Supreme Court Reinstates SOX Jury Verdict With Lower Burden of Proving Employer's Motive Against Whistleblower

 This morning, the Supreme Court unanimously found that proof of retaliatory intent is not necessary to prevail on a claim for wrongful discharge brought under §1514A(a) of the Sarbanes-Oxley Act of 2002, and the employee must prove that the protected activity was merely a contributing factor to his or her employment termination.  Murray v. UBS Securities, LLC, No. 22-660 (U.S. 2-8-24).  “Under the whistleblower-protection provision of the Sarbanes-Oxley Act of 2002, no covered employer [publicly-traded companies] may ‘discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of’ protected whistleblowing activity. 18 U. S. C. §1514A(a).”  The protected activity includes reports by employees “what they reasonably believe to be instances of criminal fraud or securities law violations.”     “When a whistleblower invokes this provision, he bears the initial burden of showing that his protected activity ‘was a contributing factor in the unfavorable personnel action alleged in the complaint.’ 49 U. S. C. §42121(b)(2)(B)(iii). The burden then shifts to the employer to show that it ‘would have taken the same unfavorable personnel action in the absence of ‘ the protected activity. §42121(b)(2)(B)(iv).”  The statutory language prohibiting discrimination against the employee does not require proof of retaliatory intent. 

According to the Court’s opinion, the plaintiff was employed as a research strategist who was required by SEC regulations to certify to his employer’s current and prospective customers that his reports were prepared independently and reflected his own views.  He alleged that he was fired after internally reporting in December 2011 and January 2012 that the leaders of two trading desks were improperly pressuring him to skew his reports to support their business strategies and to “clear” his articles with them before publication.  He found their conduct to be both unethical and illegal.  His supervisor, while sympathetic, urged him to not alienate those two individuals and was not helpful when the plaintiff reported that he was improperly being left out/excluded from meetings.   Despite having just given the plaintiff a strong performance evaluation, the manager then recommended him for layoff or to be transferred to a trading desk analyst position where he would not have SEC-certification responsibilities.  When the trading desk rejected him, he was fired in March 2012.  At trial, the employer argued that “market-wide difficulties and a $2-billion loss on a [its] trading desk in London had required the elimination of certain positions,” including his.

At trial, the judge instructed the jury that he was “not required to prove that his protected activity was the primary motivating factor in his termination, or that . . . UBS’s articulated reason for his termination was a pretext.”  When the jury sought clarification, the judge instructed that they ““should consider” whether “anyone with th[e] knowledge of [the plaintiff’s] protected activity, because of the protected activity, affect[ed] in any way the decision to terminate [his] employment.”  Recommending a $1M verdict, the “jury found that [the plaintiff] had established his §1514A claim and that [the employer] had failed to prove, by clear and convincing evidence, that it would have fired [him] even if he had not engaged in protected activity.”  The court added $1.7M in attorneys fees and costs to the jury’s recommendation.   On appeal, the Second Circuit concluded that the plaintiff was required to show that the employer possessed a retaliatory intent.  Today, the Supreme Court reversed.

Unlike most federal employment statutes, SOX adopts the “burdens of proof set forth in section 42121(b) of title 49, United States Code”—a provision of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21).” Under that statute, “the whistleblower bears the burden to prove that his protected activity “was a contributing factor in the unfavorable personnel action alleged in the complaint.” 49 U. S. C. §42121(b)(2)(B)(i). If the whistleblower makes that showing, the burden shifts to the employer to show “by clear and convincing evidence” that it “would have taken the same unfavorable personnel action in the absence of ” the protected activity. §42121(b)(2)(B)(ii).”  This framework

originated in the Whistleblower Protection Act of 1989 (WPA), 5 U. S. C. §1221(e), which provides legal protection for whistleblowers within the civil service. The framework was meant to relieve whistleblowing employees of the “excessively heavy burden” under then-existing law of showing that their protected activity was a “‘significant’, ‘motivating’, ‘substantial’, or ‘predominant’” factor in the adverse personnel action, and it reflected a determination that “[w]histleblowing should never be a factor that contributes in any way to an adverse personnel action.” Congress then incorporated the easier-to-satisfy “contributing factor” framework into a series of similar whistleblower statutes that protect non[1]civil-service employees in industries where whistleblowing plays an especially important role in protecting the public welfare—including, as noted above, the airline industry (AIR 21) and the securities industry (Sarbanes-Oxley).

The Court then explained that

Section 1514A’s text does not reference or include a “retaliatory intent” requirement, and the provision’s mandatory burden-shifting framework cannot be squared with such a requirement. While a whistleblower bringing a §1514A claim must prove that his protected activity was a contributing factor in the unfavorable personnel action, he need not also prove that his employer acted with “retaliatory intent.”

                . . . .

An animus-like “retaliatory intent” requirement is simply absent from the definition of the word “discriminate.” When an employer treats someone worse—whether by firing them, demoting them, or imposing some other un[1]favorable change in the terms and conditions of employment—“because of ” the employee’s protected whistleblowing activity, the employer violates §1514A. It does not matter whether the employer was motivated by retaliatory animus or was motivated, for example, by the belief that the employee might be happier in a position that did not have SEC reporting requirements.

The Court rejected the employer’s argument that innocent employers will be held liable for adverse employment actions which were not motivated by retaliation or the protected conduct, such as when the employee’s protected conduct results in the biggest client to leave and the employee without any work to do:

The statute’s burden-shifting framework provides that an employer will not be held liable where it “demonstrates, by clear and convincing evidence, that [it] would have taken the same unfavorable personnel action in the absence of ” the protected behavior. 49 U. S. C. §42121(b)(2)(B)(ii). The right way to think about that kind of same-action causation analysis is to “change one thing at a time and see if the out[1]come changes.” Bostock, 590 U. S., at 656. The question is whether the employer would have “retain[ed] an otherwise identical employee” who had not engaged in the protected activity. Id., at 660. As the Federal Circuit has explained in the WPA context, the same-action analysis “does not require . . . that the adverse personnel action be based on facts ‘completely separate and distinct from protected whistleblowing disclosures.’”  . . . In that case, the correct inquiry was whether the employer would have taken the same action if it had learned of the contents of the employee’s protected disclosure through other means.  . . .. In UBS’s hypothetical, the relevant inquiry would be whether the employer still would have fired the employee if the client had left for some other reason. If so, it will have no trouble prevailing under the statute.

