Amendments needed to Whistleblowers' Act

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Louis B. Eble

In light of the finger pointing and allegations of criminal wrongdoing that have arisen from the Flint water crisis, it may be an appropriate time for the Michigan Legislature to amend the Michigan Whistleblowers' Protection Act (WPA) to provide better protection to the rare employee who has the courage to report an employer's violation or suspected violation of the law. Under the current status of the WPA, an employee who suffers retaliation after reporting his or her employer is at risk of having no protection under the Act.

The WPA prevents an employer from discharging, threatening, or otherwise discriminating against an employee regarding the employee's compensation, terms, conditions, location or privileges of employment because the employee reports or is about to report a violation or suspected violated of law to a public body, referred to as engaging in "protected activity." Unless the employee acts quickly, however, there is no protection under the Act. Under the WPA, the employee must file an action for relief within 90 days of the employer's retaliatory action (e.g., discharge). This is an extremely short statute of limitations as compared to other statutes governing the workplace. For example, under the Michigan Elliot-Larsen Civil Rights Act, an employee has three years within which to file a complaint alleging retaliation.

Moreover, while the United States Supreme Court has provided greater protection to employees alleging retaliation through its interpretation of federal anti-discrimination laws, the Michigan Supreme Court has gone in the opposite direction when interpreting the WPA. Ironically, under its interpretation of the WPA, an employee with a written contract often has less protection than an at-will employee. Worse, an employer's plan to take a future adverse action against an employee is enough to start the already short 90-day limitations period within which an employee may bring a lawsuit, but an employee's report of an employer's plan to commit a future violation of the law is not enough to provide a whistleblowing employee any protection under the Act.

In 2014, in Richard L. Wurtz v. Beecher Metropolitan District, the Michigan Supreme Court ruled that an employee who reports an employer's suspected violation of law and is working under a fixed-term contract has no recourse under the WPA if the employer fails to renew his or her contract because of the employee's protected activity. The Court reasoned that a contract employee seeking a new term of employment should be treated the same as a job applicant for purposes of the WPA. Because the WPA does not cover a prospective employee, a contract employee seeking a new term of employment is not covered by the Act. On the other hand, even though an at-will employee has no guarantee of future employment, he or she is protected by the WPA if discharged as a result of engaging in protected activity.

Relying on Wurtz, the Michigan Court of Appeals recently ruled, in Nichole Lanette Bradford v. MGH Family Health Center, et al, that a contract employee whose contract had been renewed annually for "numerous years" but was not renewed shortly after engaging in protected activity could not bring a claim pursuant to the WPA. In addition, the COA found that the lawsuit was untimely because it was filed outside the 90-day statute of limitations. Although Bradford filed her lawsuit within 90 days of her employer's failure to renew her contract, her lawsuit was untimely because the employer had notified her on October 14, 2013, more than 90 days before the filing of her lawsuit, that her contract expiring on December 1, 2013, would not be renewed.

On February 1, 2016, in Barbara Pace v. Edel-Harrelson, et al, the Michigan Supreme Court ruled that the WPA does not protect an employee who reports an employer or co-worker who is planning to commit a violation of the law. In other words, if an employee attempts to prevent a crime from occurring by reporting it before it happens, the employee may be discharged by the employer without violating the WPA. On the other hand, if the employee lets a crime take place before reporting the misconduct, which at times will result in irreversible damage, the employee is protected by the WPA. The purpose of the WPA is the protection of the public by removing barriers that may interfere with employees' efforts to report violations of the law. To require that a crime must be completed, or is ongoing, before implicating the WPA undermines its purpose.

I believe that the Michigan Legislature needs to address the WPA's limitations by making the following changes to the Act: (1) increase the statute of limitations to one year; (2) extend its protections to prospective employees; and (3) provide protection to an employee or prospective employee who reports a violation, suspected violation, or planned violation of any federal or state law.

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Louis B. Eble is a litigation and employment law attorney in Bloomfield Hills.

Published: Mon, Apr 11, 2016

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