employee's employer. [FN58] The
Model Act not only protects employees who report illegalities by the employee's employer, but
also by the employee's co-employees as well as by another employer. [FN59]
Certain states, one must emphasize, require that the applicable regulations must be
designed to protect the public, health, and safety, [FN60] thereby echoing the rationales of
the common law "public policy" doctrine. [FN61] One state statute is rather strict in requiring
not only an actual legal violation, but also one that "creates and presents a substantial and
specific danger to the public health and safety." [FN62] Yet *560 others contend that even if
public policy is arguably at issue, if the whistleblowing does not involve a specific violation of
a law, the protection of the whistleblower statute will be denied. [FN63] One state statute
requires the legal violation to be a felony, or if "merely" a "criminal offense," one that is
"likely to cause an imminent risk of harm to persons or a hazard to the public health or
safety." [FN64]
A few statutes, moreover, explicitly require that the pertinent law be
applicable to the employer and relevant to its business, [FN65] and that the employer
possess the authority to correct the legal violation. [FN66] Others additionally require that the
law violated be a "positive" law. [FN67]
The Model Act developed by the National Whistleblower Center not only protects
employees who report illegalities, but also protects employees who "blow the whistle" on the
employer's activities or policies that are "incompatible with a clear mandate of public policy
concerning the public health, safety or welfare or protection of the environment." [FN68] The
key terms, "public health, safety or welfare," however, are not defined or explained in the
proposed statute.
C. Employee Complicity in Wrongdoing
A difficult issue arises when the whistleblowing employee is found to have participated in
the very wrongdoing activity that is the basis for the employee's whistleblowing claim.
Although the state statutes examined herein are silent on the issue, at least one state
whistleblowing protection statute has been interpreted by a court to allow a plaintiff
whistleblowing employee to pursue statutory remedies even though the employee participated
in, or was involved with, the illegal activity the employee was reporting. [FN69]
*561 However, the whistleblowing employee's participation and involvement certainly will
be taken into consideration by the finder of fact
when the employer defends a whistleblower claim by contending it had a legitimate
reason for the employee's discharge. [FN70] The new federal statute, in addition, implicitly
requires that the whistleblowing employee be free from any legal "taint" by stating that no
employer retaliation can be imposed on the employee "because of any lawful act done by the
employee." [FN71] The Model Act is silent on the "complicity" issue.
D. Immoral and Unethical Conduct
Rarely does one find statutorily-protected whistleblowing encompassing asserted immoral
and/or unethical conduct on the part of the employer, presumably due to the difficulty of
precisely defining those terms. Yet, one state statute does afford protection to the morally
motivated whistleblowing employee, but only if the unethical practices are committed by a
municipal employer. [FN72] Regrettably, the pertinent legislative body failed to define
"unethical practices." Occasionally a statute, in addition to referring to a legal violation, also
will specify as an additional avenue of protection a condition, policy, or practice of the
employer that would endanger or put at risk the health or safety of the employee or any other
individual. [FN73] The Model Act, as mentioned, has both legalistic and public policy
language. Such "health, safety and welfare" language not only echoes the rationales of the
common law public policy doctrine, but also raises, at least inferentially, the
possibility of a practice which is not technically illegal but unethical or immoral and which
endangers public health, safety, or welfare.
Yet, most state legislators make it very clear that only the violation of a "legal" law will
activate the statute. [FN74] For example, *562 statutory language referring to a "violation of
a civil or criminal code of this state or the United States," [FN75] or the violation of a "law,
regulation or rule promulgated under the law of this state, a political subdivision of this state,
or the United States," [FN76] clearly evinces a legislative intent not to "legislate morality."
Thus, as one court noted, the state's whistleblowing statute does not protect the reporting of
every form of discrimination, abuse, and harassment, just violations of the criminal law as
specified in and required by the statute. [FN77] Distasteful and ill-advised conduct, similarly,
if not shown to be illegal, may not be actionable. [FN78] Erroneous, arbitrary, and unfair
personnel decisions, finally, may not be actionable due to the lack of a *563 technical legal
violation, [FN79] or due to the lack of an additional public policy rationale. [FN80] To illustrate
how strictly the courts can interpret this "legal" law requirement, one must take cognizance of
a state supreme court case, where the plaintiff, an at-will employee, a recreational therapist
at a nursing home, was held to be unprotected by the state whistleblower protection statute
because the plaintiff only reported incidents of "inappropriate touching" involving nursing
home
employees and residents, which did not rise to the level of the requisite statutory violation
of law in the form of illegal physical or sexual abuse of residents. [FN81]
One way, however, that ethics can influence even a legalistic whistleblower determination
is through the requirement that the employee must possess a reasonable belief as to the
employer's asserted wrongdoing. For example, the fact that an employer had a code of
conduct which stressed ethical conduct could buttress the whistleblowing employee's
reasonable belief that a work practice rose to the level of a significant legal impropriety as
required by a state statute. [FN82]
E. Mixed Motives
It is, of course, quite possible that an employer will possess mixed motives for the
termination of the whistleblowing employee--a legitimate job-related reason as well as an
impermissible retaliatory reason. Consequently, some courts interpret their state
whistleblower statutes as requiring that the employee establish that he or she was terminated
solely for reporting his or her employer's wrongdoing. [FN83] Others, however, assert that
even if the employer had a legitimate reason for the employee's discharge, the plaintiff
employee still can prevail if an illegitimate retaliatory reason more likely than not motivated
the employer's discharge decision. [FN84] That is, the
employee *564 will prevail if he or she can show that it was more likely than not that the
retaliatory motive was the determinative or a substantial motivating factor in the adverse
decision. [FN85] It is also quite possible for the employee to possess mixed motives. If the
employee's primary motivation for "blowing the whistle" is not to inform the public regarding
a matter of societal concern, but rather personal spite and vindictiveness, the employee may
not be protected by a state whistleblower protection statute. [FN86] However, the fact the
plaintiff whistleblowing employee sought personal gain in making his or her report, rather
than acting predominantly for the public good, has been construed as legally irrelevant
pursuant to one state's whistleblower protection statute. [FN87]
F. The Public Policy Requirement
Since the whistleblowing statutes represent a codification of common law public policy
principles, one would expect to find an explicit public policy requirement in the statutes.
[FN88] Yet, the presence of an explicit statutory public policy requirement in addition to a
legal violation is clearly not the norm. Nevertheless, many court decisions exist stating that a
state's whistleblowing statute is an embodiment of the state's public policy against wrongful
or retaliatory discharge. [FN89] Certain courts, moreover, take a "strict construction"
approach to state whistleblowing statutes. For example,
the Supreme Court of Minnesota, in interpreting that state's whistleblowing statute,
declared that since the state statute "clearly and unambiguously protects reports made of a
violation of any federal or state law or rule adopted pursuant to law, we will not look beyond
its text to search for an unexpressed public policy requirement." [FN90] Some statutes,
naturally, do *565 echo the public policy language of the common law public policy
requirement. [FN91] Some courts, moreover, utilize public policy rationales to buttress a
whistleblowing employee's "legal" cause of action pursuant to the state's whistleblower
statute. [FN92] The Model Act, one recalls, is an "either-or" situation; that is, the employee
may be protected either for reporting illegalities or for disclosing public policy
"incompatibilities."
Other courts, however, declare that if the reported wrongdoing is construed as merely a
private, internal, corporate management or policy dispute, with the interests of the public only
being indirectly affected, the asserted "wrongdoing" will be insufficient to gain the protections
of the jurisdiction's whistleblower statute. [FN93]
G. The Good Faith Requirement
Whistleblowing statutes typically include a "good faith" requirement. [FN94] Good faith, of
course, can be defined in a variety of *566 ways. One court defines this critical term as an
"absence of malice" and "honesty of intention." [FN95] Knowledge on the part of the
employee that his or her report of wrongdoing is false certainly will preclude statutory relief.
[FN96] Good faith, according to other courts, requires a reasonable belief on the
whistleblowing employee's part that a violation or wrongdoing has occurred. [FN97] Moreover,
if the alleged employer misconduct involves matters deemed trivial, then the whistleblowing
employee will lack good faith. [FN98] In ascertaining whether an employee's report is made in
good faith, the court will examine not only the content of the report, but also the employee's
purpose in making the report. [FN99] The central good faith question to be answered is
whether the employee made the whistleblowing report for a proper purpose, that is, to expose
legal wrongdoing, [FN100] as opposed to merely protecting oneself or one's co-workers.
[FN101] One state supreme court elaborated on this proper purpose rationale for good faith:
In order to determine whether a report of a violation or suspected violation of law is made
in good faith, we must look not only at the content of the report, but also at the reporter's
purpose in making the report. The central question is whether the reports were made for the
purpose of blowing the whistle, i.e., to expose an illegality. We look at the reporter's purpose
at the time the reports were made, not after subsequent events have transpired. . . . In part,
the rationale for looking at the reporter's purpose at the time the report is made is to ensure
that the report that is claimed to constitute whistle-blowing
was in fact a report made for the purpose of exposing an illegality and not a vehicle,
identified after the fact, to support a belated *567 whistle-blowing claim. [FN102]
Even if a state statute does not explicitly contain a good faith requirement, the courts
commonly interpret the statutes to require that the whistleblowing employee demonstrate
good faith in reporting the improper conduct to public agencies or authorities. [FN103]
H. The Reasonableness Requirements
Some statutes require, or have been interpreted to require, that the employee "blow the
whistle" in a reasonable manner. [FN104] Many statutes, including the new federal statute as
well as the Model Act, explicitly require that the employee possess a reasonable belief as to
the wrongdoing. [FN105]
I. Actual v. Suspected v. Prospective Wrongdoing
Some statutes require that the employer's wrongdoing be an actual past event or at least
an ongoing activity, that is, an actual violation. [FN106] Yet others, including the Model Act,
additionally will protect the employee if he or she has information, or at least a reasonable
belief, or reasonable cause to believe, that the employer is committing or will commit the
wrongdoing in the future. [FN107] In some *568 states, even though the statute "speaks" in
terms of "a violation" or "the violation," [FN108] the courts have construed the statute so
as not to require an actual violation but rather only a reasonable belief that a violation has
occurred or will occur. [FN109] Significantly, the new federal statute only requires that the
employee possesses a reasonable belief as to one of the specified securities fraud or fraud
against shareholders purported violations. [FN110]
A "reasonableness" standard does not require that the whistleblowing employee know, to
a legal certainty, the exact elements and outline of the law the employer is accused of
violating. [FN111] Rather, the employee's belief must be reasonable in the sense that a
reasonable layperson would conclude that illegal activity was occurring, or at the very least,
was imminent. [FN112] The fact that a business or industry is pervasively regulated is
construed as evidence indicating that the whistleblowing employee's accusation of illegal
wrongdoing was in fact reasonable. [FN113] Of course, if the employee has a belief as to
illegality, but it is not deemed reasonable, the employee loses the protection of the state's
whistleblower statute. [FN114]
Some statutes go even further and explicitly will protect an employee for reporting merely
a suspicion of wrongdoing. [FN115] In the *569 latter situations, the law will protect a
whistleblowing employee from punishment even though the employer did not in fact commit
the suspected or conjectured wrongdoing. Thus, even the erroneous whistleblower is
safeguarded, presuming he
or she is acting in a reasonable and good faith manner. The reporting of one's suspicions,
however, must at least implicate the violation of a law. [FN116] The new federal law contains
no "suspicion" language.
A few statutes, as well as the Model Act, will protect employees for threatening to disclose
employer wrongdoing, [FN117] or protect employees about to disclose wrongdoing. [FN118]
The new federal statute is silent as to potential or threatened whistleblowing; but rather only
protects employees "who provide information" or "cause information to be provided." [FN119]
J. The Erroneous Whistleblower
A problem arises when the whistleblower believes that the employer has committed a
violation of the law or other wrongdoing. Yet, what happens when the employee is incorrect in
his or her belief? Some statutes require that an actual violation occur, [FN120] and
consequently will not protect the erroneous whistleblowing employee. [FN121] Most statutes,
including the new federal statute, as well as *570 the Model Act, however, only require that
the whistleblowing employee possess a reasonable belief, or reasonable cause to believe, that
a violation has occurred. [FN122] In the latter jurisdictions, the employee is protected, even if
ultimately incorrect as to the employer's culpability, presuming, of course, the employee had
the statutorily required reasonable cause to believe in the wrongdoing. In one jurisdiction, the
courts will not protect an employee who is discharged due to the employer's erroneous
perception that the employee had reported a violation of the law. [FN123]
K. Notice to Employer
It is important to note at the outset that the new federal whistleblowing statute does not
require that the employee first report the securities fraud to his or her employer. [FN124]
Reporting to the employer, specifically to "a person with supervisory authority over the
employee," is one of three protected disclosure avenues, and the only internal, but not
mandated, one. [FN125] Most state statutes, however, do require the whistleblowing
employee to give prior notice to the employer about its wrongdoing. [FN126] The purpose of
such a notice requirement, as one court explained, is to afford the employer the first
opportunity to correct the wrongdoing; and this rectification allows the employer to avoid any
unnecessary harm to its reputation as well *571 as the preparation for a hearing or trial.
[FN127] The Model Act, one must emphasize, allows the whistleblowing employee to report to
either a "supervisor or to a public body." [FN128]
The statutes, including the new federal statute and the Model Act, typically state that the
disclosure may be made to the employer or a managerial or supervisory representative of the
employer. [FN129] Some statutes define the key term "supervisor." [FN130] Some statutes
also require that the
whistleblowing employee possess at least a reasonable belief that the selected manager or
supervisor of the employer has the authority to investigate the employee's complaint and take
appropriate action to prevent, curtail, or redress the wrongdoing. [FN131] One state's high
court has strictly interpreted its whistleblower statute to require the employee to report only
to his or her immediate supervisor; and thus will not protect an employee who "sidesteps" an
involved immediate supervisor and reports his or her complaints to a manager to whom that
supervisor reports. [FN132] One state statute, however, does not require disclosure to the
employer if the employee is "reasonably certain" the policy or practice in question is "known
to one or more supervisors of the employer" or when the employee *572 "reasonably fears
physical harm as a result of the disclosure." [FN133] These statutory exceptions to disclosure
are significantly qualified because the statute also requires that the "situation is emergency in
nature." [FN134] However, the statute does not define this key term "emergency."
A few statutes, but not the new federal statute, require that the employee's notice to the
employer must be in writing. [FN135] One state specifies that the employee's written report
must provide "sufficient detail to identify and describe the violation." [FN136] Nevertheless,
another state's courts have noted that its whistleblower protection statute does not expressly
require the reporting employee to cite to the alleged violation of law; rather
just to provide sufficient information so the employer understood that the employee was
reciting a violation of law. [FN137] The Model Act lacks any writing or specificity requirement.
An employee who thus fails to give the statutorily required notice will not be able to state a
statutory whistleblowing claim. [FN138]
L. Employer Opportunity to Remedy
The major purpose of statutory notice requirements is to afford the employer a reasonable
opportunity to correct the activity before the wrongful discharge lawsuit is instituted. Some
statutes, therefore, explicitly require that the whistleblowing employee afford the allegedly
wrongdoing employer a "reasonable opportunity" to correct the activity, practice, policy, or
condition at issue. [FN139] One state statute *573 requires that the employer to institute
corrective measures, or at least make a "reasonable and good faith effort" to do so within
twenty-four hours after receiving a written report from the whistleblowing employee. [FN140]
Failure to give the employer this reasonable opportunity to correct the asserted wrongdoing
before bringing "outsiders" into the investigation will defeat the employee's whistleblowing
claim. [FN141] However, when the reporting employee does complain to the employer, in a
manner required by the state whistleblower statute, the employee is protected even if the
asserted violation is corrected by the employer after
notification by the employee. [FN142] Similarly, the fact that the whistleblowing employee
is terminated immediately, before being able to complete the statutorily required process, will
not justify the withholding of a whistleblower statute's protections. [FN143]
Moreover, in those statutes mandating prior notice to the employer, there typically is a
provision stating that the employee is not required to first inform the employer if the
employee has a specific reason to believe that reporting to the employer will not produce
promptly a correction of the problem. [FN144]
Some statutes, including the Model Act, however, allow the whistleblower to report the
wrongdoing activity to the employer or directly to a governmental employee or agency, thus
obviating any prior notice requirement to the employer, as well as any opportunity to correct
the wrongdoing. [FN145] The new federal statute also allows the whistleblowing employee to
disclose the securities fraud violation externally and directly to specific government entities.
[FN146]
A few statutes, including the new federal statute, and, significantly, the Model Act, lack
any requirement of prior notice to *574 the employer at all. [FN147]
M. Verbal or Written External Notice
Some whistleblower statutes require that the complaint made to the appropriate external
party, typically a government agency or official, be in writing; [FN148] and some state
statutes also require an oath or affirmation on the part of the employee. [FN149] Yet others,
including the new federal statute, permit the reporting to be made either orally or in writing.
[FN150] A few require the employee's report to be made under oath or affirmation. [FN151]
There is neither a writing nor an oath requirement in the Model Act.
N. Employer Interference with Employee Disclosure
Several statutes contain provisions prohibiting the employer from making or enforcing any
rule or policy preventing an employee from disclosing information to a government or law
enforcement agency, [FN152] or from making any type of retaliatory threat against the
employee. [FN153] Moreover, state whistleblower statutes have been construed as not
requiring a showing on the part of the employee that the employer ordered or instructed the
employee to remain silent. [FN154] Finally, reporting wrongdoing to an appropriate public
authority after discharge will not defeat the whistleblowing employee's cause of *575 action
pursuant to a state whistleblower protection statute. [FN155]
O. Reporting to Whom
The statutes, including the Model Act, consistently require that if the reporting is external
to the employer, the external reporting of wrongdoing be transmitted by the employee to a
governmental or public body, agency, entity, or officer or employee thereof [FN156] and not,
for example, by the media or a public interest group. Some statutes require that the
government agency be an "appropriate" one. [FN157] Moreover, the employee's reporting of
the wrongdoing directly to the employer, if construed as a private employer not created by
the government and not in receipt of government funding, will be an inadequate receiver of
the whistleblowing report. [FN158] Two state statutes even go so far as to include within the
definition of "public body," any "body . . . which is primarily funded by or through state or
local authority, or any member or employee of that body." [FN159] Accordingly, a state
university [FN160] and a state social worker [FN161] have been construed as public bodies.
The new federal statute requires that in addition to the *576 internal reporting avenue
previously mentioned, the whistleblowing employee may report violations of securities fraud
to either "a Federal regulatory or law enforcement agency" or "any Member of Congress or
any committee of Congress." [FN162]
However, a court has not been construed as an appropriate government "agency," at least
by one court interpreting the state whistleblower statute. [FN163] Yet two state statutes
explicitly name the "judiciary and any member
or employee of the judiciary" as part of the definition of "public body." [FN164] The Model
Act also includes the judiciary in its definition of "public body." [FN165] Finally, even if a
report is made to an appropriate "public body," the reporting, to be legally protected
whistleblowing, may have to be made to a managerial level employee and not lower level
ones. [FN166]
P. Reporting by Whom
Most statutes explicitly mention the "employee" as the reporting party, yet a few in
addition will extend protection to the employee even if another person on behalf of the
employee makes the report of wrongdoing. [FN167] Some statutes explicitly protect a person
who acts on behalf of the employee. [FN168] Moreover, each employee in the "chain of
command" who receives information and reports it to his or her supervisor or manager should
be protected from retaliatory action by a state whistleblower protection statute, presuming
that the manner in which the information is reported complies with the requirements of the
relevant statute. [FN169] The new federal statute contemplates protected reporting by
individuals other than the employee by including "cause *577 information to be provided"
language in the statute. [FN170] The Model Act, surprisingly, is silent as to this co-employee
reporting issue.
Q. Anonymity of Reporting Employee
Most statutes, including the new federal statute, do not contain any explicit provisions
regarding the employee's disclosure of his or her identity. Yet, one can infer from the internal
reporting and employer "cure" provisions therein that the statutory scheme would mandate
that the employee's identity be revealed. One statute, however, which allows either internal
or external whistleblowing, does contain a provision requiring the government body receiving
the employee's complaint to keep the employee's identity confidential, at least until disclosure
is necessary for prosecution of the employer. [FN171] Of course, an anonymous "tip" to a
governmental regulatory body may indeed trigger an investigation, but if the "tipster"
employee's identity later is revealed, the chance of being protected by the majority of the
whistleblower statutes seems very remote. The Model Act, again surprisingly, is silent on the
anonymity issue.
R. Causation
Even though not ordinarily explicitly spelled out in the statutes, the courts uniformly
require that there be a sufficient causal connection, in fact as well as legally or proximately,
between the employee's engaging in the statutorily-protected whistleblowing activity and the
employer's retaliation by means of the employee's discharge or other adverse employment
action. [FN172] The
venerable "but for" test is the standard means of determining the presence of factual
causation. [FN173] Some state courts have interpreted their state whistleblower statutes to
require that the employee's whistleblowing *578 be the sole cause of the employee's
termination. [FN174] Moreover, if the whistleblowing employee's fear of termination is not
contemporaneous with his or her decision to report the wrongdoing, causation may be
deemed lacking. [FN175]
However, if a case is deemed to be a "mixed-motives" one, factual causation can be found
if the protected whistleblowing activity was a determinative or substantial motivating factor in
the employer's decision to terminate. [FN176] One court concisely explained how the
causation rules are operative in a mixed-motives case:
The burden of disproving but-for causation has been placed upon defendants in mixed
motive cases, that is, when a plaintiff's proof of unlawful motive is sufficiently strong; the
defendant then must prove that it would have taken the same action against the employee
irrespective of the protected activity or status. [FN177]
The causal connection can be established from direct evidence, of course; and an
inference thereof can be derived from circumstantial evidence that the employer possessed
knowledge of the employee's protected activity, and the close proximity in time between the
protected action and the retaliatory
employment action. [FN178]
The courts at times suggest that Title VII Civil Rights Act cases should be used to
ascertain whether the requisite causal link existed between the employee's objection to the
asserted wrongdoing and the employer's alleged retaliatory personnel action, as well as to
examine the other elements of the plaintiff's statutory whistleblowing cause of action.
[FN179]
*579 S. Remedies and Damages
The types of remedies and damages the wrongfully discharged, disciplined, or penalized
employee can recover against his or her employer pursuant to a statutory whistleblowing
action are typically set forth in the relevant statute. One statute simply utilizes a tort
formulation, and thus provides for "all remedies available in common law tort actions."
[FN180] Some statutes generally provide for damages [FN181] or "actual damages." [FN182]
Most specify the remedies, which usually encompass the payment of back or lost wages and
benefits, costs, expenses, and reasonable attorney fees as well as witness and expert fees.
[FN183] One state statute also allows redress in the form of "any other compensatory
damages allowable at law," [FN184] thereby raising the possibility of other forms of monetary
relief. Yet one other is even more encompassing, allowing "any and all damages recoverable
at law," [FN185] thus clearly raising the possibility of emotional distress and
punitive damages being recovered from a statutory cause of action. [FN186] One statute
explicitly allows for the recovery of punitive damages. [FN187]
*580 The new federal statute allows for an enforcement action in law or equity, [FN188]
in which the employee is entitled to "all relief necessary to make the employee whole."
[FN189] Specifically, the federal statute sanctions compensatory damages, reinstatement
(with the same seniority status), back pay (with interest), as well as "special damages" such
as indicated in the statute, litigation costs, expert witness fees, and reasonable attorney fees.
[FN190] There is, it must be underscored, no language in the federal statute pertaining to
emotional distress or punitive damages, and since the category of "special damages" comes
under the general heading of "Compensatory Damages," one can safely assume that the
federal courts will not be interpreting the statutory remedies beyond those explicitly stated.
Reinstatement to the same or an equivalent or comparable position as well as
reinstatement of full fringe benefits and seniority rights also typically are afforded the
wrongfully discharged whistleblowing employee by the state statutes. [FN191] Appropriate
remedies, especially reinstatement, are typically within the discretion of the court, and
reinstatement thus may be denied if there is a serious breakdown in employer-employee
relations and thus not feasible. [FN192]
An injunction also may be an available remedy. [FN193] In some statutes,
moreover, a court is authorized to award reasonable attorney's fees, court costs, and
expenses to the "prevailing party." [FN194]A monetary sanction, finally, in the form of a fine
to be paid by the employer to the state is a prescribed sanction in certain states'
whistleblower statutes. [FN195] Surprisingly, the remedy of an injunction is *581 not
mentioned explicitly in the new federal statute, although the statute does speak in terms of
an action in equity as well as law.
The Model Act, as one would expect, is very expansive as to the remedies available to the
wronged, whistleblowing employee. The Act first states in its Remedies section that "(a)ll
remedies in common law tort actions shall be available" to the employee [FN196] and then
continues to list all the aforementioned types of relief, including specifically and explicitly
"exemplary damages." [FN197]
What is mentioned in the new federal whistleblower law, however, and which represents a
momentous departure from the state statutes, as well as the Model Act, is the provision
mandating a criminal sanction for retaliating against whistleblowers. Section 1107 of the Act,
titled "Retaliation against Informants," decrees a punishment of a fine or imprisonment for not
more than ten years, or both, for knowingly, with the intent to retaliate, taking "any action
harmful" to a person, "including interference with the lawful employment or livelihood."
[FN198] The "Retaliation" also similarly punishes
retaliation for "providing to a law enforcement officer any truthful information relating to
the commission or possible commission of any Federal offense." [FN199] It is important to
note that, as opposed to the more narrowly predicated securities fraud provisions in the bulk
of law, the criminal sanctions appear to be much more broadly based, as they can be
triggered by reporting the violation of "any federal offense." [FN200] Also, the author would
be remiss in not underscoring that Congress used, in the author's opinion, the very pejorative
and condescending word, "informants" in the criminal sanctions section, instead of the more
neutral and acceptable term, "whistleblower," which in fact was used in the "civil" section of
the law.
Finally, as a matter of very practical concern, it must be underscored that there may exist
explicit statutory provisions requiring the employee to exhaust all available administrative
*582 remedies before bringing a civil statutory whistleblower action, [FN201] as well as
mandatory time periods in the form of statutes of limitation, for bringing suit. [FN202] The
new federal statute does require that the employee first file a complaint with the Secretary of
Labor, and if the Secretary has not issued a final decision within 180 days of the filing of the
complaint, then the employee can bring his or her whistleblowing action in federal court.