To be sure, the contributing-factor framework that Congress chose here is not as protective of employers as a motivating-factor framework. That is by design. Congress has employed the contributing-factor framework in contexts where the health, safety, or well-being of the public may well depend on whistleblowers feeling empowered to come forward. This Court cannot override that policy choice by giving employers more protection than the statute itself provides.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Court of Appeals Finds Employee Has Right to Challenge Termination in Court to Determine Fall-Back Rights

Earlier this week, a divided Franklin County Court of Appeals reversed the 12(B)(6) dismissal of a declaratory judgment action seeking a determination about whether an unclassified civil service employee had been fired for cause.   Harris v. Dept. of Veterans Servs., 2018-Ohio-2165.  The employee alleged at the SPBR that he had been fired in retaliation for making a whistleblower complaint.  He then withdrew that that charge and filed a mandamus action and declaratory judgment action seeking his fall-back right to a classified civil service position he held four years earlier.   The court’s majority refused to rule on the mandamus claim because it was premature in that he could only seek fall-back rights if he had been fired without cause and his termination notice notified him that he was fired for cause.  However, the court’s majority found that the trial court had abused its discretion in dismissing the declaratory judgment action because he was entitled to a determination of whether or not his termination had been with or without cause.  The dissent observed that his whistleblower claim was subject to the jurisdiction of the SPBR and, thus, he was required to have brought such a claim before the SPBR instead of in court.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court: Does a Whistleblower by Any Other Statutory Definition Still Smell as Sweet?

A unanimous Supreme Court this morning reversed the Ninth Circuit, rejected the SEC’s own regulation and ruled that the whistleblowing protections under Dodd-Frank are not parallel to the whistleblower provisions of Sarbanes-Oxley.   Digital Realty Trust v. Somers, No. 16-1276.   In particular, while the Dodd-Frank statute protects “whistleblowers” from retaliation for activities that are protected under Sarbanes-Oxley, an individual is not a “whistleblower” under Dodd-Frank unless the individual first reported information about securities law violations to the SEC.  In other words, while Sarbanes-Oxley protects internal reports of misconduct by employees to upper management, the SEC, Congress or another federal agency if the employee complies with that statute’s shorter statute of limitations and administrative exhaustion requirements, such activity would not also be protected under Dodd-Frank (with its longer statute of limitations and no administrative exhaustion requirements) unless the individual first reported the matter to the SEC before suffering retaliation.  Accordingly, the employee who was fired allegedly in retaliation for reporting possible illegal activity to senior management and not to the SEC was not a “whistleblower” under Dodd-Frank even though he might have been under Sarbanes-Oxley if he had fist filed a complaint with the DOL within the 180-day statute of limitations.  In short, “[t]o sue under Dodd-Frank’s anti-retaliation provision, a person must first “provid[e] . . . information relating to a violation of the securities laws to the” SEC.

According to the Court’s opinion, the employer REIT employed the plaintiff as a vice president.  He reported to senior management that he suspected that the company was violating certain securities laws.  He never reported this to the SEC and was later fired.  The Court does not describe the amount of time that passed between his report, his termination or his lawsuit.  He never filed an administrative complaint with the DOL.   The employer moved to dismiss because the Dodd-Frank statute only protected employees who blow the whistle to the SEC.  The court found the statute to be ambiguous and deferred to the SEC regulation which did not require whistleblowers to ever contact the SEC under its anti-retaliation provision.   The Court of Appeals affirmed, noting that a contrary holding would nullify the anti-retaliation provisions encompassing Sarbanes-Oxley, etc. However, the Fifth Circuit ruled to the contrary in a similar case, so the Supreme Court agreed to resolve the split of authority.  Justice Ginsburg wrote for the majority, but there were also two concurring opinions which debated whether the Court should focus only on the statute’s language or also consider its legislative history and purpose.

The Court concluded that the case rested on a simple rule: ““When a statute includes an explicit definition, we must follow that definition,” even if it varies from a term’s ordinary meaning.”  Whistleblower was “unequivocally” defined in Dodd-Frank. “Section 78u–6 begins by defining a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.” 15 U.S.C §78u–6(a)(6).   The definition explained “who” was protected and the rest of the statute explained what conduct of that individual was protected.  The anti-retaliation provision, among other things, “protects disclosures made to a variety of individuals and entities in addition to the SEC. For example, the clause shields an employee’s reports of wrongdoing to an internal supervisor if the reports are independently safeguarded from retaliation under Sarbanes-Oxley.”  Importantly, “an individual who falls outside the protected category of “whistleblowers” is ineligible to seek redress under the statute, regardless of the conduct in which that individual engages.”  In contrast, a different anti-retaliation provision in the statute did not require employees to report misconduct to any government agency about matters within the jurisdiction of the Consumer Financial Protection Bureau. 

Requiring reporting to the SEC was core function of Dodd-Frank because it was enacted following the 2008 financial crises, whereas Sarbanes-Oxley was enacted in response to the collapse of Enron.  Dodd-Frank wanted to encourage more government reporting, not more internal reporting, in order to improve the SEC’s enforcement.   Moreover, Dodd-Frank enacted stronger whistleblower protections than Sarbanes-Oxley, eliminating the administrative exhaustion requirement, lengthening the statute of limitations and doubling the back pay recovery, in order to encourage more reporting to the SEC, not less.  As for concerns that employees may suffer retaliation for internal reporting if they were unaware of the requirement to also notify the SEC,

Overlooked in this protest is Dodd-Frank’s core objective: to prompt reporting to the SEC.  . . . In view of that precise aim, it is understandable that the statute’s retaliation protections, like its financial rewards, would be reserved for employees who have done what Dodd-Frank seeks to achieve, i.e., they have placed information about unlawful activity before the Commission to aid its enforcement efforts.

