The Federal Credit Union Act, 12 U.S.C. sec. 1790b, makes it unlawful to retaliate against a whistleblower who engages in certain protected activity. The statute states as follows:
No insured credit union may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee (or any person acting pursuant to the request of the employee) provided information to the [National Credit Union Administration] Board or the Attorney General regarding any possible violation of any law or regulation by the credit union or any director, officer, or employee of the credit union.
The Fifth Circuit recently identified in Schroeder v. Greater New Orleans Federal Credit Union, No. 10-31169 (December 19, 2011), the elements of a cause of action for violation of this statute as follows: (1) that the plaintiff-employee engaged in a protected activity; (2) that the employer credit union took adverse employment action against him or her; and, (3) that a causal link exists between the protected activity and the adverse employment action.
The Fifth Circuit followed earlier decisions by the First Circuit, Simas v. First Citizens Federal Credit Union, 170 F.3d 37 (1st Cir. 1999), and the Sixth Circuit, McNett v Hardin Community Federal Credit Union, 118 Fed.Appx. 960 (6th Cir. 2004), for this holding.
A tax employee, who claimed that he was fired in retaliation for his whistleblowing reports of tax fraud, may pursue claims and remedies under the Racketeering and Corrupt Organizations Act (RICO), 18 U.S.C. secs. 1962(c), (d), the Seventh Circuit ruled recently in DeGuelle v. Camilli, No. 10-2172 (7th Cir., December 15, 2011). The ruling reversed a district court's dismissal of the case.
Michael DeGuelle was employed in the tax department of S.C. Johnson & Son, Inc., a company with over 120,000 employees world-wide. He learned that the company had received $5 million plus in improper foreign tax credits due to an IRS auditing error. He reported the discovery to his supervisor, Wenzel, who told him to destroy records to keep the IRS from finding out the truth and to alter some relevant returns. This was the first instance, according to the court's opinion, where records were altered or destroyed and falsified returns mailed to the IRS. The court's opinion recites a number of disturbing instances and transactions that followed in the next few years.
DeGuelle, according to the court's opinion, met with much grief for bringing to light the company's wrongdoing. His supervisor, Wenzel, became highly antagonistic toward him and, at times, physically aggressive. DeGuelle received a procedurally irregular and highly negative mid-year performance review that followed only a few months his receipt of an award for outstanding job performance, had the company's human resources department acknowledge that his negative review was in retaliation for his whistleblowing activities, and received an offer to have his attorney's fees paid in exchange for signing a release of claims and confidentiality agreement the same day that he said that he would file a Sarbanes-Oxley whistleblower complaint with the Department of Labor. DeGuelle did file a complaint with the DOL and attached financial statements, tax documents and internal emails to his complaint. Subsequently, he was offered one year salary in exchange for his resignation, release of all claims and signing of a confidentiality agreement. Subsequently and after DeGuelle declined the resignation etc. offer, he was fired for wrongfully taking and disclosing company documents and for being untruthful during the company's investigation of his reports.
DeGuelle filed suit following his termination and pleaded various claims including two under RICO, 18 U.S.C. 1962(c) and (d). The district court dismissed his claims on the grounds that the retaliation against DeGuelle was unrelated to his reports of alleged tax fraud by his employer. This remarkably erroneous ruling was met with strong criticism by the Seventh Circuit:
When an employer retaliates against an employee, there is always an underlying motivation. In this case, for example, the motivation was to retaliate against DeGuelle for disclosing the tax scheme. Retaliatory acts are inherently connected to the underlying wrongdoing exposed by the whistleblower. Although there may not be the same victims or results, in most cases retaliatory acts and the underlying scheme "are interrelated by distinguishing characteristics and are not isolated events."
Accordingly, the Seventh Circuit reinstated DeGuelle's RICO claims and rejected decisions by other courts that have not permitted RICO claims in similar circumstances.
Although the court's opinion is not clear exactly what company documents the employer claimed that DeGuelle wrongfully possessed and/or disclosed, if those documents are the ones that DeGuelle tendered with his whistleblower complaint to the Department of Labor, the company's reliance on that disclosure may raise some of the issues discussed in an earlier post on this blog, Can A Policy Violation Also Be Protected Activity?
Some employers require injured workers to obtain full medical releases to return to work certifying that they are "100% healed" and/or have "no restrictions" of any kind. Do these type policies violate the Americans With Disabilities Act (ADA)?
Courts have consistently found that policies prohibiting injured employees from returning to work unless they can do so "without restrictions" violate the ADA. The Ninth Circuit, in McGregor v. National R.R. Passenger Corp, 187 F.3d 1113, 1116 (9th Cir. 1999), explained the ADA violation as follows:
[a] "100% healed" or "fully healed" policy discriminates against qualified individuals with disabilities because such a policy permits employers to substitute a determination of whether a qualified individual is "100% healed" from their injury for the required individual assessment whether the qualified individual is able to perform the essential functions of his or her job either with or without accommodation.
Other courts have been no less emphatic:
Henderson v. Ardco, Inc., 247 F.3d 645, 653 (6th Cir. 2001)("All courts that have examined the question . . . agree that a 100% rule is impermissible as to a disabled person.")