[FN203] The Model Act is silent on the "exhaustion" issue.
Statutes of limitation apply to the retaliatory conduct resulting from the employee
"blowing the whistle," as well as to the allegedly illegal or wrongful conduct that gives rise to
the whistleblowing. [FN204] If an employee specifically and unequivocally brings a cause of
action pursuant to his or her state's whistleblower act, the employee will be bound by the
statute of limitations therein and not any residual statute for tort or public policy claims.
[FN205] However, absent an explicit statutory limitations period, the courts likely will impose
a tort statute of limitations to the employee's whistleblowing claim. [FN206] The new federal
statute also possesses a statute of limitations provision, which mandates that the
whistleblowing employee commence his or her action not later than ninety days after the date
on which the violation occurred. [FN207] The Model Act proposes a one year statute of
limitations. [FN208]
*583 T. Sanctions for Wrongdoing by Whistleblowing Employee
Some statutes, though not the new federal statute, contain sanctions if the whistleblowing
employee institutes a cause of action pursuant to the statute for a frivolous or improper
purpose, [FN209] or if the employee fails to make a good faith and reasonable effort to
ascertain the accuracy of any information essential to the whistleblowing accusation. [FN210]
Sanctions may encompass the payment of costs and expenses and reasonable attorney's
fees. [FN211] One statute explicitly states that an employee may be subject to
disciplinary action by the employer, including suspension and termination, for reporting
information without a reasonable basis to do so. [FN212] The Model Act is silent on the
employee sanctions issue.
U. Preemption and Exclusivity
Some whistleblowing statutes provide an exclusive remedy for employees, and may
therefore preempt common law, public policy-based whistleblowing claims. [FN213] Yet other
state whistleblowing statutes have been construed as not precluding a common law, public
policy *584 whistleblowing action by a discharged employee. [FN214] That is, state statutes
that provide an administrative remedy for a whistleblowing employee have been construed as
not mandating an exclusive administrative or statutory remedy, but rather as affording the
terminated employee an alternative one to a common law public policy cause of action.
[FN215] As one court explained:
Clearly, the relief available to a whistleblower under a statutory cause of action comes
nowhere near the complete relief available in an action based upon the . . . public-policy
exception to the doctrine of employment at will. In our judgment, the relief available in an
action for the tort of wrongful discharge merely complements the limited statutory relief
available . . . . Thus, we find that the mere existence of statutory remedies for violations of
(state whistleblower statute) does not operate as a bar to alternative common law
remedies for wrongful discharge in violation of public policy embodied in the Whistleblower
Statute. [FN216]
However, in those jurisdictions that allow the two distinct causes of action, the
whistleblowing employee and especially his or her attorney, would be well advised to realize
that there may be preclusion problems in the form of res judicata and collateral estoppel
when suing under a common law theory after losing on a statutory theory. [FN217]
A few statutes even go so far as to explicitly state that the statutory whistleblowing cause
of action does not preempt or limit the development of the common law public policy doctrine.
[FN218] One statute *585 even states that in the event of a conflict between the two, the
corpus of law with "more beneficial provisions favoring the employee shall prevail." [FN219] If
a state statute expressly states that it does not preempt the common law claim, or is
construed as such, a whistleblowing employee can bring his or her common law wrongful
discharge claim even if the statutory claim would have been barred by the statute's
limitations period. [FN220]
Preemption also can arise when a state whistleblowing statute preempts recovery for
certain types of damages, typically emotional distress and punitive damages.
Preemption, finally, can arise when another statute, typically a federal one,
arguably applies to the whistleblowing employee's case. The courts have ruled that a state
whistleblower statutory cause of action is not preempted by a claim for recovery under the
Federal Claims Act. [FN221] The courts, moreover, have ruled that Title VII of the Civil Rights
Act will not preempt an employee's claim for wrongful retaliation under state whistleblowing
acts. [FN222] One court reasoned that absent an express Congressional intent in Title VII to
preempt state law was absent as well as a regulatory scheme of employment discrimination
so comprehensive as to leave little room for supplemental state regulation. [FN223] Similarly,
one federal district court has ruled that a plaintiff employee's settlement of a state statutory
whistleblowing cause of action does not operate as a waiver of the plaintiff's Title VII
discrimination claim. [FN224]
Moreover, the courts have ruled that Labor Management Relations Act does not preempt a
state whistleblower statute. [FN225] One court reasoned that the employee's rights in the
state statute were not "dependent" on the federal labor statute, and also that the employee's
rights under the state whistleblower statute existed independently of the collective bargaining
agreement. [FN226] Similarly, an employee's state *586 statutory whistleblower claim was
adjudged to be not preempted by the Railway Labor Act because the employee's claim did not
require interpretation of the collective bargaining agreement. [FN227] The non-retaliatory
provisions in the federal
Atomic Energy Act also have been deemed not to preclude an employee from bringing a
cause of action pursuant to the employee's state whistleblower protection statute. [FN228]
Finally, the Family Medical Leave Act has been construed to not preempt a state common law
public policy claim "because the FMLA provides remedies limited to the recovery of lost
employment wages and benefits and, in certain instances, liquidated damages . . . ." [FN229]
Preemption of the employee's statutory whistleblowing cause of action, however, may occur,
for example, under the Federal Aviation Act. [FN230]
As to the new federal whistleblowing statute, Congress was quite specific regarding the
preemption issue, by declaring: "Nothing in this [statute] shall be deemed to diminish the
rights, privileges, or remedies of any employee under any Federal or State law, or under any
collective bargaining agreement." [FN231] The Model Act, finally, has a strong nonpreemption section benefiting the whistleblowing employee. [FN232]
V. Conclusion
The whistleblower statutes examined appear to reflect a statutory recognition, at times
implicit, that protection of employees who report legal wrongdoing is part of the fundamental
public policy of the state. *587 Nonetheless, most of the statutes do not require a specific
finding of a contravention of "public policy" to trigger the protection of the statutes. The
statutes do seek to
prohibit employer retaliations against whistleblowing employees and deter future reprisals
to effectuate the legislative objective of encouraging employees to report employer
wrongdoing. These statutes ultimately protect not only the employee but also the public and
society from wrongdoing. The public is protected because certain obstacles, in the form of
adverse employment actions, are removed from the scenario that could interdict the
employee's efforts to report wrongdoing or suspected wrongdoing. Yet, the statutes are by no
means uniform in seeking to achieve these laudable goals. Although the statutes are
consistent in requiring the violation of a material "legal" law with public policy implications as
the predicate for whistleblowing, the statutes are then very varied as to whether the
reasonable belief or suspicion of such a legal violation will suffice. The statutes, moreover, are
even more dissimilar regarding how the employee reports the legal violations, whether orally
or in writing, and to whom, whether internally or externally. However, if the latter case, the
authorized external recipient invariably emerges as some type of governmental entity. Finally,
as to remedies, the statutes are "split," with the majority allowing only compensatory type
damages, but with the minority affording full tort damages in the case of an illegal retaliation
against the whistleblowing employee. Thus, the one safe overall conclusion is that the
whistleblower statutes vary widely, with some, such as New York's, being very cumbersome
and restrictive for employees, with others, such as New
Jersey's, being very protective of employees. Other statutes, such as Florida's, strike a
more middle-of the-road balanced approach. Of course, many jurisdictions, such as Texas, do
not even have such statutes.
For those states that do have statutes, a major problem in statutory construction arises
with respect to the whistleblowing statutes. Specifically, there emerges a conflict between two
established doctrines of statutory construction, both arguably applicable to whistleblowing
statutes. One is that statutes in derogation of the common law should be narrowly construed;
and the other is that statutes remedial in nature should be broadly interpreted to afford
access to the statutory remedies conferred. One well could argue that the whistleblowing
statutes are predominantly remedial in nature, reflecting judicial encroachments on the
common law employment-at-will doctrine; and thus the statutes should be construed in favor
of those whistleblowing employees whom the statutes were designed to *588 protect.
[FN233] Nonetheless, the courts appear to be engaging in narrow and cautious statutory
interpretation. Consequently, the whistleblowing employee would be well advised, in order to
take advantage of the protection afforded by a whistleblower statute, to strictly comply with
the requirements of the relevant whistleblower statute. [FN234] The cases interpreting the
statute are very clear in that an employee who fails to follow the specific, typically welldefined, requirements of the state's whistleblower statute cannot bring a cause of action for
wrongful discharge pursuant to the statute.
The statutory notice requirements to the employer, as well as affording a reasonable
opportunity to rectify the situation, emerge as a value-maximizing element to many
legislative schemes because they give the employer the first opportunity to correct the
problem, and this allows the employer to avoid any unnecessary harm to its reputation as well
as the burden of undergoing an investigation and burden of a hearing or trial. The act of
involving "outsiders" in an investigation of employer wrongdoing before providing the
employer an opportunity to take corrective action will defeat the protection of most
whistleblower statutes.
Whistleblower statutes were never intended to protect the incompetent or insubordinate
employee who has a "gripe" about his or her "boss," or an employee who fails to discharge
the duties for which he or she was hired. Rather, the statutes safeguard only those employees
who are terminated or punished because of their statutorily protected whistleblowing activity.
These statutes and the courts' interpretation thereof, make it very clear that protection will
not be conferred to employees who complain about their employers' immoral and unethical
business practices which are not also illegal. Thus, the traditional employment-at-will doctrine
is preserved, and any fears of a flood of suppositional wrongful discharge litigation are
mitigated. The strict causation requirement, as demanded by the courts, between the
employee's
protected whistleblowing the employer's retaliatory employment action, also weighs
against an avalanche of specious litigation.
These whistleblower protection statutes, regardless of their stringency and varying
degrees of protection, do carve out a new domain of job protection for employees. This added
protection is a *589 "safe-harbor" that most private sector employees would otherwise not
hold. These statutes, however, are of fairly recent promulgation. Antecedent to statutory
relief for whistleblowing employees was the common law, in particular, the venerable and
very supple "public policy" exception to the employment-at-will doctrine.
V. The Common Law "Public Policy" Whistleblowing Exception
A. Introduction
A widely recognized common law exception to the general employment-at-will rule exists
when the employer terminates the employee for a reason that contravenes or jeopardizes a
clear and fundamental, substantial, or well established "public policy" of the jurisdiction.
[FN235] As one court simply stated: "Firing for bad cause--one against public policy
articulated by constitutional, statutory or decisional law--is not a right inherent in the at-will
contract . . . ." [FN236] Typically, the employee is discharged for exercising some right or
fulfilling some duty that clearly relates to
safeguarding or furthering the public policy of the jurisdiction. [FN237] As one court
emphasized, "[t]he potentially harsh effects of the at-will doctrine have been tempered . . . by
the adoption of the public policy exception." [FN238] Similarly, another court declared that
"[a]n employer should not have an absolute and unfettered right to terminate an employee
for an act *590 done for the good of the public. Therefore, we hold that an at-will employee
has a cause of action for wrongful discharge if he or she is fired in violation of a wellestablished public policy of the state." [FN239]
B. Sources of Public Policy
The sources of public policy typically encompass constitutions, statutes, judicial decisions,
and administrative rules, regulations, and decisions. [FN240] As one court underscored:
"Indeed, there is no public policy that can be said to be more basic or necessary than the
enforcement of the state's criminal code or the protection of the life and property of its
citizens." [FN241] A state's statutory antitrust act, moreover, has been deemed to be a
sufficient predicate for a public policy-based whistleblowing claim because its "underlying
purpose is to establish a 'public policy of first magnitude' in furthering a competitive
economy." [FN242] Yet, "public policy," though predominantly statutorily based, is not limited
to expressions in the form of statutory enactments. [FN243] Moreover, in certain situations,
the code of
ethics of a profession may contain an expression of public policy. [FN244]
C. Clear Establishment and Articulation of Public Policy
Regardless of the source cited for the asserted public policy claim, the basis for any public
policy limitation on the traditional doctrine must be clearly articulated, well established or
mandated, and typically must be set forth with particularity. [FN245] The problem is, as one
state supreme court noted, that "there is no precise definition of *591 what constitutes clearly
mandated public policy . . . ." [FN246] Consequently, public policy determinations frequently
are made on an ad hoc basis, ultimately by the high court of the jurisdiction. Nonetheless, the
courts ordinarily look for "clear direction from a legislature or regulatory source" because this
"limits judicial forays into the wilderness of discerning 'public policy."' [FN247] Accordingly,
some courts are very circumspect when asked to find a public policy rationale for
whistleblowing. One court underscored that "only in the most extraordinary circumstances
should the courts of this State impose their judgment in an area which, in the first instance, is
clearly a legislative function." [FN248] For example, the one state appellate court failed to
find "a clear mandate of public policy" based on its state's general theft statute to support a
terminated store security employee's public policy whistleblowing case for reporting his belief
that the store manager was
stealing merchandise from the store and for investigating the manager. [FN249] As the
court explained:
The conduct at issue in this case is one employee's act of investigating possible theft from
his employer by a co-employee. Nothing in Maryland's general theft statute or any other
enactment mandates that a citizen of Maryland who suspects that another person (coemployee or otherwise) may have committed a theft must report, let alone investigate, that
suspicion . . . . To find a clear mandate of public policy, we must look to already existing
sources of policy expression. In the absence of any legislative or existing judicial
pronouncement in this state directing private citizens to investigate possible acts of theft by
co-workers or others, we find no origin for the public policy essential to [plaintiff employee's]
wrongful discharge claim. [FN250]
D. Whistleblowing as Public Policy
Whistleblowing, of course, can and does rise to the level of an activity protected by the
public policy exception to the employment-*592 at-will doctrine. [FN251] As one court
asserted, "[w]histleblowing . . . plays an invaluable role in society. As recognized by courts
considering this issue, '[p]ublic policy favors the exposure of crime, and the cooperation of
citizens possessing knowledge thereof is essential to effective implementation of that policy."
[FN252] Similarly, as another court reflected: "Virginia courts are
becoming increasingly sympathetic toward plaintiffs who are fired for bringing an
employer's criminal transgressions to light where the underlying public policy in outlawing the
conduct dictates that citizens are entitled to live free from such activity." [FN253] One state
appellate court, finally, in interpreting its state's insurance statute, elaborated on its public
policy rationale:
[The insurance code] is clearly a public welfare statute that is intended to protect
consumers from unscrupulous acts by insurance agents . . . . [The] statute [is] clearly
enacted to protect the public from insurance fraud. If such misconduct were not reported by
those with knowledge, enforcement . . . would be difficult, and the public welfare would
suffer. The Tennessee Supreme Court has stated that 'the protection of employees who report
violations of laws, regulations, and rules is a part of Tennessee public policy.' [FN254]
Maintaining safety in the workplace also is construed as proper grounds to make a
whistleblowing report in furtherance of public policy. [FN255] Thus, in order "[f]or a
whistleblowing employee to succeed on a public policy-based wrongful discharge claim, the
court must find some important public policy interest embodied in the law [which] has *593
been furthered by the whistleblowing activity." [FN256]
Nonetheless, it is necessary to note that not all jurisdictions have recognized
a common law action for the retaliatory or wrongful discharge of a private sector
whistleblowing employee. [FN257]
The vast majority of the jurisdictions, however, have created a public policy exception to
the employment-at-will doctrine for whistleblowing employees. In essence, when the "good"
of the general public is at risk or in jeopardy, the public policy "exception" will impose
limitations on the power of the employer to terminate the whistleblowing employee. Yet, what
is the public "good," and when is the public "good" imperiled? The typical answer is that the
misconduct alleged by the whistleblowing employee must be unlawful conduct that involves
the health and welfare of the public. [FN258]
*594 E. Predicate for Whistleblowing
Whistleblowing, of course, in order to trigger the public policy tort "exception," must
involve an employee discharge or adverse employment relating to a complaint or a reporting
of an employer violation of an important "public policy" of the jurisdiction. [FN259] It is
essential to note initially that the common sense observation that the actual reporting of the
public policy violations, as opposed to identifying and correcting violations, is a necessary
requirement for a whistleblower, retaliatory discharge, common law, claim. [FN260] It is also
fundamental to observe that in order for the employee to possess a viable common law
wrongful discharge lawsuit, the "policy"
contravened and reported on must inure to the benefit of the public. The important public
policy embodied in the law must have been furthered by the discharged employee's
whistleblowing activity. [FN261]
The predicate for "public policy" whistleblowing typically involves the violation of a law,
[FN262] which is similar to the statutory formulations which consistently stress "legal" law
violations. Yet the conception of the common law doctrine is potentially much more expansive
so as to encompass moral and ethical wrongdoing, presuming, of course, such misconduct,
even though not technically illegal, is serious enough to contravene the public policy of the
state. One state supreme court, moreover, explicitly has devised its jurisdiction's public policy
whistleblowing cause of action to include "the reporting of illegal or improper conduct."
[FN263] However, pursuant to that state's law, a terminated at-will employee, the former
head of security at an automotive assembly plant, could not convince a federal court that his
discharge arguably for repeatedly asking for better *595 equipment, personnel, and
resources, as well as for generally reporting his "safety concerns," rose to the level of
reporting "improper conduct," thus negating his whistleblowing retaliation cause of action.
[FN264]
Numerous illustrations exist of "public policy" whistleblowing. [FN265] Prime examples are
complaints regarding workplace safety, [FN266] conduct that harms the health and welfare of
the public, [FN267] and
reporting illegal activity by the employer internally or to government officials. [FN268]
F. Duty to Report Illegal Activity
An issue arises as to whether an at-will whistleblowing employee can sustain a public
policy wrongful discharge claim for reporting illegal activity if the employee was not under any
legal duty to report such a legal violation. A few cases hold that the whistleblowing employee
in such a situation is not protected because the lack of a legal duty to report vitiated any
public policy rationale. [FN269]
G. Employee Complicity
A difficult issue arises when the employee willingly carries out, or is involved with, the
wrongdoing the employee complained of. Despite the absence of "clean hands," the courts
hold that the employee's complicity did not preclude the terminated employee from
maintaining a common law cause of action, because the employee's whistleblowing activities
ultimately can result in a wrongful discharge in contravention of public policy. [FN270] For
example, in one state appellate case, the employee, a vice president for membership
applications and quality assurance, reported his concerns to the company's president that the
firm's board of directors were approving and handling
franchise applications in violation of anti-trust laws. [FN271] The plaintiff employee
identified seven instances over a two year period where he *596 disagreed with the board on
legal grounds. [FN272] Nonetheless, the plaintiff employee acquiesced to the board's
decisions. Eventually, the plaintiff was fired, allegedly for not being a "team player." [FN273]
When the plaintiff sued on a public policy whistleblowing theory, the defendant employer
defended in part by contending that the plaintiff's acquiescence amounted to a "cover up" of
the alleged antitrust violations. [FN274] The court, however, rejected this line of defense,
explaining that
[the defendant employer] seems to argue that [plaintiff] cannot wear the mantle of
'whistle-blower' unless he refused to carry out his employer's directions. In effect, [employer]
argues that [the plaintiff] insufficiently protested his employer's actions and should have been
insubordinate. [Employer] offers no legal authority for this argument. We decline to impose
such a requirement on whistle-blowers because it would deter an employee's legitimate
expression of concern. [FN275]
Another related and difficult issue arises when the whistleblowing employee, possessing
"clean hands," seeks to sue not only his or her employer, but also the firm's managers and
supervisors for a public policy violation. Most courts would more than likely be disinclined to
extend the reach of the public policy doctrine directly to the employer's representatives.
[FN276]
H. Disclosing Fellow Employees' Violation of the Law
Whistleblowing employees who inform on another employee's violation of the law may
invoke in certain jurisdictions the public policy exception to the employment-at-will doctrine.
[FN277] Other jurisdictions, however, declare that a whistleblowing employee who reports
legal violations by co-workers to the employer, but not public authorities, cannot utilize the
public policy doctrine to redress a retaliatory termination because the public interest is not
sufficiently *597 demonstrated. [FN278]
I. Good Faith or Reasonable Belief in Wrongdoing
In some jurisdictions, in order for the employee to recover on a "public policy"
whistleblowing theory, the courts require that there be an actual violation of the law and not
merely an employee's reasonable or good faith belief that a violation occurred. Thus,
reporting one's suspicions or the possibilities of wrongdoing may be deemed insufficient to
trigger the whistleblowing exception when there is no actual finding of wrongdoing.
In one jurisdiction, moreover, the fact that an actual legal violation has occurred is not
even a point that has to be proven. [FN279] The public policy whistleblowing doctrine, as
elucidated by the court,
did not turn on whether a law or regulation had been violated but rather on
whether an important public policy interest embodied in the law benefited from the
whistle-blowing . . . . Accordingly, the relevant inquiry here is not whether [the employer]
committed an actual [legal] violation or how [the employee] chose to categorize the
company's activities but instead whether [the employee's] complaints addressed an important
public policy interest. [FN280]
Nonetheless, if the whistleblowing employee's position subsequently is found to be
erroneous, many courts posit a "good faith" belief test to determine the viability of the cause
of action. [FN281] One jurisdiction utilizes a "feasibility" test to determine whether the
employee's reporting concerned a legal violation. [FN282]
*598 J. Private v. Public Interest
Public policy, of course, involves the public interest. One court firmly underscored that the
public policy doctrine "is a limited exception to the employment-at-will doctrine. It is not
meant to protect merely private or proprietary interests." [FN283] The "task," according to
another court "is to decide between claims that genuinely involve the mandates of public
policy that are actionable and ordinary business disputes between employee and employer
that are not." [FN284] Consequently, if a court deems the whistleblowing interest at stake
only to involve the private or proprietary
interests of the employee, as opposed to the direct interest of the general public or the
public good, the public policy exception will fail. [FN285] As one court explained: "We believe
that whistleblowing activity which serves a public purpose should be protected. So long as
employees' actions are not merely private or proprietary, but instead seek to further the
public good, the decision to expose illegal or unsafe practices should be encouraged." [FN286]
Private, internal, management or business problems or disputes, therefore, ordinarily cannot
form the basis for a wrongful discharge whistleblowing action, particularly if they are deemed
to involve merely "normal management operating procedures." [FN287] Accordingly, a court
declared that the public policy whistleblowing exception
simply was not meant to endow every workplace dispute over the water cooler on
company practices and the effect of government regulation with whistle-blower overtones. A
worker who wants to come under the protections of that [exception] *599 must seek out the
intervention of a higher authority, either inside or outside the company. [FN288]
Thus, for example, if a employee's problem with a supervisor or manager is labeled as a
"mere disagreement," it may be very difficult to convince particular courts that the employee
was engaging in protected "internal" whistleblowing by the voicing of his or her disagreement.
[FN289] Similarly, an employee who finds himself or herself disagreeing with an immediate
supervisor or manager as to the legality of work practice runs the risk of the disagreement
being labeled as such, that is, as a mere "disagreement," and not as a required "internal
report" to management of illegal fellow employee or company misconduct. [FN290] Some
jurisdictions regard the employee's reporting of wrongdoing by his or her fellow workers as
sufficiently "public." [FN291] Nevertheless, a few jurisdictions maintain that a whistleblowing
employee who reports legal violations by co-workers to the employer, but not public
authorities, cannot utilize the public policy doctrine to redress a retaliatory termination, since
the public interest is not sufficiently demonstrated; rather, the predominant interest served is
the private interest of the employer. [FN292]
K. Internal v. External Whistleblowing
The popular conception of whistleblowing is that the whistleblowing employee must
complain to outside government officials or law enforcement personnel in order to take
advantage of *600 the public policy exception. Nonetheless, many courts have allowed the
whistleblowing employee to report either internally or externally [FN293] One federal court, in
a case where the terminated plaintiff employee, a sales representative, reported to the firm's
CEO, president, as well as a member of its ethics committee, his concerns that certain
accounting and billing procedures were in violation of federal
securities law, elaborated on the internal versus external distinction:
According to defendant [employer], it is entitled to summary judgment because plaintiff
[employee] never reported defendant's conduct to any law enforcement or administrative
agency. As plaintiff highlights, however, while Arkansas courts have never directly addressed
this issue, a review of the relevant Arkansas cases does not reflect that such a requirement is
contemplated by the Arkansas courts . . . . In short, defendant has not shown that a
whistleblower is required under Arkansas law to contact an outside agency in order to avail
himself of protection under the public policy exception. [FN294]
Some jurisdictions plainly support internal whistleblowing, that is, reporting wrongdoing
internally to other employees within one's firm. [FN295] However, in some "internal"
reporting jurisdictions, the *601 whistleblowing must be made to a person within the firm of
"higher authority." [FN296] Other jurisdictions, however, require that the whistleblowing be
reported externally to the appropriate authorities. [FN297] The general rule maintains that
the whistleblowing employee must complain to outside government officials or law
enforcement personnel in order to trigger the public policy exception. Yet some courts have
allowed the whistleblowing employee to report internally to the employer. [FN298]
L. Termination before External Whistleblowing
The issue arises in the common law public policy tort, as well as pursuant to
whistleblowing statutes, as to whether the terminated employee had to "blow the whistle" to a
specific external entity before being allowed to take advantage of the public policy
"exception." According to one state supreme court, since the essence of the tort is
complaining about an employer practice that violates public policy, the elements of the tort do
not include a requirement that there be whistleblowing to a specific external entity; rather,
only that the retaliatory discharge by the employer contravene public policy. [FN299]
Similarly, one state appellate court declared that a rule requiring an *602 external report
before termination would make no sense. [FN300] As the court very practically explained:
A rule that would permit the employer to fire a whistleblower with impunity before the
employee contacted the authorities would encourage employers promptly to discharge
employees who bring complaints to their attention, and would give employees with complaints
an incentive to bypass management and go directly to the authorities. This would deprive
management of the opportunity to correct oversights straightaway, solve the problem by
disciplining errant employees or clear up a misunderstanding on the part of the whistleblower.