The Court rejected the argument that its strict interpretation would nullify the statute’s prohibition against retaliating against an employee who engages in conduct that is also protected under Sarbanes-Oxley:

With the statutory definition incorporated, clause (iii) protects a whistleblower who reports misconduct both to the SEC and to another entity, but suffers retaliation because of the latter, non-SEC, disclosure.  That would be so, for example, where the retaliating employer is unaware that the employee has alerted the SEC.  In such a case, without clause (iii), retaliation for internal reporting would not be reached by Dodd-Frank, for clause (i) applies only where the employer retaliates against the employee “because of ” the SEC reporting.  §78u–6(h)(1)(A). Moreover, even where the employer knows of the SEC reporting, the third clause may operate to dispel a proof problem: The employee can recover under the statute without having to demonstrate whether the retaliation was motivated by the internal report (thus yielding protection under clause (iii)) or by the SEC disclosure (thus gaining protection under clause (i)).

 . . . The SEC is required to protect the identity of whistleblowers, see §78u–6(h)(2)(A), so employers will often be unaware that an employee has reported to the Commission.  In any event, even if the number of individuals qualifying for protection under clause (iii) is relatively limited, “[i]t is our function to give the statute the effect its language suggests, however modest that may be.”

In light of the clear language of the statute the Court refused to accord any deference to the SEC regulation.  The Obama SEC initially proposed to define “whistleblower” as “as one or more individuals who “provide the Commission with information relating to a potential violation of the securities laws.” The SEC ultimately published regulations defining “whistleblower” differently for the reward and anti-retaliation provisions.  A whistleblower for purposes of obtaining a financial reward from the SEC was essentially the same as initially proposed, but required the information to be provided by fax, mail or through its website.  For the anti-retaliation provision, a “whistleblower” was defined as covering individuals who “possess a reasonable belief that the information you are providing relates to a possible securities law violation” and “[y]ou provide that information in a manner described in” clauses (i) through (iii) of §78u–6(h)(1)(A)” regardless of whether the individual satisfied the requirements of qualifying for a financial reward by reporting the information in a specified manner.  As noted by Justice Ginsburg, the SEC regulation was clear that the whistleblower need not report anything to the SEC in order to be protected by the Dodd-Frank anti-retaliation provisions and reiterated that interpretation in a 2015 interpretative rule:

An individual may therefore gain anti-retaliation protection as a “whistleblower” under Rule 21F–2 without providing information to the SEC, so long as he or she provides information in a manner shielded by one of the anti-retaliation provision’s three clauses. For example, a report to a company supervisor would qualify if the report garners protection under the Sarbanes-Oxley anti-retaliation provision.

The Court agreed that its application of the statutory definition could result in no protection for employees who are fired for testifying, initiating or participating in an SEC investigation if they did not first report the securities law violations to the SEC.  However, it noted that the SEC could easily rectify this by regulation to establish the manner in which whistleblowers could report information to the SEC to include such testimony, etc.   I'm sure that the Trump Administration will get right on that, although it did argue in favor of the employee and the SEC before the Court. 

As for the concurring opinions, Justice Thomas and two other Justices opined that: “Even assuming a majority of Congress read the Senate Report, agreed with it, and voted for Dodd-Frank with the same intent, “we are a government of laws, not of men, and are governed by what Congress enacted rather than by what it intended.”  Justice Thomas then quoted from an amusing Senate debate in which former Senate President Bob Dole admitted that neither he nor any other Senator wrote the Senate Report and that he had never even read it.  Instead, Thomas noted the reports are written by staffers, who are aware that Congress never reads them and that Senators do not even have the authority to amend or modify them.  In contrast, Justice Sotomayor disagreed with that view and asserted that a Senate Report was an appropriate source to consider when interpreting statutory language.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

SEC Invalidates Severance Agreement Waivers Which Preclude Whistleblowers From Recovering Financial Bounties

In August, the Securities and Exchange Commission issued a Cease and Desist Order that employers cannot require an employee in a severance agreement to waive their right to collect a financial award from a government agency because such a provision removes the financial incentive for the employee to report illegal conduct by the employer.  Such provisions are common in severance agreements because the employer is paying an employee money to which the employee is not otherwise entitled in order to buy future peace and does not wish to have to pay the employee twice if the employee later pursues a claim with a government agency.  While the SEC decision and position are based on an unusual SEC regulation that only applies to publicly traded companies, employers should remain alert to other government agencies attempting to adopt a similar position. 

Following the Great Recession, Congress enacted stronger SEC whistleblower laws in the Dodd-Frank Wall Street Reform and Consumer Protection Act, including provisions providing for financial bounties to be paid to individuals who report corporate wrongdoing to the SEC.  The SEC then enacted regulations, including the following provision at 17 C.F.R. § 240.21F-17:

 Staff communications with individuals reporting possible securities law violations.

(a) No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement (other than agreements dealing with information covered by § 240.21F-4(b)(4)(i) and § 240.21F-4(b)(4)(ii) of this chapter related to the legal representation of a client) with respect to such communications.

In 2015, the SEC announced that it violated this regulation to require employees to first report to the Company any disclosure of confidential information before exercising their right to engage in whistleblowing to the SEC.  In August, it found that an Atlanta employer had a similar confidentiality provision in its severance agreements which stated, in part,  

Employee has not and in the future will not use or disclose to any third party Confidential Information, unless compelled by law and after notice to BlueLinx. * * * If the Employee has any question regarding what data or information would be considered by BlueLinx to be information subject to this provision, the Employee agrees to contact BlueLinx’s Legal Department in writing for written clarification.

and/or

[The Employee shall not] disclose to any person or entity not expressly authorized by the Company any Confidential Information or Trade Secrets….Anything herein to the contrary notwithstanding, you shall not be restricted from disclosing or using Confidential Information or Trade Secrets that are required to be disclosed by law, court or other legal process; provided, however, that in the event disclosure is required by law, you shall provide the Company’s Legal Department with prompt written notice of such requirement in time to permit the Company to seek an appropriate protective order or other similar protection prior to any such disclosure by you.

 . . . .

