Download Whistle-Blowing

WHISTLE-BLOWING
DELENA HURST
A S S I S TA N T AT T O R N E Y G E N E R A L
DELENA.HURST@ARKANS AS AG.GOV
Arkansas Whistle-Blower Act
• Ark. Code Ann. § 21-1-601, et seq.
• A public employer shall not take adverse action
against a public employee because the employee
communicates in good faith to an appropriate
authority:
•
A violation or suspected violation of law OR
•
A waste of public funds
Arkansas Whistle-Blower Act
3
Definitions
 Whistle-blower: An employee who witnesses or has
evidence of a waste or violation and who communicates in
good faith or testifies to the waste or violation to a superior,
an agent of the employer, or an appropriate authority, prior
to any adverse action by the employer.
 Appropriate authority: Any governmental agency having
jurisdiction over law enforcement, regulatory violations,
professional conduct or ethics, or waste.
 Adverse action: Discharge, threaten, or otherwise
discriminate or retaliate in any matter that affects the
employee’s employment.
Definitions
 Communicate: Give a verbal or written report.
 Violation: An infraction or a breach, which is not
merely technical or minimal, of a state statute or
regulation or of a code of conduct or ethics.
 Waste: A conduct or an omission which results in
substantial abuse, misuse, destruction or loss of
funds, property, or manpower.
Civil Action
 An employee must file a lawsuit within one
hundred eighty (180) days after the occurrence of
the alleged violation.
 Burden of proof: The employee must prove by a
preponderance of the evidence that he has
suffered an adverse action because he engaged
or intended to engage in a protected activity.
Good faith
 An employee does not need to actually prove that there
was a violation of law or waste. A communication only
needs to be made in good faith.
 Good faith = A reasonable basis in fact for the
communication of the existence of waste or of a violation.
 No good faith = the employee has no personal knowledge
of a factual basis for the communication or the employee
knew or reasonably should have known the communication
was malicious, false or frivolous.
Affirmative Defense
• An employer shall have an affirmative defense if
the adverse action taken against the employee
was due to employee misconduct, poor job
performance, or a reduction in workforce unrelated
to a protected communication.
• The employer has the burden of proving by a
preponderance of the evidence the existence of
the employee’s misconduct unrelated to the
protected communication.
Remedies
 Two remedies:
1) Injunctive relief
2) Actual damages – fringe benefits,
retirement service credit, lost wages,
benefits, other remuneration
 If a plaintiff wins, he can be awarded reasonable
costs and attorneys’ fees.

This award can be substantially more than the judgment
itself.
State of the Law
• Not much guidance. The Arkansas Supreme Court
has not formulated a standard or framework for
reviewing the proof in whistle-blower cases.
• Courts have interpreted the statute very broadly.
• Today, Arkansas case law merely requires that an employee must
establish that he suffered an adverse action because he engaged
or intended to engage in an activity protected by the Act, and that
the adverse action was unrelated to his own misconduct or poor job
performance. Barrows v. City of Fort Smith, 2010 Ark. 73.
• Other jurisdictions have adopted the McDonnell-Douglas test in
their whistle-blower cases. The Arkansas Supreme Court has yet to
adopt or reject this approach.
Potential Defenses
Legitimate, Non-Retaliatory Reason for
Termination
• Affirmative defense
• Employer’s burden
• Hollis v. Fayetteville School District No. 1 of Washington
County, 2015 Ark. App. 544 – In the absence of any evidence
from an employee showing pretext, the testimony that the
employee was terminated for insubordination was sufficient to
establish the employer’s affirmative defense and summary
judgment was proper.
Potential Defenses
No Actual Violation of Law or Waste
• The Act only protects two types of reporting.
• This defense is that the purported act or omission by the
employer is not actually a violation of law or waste.
• Sullivan v. Coney, 2013 Ark. 222, 427 S.W.3d 682 (2013) –
Mayor's order to the police chief to arrest a person violating a
zoning ordinance was not a violation of law, and therefore the
police chief's report to a city attorney of the order was not
action protected by the Whistle-Blower Act.
Potential Defenses
No Temporal Proximity
• The Act has a causation requirement.
• However, there is no Arkansas case law addressing the
temporal proximity issue.
• Other jurisdictions have addressed temporal proximity:
• 7th Cir. – 4 months not enough to establish causation
• 8th Cir. – 2 months not sufficient
• 10th Cir. – 3 months not close enough
Potential Defenses
Violations/Waste Are Insubstantial and Trivial
• The Act requires that the violations of law or waste be
“substantial.”
• However, there is no Arkansas case law providing guidance
on what is substantial vs. insubstantial.
• Circuit courts have not been inclined to address this issue at
the summary judgment level.
Scenario 1
Facts:
• An employee is a nurse who is on duty at a mental health hospital when a
patient dies. She tells the administrator in passing, “if I had an IV, I could
have saved him.”
• There is no law that mental health hospitals must have IVs.
• 13 months later, the hospital discovers that the nurse was violating a
hospital policy dealing with patients and terminates her.
Questions:
• Is the communication protected under the Act?
• Is there a causal relationship between the communication and the
termination?
• Is there a Whistle-blower Act violation here?
Scenario 1
Actual case:
• Employer argued that there was no actual violation of law and
that there was no temporal proximity so no causation.
• Motion for Summary Judgment was denied.
• Jury found in favor of the nurse and awarded her $40,000 for
lost wages.
• Attorney’s fees awarded for $273,000.
Scenario 2
Facts:
• The employee’s job is to raise grant money for the state agency.
• She complains that her supervisor lets people take off-the-books comp
time and that there are errors in draft budget records.
• A few months later, she is terminated because she raised no money for
the agency for approximately a year.
Questions:
• Is the communication protected under the Act?
• Is there a causal relationship between the communication and the
termination?
• Is there a Whistle-blower Act violation here?
Scenario 2
Actual case:
• Motion for Summary Judgment was denied.
• Jury found in favor of plaintiff for $127,000.
• Attorney’s fees awarded for $200,000.
• Juror called afterwards and said they were divided 8-4 in
favor of the plaintiff, but one juror for the defendant switched
his vote simply because it was late Friday night and he
wanted to go home.
Lessons Learned
• Whistle-blower cases are on the rise.
• Plaintiffs’ attorneys are adding whistle-blower allegations to
employment cases because the law is so favorable to them.
• Trial courts are very hesitant to grant summary judgment on
whistle-blower claims.
• Juries may find in favor of employees for any number of reasons
unrelated to the elements of a whistle-blower claims.
• Juries have sympathy for the argument that the employer has done
something wrong (even if unrelated), because everyone has either
been fired or knows someone who has been fired when they
believe the termination was not warranted.
Case to Watch
Johnson v. Butler, Case No. CV-15-480
 Argument: Article 5, § 20 of the Arkansas Constitution
expressly prohibits the General Assembly from waiving the
State’s sovereign immunity in the Whistle-blower Act.
 Two special justices have been appointed to replace Justice
Brill and Justice Goodson, who have recused.
 Case finished briefing in October, but has not yet been
submitted.
Tips
 Don’t punish an employee for making a complaint.
 Be honest on employee evaluations.
 If you are going to fire someone, make sure you’re
following the rules yourself.
 Even if the employee commits a terminable offense, ask
yourself, how will it look? Would termination be fair? Have
other employees been treated the same way?
 When terminating an employee, make sure it’s documented
well and honestly.
Questions?
800.482.8982
[email protected]
AGLeslieRutledge
AGRutledge
AGLeslieRutledge
ArkansasAG
AGRutledge
Attorney General Leslie Rutledge