The likely result of such a contrary rule would be needless public investigations of matters
best addressed internally in the first instance. Employers benefit from a system in which the
employee reports suspected violations to the
employer first. [FN301]
M. Employer's Knowledge of Whistleblowing
In order to sustain a public policy action, some jurisdictions will require the employee to
demonstrate that his or her employer had knowledge of the employee's reporting of the
wrongdoing prior to the employee's termination. [FN302] Such knowledge on the part of the
employer, however, can be inferred by the jury. [FN303] Moreover, the employee's
threatening to "blow the whistle" prior to the employee's discharge has not been interpreted
as not being the equivalent of the employer's knowledge of actual whistleblowing. [FN304]
*603 N. The Causation Requirement
There clearly must be sufficient evidence of a causal connection in fact and in law between
the termination or adverse employment action and the protected whistleblowing action in
order to sustain a valid "public policy" cause of action. [FN305] As one court noted, the
plaintiff whistleblowing employee must sufficiently demonstrate a "link" between the
employee's termination and his or her whistleblowing. [FN306] That link can be demonstrated
by evidence indicating that the plaintiff employee's whistleblowing activity was a "substantial
factor" motivating the employee's
discharge. [FN307] For example, in one case, the plaintiff, the general manager of a
division office of an insurance firm, was terminated allegedly for "blowing the whistle" to the
state insurance agency concerning the fraud committed by an agent of the company. [FN308]
A key issue in the case was whether the retaliatory reason was a "substantial factor" in the
discharge. In finding the presence of the "substantial" impermissible reason, the court
explained that the general manager was
able to show that the adverse consequences to him began within *604 a fairly short
period of time after [the employer] learned it would have to pay restitution, and [the area
sales director's] letter to [plaintiff] emphasizes the 'personal and corporate liability' stemming
from the report. Under these circumstances, we conclude that [plaintiff] has presented barely
enough evidence from which the fact-finder could conclude that his report to the State of
[agent's] fraud was a substantial factor in his discharge. [FN309]
Temporal proximity between the protected whistleblowing activity and the employee's
termination, moreover, can give rise to an inference of causation. [FN310] One court clearly
and concisely explained this causation element in the context of a common law,
whistleblowing, retaliatory discharge case:
When evaluating whether causation has been established, Kansas courts look to whether
close temporal proximity existed between the whistleblowing activity and the discharge.
'Proximity in time between the [report] and the firing is a
typical beginning-point, coupled with evidence of satisfactory work performance and
supervisory evaluations.' If the case lacks close temporal proximity, a plaintiff still may
withstand a summary judgment motion by demonstrating a pattern of retaliatory conduct
stretching from the whistleblowing activity to the termination. [FN311]
However, a lack of temporal proximity will not negate the causation element in the
presence of other evidence. For example, in one state appellate case, the plaintiff
whistleblowing employee was discharged a "full year" after he began his protests of illegal
activities and seven months after he complained to his direct supervisor, the *605 firm's
president and CEO. [FN312] Nonetheless, other evidence indicated that the plaintiff was
"targeted as a scapegoat," "not viewed as a team player," and that the defendant employer
"failed to follow its own firing policies and to investigate the job performance allegations"
against plaintiff. [FN313] Thus the court decided that even though "[t]he timing evidence
therefore provides no clear support for either side's position. Nevertheless, the combined
effect of the other evidence adequately supports the jury's causation determination." [FN314]
O. Statutes of Limitations
In those jurisdictions where the public policy whistleblowing tort cause of action has not
been preempted by statute, the issue arises as to what
statute of limitations applies to the whistleblowing lawsuit. According to the Supreme
Court of Ohio, since the whistleblowing is an independent common law cause of action based
on the violation of public policy, the statute of limitations for general tort actions applies, as
opposed to the statutory whistleblowing time limitations for statutory causes of action.
[FN315]
P. Contract v. Tort
The right to recover on a "public policy" whistleblower cause of action typically sounds in
tort, [FN316] and is predicated on the employer's legal duty to conduct its business in accord
with the public policy of the jurisdiction. The legal duty and the concomitant tort thereby exist
independently of the type of employment relationship; and consequently even in an at-will
employment relationship, the terminated employee may be able to sue in tort for retaliatory
or wrongful discharge based on the employer's alleged violation of public policy. In a few
jurisdictions, however, the public policy cause of action sounds in contract; thus obviously
limiting the potential damages. [FN317] The exact nature of the cause of action is, of course,
*606 critical, in determining appropriate damages and remedies, as well as statutory
limitations periods. Moreover, designating a public policy cause of action as contract-based
gives rise to a risk that the whistleblowing employee's lawsuit will be preempted by federal
labor law if a collective
bargaining agreement also is in place. [FN318]
Q. Remedies and Damages: Contract v. Tort
Depending on the theory pursuant to which the terminated whistleblowing employee
seeks redress, a wrongful discharge whistleblowing cause of action can give rise to various
remedies. Common law, public policy, whistleblowing claims may arise under either a contract
or tort framework, depending on the jurisdiction. A wider array of damages is available, of
course, pursuant to a cause of action arising in tort rather contract law.
1. Contract Remedies and Damages
The conventional contract rule regarding damages maintains that an award for damages
should "make whole" the aggrieved party. This traditional rule typically constitutes
compensatory damages (the venerable "benefit of the bargain"), [FN319] with perhaps a
consequential damage element if reasonable reliance on an employer's promise can be
demonstrated, but speculative damages are impermissible. [FN320] Also, ordinarily damages
for emotional distress and mental anguish as well as punitive damages are not permissible,
[FN321] unless the breach amounts to a separate and independent tort.
A wrongfully discharged whistleblowing employee generally thus can recover only for the
loss of wages and benefits the employee would have received absent the discharge. [FN322]
Pre-judgment interest *607 and "front pay" (that is,
anticipated lost future earnings and benefits) also may be available. In addition to the
"back pay" award, the terminated employee may be able to recover for future wages. [FN323]
Costs and attorneys fees generally are not recoverable by the plaintiff employee.
The equitable remedy of reinstatement also may be available when appropriate. Yet as a
practical matter, reinstatement is frequently very difficult to secure as the employment
relationship typically has been irreparably harmed due to the whistleblowing incident,
retaliatory termination, and wrongful discharge breach of contract lawsuit.
Pursuant to conventional contract damage rules, the wrongfully discharged whistleblowing
employee has a duty to mitigate his or her damages, and thus make a good faith and
reasonable effort to seek out and secure similar employment.
2 Tort Remedies and Damages
Pursuant to tort law, in addition to compensatory damages, damages for emotional
distress and mental anguish as well as punitive damages are available. Moreover, less
certainly is required than in contract law. Tort damages are predicated, of course, on the
traditional doctrines of proximate causation and foreseeability. Damages thus can encompass
not only compensation for ascertainable economic injuries, but also for less certain, though
foreseeable, economic and non-economic injuries, including emotional distress
and mental anguish. [FN324] Damages for injury to one's reputation also may be
recoverable if proximately caused by the wrongful termination of the whistleblowing
employee.
Punitive damages, moreover, are available for a tort-based, public policy, whistleblowing
claim. [FN325] The purposes of punitive damages are to punish the wrongdoing employer for
its flagrant misconduct and to *608 deter other employers from engaging in such similar bad
conduct. Standards for an award of punitive damages may differ among jurisdictions, but
typically include conduct that is malicious, spiteful, or gross, or conduct that is in reckless
disregard for, or indifference to, the rights and safety of others. [FN326] Typically, "clear and
convincing" evidence is required to support a punitive award. [FN327] An award of punitive
damages would seem especially appropriate in a wrongful discharge, public policy, tort case,
such as a whistleblowing one, in order to uphold the public interest. Yet, as one court
emphasized, even though the case is framed as a tort, "something more" is required for a
punitive award. [FN328]
Most common law public policy claims, such as whistleblowing, it is important to recall,
are deemed to be actions in tort, and not contract, though some courts declare that a
wrongful discharge public policy claim can give rise to both tort and contract remedies.
Finally, a few courts hold that a cause of action for the wrongful discharge of an at-will
employee gives rise solely to a
contract, and not a tort, cause of action, thus limiting the damages to traditional contract
ones. [FN329]
R. Conclusion
As can be discerned readily from the preceding common law analysis, the scope of legal
avenues for the creative attorney of the discharged whistleblowing employee is quite
expansive. Although a few jurisdictions appear very conservative regarding the "public policy"
doctrine, many are quite liberal, and ever-evolving, and thus afford the terminated
whistleblowing employee, even the at-will employee, the excellent opportunity to use the
public policy doctrine as a very viable vehicle for legal redress. As a matter of fact, despite the
difficulties inherent in a whistleblowing public policy "exception," this standard has become so
engrained in the case law that several states, as has been seen, have codified this aspect of
the public policy doctrine in their statutory law
In order to maintain a viable cause of action, statutory or common law, tort or contract, it
is necessary to address such seminal *609 issues as the required elements thereto, the
standards of proof and burdens of persuasion, and the role of the court and jury.
VI. Elements, Standard of Proof, Burden of Persuasion, and Role of Court and
Jury
A. Elements
Although it is difficult to generalize, due to the plethora of whistleblowing statutes and
common law formulations, the fundamental elements of a whistleblowing employee's prima
facie case of wrongful retaliatory discharge are: (1) the plaintiff's status as an employee of
the defendant employer; (2) the employee engaged in whistleblowing activity protected by
statutory law or the common law "public policy" doctrine; (3) the employer knew of the
employee's protected whistleblowing activity; (4) the employee was subsequently terminated
from his or employment or subjected to an adverse employment action; and (5) there existed
a causal connection or nexus between the employee's participation in the protected activity
and his or her termination or job harm. [FN330] As to these fundamental aspects of *610 the
plaintiff employee's case, many courts "borrow" elements from a Title VII discriminatory
retaliation cause of action. [FN331]
Of course, in those jurisdictions that impose additional requirements on the whistleblowing
employee, such as providing written notice to the employer and affording the employer a
reasonable opportunity to correct the alleged wrongful activity, those elements naturally will
become part of the plaintiff employee's prima facie case. [FN332]
The determination as to whether the employee's evidence establishes this prima facie
case is regarded as a question of law that an appellate court can review de novo. [FN333]
B. Standard of Proof
Typically, the employee, as plaintiff, must show by "clear and convincing" evidence that
the required "whistleblowing" elements are present. [FN334] However, after the employer
introduces a legitimate job-related reason for the employee's discharge, and the employee
then is obligated to show that the discharge was really for an impermissible reason and that
the stated reason was merely a pretext for intentional retaliation, the employee can do so by
a preponderance of the evidence. [FN335] Similarly, the employee can show that it was more
likely than not that the retaliatory motive was the determinative or *611 substantial
motivating factor in the adverse decision. [FN336] The Model Act, one must emphasize, only
requires the employee to make his or her initial case by a "preponderance of the evidence,"
as opposed to a "clear and convincing" requirement. [FN337] However, under the Model Act,
the employer is held to a "clear and convincing" standard if it attempts to show a permissible
reason for the unfavorable personnel action. [FN338]
C. Burden of Persuasion or Production
The discharged or otherwise sanctioned employee bears the initial burden of presenting
sufficient evidence from which a rational inference of impermissible retaliatory discharge in
contravention of a statute or common law public policy precept could be drawn. [FN339] As
part of that initial burden, the employee must produce evidence that the employer knew that
the employee had engaged in the protected activity. [FN340]
However, once the terminated employee makes his or her prima facie showing of wrongful
retaliatory discharge, the burden of persuasion then shifts to the employer to produce
evidence, which, if taken as true, would allow a conclusion that there was a legitimate, nonretaliatory reason for the employee's discharge. [FN341]
*612 Once the employer does present evidence indicating a legitimate non-retaliatory
reason for the discharge or adverse employment action, then the burden of persuasion shifts
again to the plaintiff employee to adduce some significantly probative evidence,
demonstrating that the employer's proffered reason was unworthy of credence, and thus
merely a pretext, or that a wrongful, discriminatory, retaliatory reason more likely than not
motivated the employee's discharge or job harm. [FN342] In seeking to rebut the employer's
proffered legitimate and non-discriminatory reason for the adverse employment action, the
employee then must raise doubts about the employer's explanation by showing any
weaknesses, implausibilities, inconsistencies, incoherencies, or
contradictions in the proffered reason. [FN343] If the employee can show that the
employer delayed in commencing an investigation of the employee's alleged acts which were
the asserted legitimate reasons for the employee's discharge, such evidence can be used to
establish that the employer's reasons were merely a pretext. [FN344] In addition, if the
whistleblowing employee was involved in the illegal activity, yet was the only employee
sanctioned, an inference can be drawn that the employer's offered reason for the discharge,
that is the employee's own illegality, *613 was merely a pretextual reason. [FN345] The
timing issue, that is, the short time period between the whistleblowing employee's discharge
and the reporting of the wrongdoing, also can give rise to an inference of pretext. [FN346]
When the whistleblowing employee does present some plausible evidence of a retaliatory
discharge, and the employer also presents some plausible evidence of a legitimate job-related
reason for the discharge, thus creating a "mixed motive" type of case, the employee's burden
in some jurisdictions thereby may become quite heavy, as some courts will demand that the
employee demonstrate that the impermissible retaliatory reason was the sole reason for his or
her discharge. [FN347]
Therefore, it is important to underscore that adequate evidence by the employee of the
existence of a causal link between his or her protected whistleblowing activity and the
employee's discharge or penalization will shift
the burden of persuasion to the employer to show a legitimate non-retaliatory reason for
the adverse employment action. [FN348]
Yet, the ultimate burden of demonstrating that the employer violated a whistleblowing
statute or contravened a common law precept remains with the employee, and showing the
consequent adverse employment action, and the attendant causation, the courts uniformly
declare, is at all times, overall, and finally with the plaintiff employee. [FN349]
In ascertaining the appropriate burden-shifting rules to be utilized in a whistleblower case,
it is important to note that many courts again "borrow" the burden-shifting analysis and
attendant rules *614 from Title VII Civil Rights case law. [FN350]
D. Role of Court and Jury
One state whistleblower statute explicitly calls for a jury trial for claims brought pursuant
to the statute. [FN351] Other statutes have been interpreted to call for the use of a jury,
[FN352] and the common law public policy cause of action typically is framed as a traditional
tort claim. Of course, the evidence initially submitted must present a sufficient factual
disagreement on the essential elements of the case so as to require submission of the case to
a jury; otherwise, if the evidence is lacking or is so one-sided, then one party will prevail as a
matter of law. [FN353] Therefore,
differentiating the proper roles for the court and the jury, usually the trier of fact, is
essential.
Initially, the court, as a matter of law, and as a "threshold" determination, must ascertain
if there exists a clear articulation of law, either in a statute, rule, or regulation, or a clear
expression of public policy, that would be violated if the facts as alleged by the employee
regarding the employer's conduct are true. [FN354]
The seminal whistleblower issue as to whether the employee's protected activity caused
the employer's retaliation is regarded as a question of fact. [FN355] When the employer
submits evidence of a non-retaliatory reason for the employee's discharge, and there thereby
arises a conflict with the plaintiff's evidence establishing his or her prima facie case, the
resulting conflict represents a question of fact *615 which must be resolved by the trier of
fact, ordinarily the jury. [FN356] Similarly, it is a function of the jury as finder of fact to
determine whether the employer's proffered reason for the adverse action is legitimate or a
pretext. [FN357] Rejection of the employer's proffered reasons will permit the jury, as trier of
fact, to infer the ultimate fact of intentional retaliatory action by the employer. [FN358]
The jury as the usual finder of fact also is charged with the responsibility to determine the
causation issue. [FN359] Accordingly, the resolution of the "substantial factor" test is for the
fact-finder, typically
the jury. [FN360] In so doing, the jury is allowed to draw inferences based on the facts
and circumstances of the case, especially the close proximity in time factor between the
whistleblowing and the adverse employment action, as well as evidence of unequal treatment,
that the employee's discharge was caused by the employee's "blowing the whistle" on his or
her employer. [FN361] The issues of an award of damages and the extent thereof are
regarded as questions of fact for the jury. [FN362]
Whether an employee made a report both in good faith and with a reasonable belief within
the meaning of a whistleblower statute have been construed as questions of fact. [FN363]
When a state statute requires *616 that adequate written notice be given to the employer,
and also that the employer be afforded a reasonable opportunity to correct the problem, these
essential issues are construed as questions of material fact for the jury, thus precluding
summary judgment. [FN364]
If a statute protects an employee for reporting suspected violations, the reasonableness of
the employee's suspicions is a question of fact, typically for the jury to resolve. [FN365] The
question of whether the employee was constructively discharged in violation of a state
whistleblower protection statute is regarded as a question of fact for the jury. [FN366]
Concerning the common law, public policy, wrongful or retaliatory discharge cause of
action, the existence and clarity of the jurisdiction's public policy,
as well as whether the public policy was contravened or jeopardized, are regarded as
questions of law for the court. [FN367] The issue of causation, similarly to the statutory
causes of actions, is regarded as a factual issue ordinarily for the jury. [FN368]
As one plainly can discern from the preceding legal analysis, the subject matter of
whistleblowing is a very engrossing, comprehensive, and complex area to examine legally.
Yet, in addition to charting the legal parameters of whistleblowing, an inquiry must be
initiated to ascertain, pursuant to ethics, the morality of whistleblowing, first by scrutinizing
corporate codes of ethics and then by examining ethics as a branch of philosophy.
VII. Corporate Ethics Codes and Codes of Conduct: Whistleblowing Provisions
A. Introduction
Many companies must be very well aware of their legal *617 responsibilities, as well as
rights, pursuant to whistleblowing and statutory and case law, because many company codes,
either designated as "ethics" documents or simply "conduct" guides, contain whistleblower
provisions. The purposes for adopting such codes containing reporting provisions are
presumably to assure that the firm's employees and thus the company adhere to legal and
ethical standards of "good" conduct, and that the potential whistleblowing employees know
what is
expected of them, and how they will be treated, if the firm is engaging in wrongdoing.
Although many companies now have codes of ethics, this article will examine a certain
selected group chosen for their rather extensive whistleblowing provisions.
B. Codes of Ethics
Allied-Signal, now merged with Honeywell International Corporation, [FN369] has a Code
of Conduct with general "integrity" principles as well as specific legalistic provisions dealing
with the firm's major "stakeholders." [FN370] In addition, the Code contains a major
compliance section, entitled "Our Compliance Program," with a sub-section applying to "All
Employees." The employee compliance section commences with a command that "every"
employee "must communicate any suspected violations promptly" of the Code. [FN371]
Moreover, the employees are provided with telephone "hotlines" by which they can report
"suspected violations of laws, regulations, Company policies, or the Code of Conduct."
[FN372] The employees also may report violations through their "normal reporting channels,"
as well as their business unit's Compliance Officer, any member of the Compliance Council or
Leadership Committee, or to any corporate officer. [FN373] The Code states explicitly that
employees who do report suspected violations in "good faith" will not be subject to any
retaliation. [FN374] Their confidentiality also will be protected "to the
extent possible, consistent with law and corporate policy." [FN375] In an excellent, but
non-typical, provision, the Code expressly states that violations *618 will be investigated,
and, moreover, will be reported to "the appropriate authorities" ("upon the advice and
approval of the law department," of course). [FN376] The employees' compliance section
closes by warning "All Employees" that the failure to comply with "any responsibilities"
imposed pursuant to the Code will result in "appropriate" disciplinary action. [FN377]
United Technologies Corporation has a code similar to Allied-Signal but designated as a
Code of Ethics. The Code commences with a commitment to "the highest standards of ethics,"
and contains general "stakeholder" obligations as well as quite specific legalistic ones.
[FN378] In the employee "Responsibilities" section, the sub-section designated "Reporting
Violations" states that it is each employee's "personal responsibility to bring violations or
suspected violations" of the Code to the attention of the employee's supervisor, the legal
department, or the firm's Ombudsman. [FN379] The Code also declares that corporate policy
prohibits any retribution against employees for making such reports. [FN380] United
Technologies also has developed a supplemental guide for its employees, called Questions and
Answers about the UTC Code of Ethics. [FN381] One of the questions is "How do I report a
suspected violation of our Code" ? [FN382] The supplemental guide answers by
stating that the "preferred way" is to report any concerns to one's supervisor; but "[i]f for
some reason this is not practical, or if you prefer to report it in a more confidential manner,"
the employee is counseled to use the company's "hotline," called DIALOG, or contact the
Ombudsman, or a designated Vice-President. [FN383]
The Hess Business Practice Guide [FN384] contains a section significantly titled "Reporting
Suspected Violations," which declares *619 that employees have an "obligation" to notify their
supervisors, the legal department, or other "appropriate" company officials of "suspected"
violations of the law. [FN385] Meaningfully, the Guide states that the failure to so notify can
in and of itself be grounds for disciplining an employee. [FN386] The firm allows anonymous
reporting of violations, and accordingly provides additional designated personnel to receive
complaints as well as phone numbers. [FN387] The Guide asserts that all reports, whether
anonymous or not, will be treated confidentially, and will be investigated "promptly,
thoroughly and fairly." [FN388] This whistleblowing section of the Guide notably concludes
with the statement: "Intimidation or retaliation against anyone making such reports will not
be tolerated." [FN389]
The Code of Ethics of the Black and Decker Corporation also has a distinct section titled
"Reporting Violations of the Code." [FN390] The whistleblowing section commences with a
declaration that an employee who
becomes aware of a violation of the Code, or "believes that a violation may take place in
the future," "must" report the matter. [FN391] This initial statement is important for three
reasons. First, the employee has an obligation, arguably rising to the level of a legal
contractual duty, to report the violation. Second, the stipulation protects the employee who
believes that a violation may occur in the future, which is a significant additional level of
protection. Lastly, the protection of the Code is tied to violations of the Code, most of which
provisions track established legal precepts against anti-trust violations, discrimination, and
insider trading, for example, but some of which prohibit activities such as conflicts of interests
and gifts and entertainment which may be quite legal though unethical in the context of the
Code. As to the actual reporting of Code violations, the Code of Ethics states that "ordinarily"
the report should be made to the employee's immediate supervisor; yet if no action is taken
by the supervisor, "or the employee feels that it would be appropriate to report to a person in
higher authority," the employee should bring the matter to certain high-level corporate
personnel. [FN392] The Code continues with a *620 statement that, in order to protect a
reporting employee, requests for anonymity will be respected "to the extent this does not
result in the violation of the rights of another employee." [FN393] Apparently, the firm is
concerned with an allegedly misbehaving employee's right to "confront the witnesses" against
him or her,
particularly in a case when the assertion of wrongdoing contains a personal element, such
as a sexual harassment situation. The firm also may be concerned with a "machiavellian"
whistleblowing employee who is attempting by anonymous means to sabotage a co-worker's
career for personal gain and/or spite. The Code concludes with a stern warning that any
attempt at reprisal against the reporting employee will be "punished severely." [FN394]
The Schering-Plough Corporation Business Conduct Policy manual includes a
whistleblowing section, titled "Duty to Report Violations." [FN395] This duty mandates that
the employee is responsible for reporting to the company any circumstances that the
employee believes may constitute a violation of the policy as well as any other company
policies. [FN396] The Policy makes explicit reference to several generally stated legal
principles, and throughout requires observance of the law. The Policy requires the employee
to report in good faith; but also permits the employee to report "suspected" violations.
[FN397] The Policy allows the reporting to be directed, either orally or in writing, to the
employee's supervisor, a Human Resources representative, an attorney in the company's
legal department, or, alternatively, the firm's "Hot Line." [FN398] The Policy further states
that the company will investigate any matter reported and take appropriate corrective action.
[FN399] Finally, the Policy concludes by declaring that retribution against the reporting
employees will not be permitted. [FN400]
The Baxter Corporation has a code of ethics, entitled Baxter Ethics, [FN401] which
requires the employees to conform to all laws that *621 apply to the company's business or
risk sanctions [FN402] as well as to underscore that "ethical business conduct is part of
everyone's job" in their business dealings. [FN403] In addition to these general
pronouncements, the Code contains many specific legal and ethical rules pertaining to the
conduct of the firm's business. Of particular interest to the analysis herein are the
whistleblowing provisions, found in two sections, "Personal Responsibilities" and "Manager's
Responsibilities." In the former, the employee is counseled that he or she is "individually
responsible for reporting wrongdoing." [FN404] The Code then advises that the employee
must report "promptly" any violations of the law or Code policies to the employee's supervisor
or to another suitable department. [FN405] Employees also must assist in investigating
known violations of the company's policies. [FN406] Moreover, the Code warns the employees
that the failure to comply with the policies therein may result in termination of employment.
[FN407] In the latter section, "Manager's Responsibilities," the manager is required to
communicate to his or her employees the standards of business conduct contained in the
Code, and why they are important, as well as to maintain a work environment that
encourages open communication regarding business practice standards and concerns.
[FN408] There is, moreover, an explicit non-retaliation provision, where managers are
enjoined to "protect employees against reprisals when they report, in good faith, actions
they feel violate the law or these standards." [FN409] The company also has a firm "No
Retaliation Policy," stating: "No one will be punished for asking about possible breaches of
law, regulation, or company policy. Any allegation of a reprisal will be investigated. Baxter
managers as well the Corporate Responsibility Office and Regional Business Practices
Committees, enforce this policy." [FN410] The company also has an extensive section, titled
"What to Do if You Have a Concern About Business Practices," that informs, explains, outlines,
as well as charts, to whom and how a concerned employee reports his or her concerns.
[FN411]
The Cordis Corporation, now a subsidiary of Johnson & Johnson, *622 has a Code of
Ethics which is phrased as a general constituency obligation document, though with several
legal compliance statements in the context of "stakeholder" responsibilities. [FN412] The final
section to the Code is called "Problem Resolution." It is the whistleblowing section. If a Cordis
employee has "information concerning actual or potential violations" of the company's policies
or "matters of ethics," the Code states that the employee "should tell your supervisor or other
management, or if you prefer . . . the Ethics Hotline." [FN413] The Code section also states
that the "hotline" operator will take the information from the employee and make a "formal
report" to the corporation through its Ombudsman. The Code section
concludes by proclaiming that "[n]o reprisals will be permitted against employees
reporting possible misconduct of ethics policies," and that "[c]onfidentiality will be provided,
except when avoidable during an investigation." [FN414] Johnson & Johnson, the parent
company, does not have a Code of Ethics or Conduct per se, but it does have its famous "Our
Credo," phrased as a set of stakeholder or constituency obligations, yet which does have a
statement that "Employees must feel free to make suggestions and complaints." [FN415]
Honeywell International Inc. has a lengthy and elaborate Code of Business Conduct,
including an extensive "Integrity and Compliance Program." [FN416] The code emphasizes
adherence to national and local laws wherever it does business in the section title "Our
Relationship with Others," and specifically in a sub-section called "We Comply with Local
Laws." [FN417] In the section dealing with Integrity and Compliance, in a sub-section titled "A
Personal Responsibility," the code states: "It is the Company's responsibility to provide a
system of reporting and access when an employee who wishes to report a suspected violation.