Employee further acknowledges and agrees that nothing in this Agreement prevents Employee from filing a charge with…the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other administrative agency if applicable law requires that Employee be permitted to do so; (however, Employee understands and agrees that Employee is waiving the right to any monetary recovery in connection with any such complaint or charge that Employee may file with an administrative agency. (Emphasis added.)

The SEC determined that:

by requiring its departing employees to forgo any monetary recovery in connection with providing information to the Commission, BlueLinx removed the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.

Restrictions on the ability of employees to share confidential corporate information regarding possible securities law violations with the Commission and to accept financial awards for providing information to the Commission, such as those contained in the Severance Agreements, undermine the purpose of Section 21F, which is to “encourage individuals to report to the Commission,” and violate Rule 21F-17(a) by impeding individuals from communicating directly with the Commission staff about possible securities law violations.

The employer resolved the dispute with the EEOC, paid a $265,000 penalty to the SEC and agreed to replace the offending paragraph with the following, which permitted departed employees to not only collect financial bounties awarded by the SEC, but to also accept financial compensation from the EEOC, NLRB, and OSHA:

“Protected Rights.  Employee understands that nothing contained in this Agreement limits Employee’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”).  Employee further understands that this Agreement does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.  This Agreement does not limit Employee’s right to receive an award for information provided to any Government Agencies.”

One could argue that the SEC position only applies to waivers of bounties paid by the SEC, as opposed waivers of any right to receive any future or additional monies from the employer.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Rejects Whistleblowing Claims of Quarrelsome Employee

Last week, the federal Sixth Circuit Court of Appeals affirmed the dismissal of whistleblowing claims after a trial on the grounds that the employer was justified in terminating the plaintiff because of repeated interpersonal conflicts.  Ma v. AEP, Inc. No. 15-2105 (6^th Cir. 5-10-16).   The plaintiff had been fired for contributing to a dysfunctional department and us-and-them mentality despite a long history of superior job performance.  She claimed that she was fired for protesting an unsafe working environment.  Following a bench trial, the employer agreed that the plaintiff could not show that it was her safety concerns that motivated her termination.  On appeal, the Sixth Circuit affirmed.

According to the Court’s opinion, the plaintiff’s “engineering talents garnered her recognition for maintaining safety at AEP over her eleven-year career. But interpersonal conflict ultimately overshadowed her technical prowess . . .. Tempers flared and workflow slowed, culminating in a verbal altercation between” her and others after she made a safety complaint against another team and made another safety complaint when they objected.  Notwithstanding coaching on teamwork and professionalism, disciplinary action and an mandatory counseling, she continued  her combative behavior.  After a competing proposal was selected over her suggestion, she claimed it was unsafe and refused to work on it.  Believing that her safety objections was merely a continuation of her us-vs-them mentality, she was terminated.   Following a five-day bench trial, the court found that the plaintiff was fired for interpersonal shortcomings instead of legitimate safety objections.

The Energy Reorganization Act protects workers who report safety concerns from retaliatory termination. See 42 U.S.C. § 5851(a). To this end, the Act places an initial burden on employees to offer preponderating evidence that protected activity contributed to an adverse employment action; if the employee succeeds, the burden shifts to the employer to show by “clear and convincing evidence, that it would have taken the same unfavorable personnel action in the absence of such behavior.”

Despite this heightened burden of proof, the employer was found to have met it in this case (after lengthy and expensive pre-trial discovery and a week-long bench trial).  Despite the fact that the plaintiff was undisputedly fired after expressing protected safety concerns, the employer showed that it would have fired her without those safety concerns based on the manner of her expression.

Here, it was not Ma’s safety reports and LOTIC2 objections that irked colleagues, but rather the aggressive tone with which she delivered them. And testimony showed that colleagues avoided going to Ma with concerns because of her confrontational attitude and unwillingness to accept criticism. AEP elicited sufficient testimony on these points to support the district court’s conclusion that Ma’s inability to talk, collaborate, or otherwise work with peers caused her termination. See Am. Nuclear Res., Inc., 134 F.3d at 1295 (“[A]n employer may terminate an employee who behaves inappropriately, even if that behavior relates to a legitimate safety concern.”).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court Remands Incentive Compensation Claim and Dismisses Whistleblower and Reverse Discrimination Claims

Last week, a unanimous Franklin County Court of Appeals affirmed the dismissal on summary judgment of whistleblower and reverse race discrimination claims, but remanded the highly-compensated plaintiff’s equitable claims for a six-figure profit bonus on the grounds that the written bonus plan was unenforceable to bar his equitable claims because there was no evidence that the plaintiff knew about or had agreed to its terms and because the employer’s “promises” to award a bonus in its unfettered discretion were illusory. Pohmer v. JPMorgan Chase Bank, N.A., 2015-Ohio-1229 (3-31-15).  In affirming the dismissal of the race discrimination claim, the Court agreed that the plaintiff had not shown that the defendant employer was unusual in discriminating against the majority, that he was similarly situated to his supervisor, or that the explanation for his termination (violating the employer’s technology policy by inappropriate and personal use of his blackberry and email) was pretextual.  He could not prevail on his whistleblower claim because he could not prove that he had ever made any relevant complaints to his employer in writing and the trial court did not abuse its discretion in refusing to compel additional electronic discovery that was unlikely to reveal additional relevant evidence without exorbitant costs. 

According to the Court’s opinion, the plaintiff had received very favorable performance evaluations for over a decade, the most recent of which was in December 2011.  He had been assured in writing that he would be receiving a 4.5% profit bonus for 2011.  However, in a random review of his text messages and emails, the employer discovered that he had been sending inappropriate sexual-themed emails and messages to his children’s babysitter and co-workers in violation of the employer’s technology code of conduct.  He was soon terminated in mid-January 2012.  A few days later, the employer set the amount of discretionary incentive compensation and awarded bonuses to remaining employees a few weeks later.  The plaintiff filed suit and alleged, among other things, that he was subjected to reverse race discrimination because his supervisor also sent inappropriate emails and was not fired.  Second, he claimed that he had actually been fired in retaliation for reporting to his supervisor that one of the employer’s financial product campaigns was an illegal scam.  However, he could not produce any written evidence that he had ever made such an allegation prior to his termination despite the employer’s production of thousands of pages of emails and texts messages.  He also claimed that he was entitled to his profit bonus since he had earned it prior to his termination.

