High court reverses Court of Appeals in whistleblower case

By Lee Dryden

The Daily Record Newswire

DETROIT - A stove is at the center of a Whistleblower Protection Act dispute at a domestic violence shelter.

The Michigan Supreme Court recently ruled in Pace v. Edel-Harrelson that a woman who said she was fired after reporting a co-worker planned to misuse funds at the Eaton County facility cannot sue under the act. The high court stated whistleblower protection does not cover "future, planned, or anticipated acts amounting to a violation or a suspected violation of a law."

The high court reversed the Michigan Court of Appeals, which ruled in a published opinion, Pace v. Edel-Harrelson, et al., that reporting "a good faith and reasonable belief" that a violation of the law is being planned is enough to trigger WPA protections. The appeals court reversed the trial court's decision to grant the defendants summary disposition.

Plaintiff Barbara Pace said she was terminated after reporting that a co-worker told her she planned to use grant funds at the SIREN shelter to purchase a stove for her daughter and implied Pace should cover the transaction by documenting it under a client's name.

The co-worker, Christy Long, denied purchasing a stove or discussing any such plans. Jessica Edel-Harrelson, SIREN's executive director, stated Pace was fired for unrelated misconduct.

Pace's attorney, Lisa C. Ward, said Pace believed the stove was already purchased and is entitled to WPA protection from losing her job.

"My client reporting that - she was trying to do her duty and she got fired for that," Ward said.

Melinda A. Balian, who represents Edel-Harrelson, said Pace admitted she had no knowledge whether a stove was ever purchased and provided no evidence of such a transaction. She said the high court relied on the statute when reversing the Court of Appeals.

"The WPA does not expand protection for planned or future violations of law or planned or future suspected violations of law," Balian said. "Accordingly, because the statutory language is unambiguous, appellate courts presume that the Legislature intended the plainly expressed meaning of the statute as it's currently drafted, and further judicial construction is neither permitted nor required."

All Supreme Court justices signed the decision except Justice Joan L. Larsen, who did not participated in the case.

Varying viewpoints

Ward pointed to a footnote in the Court of Appeals opinion that mentioned conflicting evidence whether Long ever purchased the stove.

"Plaintiff cited a receipt for a washer, dated May 21, 2012, that contained a notation stating '05/23/12 Stove picked up.' However, in a letter dated April 22, 2013 (after plaintiff filed the instant complaint), the president of the subject vendor asserted that the 'stove' notation was a clerical error and should have referred to the washer described in the receipt; an updated receipt was provided with the correct notation. Plaintiff does assert that because SIREN had a line of credit with this vendor, it is possible that Long purchased the stove without leaving a paper trail," according to the footnote in the appeals court decision.

"Clerical errors are hard to explain - it's not like they misspelled washer, it's stove," Ward said.

Ward added that the Supreme Court didn't address the receipt discrepancy detailed in the appeals court decision. She said there was evidence that a stove was picked up.

"I was disappointed the Michigan Supreme Court didn't touch on that evidence," she said. "I don't believe they dug deep enough to consider the evidence we had."

Ward pointed out that all three appeals court judges - Douglas B. Shapiro, Elizabeth L. Gleicher and Amy Ronayne Krause - agreed in the February 2015 decision to reverse the trial court.

The high court opinion stated there is no indication that Pace reported to Edel-Harrelson her belief that Long had already purchased the stove.

"Because plaintiff reported a suspected future violation of a law, not a suspected existing violation, plaintiff did not engage in 'protected activity' for purposes of the WPA, regardless of her deposition testimony pertaining to her subjective belief at the time of her report to Edel-Harrelson," the opinion stated.

Balian, of Foley & Mansfield, said discussion of a "future" violation is relevant because Pace "did not report an ongoing violation or suspected violation of law."

"She allegedly reported a 'future' violation or suspected violation of law, something that may, or may not, happen in the future, which is not protected activity under the Michigan WPA," Balian said.

Balian pointed out that the high court mentioned the Minnesota Legislature adding "planned violation" to violation and suspected violation in Whistleblower Act language.

"The addition of that phrase is telling as it signals an understanding that the words 'violation or suspected violation', without some other qualifier, means a present tense act, not an act contemplated to be done in the future," she said.

But the Court of Appeals opinion stated requiring someone to wait to report an incident until they are sure the violation is complete is inconsistent with the intent of the WPA.

"Defendants' argument suggests that no matter how serious a violation is being planned, an employee who learns of the plan must (a) report the planned violation without the benefit of the protections the Legislature provided in the WPA; (b) remain silent until the violation occurs, or; (c) undertake her own investigation to determine whether and when the planned violation has been completed. The first two options are inconsistent with the language of the WPA and the third option would be foolish, if not dangerous and potentially unlawful."

Pace testified that she contacted two of her supervisors to inform them of Long's plans. When they didn't act, she reported her incident with Long directly to Edel-Harrelson in December 2011 or early January 2012.

"Plaintiff stated in her deposition that, at that time, she believed that Long had already purchased the stove with grant funds," the Supreme Court opinion stated. "Plaintiff alleges that Edel-Harrelson told plaintiff that she would look into the matter, but Edel-Harrelson claimed in a later deposition that she had no recollection of this discussion with plaintiff."

SIREN terminated Pace's employment on Jan. 18, 2012.

"Plaintiff alleges that she was terminated for reporting her conversation with Long to Edel-Harrelson," the opinion stated. "SIREN's stated reason for terminating plaintiff's employment was plaintiff's allegedly harassing and intimidating behavior toward a fellow employee in violation of defendants' employment policies in a January 2012 incident. The termination letter stated that plaintiff was terminated because she 'engaged in behavior that resulted in fear and intimidation in coworkers, and which was witnessed by three employees.'"

Pace denied engaging in physically intimidating behavior.

What's next?

Balian said this case sets a precedent.

"It provides a specific ruling that the Michigan WPA does not provide protection for future violations or suspected violations of law," she said.

Ward, however, thinks it could impact future cases in a negative manner.

"This may have a chilling effect on what people are willing to report," she said.

Ward said she needs to speak with her client to decide the next step in the case.

She said the high court didn't grant leave to appeal so she wasn't able to submit a merits brief.

"There were trial issues, issues of fact, that would be better heard by the jury," she said. "That is what a jury trial is for - to decide."

Published: Fri, Feb 12, 2016

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