. .and the normal chain of command cannot be used." [FN418] Accordingly, the code then
provides information about the Integrity and Compliance Office, ACCESS Helpline, as well as
other individuals in the company for employees with concerns to contact. [FN419]
Yet, the mere fact that a firm has an ethics code and an ethics *623 website
is certainly no guarantee of legal and moral conduct on the part of the firm and its
employees. The Enron Corporation emerges as the glaring example, as that firm had a Code
of Ethics, a Statement of Human Rights Principles, as well a Social Responsibility website,
[FN420] all of which underscored the company's commitment to the law and ethical standards
and which informed the public in a sub-section entitled "Education and Communication" that
"Enron employees at all levels are expected to be active proponents of our principles and are
trained to report without retribution anything they observe or discover that indicates our
standards are not being met." [FN421]
C. Conclusion
These Codes and their attendant whistleblower provisions not only should demonstrate
that the company is a legal, ethical, and fair firm with a deserved reputation for excellence,
honesty, and morality, but also that the company is an egoistically wise one by encouraging
and protecting the internal reporting of wrongdoing. Yet, although these codes form a very
impressive corpus of legal and ethical obligations and principles, the truly moral and prudent
firm must always abide by its own internal "law."
The occurrence of external whistleblowing, however, usually indicates not only the failure
in a firm's commitment to morality but also a breakdown in its ethical structure and
communication channels. If a company has a code of
ethics, an ethics department or officer, ethics training, and ethics "hotlines," such a
morally, and practically, committed company will enable its employees to raise effectively any
perceived problems with or within the company through clearly defined channels, pursuant to
explicit standards, and to empowered individuals.
Such a firm clearly will have a provision in its code of ethics dealing explicitly with
reporting suspected violations of the code, as well as other illegal or immoral actions. The
provision must plainly state that an employee who becomes aware of a violation, or believes
that a violation will take place in the future, must report the matter. Procedures and channels
for reporting concerns must be defined clearly. In particular, the code should specify the
person to whom the employee's concern is initially to be addressed. Ordinarily, this *624
reporting should be made to the employee's immediate supervisor; but then the code
provision should specify to whom else, and how, in the company's management hierarchy, the
employee can notify, including the ethics officer, of course. Ideally, the Code should create
multiple reporting channels so employees who suspect that their supervisors and/or managers
are engaged in wrongdoing can lodge complaints with personnel other than those to whom
they regularly report. The code provision, furthermore, very strongly must state that the
matter will be investigated promptly, thoroughly, and fairly, and that such reports will be
treated with the utmost confidentiality. In order to
demonstrate that an employee's report will not be ignored or misused, the code should
indicate that the whistleblowing employee will be informed of the results of the internal
investigation and any remedial action taken. The code provision, finally, must state that any
attempts at intimidation and/or retaliation against the whistleblowing employee will not be
tolerated and will be punished severely. The code, of course, must be effectively
communicated to all the firm's employees, who must be made to understand that they have
both a legal and an ethical duty to report suspected wrongdoing internally as well as a
concomitant duty not to retaliate against whistleblowers. [FN422]
By adopting such an ethical policy, the firm will be acting in an ethical manner in the
sense of doing the greater good and respecting all its "stakeholders" as well as acting in an
ethically egoistic manner in advancing its own "good."
Yet, it would be remiss, as well as naïve, for the author not to warn employees and their
counsel that all the preceding fine-sounding, safeguarding, "moral" privileges language
enunciated in business codes of ethics and conduct is not necessarily legally binding on the
employer. Two examples will most strikingly underscore the difference between legal and
moral rights. In one case, a New York appellate decision, the plaintiff, an at-will employee, a
product manager for a telephone company, informed his employer's counsel that a fellow
employee had concealed documents relevant to litigation
between the employer and a number of its contractors. [FN423] The plaintiff *625
employee was subsequently fired, and brought suit against his employer on a number of
theories. He lost, however, on his statutory whistleblowing cause of action, as well as his
common law public policy claim. [FN424] He also sued for breach of contract, contending that
his firm's "Code of Business Conduct," which was distributed by the employer to all
employees, stated that employees should report any knowledge of illegal acts anywhere in the
company, and most significantly that the employees were assured of protection against
reprisal for reporting actual or suspected violations of the code. [FN425] The court, however,
rejected the employee's breach of contract claim, emphasizing that the code as well as the
firm's employment manual, plainly maintained the plaintiff's at-will employment status, thus
obviating any express or implied contractual obligation on the part of the employer. [FN426]
The court explained its reasoning:
Routinely issued employment manuals, handbooks and policy statements should not be
lightly be converted into binding employment agreements. That would be an unwise
expansion of [the law]. It would subject employers who have developed written policies to
liability for breach of employment contracts upon the mere allegation of reliance on a
particular provision. Clearly, that cannot be, especially in light of conspicuous disclaiming
language. An employee seeking to rely on a provision arguably creating a promise must also
be held to reliance
on the disclaimer. Here we conclude that such disclaimer prevents the creation of a
contract and negates any protection from termination plaintiff may have inferred from the
manual's no-reprisal provision. [FN427]
The other salient example, a Connecticut appellate decision, dealt with a document
explicitly designated as a "code of ethics." [FN428] The case involved the plaintiff, an at-will
employee, who was a project engineer for a major technology company. The plaintiff, as an
employee, participated in various company sponsored programs "designed to give employees
a forum in which to express their views and concerns. [FN429] These programs were called
"Straight Talk," DIALOG, and "All Hands"; and in order to encourage employee participation,
the employer used an ombudsmen to facilitate the use *626 of the forums. [FN430] During
these forums, the plaintiff voiced his concerns that during the current poor economic climate
senior executives were awarded enormous bonuses without regard to the fate of lower level
employees, and that the firm was more interested in short term profits, than long term
growth, the interests of shareholders, and the public good. [FN431] The plaintiff continued to
express these concerns to ombudsmen and at other forums. The plaintiff subsequently was
terminated, allegedly as part of an overall reduction in force. [FN432] Whereupon, the plaintiff
sued, contending that his constitutional rights to free speech were violated because the
employer accepted funding from the state, that his discharge violated the public policy
doctrine because the state's public policy encourages free speech in a private sector
context, and that the firm's code of ethics rose to the level of an implied contract. The court
rejected the constitutional and public policy assertions. [FN433] The plaintiff's ethics-contract
claim was based on the allegation that the pursuant to the firm's code of ethics, the employer,
as well as the employees, "had a duty to treat the plaintiff fairly in all aspects of his
employment, provide open lines of communication, follow established guidelines for
promotion, development and discharge, and respect protected communications made through
its ombudsmen." [FN434] Based on this language, the plaintiff argued that an implied
contract existed between himself and the defendant employer, precluding a termination for
the exercise of his ethics code "rights." [FN435] The court then rejected this final line of legal
argument from plaintiff. The court first clearly enunciated the very "legalistic" general rule
that an employer "has no duty to comply with its code of ethics . . . ." [FN436] Yet the court
did qualify the rule by further stating "unless the code of ethics constituted an implied
employment contract." [FN437] Unfortunately for the "down-sized" plaintiff, the jury rendered
a contrary verdict on that crucial contract issue. [FN438]
The prudent employee, therefore, must be keenly aware of the "values" of legality and
morality, the distinction the courts make thereof, and the daunting challenge of converting
moral and ethical precepts into legally
operative rules. Hopefully, an employee will be *627 working for a firm that subscribes
not only to the value of legality, but also to the values of morality and ethics; and thus will
work for a firm which will obey its own code of conduct and ethics.
Finally, it is most interesting to note how the new federal statute, the Sarbanes-Oxley Act,
treats corporate codes of ethics. The statute neither mandates companies to adopt codes of
ethics, nor if in existence makes them legally binding. However, for companies and personnel
required to file certain periodic reports pursuant to the Securities Act of 1934, the statute
does require a firm to report to the Securities and Exchange Commission whether or not, and
if not the reason therefor, the company has adopted a code of ethics for senior financial
officers. [FN439] Moreover, and quite revealing, Congress in addition requires that if a
regulated firm changes its code of ethics, or makes any waiver thereto, the firm must make
an "immediate disclosure" to the Commission as well as a dissemination on the Internet or by
other electronic means. [FN440]
Corporate ethics codes and the legal efficacy thereof are just one part of an ethical
examination of whistleblowing. As ethics is a branch of philosophy, an ethical analysis of
whistleblowing perforce requires a moral philosophical treatment of the topic.
VIII. Ethical Examination of Whistleblowing
A. Introduction
As has been pointed out extensively, although there does exist a corpus of whistleblower
law to protect private sector, at-will employees, it is limited and certainly not uniform. There
is yet no general federal law, though the new federal, securities fraud, whistleblower statute
is a promising start. There are many state statutes, but only a relatively small number of truly
comprehensive state statutes. Most of these contain strict reporting requirements, and,
moreover, are strictly construed by the courts. Finally, there is a rather large, but loose,
state-by-state collection of at times widely divergent, common law, "public policy"
formulations. The statutory and case law, of course, eventually will determine the legalities of
a whistleblowing situation. Ethics, as a branch of philosophy, will be used to determine what is
morally required in a whistleblowing *628 situation.
An important initial step in conducting an ethical analysis is to distinguish "morality" from
"ethics." Morals are a person's views as to what is right or wrong, good or bad, just or unjust.
Morality provides the standards of behavior by which persons and actions are judged. Ethics,
however, is the branch of philosophy which studies how moral decisions and positions are
justified. The traditional view of ethics, or moral philosophy, is that it provides the
Next Part | First Part
FOR EDUCATIONAL USE ONLY
theoretical framework for asserting, defending, and establishing moral rules. Ethics
consists of general systems of principles that one can use to evaluate moral beliefs, resolve
moral disputes, and rationally determine a moral course of conduct. The object of ethical
philosophers is to devise logical thought systems that will determine if a proposed action,
rule, or law is moral or immoral, good or bad, right or wrong, just or unjust. [FN441]
Ascertaining whether whistleblowing is morally permissible, or in particular, whether it is
morally required, or concomitantly whether it is morally justified, is a very difficult task. Such
a moral whistleblowing inquiry first necessitates an examination of the field of ethics as a
branch of philosophy. Accordingly, one important moral philosophical issue that emerges is
whether ethics, as a branch of philosophy, grants, or should confer, any moral protection to
private sector employees, especially at-will employees in a corporate context. Do employees
have the moral right, and perhaps the moral responsibility, to "blow the whistle"? Those are
the seminal moral questions for ethical analysis. Yet, before any ethical examination can
commence and moral conclusions offered, law must be distinguished from morality, and
morality must be differentiated from ethics.
As ethics is a branch of philosophy, this part of the article will use the ethical philosophy of
Utilitarianism, propounded principally by the English philosophers Jeremy Bentham (17481832) and John Stuart Mill (1806-1873), as
well as the ethical philosophy of the German philosopher, Immanuel Kant (1724- 1804).
Employers thus must look to both the law and the philosophy of ethics when deciding issues
relating to whistleblowing my employees. [FN442]
*629 B. Ethical Egoism
Before examining Utilitarian and Kantian ethics, however, a reference beforehand must be
made to the doctrine of ethical egoism. Egoism is a consequentialist based ethical theory; but,
as the word "ego" clearly indicates, the consequences are analyzed only so far as they directly
or indirectly impact oneself. Accordingly, pursuant to egoism as an ethical theory, an action is
moral if it maintains or advances one's self-interest; and conversely an action is immoral if it
undermines or impedes one's self-interest. The objective, of course, is to maximize one's own
"good." As this article has an employment and business and corporate foundation, the
principal "good" to be valued and maximized will be deemed to be money. It is very important
to note two major constraints on the doctrine of ethical egoism. First, an "enlightened" ethical
egoist would counsel that one should be willing to take a long-term approach to maximizing
one's self-interest. Thus, a rational ethical egoist would be willing to undergo some short-term
expense or sacrifice to maximize his or her greater good in the long-run. Second, even if one
has a huge ego, and the power to exercise it, the "enlightened" ethical
egoist would say that it is stupid to take advantage of people, exploit them, trample on
their rights. Rather, a true ethical egoist would assist, sustain, and protect people, co-opt
them, and make them part of the "team." The ethical egoist will do this not out of any feelings
of benevolence and charity; but because typically it will inure to the individual benefit of the
egoist in the long-term to treat people well. Thus, self-interest is paramount, as well as
moral; but self-interest constrained by rationality and prudence. [FN443]
The author believes that the doctrine of ethical egoism would dictate to the logical and
"enlightened" employer that the employer treat the whistleblowing employee well, that is, as
a valuable asset, as part of the true "team," and definitely not as a disloyal "troublemaker" or
"informant" to be sanctioned. Ethical egoism would dictate that not only should the employer
not retaliate against the whistleblowing employee; but rather whistleblowing internally *630
should be encouraged. Surely, an egoistic employer can be made to see that it is in its own
self-interest to take care of problems internally, before they wind up in the hands of
government regulators or the media. Thus, as far as the employer is concerned, internal
whistleblowing is moral pursuant to ethical egoism. Ethical egoism will be further applied to
whistleblowing in the next major section of this article, entitled "Recommendations," and a
detailed explication of what the author believes to be in the egoistic interest of the employer
will be offered.
C. Utilitarianism
One way to address the morality of whistleblowing is to examine the consequences
thereof. Of course, ethical egoism is a consequentialist type of ethical theory, but with the
consequences involving merely oneself, at least directly. Focusing on consequences lies at the
heart of the Utilitarian ethical theory too. According to Utilitarianism, a moral action is one
which produces the greatest amount of good for the greatest number of people. The object is
to create the greatest amount of pleasure, in the sense of happiness and satisfaction, for
humankind, while incurring the least amount of pain. [FN444]
Utilitarianism, though another example of a consequentialist-based ethical theory, clearly
is one with a much broader approach than only focusing on how the consequences of an
action impact on oneself. Utilitarianism, rather, involves an examination of how the
consequences of an action impact on a much wider range of constituent groups, or
"stakeholders" in a business context. The Utilitarian, therefore, after identifying the action for
ethical evaluation, determines those people and groups directly and indirectly affected by the
action. The Utilitarian then attempts to ascertain consequences of the action, good and bad,
on the affected parties. Next, the "pleasures" or benefits to be gained from the action,
whistleblowing herein, must be balanced, weighed, and
measured against any "pains" or harms to the "stakeholders" that may be caused by
"blowing the whistle." The tasks of predicting, measuring, *631 and weighing are, admittedly,
very challenging components to this presumably "scientific," mathematical, ethical theory.
The first question pursuant to a Utilitarian ethical analysis of whistleblowing is to ascertain
exactly who are these "stakeholders," that is, the people or groups who are affected directly
as well as indirectly by the action of whistleblowing. The major stakeholder groups for
whistleblowing are as follows: employees, employers, and society as a whole; and other
constituent groups that must be covered are customers, suppliers and distributors, and
government and the legal system.
The employer as a stakeholder group surely will benefit, as was mentioned in the
preceding ethical egoistic section, from encouraging, and even rewarding, internal
whistleblowing. It may seem to the employer that it is beneficial to get rid of trouble-making
"snitches," but that kind of a notion is highly fallacious, and a much too short-term
rationalism. Actually, it is in the long-term interest of the employer to make its employees
believe that reporting wrongdoing internally is part of their jobs. It may be painful in the
short-term to expose improprieties, especially at the higher levels of the firm, but the "cost"
of investigating, acknowledging, and remedying any wrongdoing internally is surely less than
the "expense" of governmental
inquiries and proceedings, more regulations, private law suits, and scandal and shame.
These type of whistleblowing employees, who "blow the whistle" properly, and for the right
reason, are the very ones that the prudent employer wants to retain, and certainly not drive
away.
Of course, there is always a risk that there may a lessening of perceived loyalty in the
organization, or the creation of some suspicion, distrust, and strife, all of which can hinder
efficiency; but if the whistleblowing employee's assertion is handled internally in a prompt,
fair, objective, and non-retaliatory manner, the firm will benefit in the long-run. The
employees will realize that their employer is a legal and moral one that wants to act in a
proper manner, that reform can be achieved internally, and that the employer is desirable
place to work. Thus, the true loyalty on the part of the whistleblowing employee will be
recognized and rewarded.
Customers, suppliers, and distributors, as well as government and the legal system also
will benefit when the employer maintains compliance with the law and moral standards, learns
about problems early, takes any corrective actions promptly and internally, and thereby
achieves self-improvement and a self-governing status. The employer, now with a deserved
meritorious reputation for legality and *632 morality, concomitantly benefits from the
increased customer base, more stable business relationships, and less government
interference. Retaliating against legitimate whistleblowers clearly sends the
"wrong signal" to all the firm's stakeholder groups, and consequently will harm the
employer in the long-term; whereas effectively and fairly dealing with whistleblowing will
produce a benefit to the company by affirming its commitment to the values of legality and
morality.
The employees are naturally one of the important stakeholder groups for analysis.
Employees include the whistleblowing employee, naturally, as well as his or her fellow
employees. There is, of course, some real risk and danger to the whistleblowing employee,
and his or her family, notably in the form of job loss, financial hardship, and career disruption,
despite the existence of many specific, and some general, whistleblower protection laws.
Moreover, it may be personally "painful," especially in an emotional sense, for the employee
to "blow the whistle," particularly publicly, on his or her firm and co-workers. Nonetheless,
the whistleblower's perceived loyalty to his or her firm must be weighed against his or her
responsibility to protect fellow employees as well as to serve the public interest. Yet, if the
employer has in place internal channels for whistleblowing, an atmosphere of encouragement
and non-intimidation, as well as a strict policy of non-retaliation, and a corporate culture of
legality and morality, the employee's concerns and fears, especially about being a "disloyal"
employee, should be mitigated accordingly. The whistleblower's rectitude and courage should
be duly noted and rewarded.
Concerning the whistleblower's fellow employees, they also will benefit
in the long-term by the exposure of wrongdoing in their firm. They also may benefit in the
short-term too, if the whistleblowing involves a company practice or policy that is harmful to
the employees. However, the employees as a whole do have the legitimate concern of false
accusations of wrongdoing being leveled at them by jealous and spiteful co-workers. Yet if the
employer has in place policies and mechanisms to ensure prompt and impartial investigation
and resolution of all whistleblowing charges, that fear of victimization should be mollified
accordingly, with the employees as a whole thereby benefiting from the whistleblowing.
The final and major stakeholder groups to any Utilitarian ethical analysis of whistleblowing
is society as a whole. There is clearly in the vast majority of cases a benefit for society that is
caused by proper whistleblowing. Harm to the public is stopped or prevented; illegalities and
improprieties are exposed; fraud, gross waste and *633 mismanagement are revealed and
curtailed; obedience to law and morality is upheld; and the public interest is thereby served
and enhanced. Whistleblowing thus serves a socially useful purpose, typically outweighing any
perceived duties of loyalty and confidentiality to the firm.
While an action, such as whistleblowing, consequently may "pass" the Utilitarian ethical
test, and thus be adjudged as moral, it nonetheless may inflict harm on an individual or
"stakeholder" group. A Kantian moral
philosopher would be concerned with any harm inflicted on any individual or group in a
utilitarian effort to maximize the greater good.
D. Kantian Ethics
Kant's supreme ethical principle, called the Categorical Imperative, [FN445] accordingly
disregards consequences in determining moral judgments, a concept plainly diametrically
opposed to Utilitarianism. In order to be deemed "moral" pursuant to Kantian ethics, a
practice, rule, or law must "pass" the formal ethical test of the Categorical Imperative.
Therefore, even if more good consequences than bad ensue from whistleblowing, one should
still subject the practice to Kant's formal test and thereby perhaps reach a different view of
the practice's morality.
At the heart of the Categorical Imperative is the "Kingdom of Ends" principle, which
demands that one treat all rational beings as worthwhile "ends" and not as mere "means."
That is, people, because of their status as reasoning beings, must be accorded dignity and
respect. They cannot be used as mere instrumentalities or "things." Any action or practice
that is demeaning or disrespectful to human beings, or that abuses or exploits them, is
immoral pursuant to the Categorical Imperative. This ethical test, however, does not mean
that one cannot hire and retain employees to accomplish a business purpose; but an
employer always must remember that employees, even
whistleblowing employees, are human beings and not machines or inanimate objects.
Kant therefore would counsel the whistleblower to do what is morally right, for the right
reason, in the right way, and, moreover, to *634 "blow the whistle" regardless of the personal
consequences to the whistleblower. The whistleblowing at-will employee thus may lose his or
her job, but will keep his or her Kantian self-respect. Kantian ethics, moreover, would dictate
that the whistleblower, in "blowing the whistle," possess the right motive and neither
disrespect nor demean any individual. The whistleblower, however, not only must have a
strong sense of ethics, Kantian ethics especially, but also the strength of character, the "good
will," as Kant would say, to command oneself to do what is morally required.
If the whistleblower acts in a malicious or "machiavellian" manner, makes false
accusations, engages in personal attacks, and unfairly accuses fellow employees of
impropriety, perhaps out of "pure" spite, or disappointment, or revenge, or maybe to
sabotage another's career and remove a competitor, then obviously the whistleblower is
violating Kantian ethical norms and is acting immorally. Treating people with dignity and
respect, as demanded by Kantian ethics, also would require that the whistleblower not engage
in any prying and intrude into others' personal and private lives. In addition, since
whistleblowing often involves very serious accusations being made, which can irreparably
harm
people, the whistleblower owes a moral duty to those charged with wrongdoing to make
sure that the charges are well-founded, factually grounded, verifiable, and corroborated to the
fullest degree practicable. Finally, in order to meet the moral obligations imposed by Kantian
ethics, the whistleblower cannot remain anonymous. Fair treatment requires that the
whistleblower identify himself or herself, as well as accept full responsibility for "blowing the
whistle." Disclosure of the whistleblower's identity will serve two meritorious purposes: the
whistleblowing itself will be taken more seriously, since it will be coming from an identified
source, possessing a motive and corroborating information that can be objectively examined,
and the accused person thereby can better defend himself or herself against the charges.
Making anonymous accusations and generating unacknowledged rumors are clearly immoral
demeaning practices that "fail" Kantian ethics.
One problem inherent in Kantian ethics is the possibility that two secondary moral rules,
both of which "pass" the Categorical Imperative, conflict. This dilemma is particularly
apparent in a whistleblowing, private sector, business situation. It can be posited that
employees have an ethically mandated moral duty of loyalty, confidentiality, and obedience to
their firms. No duty of loyalty, however, can ever require that an employee commit an illegal
or *635 immoral act. Yet it also can be postulated that employees have in addition a moral
right to free speech in the workplace. This moral right, at a
minimum, should include the right to criticize one's employer as well as to "blow the
whistle" on illegal and wrongful business conduct that harms society. The problem is that all
these secondary moral rules theoretically "pass" Kant's Categorical Imperative; yet they clash
in practice. Consequently, whistleblowing, for ethical as well as legal, practical, and emotional
reasons, emerges as such a tumultuous arena of clashing duties and concerns.
Yet is there an ethical solution to this Kantian "conflict" problem? Perhaps the resolution is
to qualify the general duties of loyalty and confidentiality. That is, to maintain generally that
employees do owe a moral duty of loyalty and confidentiality to their employers, but also to
maintain that this moral duty is not unlimited. The general duty thus can be superseded by
special circumstances, such as when the employee not only has a moral right to free speech,
but also an ethical obligation to 'blow the whistle" to stop or prevent wrongdoing that will
harm the public interest. That is, the employee's duty to society and the public interest can
prevail over the employee's obligation of loyalty to the firm, even if that societal duty may
involve reporting the firm's wrongdoing externally to government authorities. True loyalty to
the firm, therefore, is the recognition and respect of the true interests and goals of the firm.
Whistleblowing employees acting with justification thus are very loyal employees who are
morally obligated to take that often difficult step to "blow the whistle" on their firms'
wrongdoing. The
whistleblowing employee's loyalty and duty are pledged, in the Kantian sense, to the
highest ethical principle, the Categorical Imperative.
E. Morally Required Whistleblowing
The logical ethical issue arises, therefore, as to when and under what circumstances is
whistleblowing morally required. [FN446] In exceptional circumstances, whistleblowing can be
deemed to be morally obligatory. The following requirements must be satisfied: *636 First,
the business or its employees are violating the law, or threatening to do so, or they are
engaging in some activity that is seriously harmful to the firm and its "stakeholders,"
including society. Second, the whistleblowing employee must possess a reasonable and good
faith belief that the wrongdoing has occurred, or will occur, in the near future. Third, the
employee must have made a good faith attempt to report in writing the wrongdoing to his or
her immediate supervisor, and then through internal managerial channels to the "top" of the
firm if necessary. Fourth, when these efforts at internal whistleblowing have failed, and the
employee is the "last resort" to stop or prevent the wrongdoing or harm because no one else
can or will do it, then, finally, the employee is morally obligated to externally "blow the
whistle" on his or her firm's wrongdoing, and regardless of the consequences to himself or
herself.
F. Conclusion
Three moral conclusions based on the preceding ethical analysis can be offered. First,
regarding the employer, the ethical egoism (as well as legal) analysis conducted herein clearly
indicate that it is in the employer's self-interest, and thus moral, not only not to retaliate
against good faith whistleblowers but also to encourage them internally. Second, "blowing the
whistle" by an employee may be morally justified or permitted, based on Utilitarian ethical
principles so long as Kantian ethical principles are not contravened. The most difficult moral
dilemma arises as to whether a moral duty can be ethically imposed on an employee to "blow
the whistle." That is, can whistleblowing be mandated morally on the part of the employee,
who may be exposing himself or herself to great risk, to the degree that if the employee does
not "blow the whistle," and thus violates the moral duty, the employee can be rightfully
condemned as immoral? Such a scenario or morally required whistleblowing can indeed arise,
but only in certain aforementioned circumstances when the employee is the whistleblower of
"last resort." Such a moral result is in accord with Utilitarian as well as Kantian ethical
principles. Pursuant to Utilitarianism, the greater good of society is achieved, thus making the
action moral under that ethical theory. Moreover, pursuant to Kantian ethics, the principle as
explicated herein can be made into a universal maxim and neither demeans nor disrespects
anyone. Of course, as Kant would say, does the employee possess the strength of character,
the Kantian "good will," to do what the moral "law" requires him or her to do, that is, to
"blow the whistle"?