Incentive Compensation.  The trial court had dismissed his claim for his incentive compensation on the grounds that the employer’s Performance Based Incentive Compensation Plan (PBIC) was a binding implied-in-fact contract, thus barring any equitable claim under the theories of unjust enrichment or quantum meruit.   Pursuant to the terms of the PBIC, the Plaintiff was not entitled to any profit bonus or incentive compensation unless he was still employed on the date when the profit bonus was actually paid.  However, the Court of Appeals found that the PBIC could not be a contract since there was no evidence that the plaintiff even knew about the PBIC, let alone agreed to it.   All that the employer produced was an unsigned plan document and not any communications to the Plaintiff about the PBIC or indication that the Plaintiff’s employment and incentive compensation were subject to the PBIC.  Moreover, to the extent that the PBIC contained any promises, they were illusory (and thus, non-binding) since the employer retained “sole and absolute discretion” as to when, whether, and in what amount to award bonuses.  In contrast, the plaintiff produced evidence of a powerpoint presentation about the incentive compensation he was eligible to earn for that year and an email from his supervisor about the percentage of his profit bonus; neither exhibit made any reference to the PBIC or any requirement that he needed to still be employed on the date that the bonus was paid.

The doctrine of unjust enrichment “applies when a benefit is conferred and it would be inequitable to permit the benefitting party to retain the benefit without compensating the conferring party.” . . . A claim for quantum meruit shares the same essential elements as a claim for unjust enrichment, and both doctrines are equitable doctrines.  . . .  the two doctrines differ, however, when calculating damages.  The damages for unjust enrichment are " ' "the amount the defendant benefited," ' " while the damages for quantum meruit are " ' "the measure of the value of the plaintiff's services, less any damage suffered by the other party." ' "

 . . . 

"A contract is illusory only when by its terms the promisor retains an unlimited right to determine the nature or extent of his performance; the unlimited right, in effect, destroys his promise and thus makes it merely illusory." . . . . In deciding that the PBIC Plan is an illusory contract with respect to [the plaintiff], we do not mean to say that the PBIC Plan would be illusory under all circumstances. This is not a case where [the plaintiff] was made aware of the terms of the PBIC Plan and thereby assented to the PBIC's terms in exchange for his continued employment with JPMC.

Reverse Race Discrimination.  The Court of Appeals affirmed the dismissal of this claim because the Plaintiff failed to meet his prima facie case or show that the employer’s explanation was pretextual.  First, the Court adopted the heightened burden of proof for a reverse race discrimination claim, which requires evidence of “background circumstances supporting the inference that [the defendant employer] was the unusual employer who discriminated against non-minority employees.”  The plaintiff could not meet this burden, although he correctly argued that some courts have questioned the correctness of using a modified burden of proof in any race discrimination claim.    

In any event, the Court found that the Plaintiff did not identify any similarly situated non-white employees who were treated better.   The Plaintiff identified his supervisor for sending inappropriate personal emails because he only received a disciplinary warning, but the Court found him not to be similarly situated “in all respects” (i.e., “ 'all of the relevant aspects of his employment situation were "nearly identical" to those of the [comparable employee's] employment situation.'").  

Thus, to be deemed "similarly situated," "the comparables 'must have dealt with the same supervisor, have been subject to the same standards and have engaged in the same conduct without such differentiating or mitigating circumstances that would distinguish their conduct or the employer's treatment of them for it.'

They obviously did not report to the same supervisor.  “[A] supervisor's "position of authority within the company create[s] a meaningful distinction" that "explains [the employer's] different treatment of the two.” More importantly, the employer did not learn of the supervisor’s alleged misconduct until the plaintiff raised it after his termination (presumably during his deposition).  “Other factors may have been at play including a discrepancy in the volume, frequency, and level of inappropriateness contained in the emails of each of the two men.”  

Ultimately, the Court found that the plaintiff could not show that his termination for admittedly violating the employer’s code of conduct was pretextual.   He could not “demonstrate that the proffered reason ‘(1) has no basis in fact, (2) did not actually motivate the employer's challenged conduct, or (3) was insufficient to warrant the challenged conduct.’"  Importantly, he could not show that the employer knew of any other similar violations of the code of conduct (including that of his supervisor) at the time of the Plaintiff’s termination in January 2012.   

Whistleblowing.  The trial and appellate courts both concluded that the plaintiff could not prevail on his whistleblower claim because he could not satisfy the statutory requirement that the complaint be made in writing to the employer after first making a verbal report.  The employer had produced several thousand pages of documents in discovery, including emails and text messages.  The plaintiff insisted that he had texted and/or emailed his supervisor (in addition to personal conversations) about his objections to the legality of a product campaign.  However, his alleged objections were not reflected in the documents produced in discovery.  Therefore, he could not satisfy his statutory burden of proof under Ohio’s whistleblower statute.   

The Plaintiff filed a motion to compel a forensic examination of his email and text mail boxes to ensure that none of his messages were inappropriately deleted by the defendant employer.  However, the trial court denied that discovery motion on the grounds that it was “unlikely to lead to admissible evidence and disproportionately costly.”  The appellate court found this not to be an abuse of discretion in light of the thousands of pages produced in discovery.  Moreover, it noted that the Plaintiff’s  

argument has less to do with the adequacy of the discovery process and more to do with [his] dissatisfaction that he did not discover sufficient evidence to support his claims. The trial court noted it had made an effort throughout the case "to keep discovery proportionate to the issues, and to sensibly minimize the financial cost and time burden which electronic discovery might otherwise require."

