Michigan's Whistleblowers' Act

Michigan's Whistleblowers' Act

Under the WPA, an employer is prohibited from discharging, threatening, or otherwise discriminating against an employee “because the employee, or a person acting on behalf of the employee, reports or is about to report … a violation or a suspected violation of a law or regulation or rule … to a public body.” MCL 15.362. The prohibition extends to both verbal and written reports, as well as to participation in “an investigation, hearing, or inquiry held by that public body, or a court action.” Id. Where there is sufficient (i.e., “clear and convincing”) evidence that an employee is about to report a violation or suspected violation of law, the employee is protected by the WPA. Shallal v Catholic Soc Servs, 455 Mich 604, 620–621, 566 NW2d 571 (1997); Lynd v Adapt, Inc, 200 Mich App 305, 503 NW2d 766 (1993). However, the act does not protect an employee who knows such a report is false. Chilingirian v Fraser, 194 Mich App 65, 486 NW2d 347 (1992).

Note that the Michigan Supreme Court has held that failure to renew an employment contract is not an adverse employment action under the WPA. Wurtz v Beecher Metro Dist, 495 Mich 242, 848 NW2d 121 (2014).

The WPA does not require that an employee of a public body report violations or suspected violations to an outside agency or higher authority to receive the protections of the WPA. Brown v Mayor of Detroit, 478 Mich 589, 734 NW2d 514 (2007). Further, there is no requirement that the reporting be outside of the employee’s regular job duties. Id.

The WPA provides the exclusive remedy for an employee who has been discharged for reporting an employer’s violation of the law, thus displacing the comparable common-law “public policy tort.” Dolan v Continental Airlines, 208 Mich App 316, 526 NW2d 922 (1995), aff’d in part, rev’d in part, 454 Mich 373, 563 NW2d 23 (1997); cf. McNeil-Marks v MidMichigan Med Ctr—Gratiot, No 326606, 2016 Mich App LEXIS 1182 (June 16, 2016), later proceeding, No 154159, 2017 Mich LEXIS 1182 (Jan 24, 2017) (holding that plaintiff’s public policy claim was preempted by her WPA claim because both claims arose out of same activity); Driver v Hanley, 226 Mich App 558, 575 NW2d 31 (1997) (finding by circuit court on appeal that WPA was inapplicable meant that WPA was not former employee’s exclusive remedy, and required reinstatement of original judgment on breach of contract claim). Note that the Michigan Supreme Court is considering whether to grant leave to appeal. In Kimmelman v Heather Downs Mgmt, 278 Mich App 569, 575, 753 NW2d 265 (2008), the court ruled that the WPA’s statute of limitations barred plaintiff’s claim based on his participation in a criminal investigation and court action involving a sexual assault by one of defendants’ coowners on a coworker because the claim arose exclusively under the WPA: “There is absolutely nothing, express or implied, in the plain wording of the statute that limits its applicability to violations of law by the employer or to investigations involving the employer.”

For model WPA jury instructions, see M Civ JI 107.01–.15.

What is an Employer Under Michigan's Whistleblowers' Laws?

An employer means a person who has one or more employees and includes an agent of the employer. MCL 15.361(b). Employee includes persons employed “by the state or a political subdivision of the state except state classified civil service.” MCL 15.361(a). Independent contractors are not considered to be employees under the act. Chilingirian v Fraser, 200 Mich App 198, 504 NW2d 1 (1993). Further, the WPA’s coverage extends only to the employee against whom the alleged violation is directed. Burchett v RX Optical, 232 Mich App 174, 591 NW2d 652 (1999) (infant son allegedly born premature due to stress suffered by employee-mother did not have cause of action under WPA).

What is a Public Body Under Michigan's Whistleblowers' Laws?

The term public body under the act is broadly defined to include all branches of state and local government, any “other body … created by state or local authority or … primarily funded by or through state or local authority,” law enforcement agencies, and the judiciary. MCL 15.361(d)(i)–(vi). Although subsections (i) through (iv) expressly limit the definition of a public body to include only state and local governmental entities, subsection (v) contains no such limitation and therefore includes federal law enforcement agencies. Ernsting v Ave Maria Coll, 274 Mich App 506, 736 NW2d 506 (2007). In McNeil-Marks v MidMichigan Med Ctr—Gratiot, No 326606, 2016 Mich App LEXIS 1182 (June 16, 2016), later proceeding, No 154159, 2017 Mich LEXIS 1182 (Jan 24, 2017), the court of appeals held that an attorney licensed in Michigan is a public body under the Whistleblowers’ Protection Act because attorneys are members of a body created and primarily funded by or through state authority. Note that the Michigan Supreme Court is considering whether to grant leave to appeal in McNeil-Marks and has directed the parties to address “whether the plaintiff’s communication with her attorney constitutes a report to a public body within the meaning of MCL 15.361(d) and MCL 15.362 such that it is protected activity under the Whistleblowers’ Protection Act, MCL 15.361 et seq.”

What Does Michigan Whistleblowers' Act Protect?