*637 IX. Recommendations
A. Introduction
The initial legal question to pose to a whistleblowing employee is rather simple and
straightforward, especially if the typical whistleblower statute applies; and that is to ask
whether the employee objected to an employer policy, practice, or action that was in violation
of a "legal" law, rule, or regulation. Having such a violation present will satisfy the standard
statutory norm, as well as in a common law jurisdiction materially substantiate that the
state's "public policy" has been contravened. The fact that the employee put his or her
whistleblowing complaints in writing is evidently important, obviously in a jurisdiction which
requires such a complaint to be in written form. What exactly constitutes a writing is an issue
to be determined in future cases. Lacking a writing, even if not required, nevertheless poses a
difficult evidentiary challenge for the whistleblowing employee and his or her attorney.
Requiring notice to the employer in the conventional whistleblowing as "disclosure" case
seems an appropriate requirement, as the employer may not
have knowledge that its employees and thereby the firm are violating the law or
contravening public policy. Notice also will afford the employer an opportunity to "cure" the
violation, which presumably the ethical employer, even an ethically egoistic one, would want
to do. Yet, if the "whistleblowing" is more of the "objection-refusal" or "assistance" types,
then notice should not be required, in the former case because the employer already knows
that it is engaging in wrongful activity, and in the latter case because there is by this time an
ongoing government investigation and thus the matter is essentially out of the hands of the
employer and employee.
The employer, in addition to developing whistleblowing policies and procedures, preferably
in its code of ethics, should regularly oversee its personnel to verify compliance with legal
requirements. Moreover, the employer must advise its supervisory and managerial employees
that retaliatory personnel actions in response to protected whistleblowing can encompass
much more than a discharge, as the "adverse employment action" of several whistleblowing
statutes testify.
*638 B. Business or Corporate "Wrongdoing"
"Wrongdoing" is the proper predicate for a comprehensive whistleblowing principle.
[FN447] Yet what does the term "wrongdoing" encompass? Wrongdoing, or course, includes
illegal conduct; but is also encompasses business or corporate activities that cause, or
threaten, serious physical harm
to the users of the company's products and services, the general public, as well as the
firm's own employees, who may be harmed by unsafe work areas or practices. A definition of
"wrongdoing," however, cannot be limited to actions that cause, or threaten to cause,
physical harm. While one does not want to encourage whistleblowing for matters that are
merely offensive, annoying, or in bad taste, physical harm is simply too narrow a foundation
for a whistleblowing principle. Accordingly, "wrongdoing" must include business or corporate
wrongs that invade fundamental moral rights, such as an employee's right to privacy, that
cause psychological harm, for example by sexual harassment, and inflict financial harm, for
example by embezzlement. However, merely exposing internal policy divisions or incompetent
or self-serving management, typically should not be deemed to be a sufficient predicate for
whistleblowing. Yet if the company or its personnel are acting illegally, such illegality in and of
itself is a sufficient predicate for whistleblowing, regardless of the existence or level of harm.
Although the whistleblowing statutes examined herein construe the requisite "wrongdoing" in
a highly legalistic sense, an ethical conception of whistleblowing perforce includes an element
of significant moral harm.
Similarly, the concept of 'wrongdoing' is broader than any physical harm component,
Thus, ascertaining the exact type of harm, legal, moral, physical, may be important in
determining the documentation and evidence to be secured as well as to whom the
wrongdoing should be reported. If the wrongdoing involves
illegal corporate actions, the proper recipient ultimately may be the governmental entity
with jurisdiction over the subject matter. If the wrongdoing is not necessarily illegal, but
otherwise harmful or immoral, a public interest organization, or perhaps the media, may be
an eventual preferable recipient. They may be more concerned with a non-legalistic type of
wrongdoing, and more likely to provide help and *639 advice.
C. Internal Channels and the "Chain of Command"
An employee must follow proper guidelines in reporting business or corporate wrongdoing.
[FN448] It is clear, generally legally, as well as morally, that the whistleblowing employee
should be required to bring the matter to the attention of his or her employer. Yet some
statutes, one recalls, allow the employee to report the illegality or suspected illegality
immediately to an appropriate government body. In addition, those statutes and case
precedents that do require internal notice are not explicit as to when the notice should be
given, it is fair, as well as fair to assume legally, that any notice should be done before the
whistleblowing. Accordingly, the whistleblowing employee must first attempt to report the
wrongdoing to his or her immediate supervisor, ordinarily and preferably in writing. If,
however, the supervisor is the person causing the problem, or part of its "cover-up," then the
employee is allowed to circumvent the supervisor and proceed further "up the chain" in the
corporate
hierarchy. Moreover, the employee, as part of this hierarchical reporting process, will
enable the employer to utilize that "reasonable" period of time to correct the wrongdoing.
Affording the employer a reasonable opportunity to "cure" is, as one recalls, the requirement
of a few statutes, as well as in the author's opinion the morally fair approach to
whistleblowing.
In addition, if fully "exhausting" the internal business or corporate channels would be
futile or dangerous, or would give the wrongdoer(s) the time to destroy the evidence needed
to document the wrong, then the whistleblower is not required to proceed through the entire
"chain of command." Similarly, if people's health and safety now are being seriously harmed,
or threatened imminently, then it is not morally necessary to exhaust fully all internal
business or corporate channels, though such "exhaustion" may nevertheless be statutorily
required.
Regardless of the unique nature of the situation, the employee who is contemplating
whistleblowing is advised to familiarize himself or herself with all available internal corporate
channels, provisions, *640 and procedures for reporting wrongdoing. Hopefully, the employee
is working for a moral firm that has a code of ethics with a clear and enforceable
whistleblowing component, including an absolutely clear-cut non-retaliation provision. The
employee also should seek to determine how other whistleblowing employees were treated by
the company, and what was done about the problems these employees
reported. If employees were treated fairly and the problems rectified, then the employee
should feel encouraged to proceed "up the chain"; if other employees were retaliated against,
or if the problems were not corrected, then the employee is well-advised to explore
appropriate external whistleblowing contacts.
D. Documentation and Evidence
An employee should not "blow the whistle" based on a mere guess or speculation of
wrongdoing, because such an action may harm innocent people. The law consistently
requires, one recalls, a reasonable and/or good faith belief as to wrongdoing. An employee,
therefore, has a duty to obtain as much evidence and documentation as reasonably possible
to substantiate and verify any allegation or wrongdoing. [FN449] The employee should seek
to gather sufficient evidence to allow others, internally or externally, to investigate further the
matter; and should secure evidence that will stand up in a government proceeding. If it is not
possible for the employee to secure this level of evidence, perhaps the employee can
ascertain where and how additional evidence and documentation can be obtained.
If, however, the employee possesses convincing reasons to believe that wrongdoing is
occurring, he or she should disclose it, even if adequate documentation and evidence cannot
be obtained. An employee simply may not be in
a position to obtain this type or amount of information. What if the employee is able to
obtain information, but only by engaging in illegal or immoral actions himself or herself? In
such a case, the employee generally should refrain from personally acquiring the information,
and instead inform others who would possess the necessary legal and moral authority to
investigate. If the only way to obtain evidence is through illegal or immoral means, the
employee must possess very good reasons indeed to believe the wrongdoing is so severe and
is causing such a substantial *641 risk of harm to others that breaking the law and moral
norms are unavoidably necessary.
E. Anonymous Whistleblowing
Can, and should, whistleblowing be anonymous? [FN450] Is it necessary for the
whistleblowing to be effective for the whistleblower to reveal openly himself or herself?
Although the whistleblower's identity perhaps can be kept secret, except for a few corporate
managers and investigators, in order for whistleblowing to be effective ultimately, the
whistleblower must be identified, testify and produce evidence publicly, and perhaps put
himself or herself at risk. Anonymous whistleblowing also risks violating the right of people to
face their accusers. People have that right legally, but internally, within the business or
corporation, the same rules of justice do not, but clearly, should apply. The practice, finally,
may create an atmosphere of
mistrust and anxiety at the firm, in the sense of a "big brother" environment where one is
encouraged to disclose on one's co-workers. Whistleblowing, therefore, cannot, and should
not, be anonymous.
F. The Whistleblower's Motive
The whistleblower's motive, or presence of mixed motives, for "blowing the whistle"
presents another difficult issue. Presumably the whistleblowing employee is a conscientious,
law-abiding, and moral one, who is asserting his or her concerns of wrongdoing for the "right"
reasons and not to seek revenge or for personal aggrandizement. There should not be
imposed an additional requirement to whistleblowing that the whistleblower evince sincerity
and rectitude. The essential point is not the whistleblower's state of mind, but whether the
whistleblower's assertion objectively is true or false; and if it is true, then whistleblowing may
be justified regardless of an absence of a totally altruistic motive. If, however, the
whistleblower's charges are incorrect, then his or her "bad" motive becomes a very relevant
issue indeed.
G. False Whistleblowing
If the whistleblower's assertions are false, incorrect, or *642 inaccurate, a major problem,
legally as well as morally, arises. Nonetheless, even if the report is erroneous, if the
whistleblower acted in
good faith and had reasonable grounds to base his or her charge of wrongdoing, then the
whistleblowing employee should not be penalized. Presuming the employee has brought the
false charges through the business or corporate chain of command, then his or her error
presumably has been detected and rectified before any external disclosure. In such a case, a
warning to the employee to exercise greater care in the future would be at most the
appropriate sanction. If, however, the employee lacked either good faith or reasonable
grounds, he or she should be more severely punished, and if both are missing, the employee
should be dismissed. The company, of course, should bear the burden of proving the
accusation was false; and, if determined false, then the employee must show that he or she
possessed reasonable grounds and acted in good faith without any malicious or
"machiavellian" motive.
H. Conclusion
Whistleblowing employees often are vilified as "snitches," "informants" (and most
regrettably in the new federal law), and "traitors," and consequently may be shunned,
"blackballed," or threatened or even harmed by fellow employees for not being loyal "teamplayers." Yet a legal, moral, and wise company should treat whistleblowers who raise real or
legitimately perceived concerns as admirable and valuable business assets and role-models,
meriting praise, respect, and rewards. The goals are for the firm to instill confidence in its
code of ethics as well as to make the employees believe that exposing internal
wrongdoing is part of their job.
X. Conclusion
One can think, perhaps optimistically so, that the vast majority of private sector
employers subscribe to the "values" of morality and legality, and accordingly do not engage in
illegal activities and do not contravene the fundamental public policy of the relevant
jurisdiction. These ethical employers surely neither would compel an employee to participate
in wrongdoing in order to protect his or her job, nor to demand that an employee impede a
government investigation into the employer's conduct. At the very least, the whistleblowing
statutes and public policy case law examined herein should emerge as a strong signal to the
ethically egoistic employer that companies that do *643 business in the relevant jurisdictions
must do so in a legal manner that does not violate the law or fundamental public policy. A
truly ethically egoistic employer should realize that the whistleblowing employee who
discloses business wrongdoing internally, and who presumably is so encouraged to disclose, is
a value-maximizing asset to the firm and its stakeholders. Even if the firm is harmed
financially by the disclosure, taking a long-term, self-interested stance would dictate that the
employee providing information regarding problems should not only be protected but also
encouraged to
disclose. Yet, despite all the ethical entreaties, even the egoistic one, the evidence, as
reported by the National Whistleblower Center, appears to indicate that many firms not only
do not act ethically, but do not even know where their long-term self-interest lies.
There are, of course, whistleblowing statutes and common law "public policy" formulations
that have been examined herein. Although very variegated and at times often complex, or
quite the opposite, nebulous, nonetheless they are attempting to achieve a proper balance
among the private sector employer's interest in operating a business efficiently and
productively, the employee's interest in maintaining a job and a earning livelihood, and
society's interest in seeing its laws complied with and its public policies sustained and
advanced. In particular, the whistleblowing employee has the right to express himself or
herself on the public and social implications of his or her employer's business. The employee
possesses a job security interest in knowing that he or she will not be discharged for reasons
that violate a federal or state statute or regulation or that contravene public policy. Moreover,
the whistleblowing employee, as well as his or her co-workers, have an interest in maintaining
a safe working place. Employers possess an interest in maintaining loyalty and discipline at
the workplace as well as retaining sufficient latitude to make necessary personnel changes, so
long as their conduct is consistent with the law and public policy. Employers also possess an
interest
in maintaining the confidentiality of proprietary information. Society possesses an interest
in a stable employment market, the maintaining of law and order, the free expression of
public policy issues, the functioning of business without undue impairment, the safeguarding
and advancement of fundamental public policies, and the dissuasion of frivolous litigation by
incompetent and/or disgruntled employees. The objective, of course, is to create a legal
doctrine to govern whistleblowing that balances all these interests.
Speaking very generally, the legal examination herein indicates *644 that certain state
legislatures that have adopted whistleblower protection statutes have begun to achieve
successfully this proper balance among these at times conflicting interests. In particular, a
carefully crafted statute that protects the whistleblowing employee for reporting in writing his
or her reasonable and good faith belief as to the firm's illegality, but requires the employee to
report the matter first internally to the employer, and then gives the employer a reasonable
amount of time to correct the situation, before the employee is allowed to "blow the whistle"
to a governmental agency, seems to strike the right balance. Such a statute should obviate
external whistleblowing, because presumably a rational and egoistic employer will "clean up
its act" internally, as well as be thankful for the chance to do so. Yet if the wrongdoing
employer is so stupid, arrogant, unethical, or lawless and thereby retaliates against a
conscientious employee who "blows the whistle" in a legally proper manner, the
terminated or sanctioned employee should be allowed a cause of action for tort damages
as well as reinstatement if feasible. The Model Act, though comprehensive and beneficial in
most respects, lacks those important "fairness" components of prior notice to the employer
and concomitant opportunity to "cure" that are requisite to a morally balanced statutory
solution to the whistleblowing dilemma.
In the complete absence of any actual, uniform, state legislation, it may be time for
Congress to again visit whistleblowing, and to promulgate a more generic whistleblower
protection statute patterned on the more comprehensive of the state statutes as well as the
Model Act examined herein. The new federal securities fraud whistleblower statute is a good
beginning, but generally it is a very narrowly based accounting reform statute and securities
fraud revision. Yet, the one comprehensive part to the new law is the criminal law section
dealing with retaliation against whistleblowers (or "informants," to use the statute's poor
choice of wording) who report the violation of any federal law. In the absence of broader,
non-criminal, federal whistleblower legislation, uniform state legislation, or for that matter, in
some states, any legislation at all, the legal responsibility then is thrust on the courts to
create well-crafted common law, whistleblowing, "public policy" formulations that
appropriately balance all the "stakeholder" interests.
From a business perspective, the corporate "bottom-line" is that no rational
and prudent company (or company official) should find itself the "victim" of a
whistleblowing lawsuit, civil or criminal, based on a conscientious employee reporting
corporate wrongdoing to a *645 government agency. An ethically egoistic firm will do the
"right thing"; and that is to encourage and support its employees to speak out and express
their reservations about company policies and practices, and then to accord those views a
prompt, fair, and objective hearing within and throughout the corporate hierarchy. Yet if the
employee's protestation is ignored, and the wrongdoing remains uncorrected, then should
such a firm really be confounded when the employee "blows the whistle" externally to a
government agency? The critical point is that whistleblowing, as one recalls from the original
definition, encompasses both internal and external "blowing the whistle" on wrongdoing. No
firm is immune from accusations of illegal or improper conduct. Yet the ethical and judicious
employer will avert an employee from "going public" by having ethical codes, policies,
personnel, and communication channels in place to handle internally any employee concerns
and complaints. Most importantly, legally as well a morally, the wise employer affirmatively
and unequivocally will ensure that the whistleblowing employee does not suffer any
retaliation.
[FNa1]. The author is a Professor of Business Law and Ethics at the H. Wayne Huizenga
School of Business and Entrepreneurship of Nova Southeastern University, Ft. Lauderdale,
Florida. He holds a J.D. from St. Mary's University School of Law (1976) and an LL.M. from
the University of San Diego School of Law (1987), as well as a M.A. from Drew University and
a B.A. from Gettysburg College. The author is a member of the Texas and Florida Bar
Associations. The author wishes to express his thanks and gratitude to Mrs. Stephanie Ferrari,
MBA-Finance Candidate at the Huizenga School, for her assiduous and able assistance in the
editing as well as the legal research for this article.
[FN1]. See National Whistleblower Center, at http://www.whistleblowers.org (last visited Jan.
16, 2004).
[FN2]. See id.
[FN3]. See id.
[FN4]. See id.; see also Model Whistleblower Protection Act, at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN5]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (codified as amended
in scattered sections of 18 U.S.C.); John C. Coffee, Jr., Racing Towards the Top?: The Impact
of Cross-Listings and Stock Market Competition on International Corporate Governance, 102
Colum. L. Rev. 1767, 1768 (2002); Ethan G. Zeliger, The Sarbanes-Oxley Act: Accounting for
Corporate Corruption?, 15 Loy. Consumer L. Rev. 27, 28 (2002).
[FN6]. Dahl v. Combined Ins. Co., 621 N.W.2d 163, 167 n.4 (S.D. 2001).
[FN7]. Id. at 167.
[FN8]. See generally John T. Boese, The New Florida False Claims Act: Florida Borrows a
Powerful Federal Anti-Fraud Weapon, 69 Fla. B.J. 24 (1995) (examining the federal and
Florida statutes).
[FN9]. See, e.g., Mass. Gen. Laws Ann. ch. 149, § 185 (West 2003); Pa. Stat. Ann. tit. 43, §§
1421-1424 (West 2003).
[FN10]. See, e.g., Cal. Health & Safety Code § 1278.5 (West 2003) (codifying health care
whistleblower protection statute); Pa. Stat. Ann. tit. 35, §§ 6020.101, 1112 (codifying
whistleblower provisions in Hazardous Sites Cleanup Act); Pa. Stat. Ann. tit. 53, § 4000.1714
(codifying whistleblower provisions in Municipal Waste Planning, Recycling and Waste
Reduction Act); Va. Code Ann. §§ 40.1-51.2:1 (Michie 2003) (protecting safety or health
complaints).
[FN11]. See, e.g., Adair v. United States, 208 U.S. 161, 174-75 (1908); Gower v. IKON Office
Solutions, Inc., 155 F. Supp. 2d 1268, 1272 (D. Kan. 2001) (applying Arkansas law); Thomas
v. Med. Ctr. Physicians, 61 P.3d 557, 563 (Idaho 2002); Anderson-Johanningmeier v. MidMinn. Women's Ctr., Inc., 637 N.W.2d 270, 273 (Minn. 2002); D'Agostino v. Johnson &
Johnson, Inc., 628 A.2d 305, 311 (N.J. 1993); Guy v. Mut. of Omaha Ins. Co., No. W199900942- COA-R9CV, 2001 WL 204485, at *7 (Tenn. Ct. App. March 1, 2001), aff'd, 79 S.W.3d
528 (Tenn. 2002); Frank J. Cavico, Employment At Will and Public Policy, 25 Akron L. Rev.
497, 498 (1992).
[FN12]. See, e.g., Adair, 208 U.S. at 174-75; Gower, 155 F. Supp. 2d at 1272; Menchaca v.
Am. Med. Response of Ill., Inc., No. 98 C 547, 2000 WL 1141570, at *4 (N.D. Ill. Aug. 11,
2000); Anderson-Johanningmeier, 637 N.W.2d at 273; Dahlberg v. Lutheran Soc. Serv. N.D.,
625 N.W.2d 241, 252 (N.D. 2001); Guy, 2001 WL 204485, at *7; Cavico, supra note 11, at
498.
[FN13]. See, e.g., Adair, 208 U.S. at 174-75; Szaller v. Am. Red Cross, 293 F.3d 148, 150
(4th Cir. 2002) (applying Maryland law); Gower, 155 F. Supp. 2d at 1272; Menchaca, 2000
WL 1141570, at *4; Thomas, 61 P.3d at 563; Jacobson v. Knepper & Moga, 706 N.E.2d 491,
492 (Ill. 1998); Anderson-Johanningmeier, 637 N.W.2d at 273; D'Agostino, 628 A.2d at 311;
Lobosco v. N.Y. Tel./NYNEX, 751 N.E.2d 462, 464 (N.Y. App. Div. 2001); Guy, 2001 WL
204485, at *7; Cavico, supra note 11, at 498.
[FN14]. See, e.g., Adair, 208 U.S. at 174-75; D'Agostino, 628 A.2d at 312-14; Crain v. Nat'l
Am. Ins. Co., 52 P.3d 1035, 1040 (Okla. Civ. App. 2002); Guy, 2001 WL 204485, at *7;
Cavico, supra note 11, at 498.
[FN15]. See, e.g., Wright v. Dothan Chrysler Plymouth Dodge, Inc., 658 So.2d 428, 431 (Ala.
1995) (allowing legislative branch to create exceptions to employment-at-will rule); Robins
Fed. Credit Union v. Brand, 507 S.E.2d 185, 187 (Ga. Ct. App. 1998); Jellico v. Effingham
Cty., 471 S.E.2d 36, 38 (Ga. Ct. App. 1996) (holding courts will not "usurp" legislative
functions under "rubric" of "public policy"); Lobosco, 772 N.E.2d at 464 ("New York does not
recognize the tort of wrongful discharge. Furthermore, there is no exception for firings that
violate public policy such as, for example, discharge for exposing an employer's illegal
activities.") (citations omitted); Di Blasi v. Traffax Traffic Network, 681 N.Y.S.2d 147, 149
(N.Y. App. Div. 1998); Dray v. New Mkt. Poultry Prod., Inc., 518 S.E.2d 312, 313 (Va. 1999)
(refusing to create whistleblowing exception to employment-at-will doctrine).
[FN16]. See, e.g., King v. Donnkenny, Inc., 84 F. Supp. 2d 736, 740 (W.D. Va. 2000)
("[T]here is no exception for employees who are terminated for merely 'blowing the whistle'
on an employer for violating generalized regulatory mechanisms for business and industry.").
[FN17]. See, e.g., Wrongful Discharge from Employment Act, Mont. Code Ann. § 39-2-904
(2000); Cavico, supra note 11, at 529 (discussing Montana statute as well as Puerto Rico
statute).
[FN18]. See, e.g., Fla. Stat. Ann. § 448.102(2) (West 2003); Minn. Stat. Ann. §
181.932(1)(b) (West 2003); N.H. Rev. Stat. Ann. § 275- E:2(I)(b) (2003); N.J. Stat. Ann. §
34:19-3b (West 2003); N.Y. Lab. Law § 740(2) (McKinney 2003); R.I. Gen. Laws § 28-503(2) (2003); Daniel R. Levine, An Important Decision in the Evolution of Florida's WhistleBlower's Act, 70 Fla. B.J. 59 (1996) (examining Florida statute and in particular distinguishing
the reporting of illegalities from refusing to participate in illegalities).
[FN19]. See, e.g., Fla. Stat. Ann. § 448.102(3); Minn. Stat. Ann. § 181.932(1)(c); N.H. Rev.
Stat. Ann. § 275-E:3; N.J. Stat. Ann. § 34:19- 3c; N.Y. Lab. Law § 740(2); R.I. Gen. Laws §
28-50-3(3).
[FN20]. See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 802-03
(to be codified at 18 U.S.C. 1514A(a)).
[FN21]. See Model Whistleblower Protection Act § 3(a)-(e), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN22]. See, e.g., Birchem v. Knights of Columbus, 116 F.3d 310, 315 n.4 (8th Cir. 1997)
(holding the North Dakota whistleblower statute does not protect independent contractors);
McClure v. Am. Family Mut. Ins. Co., 29 F. Supp. 2d 1046, 1061 (D. Minn. 1998), aff'd, 223
F.3d 845 (8th Cir. 2000) (interpreting Minnesota whistleblower statute); Stephens v.
Prudential Ins. Co. of Am., 717 N.Y.S.2d 144, 145 (N.Y. App. Div. 2000) (interpreting New
York statute).
[FN23]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(a)(2)-(3) (West 2003) ("'Employer'
means a person engaged in business who has employees, including the state and any political
subdivision of the state. 'Employee' means any person engaged in service to an employer in
the business of his employer."); Haw. Rev. Stat. Ann. § 378-61 (Michie 2003) ("'Employer'
means a person who has one or more employees. 'Employee' means a person who performs a
service for wages or other remuneration under a contract for hire, written or oral, express or
implied."); N.Y. Lab. Law § 740(1)(b) (providing "any person, firm, partnership, institution,
corporation, or association that employs one or more employees"); Tenn. Code Ann. § 50-1304(b) (2003) (providing "all employees in the private sector").
[FN24]. Compare Fla. Stat. Ann. § 448.101(3) (providing "any private individual, firm,
partnership, institution, corporation, or association that employs ten or more people") with
Mich. Comp. Laws Ann. § 15:361(b) (West 2003) (providing "'employer' means a person who
has one or more employees"); Ohio Rev. Code Ann. § 4113.51(B) (West 2003) (providing
"'employer' means any person with one or more employees").
[FN25]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 802 (to be
codified at 18 U.S.C. 1514A).
[FN26]. Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN27]. Id.
[FN28]. Model Whistleblower Protection Act § 2(a), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN29]. Compare Stone and Webster Eng'g Corp. v. Herman, 115 F.3d 1568 (11th Cir. 1997)
(discussing the narrow whistleblower protection provisions in the Atomic Energy Act) with N.J.
Stat. Ann. § 34:19-3 (West 2003) (containing the general provisions of the New Jersey
Conscientious Employee Protection Act).
[FN30]. Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN31]. See, e.g., Fla. Stat. Ann. § 448.101(5) (West 2003) (providing "discharge,
suspension, or demotion... or any other adverse employment action"); accord, N.Y. Lab. Law
§ 740(1)(e) (McKinney 2003). But see DiCentes v. Michaud, 719 A.2d 509, 514-15 (Me.
1998) (holding failure of public sector employer to provide letter of reference to employee is
not construed as a retaliatory employment action affecting existing employment); Beck v.
Tribert, 711 A.2d 951 (N.J. Super. Ct. App. Div. 1998) (holding the state whistleblower
statute does not apply to post-employment retaliatory negative references).