Indeed, the supervisor denied ever receiving such a written report and the Plaintiff failed to mention any written objections about the product campaign in his own deposition.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court Decides TSA Whistleblowing Case on Statutory Construction

On Wednesday, the Supreme Court held that it violated a federal whistleblowing statute to dismiss a TSA agent for disclosing to the media in violation of a specific TSA regulation that air marshals had been pulled from overnight flights during a hijacking security warning.  DHS v. MacLean, No. 13-894 (1-21-15).  In that case, the whistleblowing statute at issue prohibited adverse employment actions against employees who disclosed information which they reasonably believed reflected a “violation of any law, rule or regulation” or “a substantial and specific danger to public health or safety” unless the disclosure was “specifically prohibited by law” or by an Executive order "in the interest of national defense or the conduct of foreign affairs.” The Court rejected the government's argument that the agent’s disclosure in violation of a TSA regulation came within the exception for disclosures “specifically prohibited by law” because the statute’s use of “law, rule, or regulation” and “by an Executive Order” meant that Congress did not equate in that statute “law” with “regulation.”  Therefore, the TSA regulation did not fit within the whistleblowing statute’s exception for “law.”   In addition, it would defeat the purpose of the whistleblowing statute to permit an agency to prohibit whistleblowing by regulation.  Finally, the statute underlying the TSA regulation did not specifically prohibit the disclosure of the marshal assignment information, and so, did not fit within the exception either.      In dissent, two justices would have found the Homeland Security Act to fit within the whistleblowing exception for “law” because the TSA had been mandated by that statute to promulgate the regulation prohibiting the disclosure of sensitive security information.

According to the Court’s opinion, the plaintiff defended his disclosure of TSA air marshal assignments on the grounds “that his disclosure was whistleblowing activity under 5 U. S. C. §2302(b)(8)(A), which protects employees who dis­close information that reveals “any violation of any law, rule, or regu­lation,” or “a substantial and specific danger to public health or safe­ty.”  In particular, the statute prohibits adverse employment actions because of:

 (A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences—

(i) any violation of any law, rule, or regulation, or

(ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety,

if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs;

His disclosure violated a TSA regulation which was authorized by the Homeland Security Act, which had directed the TSA to “‘prescribe regulations prohibiting the disclosure of infor­mation . . . if the Under Secretary decides that disclosur[e] would . . . be detrimental to the security of transportation.’ 49 U. S. C. §114(r)(1)(C).”   Accordingly, the “TSA promulgated regula­tions prohibiting the unauthorized disclosure of “sensitive security in­formation,” including “[s]pecific details of aviation security measures . . . [such as] information concerning spe­cific numbers of Federal Air Marshals, deployments or missions, and the methods involved in such operations,” 49 CFR §1520.7(j).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Finds Broad Statutory Whistleblowing Protection for Patient Abuse

Less than a week after rejecting a different whistleblower claim for not strictly complying with the applicable whistleblower statute, the Ohio Supreme Court this morning approved a whistleblower retaliation claim brought by a nurse who was terminated by a hospice employer after reporting suspected patient abuse to a nursing home and patient family. Hulsmeyer v. Hospice of Southwest Ohio, Inc., Slip Opinion No. 2014-Ohio-5511.  As reported here last year, the plaintiff alleged that she was terminated by her hospice employer in retaliation for reporting patient abuse (that had been reported to her by a subordinate) to the nursing home of the patient which had allegedly been abused and the patient’s family.  The employer had successfully argued to the trial court that her report was not protected by R.C. § 3721.24 because she did not report or threaten to report the potential patient abuse to the Ohio Director of Health.  On appeal, the Court held that an employee or contractor “who reports or indicates an intention to report suspected abuse or neglect of a long-term care-facility or residential-care-facility resident is not required to report or indicate an intent to report the suspected abuse or neglect to the Ohio director of health in order to state a claim for retaliatory discharge under R.C. 3721.24.”  The Court refused to address whether the plaintiff had stated a common law wrongful discharge claim in her complaint.

 According to the Court’s opinion, the plaintiff had alleged in her complaint that she had received a report from one of her subordinates that a patient had been bruised, presumably by the nursing home staff where she resided.  The nurse had taken pictures of the bruises.  The plaintiff had been advised by a social worker and staff physician to report this to the nursing home and the patient’s family.  She claims that she also reported this to her own boss before she discussed it with the nursing home and patient family.  However, a few weeks later, she was terminated for bringing the issue to the nursing home and patient family and authorizing the pictures to be taken of the patient without first informing or obtaining authorization from her employer.

The statute which prohibits retaliation against employees or contractor for reporting suspected patient abuse is silent about where the report must be made to come within coverage of the statutory protection.  R.C. § 3721.24 states in relevant part that: 

(A) No person or government entity shall retaliate against an employee or another individual used by the person or government entity to perform any work or services who, in good faith, makes a report of suspected abuse or neglect of a resident or misappropriation of the property of a resident; indicates an intention to make such a report; provides information during an investigation of suspected abuse, neglect, or misappropriation conducted by the director of health; or participates in a hearing conducted under section 3721.23 of the Revised Code or in any other administrative or judicial proceedings pertaining to  the suspected abuse, neglect, or misappropriation. For purposes of this division, retaliatory actions include discharging, demoting, or transferring the employee or other person, preparing a negative work performance evaluation of the employee or other person, reducing the benefits, pay, or work privileges of the employee or other person, and any other action intended to retaliate against the employee or other person.

The defendant employer argued that this silence makes the statute ambiguous and should be interpreted to refer to an earlier statutory section which covers licensed healthcare professionals and others, including residents of long-term care and residential facilities, at R.C. § 3721.22.  That section requires licensed healthcare professionals to report suspected abuse to the Director of Health, permits residents and others to make such reports and protects them from criminal and civil prosecution.   However, §3721.24 covers a different groups, such as any employees (rather than merely licensed professionals) and contractors.  The Court found this difference to be significant:

Providing employees broader reporting options than those found in R.C. 3721.22 is consistent with the purpose of preventing retaliation against employees. Employees may be more likely to report suspected abuse or neglect to someone other than the director of health, such as a resident’s family member or a coworker.   

The Court also found the anti-retaliation provision was not ambiguous by omitting where reports of suspected abuse were to be made.   

Because the General Assembly enacted R.C. 3721.22 and 3721.24 in the same bill, we presume that the absence of any requirement in R.C. 3721.24 that a report, or intent to report, suspected abuse or neglect must be made to the director of health was intentional. If the  General Assembly had intended to afford protection to only those employees who reported, or indicated an intention to report, suspected abuse or neglect to the director of health, it could have done so by inserting the words “to the director of health” after the word “report” in R.C. 3721.24(A), or by incorporating the requirement from R.C. 3721.22. It did neither. And we will not add those words by judicial fiat.

