By Stacey A. DeKalb, Chair of Lommen Abdo’s Employment Practice Group

The Minnesota Supreme Court has expanded the rights of whistleblowers under the Minnesota Whistleblower Act by removing the requirement that a reporting employee act with the purpose of exposing an illegality.  Pursuant to the Supreme Court’s new case, Friedlander v. Edwards Lifesciences LLC., whistleblowers are now held to a new good faith standard under the law which includes any report as long as it is “not knowingly false or in reckless disregard of the truth.” Previously, whistleblower protections were limited to reports that fit the definition of “good faith,” which required that the whistleblower act with the purpose of exposing an illegality. The decision eliminates the exclusion from the previous definition of those employees whose job it is to report such offenses, such as lawyers, or where the employer was already aware of the illegal practices.

As noted above, based upon prior case law, an employee bringing a whistleblower case had to show “good faith” by demonstrating that the purpose of the report was “to expose an illegality.” In 2013, the Minnesota Legislature amended the Whistleblower Act to provide a statutory definition of “good faith.” The question certified to the Minnesota Court was whether “the 2013 amendment to the Minnesota Whistleblower Act defining the term ‘good faith’ to mean ‘conduct that does not violate section 181.932, subdivision e’ eliminates[s] the judicially created requirement that the putative whistleblower act with the purpose of ‘exposing an illegality.’”  Until the Minnesota Supreme Court’s unanimous decision, it was not clear whether the judicially-imposed “expose an illegality” requirement remained part of the law, as that language was not addressed in the 2013 law.

Friedlander Case

In Friedlander, the former employer was sued for retaliatory discharge when Friedlander was fired after speaking up about breaching customers’ contracts.  Friedlander spoke with management about the company’s alleged failure to offer price concessions to customers in violation of their contracts. Management was already aware of the issue.  Friedlander was subsequently fired.  The employer argued that Friedlander did not make the report in good faith, under the Minnesota law, because he had not “exposed” the allegedly illegal conduct to anyone since the people to whom he reported the conduct already knew about it.  The Minnesota Supreme Court held that the 2013 amendment, defining “good faith” as reports that are not knowingly false or made in reckless disregard of the truth of the matter asserted, moves the meaning of good faith away from considering the whistleblower’s motives in making the report to solely the content of the report.

Recommendations for Employers

The employee-friendly Minnesota whistleblower statute is almost certain to lead to an increase in whistleblower claims.  Employers already are required to notify employees of their rights regarding termination under the Minnesota Whistleblower Act and, along with this, they should include strong anti-retaliation policies in their employee handbooks.  Employers also are advised to review their internal practices for handling internal employee reports.  Employers may want to consider consulting legal counsel early on to assess the need to have an outside party conduct the investigation as well as review the company’s practices to reduce the risk of retaliatory action being taken against the reporter and ensure the employer acts in good faith.  In addition, it is imperative that employers not only carefully document the allegations, investigation results, and communication with the employee concerning the employee’s report but, also, the reasons for any internal actions taken with respect to the reporting employee whether it be failure to promote, job transfer or the like. The risk to the employer is that such an employee later may claim that the employer’s adverse decisions are retaliation for having made a whistleblower claim.

This employment law update was written by Stacey DeKalb, chair of Lommen Abdo’s Employment Practice Group. Employers with questions are advised to contact the Lommen Abdo Employment Law Practice Group so we can assist in addressing the issues raised in this update. If you have questions about this topic, or any other aspect of your company’s employment obligations, please contact Stacey DeKalb at 612.336.9310 or stacey@lommen.com.

 

THESE MATERIALS ARE INTENDED TO PROVIDE AN OVERVIEW OF EMPLOYMENT ISSUES IN THE WORKPLACE AND ARE NOT INTENDED TO GIVE LEGAL ADVICE.  IF YOU HAVE QUESTIONS OR COMMENTS REGARDING EMPLOYMENT LAW ISSUES, PLEASE CONTACT STACEY DEKALB AT THE LOMMEN ABDO EMPLOYMENT LAW DEPARTMENT AT 612.336.9310, 715.386.8217 OR 800.752.4297.