[FN32]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802 ("No company... or any officer...
may discharge, demote, suspend, threaten, harass, or in any manner discriminate against an
employee in the terms and conditions of employment."); see, e.g., N.H. Rev. Stat. Ann. §
275-E:2(I) (2003).
[FN33]. See Model Whistleblower Protection Act § 2(e), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004) (providing "discharge,
suspension, demotion, harassment, or the refusal to hire an employee, or other adverse
employment action").
[FN34]. See Kulch v. Structural Fibers, Inc., 677 N.E.2d 308, 326-28 (Ohio 1997) (codifying
the Ohio whistleblowing statute).
[FN35]. 739 N.E.2d 851, 852 (Ohio Ct. App. 2000).
[FN36]. See id.
[FN37]. See id.
[FN38]. Id. at 855.
[FN39]. Id. at 854.
[FN40]. Id. at 855.
[FN41]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501 (3)(c)(ii) (West 2003); Haw. Rev. Stat.
Ann. § 378-62 (Michie 2003); R.I. Gen. Laws § 28- 50-3(1) (2003).
[FN42]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501(3)(c)(ii); Cal. Lab. Code § 1102.5(b) (West
2003); Fla. Stat. Ann. § 448.101(4), 448.102(1) (West 2003); Haw. Rev. Stat. Ann. § 37862(1); Me. Rev. Stat. Ann. tit. 26, § 833(1)(A) (West 2003); Mich. Comp. Laws Ann. § 15.362
§ 2 (West 2003); Minn. Stat. Ann. § 181.932(1)(a) (West 2003); N.H. Rev. Stat. Ann. § 275E:2(I)(a) (2003); Ohio Rev. Code Ann. § 4113.52(A) (West 2003); R.I. Gen. Laws § 28-503(1); Tenn. Code Ann. § 50-1-304 (c) (2003) (providing "civil or criminal code of this state or
the United States").
[FN43]. See, e.g., Cal. Lab. Code § 1102.5(b); Conn. Gen. Stat. Ann. § 31-51m(b) (West
2003); Fla. Stat. Ann. § 448.101(4), 448.102(1); Haw. Rev. Stat. Ann. § 378-62(1); Me. Rev.
Stat. Ann. tit. 26, § 833(1)(A); Mich. Comp. Laws Ann. § 15.362 § 2; Minn. Stat. Ann. §
181.932(1)(a); N.H. Rev. Stat. Ann. § 275-E:2(I)(a); Ohio Rev. Code Ann. § 4113.52(A);;
R.I. Gen. Laws § 28-50-3(1); Tenn. Code Ann. § 50-1-304 (c). But see New World
Communications of Tampa, Inc. v. Akre, No. 2D01-529, 2003 WL 327505, at *2 (Fla. Dist. Ct.
App. Feb. 14, 2003) (holding that pursuant to Florida whistleblower statute, federal agency
"policy" is not equivalent to "rule" or "regulation" because neither formally "adopted" nor
"published" as a regulation).
[FN44]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(b); Fla. Stat. Ann. § 448.101(4),
448.102(1); Haw. Rev. Stat. Ann. § 378-62(1); Me. Rev. Stat. Ann. tit. 26, § 833(1)(A)
(providing "political subdivision" of state); Mich. Comp. Laws Ann. § 15.362 § 2; N.H. Rev.
Stat. Ann. § 275- E:2(I)(a); Ohio Rev. Code Ann. § 4113.52(A).
[FN45]. N.Y. Lab. Law § 740(2)(a) (McKinney 2003).
[FN46]. Gillyard v. Delta Health Group, Inc., 757 So.2d 601, 603 (Fla. Dist. Ct. App. 2000).
Neither the governor's executive order nor a county order requiring mandatory evacuation of
county was a "law, rule, or regulation" as defined in Florida Whistleblower Act; thus nursing
home employee could be discharged for refusal to report to work to care for patients. Id.
[FN47]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A).
[FN48]. Model Whistleblower Protection Act § 3(a), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN49]. Estate of Roach v. TRW, Inc., 754 A.2d 544, 550-52 (N.J. 2000).
[FN50]. See id. (providing examples of employees making personal calls during work hours or
taking extended lunches).
[FN51]. See Phinney v. Perlmutter, 564 N.W.2d 532, 551-53 (Mich. Ct. App. 1997)
(interpreting state statute).
[FN52]. See, e.g., Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 261-63 (1st Cir.
1999) (complaining employee failed to allege that co-worker's medical condition violated Title
VII or any other law); Nichols v. Metro. Ctr. for Indep. Living, Inc., 50 F.3d 514, 516-17 (8th
Cir. 1995) (applying Minnesota statute and holding employee's complaint regarding
employer's reduction of transportation services at center for independent living concerned
only a change in employer's management practices because providing such services was
construed as a condition for obtaining a certificate and not a penal or regulatory mandate);
Schultz v. Tampa Elec. Co., 704 So.2d 605, 606 (Fla. Dist. Ct. App. 1997) (holding that
former employee of utility company expressed his "concerns" to state regulatory agency
regarding "the actual effectiveness of [employer's] many conservation plans and programs"
but court ruled that
[n]one of these statements by [plaintiff] are sufficient to state a cause of action under the
whistleblower act. [Plaintiff's] disagreement with what he perceives to be [employer's] lack of
effort with regard to conservation plans and programs does not disclose an activity, policy, or
practice of [employer] that violates a law, rule, or regulation.);
Bard v. Bath Iron Works Corp., 590 A.2d 152, 156 (Me. 1991) (holding that an employee
complaining about flaws in employer's quality assurance process that allegedly violated
provision in employer's contract with the Navy was not protected whistleblowing pursuant to
state statute because employer was not shown to be violating law or rule as opposed to a
mere contract provision.); Vagts v. Perry Drug Stores, Inc., 516 N.W.2d 102, 103-04 (Mich.
Ct. App. 1994); Obst v. Microtron, 588 N.W.2d 550 (Minn. Ct. App. 1999), aff'd, 614 N.W.2d
196 (Minn. 2000) (holding no violation of law or suspected
violation as required by state whistleblower statute when employee complained of
employer's failure to notify manufacturer of alternative testing methods for automobile
components because testing methods were not governed by any federal rules or standards);
Demas v. Nat'l Westminster Bank, 712 A.2d 693, 696-97 (N.J. Super. Ct. App. Div. 1998)
(applying New Jersey statute); Catalane v. Gilian Instrument Corp., 638 A.2d 1341, 1350
(N.J. Super. Ct. App. Div. 1994) (holding employee's dissatisfaction regarding treatment of
coworker, and statement that "certain labor laws" required employees to be treated properly
was deemed insufficient pursuant to state whistleblower protection statute due to lack of
illegal acts committed by employer); McGuire v. Elyria United Methodist Vill., 787 N.E.2d 53,
57 (Ohio Ct. App. 2003) (holding that a terminated at-will employee who expressed concerns
about staffing levels could not take advantage of Ohio whistleblower protection statute, as
strictly construed by court, because employee lacked a "reasonable belief" that a "criminal
violation" or "offense" had "occurred"); Voss v. Shelter Mut. Ins. Co., 958 S.W.2d 342, 34445 (Tenn. 1997) (showing how the employee complained to state insurance agency that
employer was raising its rates too much, that employer was looking out for itself and not
policy holders, and that state should keep its eye on employer; yet employee did not assert
that employer violated any laws in setting its rates).
[FN53]. See, e.g., Nichols, 50 F.3d at 516-17; Petroskey v. Lommen, Nelson, Cole &
Stageberg, 847 F. Supp. 1437, 1447-48 (D. Minn. 1994), aff'd, 40 F.3d 278 (8th Cir. 1994)
(applying Minnesota statute); New World Communications of Tampa, Inc. v. Akre, No. 2D01529, 2003 WL 327505, at *2 (Fla. Dist. Ct. App. Feb. 14, 2003) (holding that pursuant to
Florida whistleblower statute, a plaintiff employee, a news reporter, discharged for
threatening to report to the FCC that the defendant station was violating the agency's policy
against "news distortion" shall not be granted relief because the statute required the violation
of a "rule" or "regulation," and the agency's policy did not qualify as a rule or regulation
because it was neither formally adopted as a rule nor published); Catalane, 638 A.2d at 1350;
McGuire, 787 N.E.2d at 57.
[FN54]. See, e.g., Susan v. Nova S.E. Univ., 723 So.2d 933, 934 (Fla. Dist. Ct. App. 1994)
(Florida Whistleblower Act); Roach, 727 A.2d at 1058- 63 (whistleblowing employee's
allegations that coworker was cheating on his expense accounts and engaging in conflicts of
interest did not constitute an activity of the employer within the meaning of New Jersey
whistleblower statute); Lawson v. AK Steel Corp., 703 N.E.2d 371, 373-74 (Ohio 1998)
(holding that an allegation against two fellow employees of accepting gratuities from vendors
was not actionable under Ohio whistleblower statute, which required legal violation by
"employer"); see also Gorgone v. Capozzi, 656 N.Y.S.2d 49, 51 (N.Y. App. Div. 1997)
(holding that the transfer of employee for reporting theft by co-worker did not violate New
York whistleblower statute because employee did not "blow the whistle" on any illegal conduct
attributable to employer).
[FN55]. Ohio Rev. Code Ann. § 4113.52(A)(3) (West 2003).
[FN56]. See, e.g., Dolan v. Cont'l Airlines/Cont'l Express, 563 N.W.2d 23, 26-28 (Mich. 1997)
(interpreting state statute); Dudewicz v. Norris-Schmid, Inc., 503 N.W.2d 645, 647-51 (Mich.
1993) (interpreting state whistleblower statute).
[FN57]. Guy v. Mut. of Omaha Ins. Co., No. W1999-00942-COA-R9CV, 2001 WL 204485, at
*9 (Tenn. Ct. App. March 1, 2001), aff'd, 79 S.W.3d 528 (Tenn. 2002) (showing how the
general manager of regional insurance firm office reported to state insurance department that
fellow agent was defrauding customers).
[FN58]. See N.J. Stat. Ann. § 34:19-3a (West 2003).
[FN59]. See Model Whistleblower Protection Act § 3(a), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN60]. See, e.g., Tenn. Code Ann. § 50-1-304(c) (2003).
[FN61]. Thompson v. Campbell, 845 F. Supp. 665, 674-76 (D. Minn. 1994) (stating the
Minnesota whistleblower statute covers only reports of types of wrongdoing that contravene
clearly mandated public policy).
[FN62]. N.Y. Lab. Law § 740(2)(a) (McKinney 2003); Schultz v. N. Am. Ins. Group, 34 F.
Supp. 2d 866, 868-69 (W.D.N.Y. 1999) (holding that the whistleblower claim alleging
fraudulent economic practices did not constitute a danger to public health or safety as
required by New York whistleblower protection statute); accord, Remba v. Fed'n Employment
and Guidance Serv., 559 N.Y.S.2d 961, 961-62 (N.Y. 1990) (fraudulent billing); Green v.
Saratoga A.R.C., 650 N.Y.S.2d 441, 442-43 (N.Y. App. Div. 1996) (holding that the
employee's report of suspected drug use at intermediate care facility was deemed not to
endanger health or safety of public at large).
[FN63]. See, e.g., Forrester v. John H. Phipps, Inc., 643 So.2d 1109, 1110-1112 (Fla. Dist.
Ct. App 1994) ("Public policies" against signing or agreeing to false statements and slander
did not fall within scope of Florida whistleblower statute's requirement of a "law, rule or
regulation.").
[FN64]. Ohio Rev. Code Ann. § 4113.52(A) (West 2003).
[FN65]. See, e.g., Fla. Stat. Ann. §§ 448.101(4), 448.102(1) (West 2003).
[FN66]. See Ohio Rev. Code Ann. § 4113.52(A).
[FN67]. Tyson v. Viacom, Inc., 760 So.2d 276, 277 (Fla. Dist. Ct. App. 2000) (holding that
the employer's alleged violation of an injunction did not constitute a "violation of law, rule or
regulation" as required by state whistleblower act).
[FN68]. Model Whistleblower Protection Act § 3(c), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN69]. See Donofry v. Autotote Sys., Inc., 795 A.2d 260, 268 (N.J. Super. Ct. App. Div.
2001); contra DaSilva v. Clarkson Arms, Inc., 592 N.Y.S.2d 319, 320 (N.Y. App. Div. 1993)
(holding that neither precedent nor legislative history supports contention that plaintiff
employee would be protected under New York whistleblower statute if plaintiff was found to
be an accomplice in the illegal acts of employer).
[FN70]. See Donofry, 795 A.2d at 268.
[FN71]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A).
[FN72]. See Conn. Gen. Stat. Ann. § 31-51m(b) (West 2003).
[FN73]. See, e.g., Me. Rev. Stat. Ann. tit. 26, § 833(1)(B) (West 2003).
[FN74]. See, e.g., Fla. Stat. Ann. § 448.101(4), 448.102(1) (West 2003); Mich. Comp. Laws
Ann. § 15.362 § 2 (West 2003) (codifying a "violation of a law, or regulation or rule
promulgated pursuant to the law of this state, a political subdivision of this state, or the
United States"); Minn. Stat. Ann. § 181.932(1)(a) (West 2003) (codifying "law or rule
adopted pursuant to law"); N.J. Stat. Ann. § 34:19-3a (West 2003) (codifying "violation of a
law, or a rule or regulation promulgated pursuant to law" or "in the case of an employee who
is a licensed or certified health care professional, reasonably believes constitutes improper
quality of patient care"); N.Y. Lab. Law § 740(1)(c) (McKinney 2003) (codifying "duly enacted
statute or ordinance or any rule or regulation promulgated pursuant to any federal, state or
local statute or ordinance"); Ohio Rev. Code Ann. § 4113.52(A) (West 2003) (creating felony
or a criminal offense); see also Schultz v. Tampa Elec. Co., 704 So.2d 605, 606 (Fla. Dist. Ct.
App. 1997) (stating that a former employee of utility company expressed his "concerns" to
state regulatory agency regarding "the actual effectiveness of [employer's] many
conservation plans and programs"; but court ruled that
[n]one of these statements by [plaintiff] are sufficient to state a cause of action under the
whistleblower act. [Plaintiff's] disagreement with what he perceives to be [employer's] lack of
effort with regard to conservation plans and programs does not disclose an activity, policy, or
practice of [employer] that violates a law, rule, or regulation.);
Forrester v. John H. Phipps, Inc., 643 So.2d 1109, 1111-12 (Fla. Dist. Ct. App. 1994)
(showing the dispute "aired" in local newspaper between the plaintiff, formerly employed as a
television correspondent, and the defendant, a local affiliate television station and the former
employer, as to the reasons for the plaintiffs suspension). The court stated: "[w]e are
confident that the legislature did not intend to create a cause of action for what essentially
amounts to an internal and personal dispute between appellant and her
employer." Id.; Young v. Schering Corp., 645 A.2d 1238, 1244-46 (N.J. Super. Ct. App.
Div. 1994), aff'd, 660 A.2d 1153 (holding that the doctor's termination for complaining about
research decision and expressing disagreements not contravene state whistleblower statute
because no violation by employer of law or regulation); Catherine A. Kyres, Florida Workers'
Whistles Are Not Silenced, 74 Fla. B.J. 47 (2000). "The phrase [contained in the state
whistleblower statute] 'in violation of a law, rule, or regulation' does not confer protection to
an employee who complains about business practices which may be morally objectionable,
but are not illegal." Id. at 49.
[FN75]. Tenn. Code Ann. § 50-1-304(c) (2003).
[FN76]. R.I. Gen. Laws § 28-50-3(1) (West 2003); accord, N.H. Rev. Stat. Ann. § 275E:2(I)(a) (2003); N.Y. Lab. Law § 740(1)(c).
[FN77]. See Thatcher v. Goodwill Indus. of Akron, 690 N.E.2d 1320, 1324- 27 (Ohio Ct. App.
1997) (reporting employee did not describe violation of a statute viewed as "felonious"
pursuant to state statute).
[FN78]. See Petroskey v. Lommen, Nelson, Cole, & Stageberg, P.A., 847 F. Supp. 1437,
1447-48 (D. Minn. 1994), aff'd, 40 F.3d 278 (applying Minnesota statute and holding that an
attorney's alleged berating of female paralegal was not illegal as required by statute).
[FN79]. See Morrow v. Air Methods, Inc., 884 F. Supp. 1353, 1356-59 (D. Minn. 1995)
(interpreting Minnesota statute).
[FN80]. See Paul v. Aurora Med. Group, P.C., 670 N.Y.S.2d 747, 748 (1998).
[FN81]. Dalhberg v. Lutheran Soc. Servs. of N.D., 625 N.W.2d 241, 255 (N.D. 2001).
[FN82]. See Estate of Roach v. TRW, Inc., 754 A.2d 544, 550-52 (N.J. 2000) (showing that
an employee reported co-employees' alleged action of falsifying expense reports pursuant to
state whistleblower statute).
[FN83]. See Griggs v. Coca-Cola Employees' Credit Union, 909 F. Supp. 1059, 1065 (D. Tenn.
1995) (discussing the Tennessee whistleblower act); Guy v. Mut. of Omaha Ins. Co., No.
W1999-00942-COA-R9CV, 2001 WL 204485, at *9 (Tenn. Ct. App. Mar. 1, 2001) (discussing
the whistleblower act), aff'd, 79 S.W.3d 528 (Tenn. 2002).
[FN84]. See, e.g., McGrath v. TCF Bank Sav., FSB, 509 N.W.2d 365 (Minn. 1993)
(interpreting state whistleblower statute); Donofry v. Autotote Sys., Inc., 795 A.2d 260, 26971 (N.J. Super. Ct. App. Div., 2001); Kolb v. Burns, 727 A.2d 525, 530-32 (N.J. Super. Ct.
App. Div., 1999) (interpreting state whistleblower statute).
[FN85]. See, e.g., McGrath, 509 N.W.2d at 366 (interpreting state whistleblower statute);
Donofry, 795 A.2d at 269-71; Kolb, 727 A.2d at 530-32 (interpreting state whistleblower
statute).
[FN86]. Shallal v. Catholic Soc. Serv. of Wayne County, 566 N.W.2d 571, 579 (Mich. 1997).
[FN87]. See Phinney v. Perlmutter, 564 N.W.2d 532, 551-53 (Mich. Ct. App. 1997)
(interpreting state statute).
[FN88]. See N.Y. Lab. Law § 740(2)(a) (McKinney 2003) (codifying a legal "violation which
creates and presents a substantial and specific danger to the public health or safety").
[FN89]. See, e.g., Bard v. Bath Iron Works Corp., 590 A.2d 152, 156 (Me. 1991).
[FN90]. Anderson-Johanningmeier v. Mid-Minnesota Women's Ctr., Inc., 637 N.W.2d 270, 276
(Minn. 2002) (The state's high court did not need to address employer's argument that
employee's whistleblowing, regarding whether fellow employee's vacation pay was a violation
of state wage and hour laws, was merely an internal business management problem not
involving public policy, because there was no explicit public policy requirement in state
statute; and court was not willing to read any additional requirements into the whistleblower
statute.).
[FN91]. See, e.g., N.Y. Lab. Law § 740(2)(a) (providing "substantial and specific danger to
the public health or safety"); Ohio Rev. Code Ann. § 4113.52(A)(3) (West 2003) (providing
"imminent risk of physical harm to persons or a hazard to public health or safety").
[FN92]. Thompson v. Campbell, 845 F. Supp. 665, 674-76 (D. Minn. 1994) (interpreting
Minnesota statute).
[FN93]. See, e.g., McGrane v. Reader's Digest Ass'n, Inc., 822 F. Supp. 1044 (S.D.N.Y. 1993)
(holding that the internal reports of financial wrongdoing not sufficient to trigger protection of
New York whistleblower statute); Littman v. Firestone Tire and Rubber Co., 715 F. Supp. 90
(S.D.N.Y. 1989) (holding that an activity by an employee in exposing alleged fraud directed
solely at the employer, with the shareholding public only indirectly involved, was not the type
of activity protected by New Jersey whistleblower statute); Forrester v. John H. Phipps, Inc.,
643 So. 2d 1109, 1111-12 (Fla. Dist. Ct. App. 1994); Young v. Schering Corp., 645 A.2d
1238, 1244-46 (N.J. Super. Ct. App. Div. 1994), aff'd, 660 A.2d 1153; Dalhberg v. Lutheran
Soc. Serv. of N.D., 625 N.W.2d 241, 255-56 (N.D. 2001) (stating the plaintiff employee,
recreational therapist at nursing home, made report to management of incidents of
"inappropriate touching" by employees of residents primarily to question disparate, internal
discipline of staff for inadequate supervision, and only incidentally for reporting an illegality);
Haney v. Chrysler Corp., 699 N.E.2d 121, 122-23 (Ohio Ct. App. 1997) (comparing the
employee's written report to employer as required by Ohio statute related more to employee's
unhappiness with work environment and problems with management than to actual safety
violations); Voss v. Shelter Mut. Ins. Co., 958 S.W.2d 342, 344-45 (Tenn. 1997).
[FN94]. See, e.g., Me. Rev. Stat. Ann. tit. 26, § 833(1)(A) (West 2003); Minn. Stat. Ann. §
181.932(1)(a) (West 2003); N. H. Rev. Stat. Ann. § 275-E:2(I)(a) (2003); Ohio Rev. Code
Ann. § 4113.52(B), (C) (stating a "reasonable and good faith effort to determine the accuracy
of any information reported"); Anderson-Johanningmeier, 637 N.W.2d at 277 (interpreting
state whistleblower statute); Karch v. Baybank FSB, 794 A.2d 763, 775 (N.H. 2002) (holding
that state statute "recognizes a public policy of good faith reporting"); Appeal of Osram
Sylvania, Inc., 706 A.2d 172, 175 (N.H. 1998) (stating the statutory good faith test was
met); Madison v. USF&G Fin. Serv. Corp., 693 N.E.2d 293, 296-97 (Ohio Ct. App. 1997) (Ohio
whistleblower statute).
[FN95]. Appeal of Osram Sylvania, Inc., 706 A.2d 172, 175 (N.H. 1998).
[FN96]. See Mich. Comp. Laws Ann. § 15.362 Sec. 2 (West 2003).
[FN97]. See, e.g., Me. Rev. Stat. Ann. tit. 26, § 833(1)(A) (providing a "reasonable cause to
believe"); Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 261-63 (1st Cir. 1999)
(holding that there is no requirement under Maine statutory scheme requiring the employer's
alleged wrongful practice be actually illegal or unsafe; rather only that the employee possess
a reasonable and good faith belief thereof); Anderson-Johanningmeier, 637 N.W.2d at 277
(interpreting state whistleblower statute).
[FN98]. See Anderson-Johanningmeier, 637 N.W.2d at 277 (interpreting state whistleblower
statute).
[FN99]. See Obst v. Microtron, Inc., 614 N.W.2d 196, 202 (Minn. 2000) (applying Minnesota
statute).
[FN100]. See id.
[FN101]. See Dalhberg v. Lutheran Soc. Serv. of N.D., 625 N.W.2d 241, 254 (N.D. 2001).
[FN102]. Id.
[FN103]. See LaFond v. Gen. Physics Serv. Corp., 50 F.3d 165, 173-76 (2d Cir. 1995)
(interpreting Connecticut whistleblower statute).
[FN104]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501(3)(c)(ii) (West 2003); Fleming v. Corr.
Healthcare Solutions, 751 A.2d 1035, 1039 (N.J. 2000) (allowing an employer to fire an
employee who is unreasonable in expressing complaints pursuant to state whistleblower
statute).
[FN105]. See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803
(to be codified at 18 U.S.C. 1514A(a)(1)) ("reasonably believes constitutes a violation");
Model Whistleblower Protection Act §§ 3(a), (c), at http://www.whistleblowers.org/model.htm
(last visited Jan. 16, 2004) (providing a "reasonably believes" standard); see, e.g., Ariz. Rev.
Stat. Ann. § 23-1501(3)(c)(ii); Cal. Lab. Code § 1102.5(b) (West 2003); N.J. Stat. Ann. §
34:19-3a (West 2003) providing a "reasonably believes" standard); Ohio Rev. Code Ann. §
4113.52(B), (C) (West 2003) (requiring a "reasonable and good faith effort to determine the
accuracy of any information reported"); R.I. Gen. Laws § 28-50-3(1) (2003); Appeal of
Osram Sylvania, Inc., 706 A.2d 172, 174-76 (N.H. 1998) (providing an objectively reasonable
standard); Higgins v. Pascack Valley Hosp., 730 A.2d 327, 261-63 (N.J. 1999) (requiring an
objectively reasonable basis); McGuire v. Elyria United Methodist Vill., 787 N.E.2d 53, 57
(Ohio Ct. App. 2003); Madison v. USF&G Fin. Serv. Corp., 693 N.E.2d 293, 296-97 (Ohio Ct.
App. 1997) (discussing the Ohio whistleblower statute).
[FN106]. See, e.g., Fla. Stat. Ann. § 448.102(1) (West 2003) ("in violation"); N. J. Stat. Ann.
§ 34:19-3a (West 2003) ("in violation"); N.Y. Lab. Law § 740(2)(a) (McKinney 2003) ("in
violation").
[FN107]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501 (3)(c)(ii); Me. Rev. Stat. Ann. tit. 26, §
833(1)(A) (West 2003); N.H. Rev. Stat. Ann. § 275-E:2(I)(a) (2003) (requiring there to be a
"reasonable cause to believe"); R.I. Gen. Laws § 28-50-3(1); Karch v. Baybank FSB, 794
A.2d 763, 775 (N.H. 2002) (discussing the, "reasonably perceived illegal actions of
employers," standard pursuant to state statute); Model Whistleblower Protection Act §§ 3(a),
(c), at http://www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN108]. Ohio Rev. Code Ann. § 4113.52(A).
[FN109]. See N.J. Stat. Ann. § 34:19-3a (requiring an "employee [to] reasonably believe");
Falco v. Cmty. Med. Ctr., 686 A.2d. 1212, 1221 (N.J. Super. Ct. App. Div. 1997) (applying
state statute); Madison, 693 N.E.2d at 296-97 (discussing the Ohio whistleblower statute).
[FN110]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN111]. Blackburn v. U.P.S., Inc., 3 F. Supp. 2d 504, 515-16 (D. N.J. 1998), aff'd, 179 F.3d
81 (3rd Cir. 1999).