The lone dissent agreed with the employer that §3721.24 should be interpreted to be consistent with §3721.22.  However, Justice French also would have found a public policy wrongful discharge claim to exist from the allegations in the Complaint.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Rejects Whistleblower Retaliation Claim Where Plaintiff Did Not Comply with Statute.

This morning, the Ohio Supreme Court reinstated the summary judgment of a public employer which had been accused of terminating a whistleblower in retaliation for reporting environmental misconduct involving its wastewater treatment plant. Lee v. Cardington, Slip Opinion No. 2014-Ohio-5458.  The Court found that the plaintiff did not satisfy the very technical requirements of Ohio’s whistleblower statute, even though he had been “instrumental in exposing crimes related to an automotive-parts manufacturer’s discharge of hazardous chemicals into the public water supply.”  Most notably, the crimes he exposed involved a local employer and not his own employer.   However, the plaintiff also failed to submit a written report to his employer (to give it the opportunity to cure any legal violations about its failure to make equipment repairs) before he reported his concerns to the EPA.

According to the Court’s opinion (and as previously described here last year), the plaintiff supervised his employer’s wastewater treatment plant and discovered that a local employer was discharging a hazardous chemical which caused over $750K in damage to the treatment plant.  After noticing significant accumulations of foam at the plant and that the treated sewage he used as farm fertilizer was harming plants, he asked the Ohio EPA to investigate.  EPA eliminated the treatment plant as a source of the pollution.   The US EPA also ruled out the treatment plant and ultimately found a local manufacturer to be responsible.  The plaintiff then had several disagreements with the Village Administrator (his boss) about how to repair the problems at the plant caused by the pollution and whether delays and uncorrected repairs would cause inadequate wastewater treatment discharged into a public water supply. Mostly, he felt that his suggestions would be more cost effective and efficient than other remedies being considered.   He took his concerns to the Village Council, where he conceded that the Village had not violated its operating permit yet, but would in the future if repairs were not made.   A few months later, the plaintiff was terminated for “insubordination, failure to complete jobs, personal use of village property, and taking time off without notice.”  He filed suit alleging retaliation. 

 

R.C. 4113.52(D) provides a cause of action to any employee who suffers disciplinary or retaliatory action “as a result of * * * having filed a report under division (A)” of R.C. 4113.52. The question here is whether Lee qualified for protection under R.C. 4113.52(A)(1) or (2), which identify two forms of whistleblowing. 

                . . .

R.C. 4113.52(A)(1) applies when an employee “becomes aware in the course of the employee’s employment of a violation of any state or federal statute or any ordinance or regulation of a political subdivision.” R.C. 4113.52(A)(1)(a). The violation must be one that the “employer has authority to correct” and that the “employee reasonably believes * * * is a criminal offense that is likely to cause an imminent risk of physical harm to persons or a hazard to public health or safety, a felony, or an improper solicitation for a contribution.” Id.

{¶ 21} To report a violation, the employee must start with his or her employer. The employee must orally report the violation to his or her supervisor or other responsible officer and “subsequently shall file with that supervisor or officer a written report that provides sufficient detail to identify and describe the violation.” Id. If the employer does not correct or make a good faith effort to correct the violation within 24 hours, the employee may then notify outside authorities. Id.

The plaintiff did not prove that he ever submitted a written report to the Village (or his supervisor) about the Village violating any law.  He made a report about equipment failures and had conceded that the Village had not yet violated its operating permit.  The equipment failures did not constitute a crime.  Further, making recommendations about how to avoid violating the operating permit in the future did not qualify as a report of a crime under the statute. 

Moreover, his oral reports were too late under the whistleblower statute since they were made after he reported his concerns to the EPA about the pollution.   Therefore, he never gave his employer the opportunity to correct any potential crimes or legal violations.

Under R.C. 4113.52(A)(2), an “employee qualifies for protection”  

only after (1) discovering a criminal violation of R.C. Chapter 3704, 3734, 6109, or 6111 and (2) providing oral or written notification to “any appropriate public official or agency that has regulatory authority over the employer and the industry, trade, or business in which the employer is engaged.” R.C.  4113.52(A)(2).

The plaintiff did not qualify for protection under this portion of the whistleblower statute because there was no evidence that he communicated any concerns about the Village violating the law – only about the foam being generated by the local manufacturer.   The EPA told him that the treatment plant was not a source of the pollution, destroying any reasonable basis he may have had for making a report about the plant.

The Court only considered the Village’s appeal of the whistleblower claim and not any possible cross appeal of the dismissal of the plaintiff’s wrongful discharge in violation of public policy claim (which had previously been dismissed since it was supposedly adequately addressed by the whistleblower statute).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Court of Appeals: Ohio Public Policy Exists to Support Wrongful Discharge Claims for Reporting Unsafe Workplace, Substance Abuse and Patient Mistreatment

Last week, a panel of the Franklin County Court of Appeals unanimously reversed an employer’s summary judgment in a wrongful discharge case and found a specific statutory duty for employers to provide a safe workplace that was void of patient malpractice and drug abuse.  Blackburn v. Am. Dental Ctrs., 2014-Ohio-5329.  In that case, a dental office hired a dentist for less than six months in 2002.  In that time, he became the subject of a number of complaints by the plaintiffs (and presumably others).  One of the plaintiffs was terminated shortly after the dentist left and another ceased coming to work approximately five months later, after objecting to unsafe practices (most from the former dentist) involving employees and patients. They both filed a number of claims, including a whistleblower claim which was dismissed on summary judgment, and public policy discharge claims based on an unsafe workplace, mistreatment of patients and workplace substance abuse. The Court reiterated that a plaintiff may pursue a public policy wrongful discharge claim even if her whistleblower claim fails as long as she can identify an independent public policy apart from the failed statutory whistleblower claim.  Further, the plaintiff is not required to specifically identify the statute evincing the public policy in her complaint and can survive summary judgment by identifying the statute at that time.  Rejecting the holding of a different Ohio Court of Appeals, the  Court found Ohio Revised Code §§ 4101.11 and 4101.12 to evince a public policy prohibiting retaliation by employers against employees who report workplace conditions that jeopardize staff and dental patient safety.  Moreover, the Court found these statutes broad enough to also constitute a public policy against alleged workplace drug abuse which poses “threat to employee and patient safety.”