The act protects not only employees’ reports of violations of law by the employer but also employees’ reports regarding coemployees and third parties. See, e.g., Dudewicz v Norris-Schmid, Inc, 443 Mich 68, 503 NW2d 645 (1993) (employee who filed criminal complaint against coemployee for assault and battery protected by WPA); Terzano v Wayne County, 216 Mich App 522, 549 NW2d 606 (1996) (employee who reports third-party violations or suspected violations of law is protected by WPA when employee acts within scope of his or her employment and violation or suspected violation affects employer’s business). Thus, in Terzano, the court affirmed a verdict in favor of an electrician at a county-operated airport who was discharged after reporting electrical violations by an airport tenant to the city electrical inspector. When plaintiff reported her concerns that certain funds were being used for purposes other than those stated on a millage ballot, she was reporting a “suspected violation of a law” and thus was engaged in protected activity.

Giving deposition testimony in a civil action is also protected activity under the WPA. Henry v City of Detroit, 234 Mich App 405, 594 NW2d 107 (1999). In Henry, a former police commander testified at deposition concerning violations of internal police procedures in a death case. Although the testimony did not constitute a “report to a public body,” the giving of deposition testimony was held to be “participation in a court proceeding” and was therefore protected under the WPA. Id. at 412–413.

Before 2013, courts had ruled that where the employee’s whistleblower activity is motivated by vindictiveness or a desire to protect the employee’s job rather than by “a desire to inform the public on matters of public concern,” the employee’s WPA claims are properly dismissed. David v ANA TV Network, Nos 98-2288, 98-2289, 2000 US App LEXIS 2477 (6th Cir Feb 16, 2000) (unpublished); see also Shallal v Catholic Soc Servs, 455 Mich 604, 620–621, 566 NW2d 571 (1997).

The Michigan Supreme Court has since ruled, however, that a plaintiff’s motivation is not relevant to whether he or she has engaged in protected activity, and proof of any specific motivation is not a prerequisite to bringing a claim under the WPA. Whitman v City of Burton, 493 Mich 303, 310, 831 NW2d 223 (2013), on remand, 305 Mich App 16, 850 NW2d 621, vacated and remanded on other grounds, 497 Mich 896, 855 NW2d 746 (2014), dismissed on remand, 311 Mich App 315, 874 NW2d 743 (2015), vacated in part on other grounds and leave to appeal denied, 499 Mich 861, 873 NW2d 593 (2016). The Whitman decision clarifies the court’s prior holding in Shallal. The Whitman court specifically addressed Shallal and ruled that to the extent that Shallal was interpreted to require a specific motive for the employee’s whistleblowing, any language to that effect was dicta as to the issue of causation. Thus in Whitman, the material question was whether plaintiff was terminated for engaging in protected activity. The possibility that plaintiff’s “primary motivation” was to advance his own financial interests did not preclude the claim.

In an order, the Michigan Supreme Court vacated the later court of appeals decision on remand, 305 Mich App 16, and “for reconsideration in light of [Wurtz v Beecher Metro Dist, 495 Mich 242, 848 NW2d 121 (2014)].” 497 Mich 896. In the order, the supreme court also clarified that “reports given because the employee is requested to participate in an investigation by a public body are still considered protected activity. See MCL 15.362; [Chandler v Dowell Schlumberger Inc, 456 Mich 395, 399, 542 NW2d 310 (1998)]. Any contrary suggestion in our earlier opinion in this case, [493 Mich 303, 313], is vacated.” 497 Mich 896. On second remand, the court of appeals again dismissed plaintiff’s claims. The court held that because plaintiff alleged that defendants violated the WPA after the conclusion of his employment, Wurtz required its dismissal. The court also held that his conduct ran contrary to the public interest and that the mayor’s refusal to reappoint plaintiff to another term was because of plaintiff’s misconduct, not any whistleblowing activity during his employment. 311 Mich App 315.

In a later order, the Michigan Supreme Court vacated “those parts of the [July 9, 2015] opinion holding that a plaintiff’s actions or conduct, as an objective matter, must advance the public interest to entitle a plaintiff to the protection of the [WPA], MCL 15.361 et seq., and that the plaintiff here failed to establish sufficient evidence of the necessary causal connection between his claimed protected activity and the alleged adverse employment action to avoid a judgment notwithstanding the verdict.” 499 Mich 861. The court explained that because the court of appeals found that, pursuant to Wurtz, plaintiff is not an “employee” placed to bring a WPA claim, resolution of those issues was unnecessary. Id.

The activity protected under the WPA is not limited to activity that has a close connection to the work environment or to the employee’s business practices. Trepanier v National Amusements, Inc, 250 Mich App 578, 649 NW2d 754 (2002). In Trepanier, plaintiff stated a claim under the WPA when he was fired after seeking a personal protection order against a coworker with whom he had had a sexual relationship and there was evidence of a causal connection between plaintiff’s protected activity and his termination. See also McNeil-Marks (plaintiff nurse presented prima facie case under WPA where there was evidence that she reported suspected violation of PPO by patient in defendant medical center). Note that the Michigan Supreme Court is considering whether to grant leave to appeal. 2017 Mich LEXIS 1182.