[FN112]. See id.
[FN113]. See Melchi v. Burns Intern. Sec. Serv., Inc., 597 F. Supp. 575, 583-84 (E.D. Mich.
1984) (In view of the pervasive regulation of the nuclear power industry, it was reasonable
for employee security guard to assume that destruction or falsification of reports and records
by his employer would constitute a violation of a law, rule, or regulation, as required by
Michigan whistleblower statute.).
[FN114]. See Higgins v. Pascack Valley Hosp., 730 A.2d 327, 328 (N.J. 1999) (holding that an
employer retains authority to dismiss whistleblowing employee if belief in wrongdoing not
supported by an objectively reasonable basis); Blackburn, 3 F. Supp.2d at 515-16 (holding
that an employee's belief that employer's pricing policies might someday violate anti-trust law
unless certain precautions were taken or certain changes made was not sufficiently
reasonable, pursuant to New Jersey whistleblower statute).
[FN115]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(b) (West 2003); Haw. Rev. Stat. Ann. §
378-62 (Michie 2003) (requiring "a violation or suspected violation"); Mich. Comp. Laws Ann.
§ 15.362 Sec. 2 (West 2003) (requiring "a violation or a suspected violation"); Minn. Stat.
Ann. § 181.932(1)(a) (West 2003); Bard v. Bath Iron Works, 590 A.2d 152, 156 (Me. 1991)
(An employee reporting suspected violation of federal law protected under Maine
whistleblower act.); Obst v. Microtron, Inc., 588 N.W.2d 550, 553-55 (Minn. Ct. App. 1999),
aff'd, 614 N.W.2d 196 (Minn. 2000); Karch v. Baybank FSB, 794 A.2d 763, 775 (N.H. 2002)
(interpreting state whistleblower statute to protect the "good faith reporting of reasonably
perceived illegal actions of employers by employees").
[FN116]. See Obst, 588 N.W.2d at 553-55.
[FN117]. See, e.g., Fla. Stat. Ann. § 448.102(1) (West 2003); N.H. Rev. Stat. Ann. § 275E:2(I) (2003); N.J. Stat. Ann. § 34:19-3a (West 2003); N.Y. Lab. Law § 740(2)(a) (McKinney
2003); Model Whistleblower Protection Act §§ 3(a), (c), at
http://www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN118]. See Mich. Comp. Laws Ann. § 15.362.
[FN119]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A(a)(1)).
[FN120]. See N.Y. Lab. Law § 740(2)(a).
[FN121]. See Pail v. Precise Imp. Corp., 681 N.Y.S.2d 498, 499-500 (App. Div. 1998) (holding
that not even a good faith but erroneous belief as to a legal violation will trigger protection of
New York whistleblower statute); Bordell v. Gen. Elec. Co., 644 N.Y.S.2d 912, 913 (1996)
(holding that not even a reasonable belief that employer was in possible violation of the law
will be sufficient to gain protection of New York whistleblower statute); accord, Rotwein v.
Sunharbor Manor Residential Health Care Facility, 695 N.Y.S.2d 477, 482 (1999) Lambert v.
Gen. Elec. Co., 666 N.Y.S.2d 289, 290- 91 (App. Div. 1997).
[FN122]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802 (providing the "reasonably
believes" language); Model Whistleblower Protection Act §§ 3(a), (c), at
http://www.whistleblowers.org/model.htm (last visited Jan. 16, 2004); see, e.g.,Cal. Lab.
Code § 1102.5(b) (West 2003) (requring a "reasonable cause to believe"); Me. Rev. Stat.
Ann. tit. 26, § 833(1)(A) (West 2003) (requiring a "reasonable cause to believe"); Karch v.
Baybank FSB, 794 A.2d 763, 775 (N.H. 2002) (Pursuant to state statute, the reporting of
"reasonably perceived legal actions of employers by employees" is protected "even if it is
ultimately determined that the employer engaged in no illegal conduct.") (showing that the
employee was incorrect in her belief that the employer and one of its vice-presidents were
acting illegally in contravention of states eavesdropping and wiretapping law).
[FN123]. See Chandler v. Dowell Schlumberger Inc., 572 N.W.2d 210, 212- 14 (Mich. 1998)
(interpreting state whistleblower protection act).
[FN124]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN125]. Id. § 1514A(a)(1)(C).
[FN126]. See, e.g., Fla. Stat. Ann. § 448.102(1) (West 2003); Me. Rev. Stat. Ann. tit. 26 §
833(2); N. J. Stat. Ann. § 34:19-4 (West 2003) (written notice to supervisor required); N.Y.
Lab. Law § 740(3) (McKinney 2003); Ohio Rev. Code Ann. § 4113.52(A) (West 2003)
(requiring oral and written notice); Potomac Sys. Eng'g, Inc. v. Deering, 683 So. 2d 180, 182
(Fla. Dist. Ct. App. 1996) (stating that the Florida whistleblower statute requires pre-suit
notice); Richard D. Tuschman, Another Look at the Notice Requirements of the Florida Private
Sector Whistleblower's Act, Fla. B.J., Nov. 1997, at 43 (examining the Florida statute,
particularly the notice requirements).
[FN127]. See Deering, 683 So. 2d at 182 (Florida whistleblower statute).
[FN128]. Model Whistleblower Protection Act §§ 3(a) or (c), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN129]. See, e.g., Sarbanes-Oxley Act, § 806, 116 Stat. at 802; Ariz. Rev. Stat. Ann. § 231501(3)(c)(ii) (West 2003); Fla. Stat. Ann. § 448.102(1); Me. Rev. Stat. Ann. tit. 26, §
833(2) (requiring the "person having supervisory authority"); N.H. Rev. Stat. Ann. § 275E:2(II) (2003) (requiring the "person having supervisory authority with the employer"); N.J.
Stat. Ann. § 34:19-4 (requiring person to be the "supervisor of the employee"); N.Y. Lab. Law
§ 740(1)(f), (3) (requiring the supervisor to have managerial authority to take corrective
action); Ohio Rev. Code Ann. § 4113.52(A) (requiring notice to employee's supervisor or
"other responsible officer of the employee's employer"); R.I. Gen. Laws § 28-50-3(4) (2003)
(allowing notice to be made either verbally or in writing to the employer or the employee's
supervisor, but if the report is verbally made, the employee must establish by "clear and
convincing evidence" that the report was made); Model Whistleblower Protection Act §§ 2(d),
3(a), (c), at http://www.whistleblowers.org/model.htm (last visited Jan. 16, 2004) (requiring
the "supervisor... who has authority to direct or control... or who has authority to take
corrective action... ").
[FN130]. See, e.g., Fla. Stat. Ann. § 448.101(6), 448.102 (1) (requiring "any individual within
an employer's organization who has authority to direct and control the work performance of
the affected employee or who has the managerial authority to take corrective action regarding
the violation of law, rule or regulation of which the employee complains"); N.Y. Lab. Law §
740(1)(f), (3) (stating a "supervisor" is one who has the "managerial authority to take
corrective action regarding the violation of the law").
[FN131]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501(3)(c)(ii).
[FN132]. Fleming v. Corr. Healthcare Solutions, Inc., 751 A.2d 1035, 1039-40 (N.J. 2000)
(interpreting state whistleblower statute).
[FN133]. N.J. Stat. Ann. § 34:19-4.
[FN134]. Id.
[FN135]. See, e.g., Fla. Stat. Ann. § 448.102(1); Ohio Rev. Code Ann. § 4113.52(A) (West
2003) (requiring an oral report initially, and then written report); Judd v. Englewood Cmty.
Hos., 739 So.2d 627, 628 (Fla. Dist. Ct. App. 1999) (requiring written notice to employer).
[FN136]. Ohio Rev. Code Ann. § 4113.52(A); Contreras v. Ferro Corp., 652 N.E.2d 940, 94345 (Ohio 1995) (holding that the written report was tardy and lacked sufficient detail to
identify and describe violation); Haney v. Chrysler Corp., 699 N.E.2d 121, 122-23 (Ohio Ct.
App. 1997) (holding that the written report provided was not sufficiently detailed as to safety
violations).
[FN137]. In re Fred Fuller Oil Co., Inc., 744 A.2d 1141, 1145 (N.H. 2000) (In such a reporting
situation, the employer is presumed to be familiar with the laws and regulations governing its
business.).
[FN138]. See, e.g., Fla. Stat. Ann. § 448.102(1); Me. Rev. Stat. Ann. tit. 26, § 833(2) (West
2003); McEowen v. Jones Chem., Inc., 745 So.2d 991, 992 (Fla. Dist. Ct. App. 1999); Kulch
v. Structural Fibers, Inc., 677 N.E.2d 308, 319 (Ohio 1997), (showing that the employee gave
oral notice to employer but not written notice as required by Ohio whistleblower statute
before complaining to OSHA, and the employee was legally discharged).
[FN139]. See, e.g., Fla. Stat. Ann. § 448.102(1); Me. Rev. Stat. Ann. tit. 26, § 833(2); N.H.
Rev. Stat. Ann. § 275-E:2(II) (2003); N.J. Stat. Ann. § 34:19-4; N.Y. Lab. Law § 740(3)
(McKinney 2003); Contreras v. Ferro Corp., 652 N.E.2d 940, 943-46 (Ohio 1995) (holding the
employee failed to provide employer with opportunity to correct illegal inventory diversion).
[FN140]. Ohio Rev. Code Ann. § 4113.52(A).
[FN141]. See, e.g., Wood v. Dorcas, 757 N.E.2d 17, 22 (Ohio Ct. App. 2000).
[FN142]. See Appeal of Bio Energy Corp., 607 A.2d 606, 608-10 (N.H. 1992).
[FN143]. See In re Fred Fuller Oil Co., Inc., 744 A.2d 1141, 1143-45 (N.H. 2000).
[FN144]. See, e.g., Me. Rev. Stat. Ann. tit. 26, § 833(2); N.H. Rev. Stat. Ann. § 275-E:2(II).
[FN145]. See, e.g., Ariz. Rev. Stat. Ann. § 23-1501 (3)(c)(ii) (West 2003) (The disclosure can
be made either to the employer or a managerial or supervisory representative of the
employer or to an employee of a public body or political subdivision or an agency thereof.);
Minn. Stat. Ann. § 181.932(1)(a) (West 2003); N.D. Cent. Code § 34-10-20(1)(a) (2003)
(requiring it "to an employer, a government body, or a law enforcement official"); R.I. Gen.
Laws § 28-50-3(1) (2003); Model Whistleblower Protection Act §§ 3(a), (c), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN146]. See Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803
(to be codified at 18 U.S.C. 1514A(a)(1)(A)).
[FN147]. See, e.g., Sarbanes-Oxley Act, § 806, 116 Stat. at 802; Conn. Gen. Stat. Ann. § 3151m(4)(b) (West 2003); Mich. Comp. Laws Ann. § 15.362 Sec. 2 (West 2003); N.D. Cent.
Code § 34-10-20(1)(a); R.I. Gen. Laws § 28-50-3(1); Model Whistleblower Protection Act §§
3(a), (c), at http://www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN148]. See, e.g., Ohio Rev. Code Ann. § 4113.52(A) (West 2003) (requiring the written
report to provide "sufficient detail" to identify and describe the violation").
[FN149]. See, e.g., Fla. Stat. Ann. § 448.102(1) (West 2003) ("under oath" and "in writing").
[FN150]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802; see, e.g., Conn. Gen. Stat. Ann. §
31-51m(b); Haw. Rev. Stat. Ann. § 378-62 (Michie 2003); Me. Rev. Stat. Ann. tit. 26, §
833(1)(A) (West 2003); Mich. Comp. Laws Ann. § 15.362; N.H. Rev. Stat. Ann. § 275E:2(I)(a) (2003); N.Y. Lab. Law § 740(2)(a) (McKinney 2003); R.I. Gen. Laws § 28-50-3(1).
[FN151]. See Fla. Stat. Ann. § 448.102(1) (requiring it to be" under oath" and "in writing").
[FN152]. See, e.g., Cal. Gov't Code § 12653(a) (West 2003); Cal. Lab. Code § 1102.5(a).
[FN153]. See, e.g., Haw. Rev. Stat. Ann. § 378-62; Mich. Comp. Laws Ann. § 15.362; N.D.
Cent. Code § 34-10-20(1)(a) (2003); R.I. Gen. Laws. § 28-50-3(1).
[FN154]. See Mason v. Seaton, 942 S.W.2d 470, 474 (Tenn. 1997) (interpreting Tennessee
whistleblower statute).
[FN155]. See Lynd v. Adapt, Inc., 503 N.W.2d 766, 767 (Mich. Ct. App. 1993).
[FN156]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(4) (2003) (defining "public body," as a
public agency or subdivision or an employee or officer thereof, or a federal agency, or an
officer, employee or member thereof); Haw. Rev. Stat. Ann. § 378-61 (defining "public body"
extensively and in detail); Me. Rev. Stat. Ann. tit. 26, § 833(1)(A) (West 2003) (defining
"public body"); Mich. Comp. Laws Ann. § 15:361(d) (defining "public body" very broadly);
Minn. Stat. Ann. § 181.932(1)(a) (West 2003) (requiring "any government body or law
enforcement official"); N.J. Stat. Ann. § 34:19-3a (West 2003) (defining "public body"); N.Y.
Lab. Law § 740(1)(d) (McKinney 2003) (defining "public body" very broadly); Ohio Rev. Code
Ann. § 4113.52(A) (West 2003) (allowing the report to be made to "prosecuting authority of
the County or municipal Corporation where the violation occurred, with a peace officer, with
the Inspector General..., or with any other appropriate public official or agency that has
regulatory authority..."); R.I. Gen. Laws § 28-50-3(1) (defining "public body"); Model
Whistleblower Protection Act § 2(c), at http://www.whistleblowers.org/model.htm (last visited
Jan. 16, 2004) (defining "public body" very broadly).
[FN157]. See, e.g., Fla. Stat. Ann. § 448.102(1) (West 2003) (lacking to define
"appropriate").
[FN158]. See Lowe v. AmeriGas, Inc., 52 F. Supp. 2d 349, 360 (D. Conn. 1999), aff'd, 208
F.3d 203 (interpreting Connecticut whistleblower statute); Green v. Ralee Eng'g Co., 78 Cal.
Rptr. 2d 16, 22-23 (1998) (interpreting California whistleblower statute).
[FN159]. Haw. Rev. Stat. Ann. § 378-61(4); Mich. Comp. Laws Ann. § 15:361(d).
[FN160]. See Phinney v. Perlmutter, 564 N.W.2d 532, 551-53 (Mich. Ct. App. 1997)
(interpreting state whistleblower statute).
[FN161]. See Branch v. Azalea/Epps Home, Ltd., 472 N.W.2d 73, 74-75 (Mich. Ct. App. 1991)
(construing a former employee of adult residential foster-care facility reported circumstances
of patient's death to a social worker, as a "public body" for purposes of state whistleblower
statute).
[FN162]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A(a)(1)(B), (C)).
[FN163]. Tyson v. Viacom, Inc., 760 So.2d 276, 277 (Fla. Dist. Ct. App. 2000) (A federal
district court which issued an injunction did not constitute an "agency" within meaning of
state whistleblower statute; and thus former employee could not maintain a cause of action
based on employer's alleged violation of the injunction.).
[FN164]. Haw. Rev. Stat. Ann. § 378-61; Mich. Comp. Laws Ann. § 15:361(d).
[FN165]. Model Whistleblower Protection Act § 2(c)(2), at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN166]. Marques v. Fitzgerald, 99 F.3d 1, 5-6 (1st Cir. 1996) (Term "public body" in state
whistleblower act did not encompass all municipal employees, but did include a superior
charged with carrying out the policies and decisions of the city.).
[FN167]. See, e.g., Haw. Rev. Stat. Ann. § 378-62; Me. Rev. Stat. Ann. tit. 26, § 833(1)(A)
(West 2003); Mich. Comp. Laws Ann. § 15.362; N.H. Rev. Stat. Ann. § 275-E:2(I)(a) (2003)
(requiring person to "report or cause to be reported"); N.D. Cent. Code § 34-10-20(1)(a)
(2003); R.I. Gen. Laws § 28-50-3(1) (2003).
[FN168]. See, e.g., Minn. Stat. Ann. § 181.932(1)(a) (West 2003).
[FN169]. See Contreras v. Ferro Corp., 652 N.E.2d 940, 943-46 (Ohio 1995).
[FN170]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A(a)(1)(A)).
[FN171]. See Minn. Stat. Ann. § 181.932(2).
[FN172]. See, e.g., LaFond v. Gen. Physics Serv. Corp., 50 F.3d 165, 173- 76 (2d Cir. 1995)
(interpreting Connecticut whistleblower statute); Padron v. Bellsouth Telecomm., Inc., 196 F.
Supp. 2d 1250, 1255-56 (S.D. Fla. 2002) (examining the causation requirement pursuant to
state statute); Roberson v. Occupational Health Ctr. of Am., Inc., 559 N.W.2d 86, 87-89
(Mich. Ct. App. 1996) (stating that causation was lacking pursuant to state statute); Donofry
v. Autotote Sys., Inc., 795 A.2d 260, 274-75 (N.J. Super. Ct. App. Div. 2001) (stating
causation was present pursuant to state statute).
[FN173]. See, e.g., Donofry, 795 A.2d at 274-75 (stating causation was present pursuant to
state statute).
[FN174]. See Guy v. Mut. of Omaha Ins. Co., No. W1999-00942-COA-R9CV, 2001 WL
204485, at *9 (Tenn. App. Mar. 1, 2001), aff'd, 79 S.W.3d 528 (Tenn. 2002).
[FN175]. See Guy, 2001 WL 204485, at *11.
[FN176]. Donofry, 795 A.2d at 274-75 (stating causation was present pursuant to state
statute).
[FN177]. Id. at 274.
[FN178]. See, e.g., Padron v. Bellsouth Telecomm., Inc., 196 F. Supp. 2d 1250, 1255-56
(S.D. Fla. 2002) (holding that "close temporal proximity" between the whistleblowing and the
adverse employment action may be sufficient to show causation element); Pannell v. Future
Now, 895 F. Supp. 196, 200-01 (W.D. Tenn. 1995) (examining the Tennessee whistleblower
act) (Former employee failed to demonstrate a sufficient causal relationship between her
refusal to remain silent about store manager's alleged involvement in insurance fraud and her
termination, because there was no proof that the store manager who fired employee knew of
employee's report alleging insurance fraud.); see also DiCentes v. Michaud, 719 A.2d 509,
514-15 (Me. 1998) (applying statute to a public sector case).
[FN179]. See, e.g., Sierminski v. Transouth Fin. Corp., 216 F.3d 945, 950-51 (11th Cir.
2000); Donofry, 795 A.2d at 269.
[FN180]. N.J. Stat. Ann. § 34:19-5 (West 2003); Donofry, 795 A.2d at 265, 275 (allowing
compensatory damages, including future lost wages and benefits, as well as attorneys' fees
and costs, to be awarded to whistleblowing employee pursuant to sate statute); Mehlman v.
Mobil Oil Corp., 676 A.2d 1143, 1164-65 (N.J. Super. Ct. App. Div. 1996), aff'd, 707 A.2d
1000 (allowing emotional distress and punitive damages pursuant to state whistleblower
statute).
[FN181]. See, e.g., Minn. Stat. Ann. § 181.935(a) (West 2003) (allowing "any and all
damages recoverable at law"); N.D. Cent. Code § 34-10-20(3) (2003) (allowing "actual
damages"); Tenn. Code Ann. § 50-1-304 (d)(1) (2003).
[FN182]. R.I. Gen. Laws § 28-50-4(a) (2003).
[FN183]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(c) (West 2003); Fla. Stat. Ann. §§
448.103(2), 448.104 (West 2003); Haw. Rev. Stat. Ann. §§ 378-63(a), 378-64 (Michie 2003)
(providing "actual damages"); Minn. Stat. Ann. § 181.935(a); N.J. Stat. Ann. § 34:19-5; N.Y.
Lab. Law § 740(5) (McKinney 2003); Ohio Rev. Code Ann. § 4113.52(E) (West 2003); Tenn.
Code Ann. § 50-1-304 (d)(2); Donofry, 795 A.2d at 265, 275.
[FN184]. Fla. Stat. Ann. § 448.103(2)(e).
[FN185]. Minn. Stat. Ann. § 181.935(a).
[FN186]. See Morrow v. Air Methods, Inc., 884 F. Supp. 1353, 1356-59 (D. Minn. 1995)
(Since Minnesota statutory whistleblower action sounds in tort, recovery of punitive damages
is allowed.); Baufield v. Safelite Glass Corp. 831 F. Supp. 713, 719-20 (D. Minn. 1993)
(allowing mental anguish and emotional distress damages upheld pursuant to Minnesota
whistleblower statute).
[FN187]. See N.J. Stat. Ann. § 34:19-5; Donofry, 795 A.2d at 268 (holding punitive damages
were not recoverable due to lack of "egregious conduct" for terminated whistleblowing
employee); Mehlman v. Mobil Oil Corp., 676 A.2d 1143, 1164-65 (N.J. Super. Ct. App. Div.
1996), aff'd, 707 A.2d 1000 (holding that compensatory damages were not necessary for
award of punitive damages pursuant to state whistleblower statute); contra, Clarke v. TRW,
Inc., 921 F. Supp. 927, 935-36 (N.D.N.Y. 1996) (holding that punitive damages is not an
available remedy pursuant to New York whistleblower statute).
[FN188]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806, 116 Stat. 745, 803 (to be
codified at 18 U.S.C. 1514A(b)(1)(B)).
[FN189]. Id.
[FN190]. Id. at 804 (to be codified at 18 U.S.C. § 1514A(c)(2)).
[FN191]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m (c) (West 2003); Fla. Stat. Ann. §
448.103(2)(b) (West 2003); Haw. Rev. Stat. Ann. § 378- 64 (Michie 2003); N.J. Stat. Ann. §
34:19-5; N.Y. Lab. Law § 740(5) (McKinney 2003); N.D. Cent. Code § 34-10-20(3) (2003);
Ohio Rev. Code Ann. § 4113.52(E) (West 2003).
[FN192]. See Appeal of Osram Sylvania, Inc., 706 A.2d 172, 174-76 (N.H. 1998) (interpreting
New Hampshire statute).
[FN193]. See, e.g., Fla. Stat. Ann. § 448.103(2)(a); Haw. Rev. Stat. Ann. § 378-63(a)
(providing "appropriate injunctive relief"); Minn. Stat. Ann. § 181.935(a) (West 2003); N.J.
Stat. Ann. § 34:19-5; N.Y. Lab. Law § 740(5); N.D. Cent. Code § 34-10-20(3); Ohio Rev.
Code Ann. § 4113.52(D); R.I. Gen. Laws. § 28-50-4(a) (2003); Minn. Ass'n of Nurse
Anesthetists v. Unity Hosp., 59 F.3d 80 (8th Cir. 1995) (dening a preliminary injunction
pursuant to Minnesota whistleblower statute).
[FN194]. See, e.g., Fla. Stat. Ann. § 448.104; Ohio Rev. Code Ann. § 4113.52(E).
[FN195]. See, e.g., Haw. Rev. Stat. Ann. § 378-65 (providing a civil fine "not more than $500
for each violation"); Me. Rev. Stat. Ann. tit. 26, § 836 (West 2003) (providing a civil fine of
ten dollars each day of "willful" violation); Minn. Stat. Ann. § 181.935(b) (providing a civil
penalty of twenty-five dollars per day per "injured employee"); N.J. Stat. Ann. § 34:19-5
(requiring a $1,000 fine for the first violation and a $5,000 fine for each subsequent
violation).
[FN196]. Model Whistleblower Protection Act § 6, at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN197]. Id.
[FN198]. Sarbanes Oxley Act of 2002, Pub. L. No. 107-204, § 1107(e), 116 Stat. 745, 810 (to
be codified at 18 U.S.C. § 1513(e)) (requiring "retaliation against informants").
[FN199]. Id.
[FN200]. Id. (emphasis added).
[FN201]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(c) (West 2003).
[FN202]. See, e.g., Conn. Gen. Stat. Ann. § 31-51m(c) (requiring ninety days from violation
or final administrative determination, whichever is later); Fla. Stat. Ann. § 448.103(1)(a)
(West 2003) (requiring it to be within two years after discovering the alleged retaliatory
personnel action was taken, or within four years after the action was taken, whichever is
later); Haw. Rev. Stat. Ann. § 378-63(a) (Michie 2003) (requiring a civil action or injunction
within two years after occurrence of alleged violation of statute); N.J. Stat. Ann. § 34:19-5
(West 2003) (requiring it to be done one year from violation of statute); N.Y. Lab. Law §
740(4) (McKinney 2003) (requiring it to be "within one year after the alleged retaliatory
personnel action"); N.D. Cent. Code § 34-10-20(3) (2003) (requiring it to be within 180 days
after the alleged violation); Ohio Rev. Code Ann. § 4113.52(D) (West 2003) (requiring a civil
action for remedies or injunctive relief within 180 days after the date the disciplinary or
retaliatory action was taken); R.I. Gen. Laws § 28-50-4(a) (2003) (requiring three years after
the occurrence of the alleged whistleblowing violation).
[FN203]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN204]. Molenda v. Hoechst Celanese Corp., 60 F. Supp. 2d 1294, 1299- 1300 (S.D. Fla.
1999), aff'd, 212 F.3d 600).
[FN205]. See Hady v. Hunt-Wesson, Inc., 63 F. Supp. 2d 830, 832-34 (N.D. Ohio 1999).
[FN206]. See, e.g., Larson v. New Richland Care Ctr., 538 N.W.2d 915, 919-20 (Minn. Ct.
App. 1995) (applying it to a public sector case and holding that a two year limitations period
for intentional torts applies to state whistleblower statute).
[FN207]. See Sarbanes-Oxley Act, § 806, 116 Stat. at 802.
[FN208]. See Model Whistleblower Protection Act § 4, at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN209]. See Tenn. Code Ann. § 50-1-304(f)(1)-(2) (2003).
[FN210]. See Ohio Rev. Code Ann. § 4113.52(C) (West 2003).
