10th Circuit Finds Whistleblower Who Reported Misconduct to Supervisors Allegedly Complicit in Misconduct Has No Claim under Kansas Law
In a decision released February 12, 2014, the U.S. Court of Appeals for the Tenth Circuit upheld summary judgment dismissing a whistleblower's Kansas state-law retaliatory discharge claims for failure to meet the claim's reporting requirement.
Although the whistleblower in Lykins v. Certainteed Corp. had reported the alleged misconduct – coworkers' discharge of industrial waste into city sewers – to "various supervisors at [his] plant, including [the] plant manager," these reports were insufficient to support his claim because the supervisors were allegedly complicit in the misconduct at issue. Under these circumstances, the court held that Kansas law required the plaintiff to have reported the misconduct to some "higher authority" who was not complicit with that misconduct, either within or outside the company.
Plaintiff had worked as an at-will employee at defendant's Kansas City, Kansas fiberglass plant for more than 10 years. He claimed that between May and August of 2010, he witnessed numerous employees unlawfully disposing of waste materials containing hexavalent chromium directly to city sewers. Plaintiff had reported his allegations to multiple supervisors at the plant, including the plant manager, but the plaintiff alleged that his reports were met with indifference and/or hostility.
On August 16, 2010, plaintiff was given a poor work performance letter that he refused to sign, notwithstanding a warning that his failure to do so would lead to termination. The next day, which was also the date of a planned state environmental inspection, plaintiff was called into a meeting with plant management. He voiced his concerns of retaliation for raising his complaints about unlawful waste discharges, but was fired anyway.
Tenth Circuit's Analysis
The Tenth Circuit noted the elements of a whistleblower wrongful discharge claim under Kansas Law:
- A reasonably prudent person would have concluded that the employer or a coworker was engaged in conduct that violated rules, regulations, or the law pertaining to the public health and safety and the general welfare.
- The employer had knowledge that the employee reported the violation prior to his or her discharge.
- The employee was discharged for making the report.
With respect to the second element, Kansas courts have required the employee to "seek to stop unlawful conduct through the intervention of a higher authority, either inside or outside the company." The Tenth Circuit found this requirement to mean that the employee must report to someone higher than any alleged wrongdoer, inside the company if possible, but outside the company if necessary. "Simply reporting to a higher-level wrongdoer is insufficient."
Because plaintiff had consistently identified the supervisors to whom he reported the alleged misconduct as wrongdoers in pleadings and discovery, reporting to those wrongdoers did not suffice to meet the requirement. The plaintiff could have reported his concerns to the employer's anonymous 24-hour compliance hotline or to state environmental officials.
The court noted plaintiff's concern that its ruling might discourage employees from internal reporting of health and safety concerns. It found, however, that the greater risk would be in accepting plaintiff's argument such that "[o]rdinary dialogue and disagreement between management and employees would become the substance of whistleblowing claims. Obviously, something more is required to differentiate internal dissatisfaction from the protected act of whistleblowing." That "something more" is a report to a higher corporate or governmental authority that has no involvement in the alleged misconduct and therefore might reasonably be expected to intervene and address it.
Kansas employers or counsel faced with a state law whistleblower claim should quickly identify the person(s) to whom the plaintiff reported the alleged misconduct. This will enable them to evaluate whether any of those persons are sufficiently untainted by the misconduct to satisfy the reporting requirement of Kansas law. If not, and particularly if the employee failed to use other reporting routes available to him or her, the claim may be barred. The Lykins decision also reinforces the utility of having a compliance hotline available to employees who want to report alleged misconduct. An employer who maintains such a hotline not only provides an avenue for discovering and addressing potential compliance problems, but also precludes an employee-plaintiff from later claiming that he had no satisfactory reporting options available in the workplace.
Note that this decision only applies to Kansas common law whistleblower claims. Laws in other states, and several federal laws providing whistleblower protections (such as Sarbanes-Oxley whistleblower protections for employees who report violations of the federal securities laws and civil rights law protections against retaliation), require application of different standards developed by the courts and administrative agencies responsible for interpreting those laws.
Other key Kansas whistleblower decisions:
Other recent whistleblower cases of note:
If you have any questions about the implications of this case or responding to whistleblower claims, please do not hesitate to contact Sean Colligan or your usual Stinson Leonard Street LLP attorney.