Hutchinson v. UPS, 883 F.Supp. 379, 397 (N.D. Iowa 1995)("Such a policy would on its face 'discriminate against a qualified individual with a disability because of the disability of such individual in regard to . . . terms, conditions, and privileges of employment.'")
Bearshield v. John Morrell & Co., 570 N.W.2d 915, 923–924 (Iowa 1997) (evidence could support finding that employer perceived plaintiff as having disability if its refusal to allow plaintiff to return to work was based on its fear of higher costs, as reflected by company's “100% healed” policy, rather than on individualized assessment, as required by ADA)
Warmsley v. New York City Transit Authority, 308 F. Supp. 2d 114, 122 (E.D.N.Y. 2004) (“Courts have ‘consistently found’ that such ‘100% healed’ or ‘fully healed’ policies violate the ADA")
Meling v. St. Francis College, 3 F. Supp. 2d 267 (E.D.N.Y. 1998) (finding such policy “simply defies the ADA,” and justifies jury's punitive damage award)
Heise v. Genuine Parts Co., 900 F.Supp. 1137, 1154 n.10 (D. Minn. 1995)(holding that a "must be cured" or "100% healed" policy is a per se violation of the ADA because the policy does not allow a case-by-case assessment of an individual's ability to perform essential functions of the individual's job, with or without accommodation)
Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 698-99 (7th Cir. 1998) (general physical fitness criterion, like “100% healed” and “must be cured” policies violate the ADA)
A claim of wrongful discharge under Kentucky law arises where an employee's discharge from employment in contrary to public policy. The two prime examples are (1) where the employee is fired for refusing to violate a law in the course of his or her employment; and, (2) where the reason for discharge was the employee's exercise of a statutory right. Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985). The Kentucky Supreme Court relied on a Michigan case, Suchodolski v. Michigan Consolidated Gas Company, 316 N.W.2d 710 (Mich. 1982), for these clarifications.
Does a wrongful discharge under Kentucky law require proof that the employer ordered the employee to violate the law? Kentucky courts are yet to squarely address this question in a published opinion. The Sixth Circuit's recent decision in Morrison v. B. Braun, No. 10-1548 (6th Cir., December 8, 2011), should provide some guidance since it relied upon Suchodolski. The Sixth Circuit, in an opinion authored by Judge Boyce Martin, rejected the employer's argument that the discharged employee must prove that she was ordered to violate the law by her employer:
Courts applying Michigan law have consistently defined the wrongful discharge tort at issue here as an employer's termination of an employee because of the employee's "failure or refusal to violate a law in the course of employment." No Michigan court has defined this cause of action to require a plaintiff to show that the employer directed him or her to violate the law.
Can a policy violation also be protected activity? Here's the scenario: a client in an employment discrimination case secretly tape-records conversations and discussions in her workplace because she believes she is being subjected to gender discrimination (such a recording would be legal in Kentucky because the client, the recorder, consents to the recording). But the employer has a policy forbidding tape-recording in the workplace. After the client is fired and files a gender discrimination suit, the employer learns of the recordings and contends that her remedies should be limited because this violation of policy would have justified her firing. This is known as the after-acquired evidence doctrine discussed by the Supreme Court in McKennon v. Nashville Banner, 513 U.S. 352 (1995). Some courts recognize the problems that employers raise for themselves in making arguments like this.
In Loudermilk v. Best Pallet, LLC, 636 F.3d 312 (7th Cir. 2011), the plaintiff had raised numerous complaints about discriminatory treatment in the workplace. He took some photos for purposes of supporting his complaints. The employer, after much floundering around, eventually claimed that it fired the plaintiff for taking the photos. The Seventh Circuit, which reversed a district court's grant of summary judgment to the employer, took a dim view of the employer's argument:
Best Pallet says that it fired Loudermilk not because of the note's content, but because he had taken pictures of the work site, in violation of company policy. But it did not give thatexplanation to Loudermilk—or for that matter the EEOC. Best Pallet told the agency that it let Loudermilk go as part of a reduction in force (though Loudermilk's name was not on a list of workers that had been prepared for that purpose). In court it abandoned that explanation and contended that Loudermilk had resigned, or that his departure was a "mutual decision." Since Loudermilk says that he did not resign, that explanation can't prevail at the summary judgment stage. This led to the "fired for photography" contention, which is problematic not only because the no-photography policy may have been cooked up after the fact, but also because it comes close to conceding retaliation.
In Heller v. Champion Int'l Corp., 891 F.2d 432 (2nd Cir. 1989), the employer argued that it was justified in firing the plaintiff, regardless of the terms of any implied contract, because he had been disloyal by taping conversations with company personnel. The Second Circuit rejected this argument and, noting that the plaintiff also contended that he was a victim of age discrimination, observed as follows:
At the time the events of this lawsuit were unfolding, Heller believed that Champion was not only in the process of breaking its promises to him, but that it was also discriminating against him because of his age. His surreptitious tape-recording, to be sure, represents a kind of "disloyalty" to the company, but not necessarily the kind of disloyalty that under these circumstances would warrant dismissal as a matter of law. The Age Discrimination in Employment Act prohibits employers from discharging individuals because they have "participated in any manner in an investigation, proceeding, or litigation under this chapter."
Some courts have reached different conclusions and all have cautioned that there are limits on what an employee may do to gather evidence to bolster their discrimination complaints. The circumstances of each case, accordingly, will have to be probed and considered carefully.