[FN211]. See N.J. Stat. Ann. § 34:19-6 (West 2003) (allowing only if the employee's law suit
was "without basis in law or fact"); N.Y. Lab. Law § 740(6) (McKinney 2003) (providing
attorneys' fees and costs to be awarded to the employer if the court determines that the
action was brought by the employee was "without basis in law or fact"); N.D. Cent. Code §
34-10-20(3) (West 2003) (allowing "reasonable attorneys' fees to the prevailing party");
Tenn. Code Ann. §§ 50-1-304(f)(1), (f)(2) (2003); Rotwein v. Sunharbor Manor Residential
Health Care Facility, 695 N.Y.S.2d 477 (1999) (holding the defendant employer was entitled
to attorneys' fees and costs since whistleblowing employee's complaint had "no basis in law or
fact").
[FN212]. See Ohio Rev. Code Ann. § 4113.52(C).
[FN213]. See, e.g., Dodewicz v. Norris-Schmid, Inc., 503 N.W.2d 645, 649- 50 (Mich. 1993)
(holding that the state whistleblower statute preempts public policy exception to the
employment-at-will doctrine); Vagts v. Perry Drug Stores, Inc., 516 N.W.2d 102, 103-04
(Mich. Ct. App. 1994) (holding that the state whistleblower statute preempted employee's
public policy retaliatory discharge cause of action); Shuttleworth v. Riverside Osteopathic
Hosp., 477 N.W.2d 453, 454-55 (Mich. Ct. App. 1991) (holding that the state whistleblower
act was exclusive remedy for employee, thus precluding common law action for retaliatory
discharge); Pipas v. Syracuse Home Ass'n, 641 N.Y.S.2d 768 (App. Div. 1996) (holding that
the employee's election to bring statutory whistleblowing cause of action barred tort causes of
action relating to employee's retaliatory discharge). But see Lowe v. AmeriGas, Inc., 52 F.
Supp. 2d 349, 360 (D. Conn. 1999), aff'd, 208 F.3d 203 (interpreting Connecticut
whistleblower statute); Driver v. Hanley, 575 N.W.2d 31, 34-36 (Mich. Ct. App. 1997) (stating
the whistleblower statute was not an exclusive remedy for the whistleblowing employee who
pursued a breach of contract claim against former employer).
[FN214]. See, e.g., Hunt v. Honda of Am. MFG, Inc., No. C2-01-1188, 2002 WL 31409866, at
*2 (S.D. Ohio, Sept. 4, 2002) (citing Kulch v. Structural Fibers, Inc., 677 N.E.2d 308 (Ohio
1997); Doody v. Centerior Energy Corp., 739 N.E.2d 851, 854-56 (Ohio Ct. App. 2000)
(examining the Ohio whistleblower statute); Wood v. Dorcas, 757 N.E.2d 17, 20-25 (Ohio Ct.
App. 2000) (holding a discharged employee can bring statutory cause of action pursuant to
Ohio whistleblower statute, common law action in tort, or both); Kulch, 677 N.E.2d at 328-29,
(holding that an at-will whistleblowing employee can maintain common law tort action or
state statutory whistleblower cause of action, or both, but not entitled to double recovery);
Lawson v. AK Steel Corp., 699 N.E.2d 951 (Ohio Ct. App. 1997), remanded to 703 N.E.2d
371, 373-74 (Ohio 1998) (interpreting Ohio whistleblower statute).
[FN215]. See, e.g., Anders v. Specialty Chem. Res., Inc., 700 N.E.2d 39, 44-46 (Ohio Ct.
App. 1997); see also Walters v. Maricopa Cty., 990 P.2d 677, 680-82 (Ariz. Ct. App. 1999)
(applying statute to a public sector case).
[FN216]. Wiles v. Medina Auto Parts, No. 3131-M, 2001 WL 615938, at *4 (Ohio Ct. App.
2001); accord, Loomis v. Honda of Am. Mfg. Inc., No. SC2-01- 606, 2002 WL 484636, at *1
(S.D. Ohio 2002 Feb. 13, 2002).
[FN217]. See Forshey v. Airborne Freight Corp., 755 N.E.2d 969, 976 (Ohio Ct. App. 2001).
[FN218]. See, e.g., Haw. Rev. Stat. Ann. § 378-69 (Michie 2003).
[FN219]. Id.
[FN220]. See Crusco v. Oakland Care Ctr., Inc., 702 A.2d 1363, 1366-68 (N.J. Super. Ct.
App. Div. 1997).
[FN221]. See, e.g., Palladino ex re. U.S. v. VNA of S. N.J., Inc., 68 F. Supp. 2d 455, 466-69
(D. N.J. 1999).
[FN222]. See, e.g., Gray v. Webco Gen. P'ship, 36 F. Supp. 2d 1331, 1333- 34 (M.D. Fla.
1999); Sandom v. Travelers Mortgage. Serv., Inc., 752 F. Supp. 1240, 1246 (D. N.J. 1990)
(N.J. whistleblower statute not preempted).
[FN223]. See Gray, 36 F. Supp. 2d at 1333-34.
[FN224]. See Collete v. St. Luke's Roosevelt Hosp., 132 F. Supp. 2d 256, 272, 275 (S.D.N.Y.
2001).
[FN225]. See, e.g., Schroeder v. Crowley Maritime Corp., 825 F. Supp. 1007, 1009-10 (S.D.
Fla. 1993), aff'd, 55 F.3d 638.
[FN226]. Id.
[FN227]. Espinosa v. Cont'l Airlines, 80 F. Supp. 2d 297, 302-03 (D. N.J. 2000).
[FN228]. Doody v. Centerior Energy Corp., 739 N.E.2d 851, 854-56 (Ohio Ct. App. 2000)
(construing federal law in relation to Ohio whistleblower statute).
[FN229]. Loomis v. Honda of Am. Mfg. Inc., No. SC2-01-606, 2002 WL 484636, at *1-2 (S.D.
Ohio Feb. 13, 2002); accord, Arthur v. Armco, Inc., 122 F. Supp. 2d 876, 879-80 (S.D. Ohio
2000).
[FN230]. Botz v. Omni Air Int'l, 134 F. Supp. 2d 1042, 1045-49 (D. Minn. 2001) (finding
preemption of Minnesota whistleblower statute by Federal Aviation Act because employee's
complaint of lack of enforcement of a law concerned a regulation "related to a service" of an
air carrier); Espinosa, 80 F. Supp. 2d at 300-03 (holding employee's state statutory
whistleblower claim not completely preempted by Federal Aviation Administration
Authorization Act); see also McLean v. Carlson Co., Inc., 777 F. Supp. 1480, 1483 (D. Minn.
1991) (holding employee's whistleblower lawsuit under Minnesota statute preempted by
ERISA because employee's claim referred to ERISA and depended upon its existence).
[FN231]. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806(d), 116 Stat. 745, 802 (to
be codified at 18 U.S.C. § 1514A(d)).
[FN232]. Model Whistleblower Protection Act § 8, at http://
www.whistleblowers.org/model.htm (last visited Jan. 16, 2004).
[FN233]. Phinney v. Perlmutter, 564 N.W.2d 532, 551-53 (Mich. Ct. App. 1997) (stating that
state statute should be liberally construed in favor of whistleblowing employees).
[FN234]. See, e.g., Doody v. Centerior Energy Corp., 739 N.E.2d 851, 854- 55 (Ohio Ct. App.
2000) (interpreting Ohio whistleblower statute narrowly).
[FN235]. See, e.g., White v. Honda of Am. Mfg., Inc., 191 F. Supp. 2d 933, 952-53 (S.D.
Ohio 2002) ("Ohio law limits the employment-at-will doctrine by creating a common law tort
claim for wrongful discharge in violation of public policy."); Gower v. IKON Office Solutions,
Inc., 155 F. Supp. 2d 1268, 1272 (D. Kan. 2001) (applying Arkansas law) ("The Arkansas
Supreme Court... has recognized several exceptions to the employment-at-will doctrine,
including an exception for cases in which employees are discharged in violation of the general
public policy of the state."); Tameney v. Atl. Richfield Co., 610 P.2d 1330, 1335-36 (Cal.
1980) (recognizing a cause of action for violation of public policy, based in tort, and posited
as an exception to the general employment-at-will rule); Jacobson v. Knepper & Moga, P.C.,
706 N.E.2d 491, 492-93 (Ill. 1998); Sears, Roebuck and Co. v. Wholey, 779 A.2d 408, 412
(Md. Ct. Spec. App. 2001), aff'd, 803 A.2d 482 (Md. 2002); Anderson-Johanningmeier v. MidMinn. Women's Ctr., Inc., 637 N.W.2d 270, 273 (Minn. 2002); Dahlberg v. Lutheran Soc.
Serv. of N.D., 625 N.W.2d 241, 252 (N.D. 2001); Dahl v. Combined Ins. Co., 621 N.W.2d
163, 167 (S.D. 2001); Guy v. Mut. of Omaha Ins. Co., No. W1999-00942-COA-R9-CV, 2001
WL 204485, at *7 (Tenn. Ct. App. March 1, 2001), aff'd, 79 S.W.3d 528 (Tenn. 2002).
[FN236]. Murcott v. Best Western Int'l, Inc., 9 P.3d 1088, 1095-96 (Ariz. Ct. App. 2000).
[FN237]. See, e.g., Doody, 739 N.E.2d at 856 ("Ohio has a recognized public policy in favor of
workplace safety."); Cavico, supra note 11, at 503.
[FN238]. Dahl, 621 N.W.2d at 166.
[FN239]. Gower, 155 F. Supp. 2d at 1272 (applying Arkansas law).
[FN240]. See, e.g., Szaller v. Am. Nat'l Red Cross, 293 F.3d 148, 151 (4th Cir. 2002)
(applying Maryland law); Murcott, 9 P.3d at 1095-96; Wholey, 779 A.2d at 412-13; Pierce v.
Ortho Pharm. Corp., 417 A.2d 505, 512 (N.J. 1980); Dahl, 621 N.W.2d at 166; Guy, 2001 WL
204485, at *7; Cavico, supra note 11, at 506.
[FN241]. Dahl, 621 N.W.2d at 167; accord, Murcott, 9 P.3d at 1096 ("Although public policy
need not always derive from a criminal statute... the criminal code is a clear expression of
state public policy.").
[FN242]. Murcott, 9 P.3d at 1096.
[FN243]. See, e.g., Loomis v. Honda of Am. Mfg. Inc., No. SC2-01-606, 2002 WL 484636, at
*1 (S.D. Ohio Feb. 13, 2002) (noting that policy must still be "of equally serious import as the
violation of a statute" pursuant to Ohio common law); accord, Arthur v. Armco, Inc., 122 F.
Supp. 2d 876, 879 (S.D. Ohio 2000).
[FN244]. See, e.g., Pierce, 417 A.2d at 512.
[FN245]. See, e.g., Szaller, 293 F.3d at 151 (applying Maryland law); Guy, 2001 WL 204485,
at *7; Wholey, 779 A.2d at 412; Gower v. IKON Office Solutions, Inc., 155 F. Supp. 2d 1268,
1272 (D. Kan. 2001) (applying Arkansas law); Arthur, 122 F. Supp. 2d at 878-79; Dahl, 621
N.W.2d at 166; White v. Honda of Am. Mfg., Inc., 191 F. Supp. 2d 933, 952-53 (S.D. Ohio
2002) (applying Ohio law).
[FN246]. Jacobson v. Knepper & Moga, P.C., 706 N.E.2d 491, 493 (Ill. 1998).
[FN247]. Wholey, 779 A.2d at 412 (quoting Milton v. IIT Research Inst., 138 F.3d 519, 523
(4th Cir. 1998)).
[FN248]. Guy, 2001 WL 204485, at *7 (quoting Watson v. Cleveland Chair Co., 789 S.W.2d
538, 540 (Tenn. 1989)).
[FN249]. Wholey, 779 A.2d at 419.
[FN250]. Id.
[FN251]. See, e.g., Brown v. Wheat First Sec., Inc., 257 F.3d 821, 824 (D.C. Cir. 2001)
("[W]histleblower claim would qualify as an exception to the employment-at-will doctrine
under the principles of District of Columbia law....") (citing Carl v. Children's Hosp., 702 A.2d
159 (D.C. 1997)); Boe v. AlliedSignal, Inc., 131 F. Supp. 2d 1197, 1203 (D. Kan. 2001)
(citing Palmer v. Brown, 752 P.2d 685 (Kan. 1998)); Arthur v. Armco, Inc., 122 F. Supp. 2d
876, 878-79 (S.D. Ohio 2000); Menchaca v. Am. Med. Response of Ill., Inc., No. 98C547,
2000 WL 1141570, at *5 (N.D. Ill. Aug. 11, 2000); Jacobson, 706 N.E.2d at 493 ("[A] review
of Illinois case law reveals that retaliatory discharge actions are allowed" ... "[w]hen an
employee is discharged in retaliation for the reporting of illegal or improper conduct,
otherwise known as 'whistleblowing."'); Guy, 2001 WL 204485, at *7; Cavico, supra note 11,
at 520-24.
[FN252]. Dahl v. Combined Ins. Co., 621 N.W.2d 163, 167 (S.D. 2001).
[FN253]. King v. Donnkenny, Inc., 84 F. Supp. 2d 736, 740 (W.D. Va. 2000).
[FN254]. Guy, 2001 WL 204485, at *13.
[FN255]. See, e.g., Doody v. Centerior Energy Corp., 739 N.E.2d 851, 856 (Ohio Ct. App.
2000) (holding that plaintiff employee, a radiological engineer at nuclear plant, could bring a
public policy tort cause of action against his employer for terminating him allegedly due to his
report of worker contamination at plant, even though his statutory whistleblower claim was
denied because of failure to comply strictly with provisions in statute).
[FN256]. Murcott v. Best Western Int'l, Inc., 9 P.3d 1088, 1096 (Ariz. Ct. App. 2000).
[FN257]. See, e.g., Szaller v. Am. Red Cross, 293 F.3d 148, 151 (4th Cir. 2002) (applying
Maryland law after Red Cross employee terminated for reporting alleged violations by
employer of FDA regulations as well as violation of consent decree to a Red Cross "hotline")
("Due to a concern with opening the 'floodgates of litigation,' however, Maryland has not
found a mandate of public policy sufficiently clear for purposes of a wrongful discharge action
in every state statute or regulation."). The court noted that:
Maryland does not provide 'a generalized whistleblower cause of action' for an at-will
employee who reports a violation of federal or state law. And Congress has not created one
either. Therefore, it would be inappropriate for a federal court to create such a protection by
expanding the wrongful discharge cause of action to all employees who are terminated for
reporting potential illegalities.
293 F.3d at 153 (citation omitted); accord, Terry v. Legato Sys., Inc., 241 F. Supp. 2d
566, 570 (D. Md. 2003) ("Maryland does not provide a general 'whistle-blower' cause of
action for an at-will employee who reports a violation of federal or state law."); see also, e.g.,
Storey v. Patient First Corp., 207 F. Supp. 2d 431, 454-55 (E.D. Va. 2002) ("[A] generalized,
common law 'whistleblower' retaliatory discharge claim... has not been recognized as an
exception to Virginia's employment-at-will doctrine.")
(citing Dray v. New Market Poultry, Inc., 518 S.E.2d 312 (Va. 1999); Nichols v.
Healthsouth Corp., No. Civ. A. 3:00-CV-1487-P, 2001 WL 1081288, at *6 (N.D. Tex. Sept. 12,
2001) (explaining that although Texas does not recognize a general exception for the private
sector whistleblowing employee, a "whistleblowing" employee does have a common law cause
of action if he or she was discharged "for the sole reasons that the employee refused to
perform an illegal act") (citing Austin v. Healthtrust, Inc., 967 S.W.2d 400, 401 (Tex. 1998);
Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985)). Other jurisdictions are
very conservative when it comes to carving out exceptions to the traditional employment-atwill doctrine for whistleblowing or otherwise. See King, 84 F. Supp. 2d at 740 ("[T]here is no
exception for employees who are terminated for merely 'blowing the whistle' on an employer
for violating generalized regulatory mechanisms for business and industry.").
[FN258]. See, e.g., Thomas v. Med. Ctr. Physicians, P.A., 61 P.3d 557, 565 (Idaho 2002)
("Employees are protected under the public policy exception to the at-will doctrine for
reporting the falsification of medical records and the performance of unnecessary operations
to bolster a physician's income.").
[FN259]. Pytlinski v. Brocar Prods., Inc., 760 N.E.2d 385, 388 (Ohio 2002).
[FN260]. Menchaca v. Am. Med. Response of Ill., Inc., No. 98C547, 2000 WL 1141570, at *6
(N.D. Ill. Aug. 11, 2000) (noting the court's inability to "find a single case in which a plaintiff
successfully alleged retaliatory discharge in the whistle-blower context without having told
someone about the violations"). The court added:
Nothing in the record suggests that [the plaintiff employee] ever reported any of the health
and safety violations; she simply identified the problems and corrected them. And [plaintiff]
has offered no justification for expanding the tort of retaliatory discharge to include 'whistleblowing' claims in which the whistle is never really blown.
Id.
[FN261]. See, e.g., Murcott, 9 P.3d at 1096.
[FN262]. Gower v. IKON Office Solutions, Inc., 155 F. Supp. 2d 1268, 1272 (D. Kan. 2001)
(applying Arkansas law where plaintiff employee, sales representative, internally reported his
concerns that firm's billing and accounting procedures violated federal securities law).
[FN263]. Jacobson v. Knepper & Moga, P.C., 706 N.E.2d 491, 493 (Ill. 1998) (emphasis
added).
[FN264]. Miller v. Ford Motor Co., 152 F. Supp. 2d 1046, 1049 (N.D. Ill. 2001).
[FN265]. Cavico, supra note 11, at 520 n.116 (citing cases).
[FN266]. See, e.g., Pytlinski v. Brocar Prods, Inc., 760 N.E.2d 385, 388 (Ohio 2002).
[FN267]. See, e.g., Thomas v. Med. Ctr. Physicians, P.A., 61 P.3d 557, 565 (Idaho 2002).
[FN268]. See, e.g., Gower v. IKON Office Solutions, Inc., 155 F. Supp. 2d 1268, 1272 (D.
Kan. 2001) (applying Arkansas law to alleged termination as result of plaintiff employee's
report of federal securities law violations).
[FN269]. See, e.g., Sears, Roebuck and Co. v. Wholey, 779 A.2d 408, 416- 17 (Md. Ct. Spec.
App. 2001), aff'd, 803 A.2d 482 (Md. 2002).
[FN270]. See, e.g., Murcott v. Best Western Int'l, Inc., 9 P.3d 1088, 1096 (Ariz. Ct. App.
2000).
[FN271]. Id. at 1092.
[FN272]. Id.
[FN273]. Id. at 1099.
[FN274]. Id. at 1096-97.
[FN275]. Id. at 1097.
[FN276]. Arthur v. Armco, Inc., 122 F. Supp. 2d 876, 880 (S.D. Ohio 2000) ("[T]he case law
recognizing common law claims for wrongful discharge in violation of public policy speaks
solely in terms of the liability of an 'employer."').
[FN277]. See, e.g., Paolella v. Browning-Ferris, Inc., 158 F.3d 183, 189- 92 (3rd Cir. 1998)
(applying Delaware law); Dahl v. Combined Ins. Co., 621 N.W.2d 163, 166-67 (S.D. 2001)
(finding that plaintiff employee, a district insurance manager, could be protected for reporting
to state division of insurance that several of employer's agents working under his control had
wrongfully misappropriated premium money).
[FN278]. Fox v. MCI Communications Corp., 931 P.2d 857, 861 (Utah 1997); Faust v. Ryder
Commercial & Leasing Servs., Inc., 954 S.W.2d 383, 392 (Mo. Ct. App. 1997).
[FN279]. Murcott, 9 P.3d at 1096.
[FN280]. Id. (citation omitted) (considering claim by plaintiff, vice-president of membership
development and quality assurance, after plaintiff reported concerns that firm's board of
directors were violating anti-trust laws in voting for franchise membership applications, but no
antitrust violations ever demonstrated to have occurred).
[FN281]. See, e.g., Dahl, 621 N.W.2d at 167 ("Persons acting in good faith who have
probable cause to believe crimes have been committed should not be deterred from
reporting...."); Fowler v. Criticare Home Health Servs., Inc., 10 P.3d 8, 14 (Kan. Ct. App.
2000); Cavico, supra note 11, at 520 n.116 (citing cases).
[FN282]. Gower v. IKON Office Solutions, Inc., 155 F. Supp. 2d 1268, 1273-74 (D. Kan.
2001) (remarking that under Arkansas law, it was "at least feasible that defendant's investors
could have been misled" by billing and accounting procedures that whistleblowing employee
claimed were in violation of federal securities law).
[FN283]. Id. at 1272.
[FN284]. Crain v. Nat'l Am. Ins. Co., 52 P.3d 1035, 1039 (Okla. Civ. App. 2002) (internal
quotation omitted).
[FN285]. See, e.g., id. at 1041 (explaining that the reporting of embezzlement within a
private business, whether to internal or external sources, involves "merely private or
proprietary interests insufficient to support" a public policy claim) (citing Hayes v. Eateries,
Inc., 905 P.2d 778, 788 (Okla. 1995); Sears, Roebuck and Co. v. Wholey, 779 A.2d 408, 412,
420 (Md. Ct. Spec. App. 2001), aff'd, 803 A.2d 482 (Md. 2002).
[FN286]. Dahl, 621 N.W.2d at 167 (emphasis in original); accord, Crain, 52 P.3d at 1042
(concluding that employee, an assistant vice-president of insurance company, who reported
financial irregularities to an outside auditor, was deemed to be clearly acting in the public
interest, and not merely serving private and proprietary business interests, due to the
existence of a well-defined public policy regulating the insurance industry).
[FN287]. Wholey, 779 A.2d at 412, 420 (involving the reporting to director of security by
employee, a terminated store security supervisor, that the store manager was stealing from
the store, as well as the plaintiff's investigation thereof, including the use of surreptitious
monitoring, were deemed to be an internal company "private dispute" and "not to the benefit
of the public good," thus precluding plaintiff's whistleblowing public policy cause of action).
[FN288]. Fowler v. Criticare Home Health Servs., Inc., 10 P.3d 8, 15 (Kan. Ct. App. 2000).
[FN289]. See, e.g., Boe v. AlliedSignal, Inc., 131 F. Supp. 2d 1197, 1204-5 (D. Kan. 2001)
(concluding that under Kansas common law, plaintiff employee, a controller, who refused to
sign "representation letters" attesting as to accuracy of accounting statements, as instructed
by his supervisor, due to employee's fears that securities laws were being violated, was not
regarded as a protected "internal" whistleblower in part because employee's conduct was
deemed to be "merely voicing a disagreement."). However, plaintiff employee's reporting of
improper accounting practices to firm's in-house counsel, business conduct and ethics officer,
human resources manager, and government compliance officer was construed as protected
"internal" whistleblowing because it "appear [ed] to be more than merely voicing his
disagreement." Id. at 1204.
[FN290]. Fowler, 10 P.3d at 14-15 (involving plaintiff employee's disagreement with the firm's
general manager as to the legality of shipping guns and live ammunition via UPS to the
defendant firm's owner who was on vacation). In rejecting the whistleblowing claim, the court
stated that the disagreement was "just that," a disagreement; and did not qualify as an
"internal report to management of illegal coworker or company conduct. Id. at 14.
[FN291]. Dahl, 621 N.W.2d at 167-68 (involving plaintiff employee's report to state division of
insurance that employer's agents under his control had misappropriated insurance premiums).
[FN292]. Faust v. Ryder Commercial & Leasing Servs., Inc., 954 S.W.2d 383, 392 (Mo. Ct.
App. 1997); Fox v. MCI Communications Corp., 931 P.2d 857, 861 (Utah 1997).
[FN293]. See, e.g., Frederick v. Simmons Airlines, Inc., 144 F.3d 500, 504-05 (7th Cir. 1998)
(finding complaints made through leaflets and television appearances protected); Menchaca v.
Am. Med. Response of Ill., Inc., No. 98C547, 2000 WL 1141570, at *6 (N.D. Ill. Aug. 11,
2000) (noting that disclosure can be made "to an outside agency or to a supervisor within the
company" pursuant to Illinois common law); Murcott v. Best Western Int'l, Inc., 9 P.3d 1088,
1097 (Ariz. Ct. App. 2000) (finding plaintiff employee protected for reporting alleged antitrust violations to company's president and CEO); Thomas v. Med. Ctr. Physicians, P.A., 61
P.3d 557, 565 (Idaho 2002); Fowler, 10 P.3d at 15; Dahl, 621 N.W.2d at 167 (reporting "to a
supervisor or outside agency").
[FN294]. Gower v. IKON Office Solutions, Inc., 155 F. Supp. 2d 1268, 1272-73 (D. Kan.
2001).
[FN295]. See, e.g., Gower, 155 F. Supp. 2d at 1272-73 (D. Kan. 2001) (interpreting Arkansas
law where plaintiff employee, a sales representative reported internally to firm's CEO,
president, and member of ethics committee his concerns that certain billing and accounting
procedures were in violation of federal securities laws); Boe v. AlliedSignal, Inc., 131 F. Supp.
2d 1197, 1204 (D. Kan. 2001) (stating that under Kansas common law, whistleblower's report
can be made "to either company management or law enforcement officials") (quoting Palmer
v. Brown, 752 P.2d 685, 690 (Kan. 1988)); Murcott, 9 P.3d at 1097-98 (spelling out the
"cure" rationale supporting such internal whistleblowing). Specifically, the Arizona court
noted:
[Employee's report to firm's president and CEO] at least allowed management the chance to
address actual wrongdoing or clear up [legal] misunderstandings at the outset. A contrary
conclusion would have prevented [plaintiff employee] from making his case to anyone in the
company, thereby foreclosing any possibility of an internal resolution. We are unwilling to
place [plaintiff] or any other employee in such a position.
Id. at 1097; see also, e.g., Thomas, 61 P.3d at 565 (considering doctor's termination for
reporting to medical center's chief administrator, CEO, president, and quality assurance
committee that another doctor in his department was falsifying medical records and
performing unnecessary operations in order to bolster his income); Crain v. Nat'l Am. Ins.
Co., 52 P.3d 1035, 1039 (Okla. Civ. App. 2002) (stating, in the context of an employee's
termination for reporting to an outside auditor that employer was falsifying estimated
recoveries, that "Oklahoma law protects both internal and external reporting of whistleblowers who establish a sufficient public policy violation
(C) 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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