A variety of state and federal laws protect employees against workplace retaliation for reporting violations of law, including the Minnesota Whistleblower Act (the “MWA”). In apparent response to several court decisions narrowing the MWA’s application, the Minnesota Legislature in May 2013 overhauled the statute, expanding its coverage and providing definitions for some previously undefined terms. Unfortunately, the revised law was not a model of clarity, leaving some questions open. This article will provide an overview of the statute and recent cases interpreting it.
Under the MWA, an employer may not “discharge, discipline, threaten, otherwise discriminate against, or penalize an employee” for reporting a violation, suspected violation or planned violation of law to an employer, government body or law enforcement official. Minn. Stat. § 181.932. The report must be made in good faith, defined as disclosures (1) not known to be false, or (2) not made in reckless disregard for the truth. Minn. Stat. § 181.931. Law, for MWA purposes, means federal law, state law, a rule adopted under a law, or, following the 2013 amendments, the “common law” (e.g., a breach of contract with a customer). “Governmental bodies” include law enforcement and administrative agencies, such as the Internal Revenue Service, the Minnesota Department of Agriculture or the Minneapolis Health Department. Unlike some employment statutes, the MWA applies to all public and private employers in Minnesota, regardless of size. Only current employees are protected, however, not former ones. Absey v. Dish Network Service, LLC (Minn. App. 2013) (no claim based on an employer’s failure to rehire, regardless of timing of report). MWA claims are subject to a generous 6-year statute of limitations. Ford v. Minneapolis Public Schools (Minn. 2016).
To prevail in an MWA lawsuit, an employee must have engaged in statutorily protected conduct and been penalized for doing so. Indirect or circumstantial evidence will suffice, and may include close proximity in time between the report and the alleged acts of retaliation. Pope v. ESA Services, Inc. (8th Cir. 2005) (5 months deemed too long to show causation). Fundamentally, the whistleblower’s report must have been made for the purpose exposing illegal conduct. Reports for other purposes, such as trying to get a co-worker fired, do not qualify. Prior employer knowledge of the violations being reported will defeat a MWA claim, unless the employee doesn’t know the employer knows it or the report is made to a government official. Obst v. Microton, Inc. (Minn. 2000). The employee need not identify the specific law he suspects was violated in his report, nor need he be factually correct about allegations he reports in good faith. However, but there must be some actual law, rule or (following the 2013 amendments) common law implicated in the report. Kratzer v. Welsh Cos. (Minn. 2009). That is, the acts or omissions reported, if correct, must violate some actual law or rule, or (following the 2013 amendments) breach a contract or support a tort claim. Schwab v. Altaquip LLC (D. Minn. 2015). By contrast, complaints about “matters of office and personnel management” or violations of “internal procedures” are not statutorily protected conduct under the MWA. McCracken v. Carleton College (D. Minn. 2013); Schwab, supra. The courts to date have not delineated the boundary between employment policy and contract under the amended statute. Presumably, complaints about unpaid vacation pay would qualify, as opposed to (say) violations of a workplace fragrance or social media policy.
Beginning with the 2010 decision of Kidwell v. Sybaritic, Minnesota courts limited the universe of potential MWA plaintiffs through a series of restrictive readings of the statute’s “good faith” requirement. In Kidwell, the Minnesota Supreme Court ruled that an employee’s report of wrongdoing within the normal chain of command cannot, by definition, qualify as whistleblowing, if the employee was under a duty to make the report in question. As explained by the court, “when an employee performs the duties of his or her job, the employee acts not with the purpose of exposing an illegality but, rather, only with the purpose of promoting the employer’s interests.” The holding in Kidwell was applied in subsequent cases, including the 2011 Joyce v. State decision, involving a prison security office fired after he reported that pharmacy doors were not being properly secured, allowing inmates unauthorized access to narcotics. In dismissing the MWA claim, the court relied on a list of job duties set forth in his written Position Description, and concluded as a matter of law that the plaintiff’s report to the prison’s warden fell within the “normal chain of command.”
No case has been found addressing whether the statutory changes effectively overruled the Kidwell “job duties exception.” Although arguments can be made both ways, the better argument, in my view, is that it does. The modified statute for the first time defines the terms “good faith” and “report.” An employee whose duties include reporting illegality still acts in good faith, which the statute basically defines to be an absence of bad faith – a report known to be false or made in reckless disregard of the truth. Likewise, the term report is broad enough to encompass communications falling within an employee’s job duties: any “verbal, written, or electronic communication by an employee about an actual, suspected, or planned violation of a statute, regulation, or common law, whether committed by an employer or a third party.”
Uncertainty also remains as to the continuing validity of the court-made rule requiring that any MWA report have as its purpose protecting the general public, or at least one or more individuals other than or in addition to the whistleblower herself. In a case predating the legislative changes, the court in Biffert v. Nick Devries State Farm Ins. (Minn. App. 2013) dismissed the legal claim of an employee fired after reporting to the Department of Labor that her employer unlawfully denied her access to earnings statements. Interpreting prior court precedents, it concluded that a good-faith report “must be made for the purpose of protecting someone in addition to the reporter.” Again, no court to date has attempted to square this holding with the newly defined term “good faith,” which contains no requirement that a report be made for the protection of the general public. One court in a case based on post-amendment events noted in passing that the report there was “not made for appellant’s own benefit,” but the precise question of statutory interpretation was not, apparently, before the court. Kirk v. Dept. of Transp. (Minn. App. 2015). The better argument, in my opinion, is that Biffert is effectively overruled. Time will tell, however, whether Minnesota’s appellate courts agree.