According to the Court’s opinion, the plaintiffs filed a number of claims in April 2008, including whistleblowing, wrongful discharge in violation of public policy and slander.  The employer filed counter-claims against them as well.

[Plaintiffs] alleged . . . that, after [the employer] hired Dr. Allen, they began investigating Dr. Allen's background and discovered he had lost his dentistry license in Michigan, had been convicted of criminal offenses in Michigan, and under the terms of his sentence, was not supposed to leave Michigan. [Plaintiffs] also claimed to have witnessed Dr. Allen engage in substandard and dangerous patient treatment that resulted in permanent damage or loss of teeth. Much of this involved unnecessary dental procedures or deliberately botched work to generate further treatment and thus higher billings for [the employer] and Dr. Allen. [Plaintiffs] further claimed to have witnessed Dr. Allen at work intoxicated, hung over, smelling of alcohol, and falling asleep while examining patients. [Plaintiffs] claimed that they informed their supervisors . . . of these issues regarding Dr. Allen, but rather than act to protect patients from this conduct, ADC management and staff retaliated against appellants by, among other things, harassing appellants, warning them not to lodge further complaints, threatening them with legal action for defamation, reducing their wages, assigning them unfavorable work duties, and denying promotions.

  . . . .

With respect to workplace safety, both [plaintiffs] claim to have reported issues arising from Dr. Allen's conduct, generally alleging that he physically accosted or harassed  [them], threatened them, and had other violent confrontations in the workplace, including an instance in which another dentist in the same office brought a machete to work to confront Dr. Allen. Both [plaintiffs] asserted that, when they brought these problems to the attention of their superiors, they were told to ignore the situation or face termination.

 . . .

 . . . In this case, the record is replete with evidence of the professional shortcomings of Dr. Allen. The evidence indicates he routinely worked when hung over or intoxicated to the point of dysfunction, and the results for some patients were disfiguring, painful, and permanent. He intentionally botched simple procedures in order to generate lucrative repair work after the fact. Most relevant to the jeopardy element, the materials submitted by appellants, if believed, make it clear that their terminations were in direct response to appellants' attempts to warn their employer about the grossly substandard care provided by Dr. Allen to ADC patients.

The trial court granted summary judgment to the employer on most of the plaintiff’s claims in September 2010 (at which time the remaining claims and counter-claims were voluntarily dismissed).   The Court of Appeals initially affirmed the dismissal of most of the claims (including the whistleblower claims), but reversed on the public policy wrongful discharge claim:

we concluded that the trial court erred when it held that as a matter of law appellants had insufficiently pleaded in their complaint the claims for public policy wrongful discharge based on drug and substance abuse in the workplace, patient safety, and workplace safety.

 . . . .

The failure of appellants' whistleblower claims does not preclude a common law claim for wrongful discharge in violation of public policy, because the whistleblower statute supplements rather than replaces the common law cause of action.  . . . However, if an employee fails to strictly comply with the whistleblower requirements of R.C. 4113.52, as we found in Blackburn, the employee cannot base a Greeley claim solely upon the public policy embodied in that statute. Id. at 153. Rather, the employee must identify an independent source of public policy to support her claim.

On remand, the trial again dismissed the wrongful discharge claim on the basis that the sources of public policy were not sufficiently identified in the complaint.  The Court of Appeals reversed since the public policy sources were sufficiently identified at the summary judgment stage:

They cite to two specific sections of the Ohio Revised Code, R.C. 4101.11 and 4101.12, as specific statutory support for their proposed public policy promoting workplace safety for employees and patients. . . .

These sections provide as follows:

R.C. 4101.11. Duty of employer to protect employees and frequenters Every employer shall furnish employment which is safe for the employees engaged therein, shall furnish a place of employment which shall be safe for the employees therein and for frequenters thereof, shall furnish and use safety devices and safeguards, shall adopt and use methods and processes, follow and obey orders, and prescribe hours of labor reasonably adequate to render such employment and places of employment safe, and shall do every other thing reasonably necessary to protect the life, health, safety, and welfare of such employees and frequenters.

R.C. 4101.12.  Duty of employer to furnish safe place of employment No employer shall require, permit, or suffer any employee to go or be in any employment or place of employment which is not safe, and no such employer shall fail to furnish, provide, and use safety devices and safeguards, or fail to obey and follow orders or to adopt and use methods and processes reasonably adequate to render such employment and place of employment safe. No employer shall fail to do every other thing reasonably necessary to protect the life, health, safety, and welfare of such employees or frequenters. No such employer or other person shall construct, occupy, or maintain any place of employment that is not safe.

 . . .

We accordingly find that these statutes together establish that there exists a clear public policy that is manifested in a state or federal constitution, statute, or administrative regulation in Ohio favoring workplace safety for employees and frequenters.  . . . There is a statewide policy prohibiting termination of employees who report conduct and practices in a dental practice that present a risk of severe harm to patients or staff.

 . . . .

We accordingly find the trial court erred in concluding that there is no Ohio public policy against retaliation by employers against employees who report workplace conditions that jeopardize staff and dental patient safety.  . . .. In so holding, based on R.C. 4101.11 and 4101.12, we specifically disagree with the Sixth District's holding in Whitaker v. FirstEnergy Operating Co., 6th Dist. No. OT-12-021, 2013-Ohio-3856, ¶ 25, which found those statutes too "general and broad" to support such a claim, and agree with the dissent in that case. (Yarbrough, J., dissenting.)

With respect to the allegation that there is a clear statewide public policy against drug abuse in the workplace, other than the general criminalization of some types of drug use, we find that this public policy is essentially subsumed into the two others cited. To the extent the alleged drug abuse is a component of the threat to employee and patient safety, it falls under the workplace safety rubric generally rather than as an independent public policy grounds.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.