What are the Elements of a Cause of Action Under Michigan's Whistleblowers' Statute?

A plaintiff must show:

1. That the plaintiff was engaged in a protected activity as defined by the act;
2. That the plaintiff was discharged, threatened, or otherwise discriminated against; and
3. That there was a causal connection between the protected activity and the adverse action.

Ordinarily, the plaintiff may establish the elements of his or her prima facie case by a preponderance of the evidence. Melchi v Burns Int’l Sec Servs, Inc, 597 F Supp 575, 581–582 (ED Mich 1984). However, where the protected activity alleged is that the employee was “about to report” (as opposed to “reported”), the act requires that this element be shown “by clear and convincing evidence.” MCL 15.363(4).

Once the employee has established a prima facie case, the burden shifts to the employer to establish a legitimate, nondiscriminatory reason for its adverse action. Phinney, 222 Mich App at 563. If the employer carries this burden, the plaintiff must be given an opportunity to prove that the legitimate reason offered by the employer was pretextual. The plaintiff may prove pretext either by direct evidence that the discriminatory reason was the true reason or, indirectly, by establishing that the employer’s reason is not worthy of credence. Id.

In Wurtz v Beecher Metro Dist, 495 Mich 242, 848 NW2d 121 (2014), the Michigan Supreme Court held that plaintiff could not sustain a claim under the WPA where his employment contract contained a no-renewal clause and the alleged adverse action was defendant’s refusal to renew the contract for the next employment term. The court held that the statutory language prohibited only adverse actions that could be taken against an “employee.” Thus, on these facts, the failure to hire Mr. Wurtz was not actionable under the WPA.

But in Debano-Griffin v Lake County Bd of Comm’rs, 493 Mich 167, 828 NW2d 634 (2013), the Michigan Supreme Court ruled that plaintiff submitted sufficient evidence to create a genuine issue of material fact as to the causation element of her claim under the WPA. Defendant-employer argued that plaintiff could not prove causation because it eliminated her position. The supreme court held that during the 12-day period when plaintiff engaged in protected activity, her position “went from fully funded [by the County Board] to non-existent” and thus a reasonable juror could infer that the board “had already decided to fund her position until she publicly voiced her complaints.” Id. at 177. With regard to causation, plaintiff’s claim was strengthened by the fact that the same entity that made the decision to eliminate plaintiff’s position was also the recipient of her complaint “because it is reasonable to infer that the more knowledge the employer has of the plaintiff’s protected activity, the greater the possibility of an impermissible motivation.” Id. at 178.

How to Seek Protection Under Michigan's Whistleblowers' Act?

A person seeking relief under the WPA must file suit within 90 days of the alleged violation. MCL 15.363(1). The action may be brought in the circuit court for the county where the alleged violation occurred or where the defendant resides or has his or her principal place of business. MCL 15.363(2).

The supreme court has held that the act includes the right to a jury trial where the plaintiff’s claim is for money damages and that the right exists even in suits against the State of Michigan and its subdivisions. Anzaldua v Band, 457 Mich 530, 578 NW2d 306 (1998) (legislature expressly applied WPA to the state by including state and its political subdivisions in its definition of employer); see also Phinney v Verbrugge, 222 Mich App 513, 564 NW2d 532 (1997) (by including state entities in definition of employer and providing for actions in circuit court, legislature waived right of state entities to be sued only in court of claims).

The WPA provides for actual damages or injunctive relief. MCL 15.363(1). The term damages is defined by the act as “damages for injury or loss caused by each violation of this act, including reasonable attorney fees.” MCL 15.363(3). Emotional distress damages are therefore recoverable under the act. Phinney. The act also expressly provides for reinstatement, back pay, reinstatement of fringe benefits and seniority rights, actual damages, or any combination of these remedies. MCL 15.364.

In determining whether to award reinstatement, the court may consider the motives of the employee in reporting the employer’s misconduct. See, e.g., Melchi v Burns Int’l Sec Servs, Inc, 597 F Supp 575 (ED Mich 1984) (reinstatement properly denied where there was evidence that employee may have acted in part with improper motives in reporting employer’s misconduct). It is also proper for the court to consider the nature of the claim and the amount of damages involved in exercising its discretion with respect to attorney fee awards. Phinney, 222 Mich App at 561 (court did not abuse discretion in denying fees where case was not one where it would have been difficult for plaintiff to obtain and compensate counsel).

An award of attorney fees and costs to a plaintiff who brings a successful WPA claim should be analyzed using the factors stated in Grow v WA Thomas Co, 236 Mich App 696, 714–715, 601 NW2d 426 (1999) (fees and costs under ELCRA). O’Neill v Home IV Care, Inc, 249 Mich App 606, 643 NW2d 600 (2002). In O’Neill, the trial court improperly considered the mediation evaluation and the effect its WPA attorney fee award would have on mediation sanctions when it calculated the amount of the fees to be awarded to plaintiff. This approach was contrary to the purpose of the WPA, which is to remove barriers to an employee who seeks to report violations of the law.