Making the Ethical Call: Whistle-blowing Law 101

Several local cases have added to the whistle-blowing list, including a suit filed by former CoxHealth employees Roger Cochran and Dennis Morris, who claim they were fired for talking to federal investigators about alleged overcharges for kidney dialysis services paid for by government programs. The case is pending in U.S. District Court for the Western District of Missouri.

“The acts of defendant in retaliating against Roger Cochran because of his cooperation with federal authorities regarding investigation into potentially criminal and fraudulent activity being committed by individuals at Cox were outrageous,” the suit states. “As a direct and proximate result of the foregoing, Roger Cochran has lost all benefits and privileges of employment … and is entitled to all relief to make him whole.”

The suit makes similar statements regarding co-plaintiff Morris.

CoxHealth Vice President of Communications Laurie Cunningham said in a written statement that the health system doesn’t discuss personnel actions involving individual employees.

“We look forward to responding to the claims of Mr. Cochran and Mr. Morris in the legal venue of the courtroom, as we are confident that both of these terminations were fully warranted and properly handled,” the statement said.

While there are numerous situations where whistle-blowers need protection, Husch Blackwell Sanders labor and employment attorney Paul Satterwhite said the term can be overused.

“Since it is part of the lexicon, anytime anyone has a complaint or a discussion about something they don’t like about their employer, they’re referred to as a whistle-blower,” Satterwhite said. “Well, if they weren’t reporting illegal conduct or something that would otherwise fall under the retaliation or whistle-blower statutes, they’re not a whistle-blower. They’re just complaining about something they didn’t like at their company.”

Statutory protection

Daniel Wooten, partner with The Law Firm of Neale & Newman LLP, whose practice has an emphasis in employment law, said there are two types of whistle-blower protection in Missouri: those set forth in statute and common law protections established through court precedent.

“If you blow the whistle on a company, you’re engaging in protected activity in many instances,” Wooten said. “If you notify someone within or without the company you work for that there’s illegal conduct, or conduct that violates some affirmative statement of policy, the law says you can’t be fired for that.”

Statutory protections for whistle-blowing include the federal Sarbanes-Oxley Act, which protects employees of public companies from retaliation for reporting improper or illegal financial activities, and the False Claims Act, originally passed just after the Civil War, which allows individuals to sue government contractors for defrauding the government.

Also protected by statute are cases of discrimination based on factors such as race, gender, age and religion.

A local example under that type of protection is the case of Michele Osborn, a former employee of Liberty Bank who alleged discrimination and harassment by a bank officer between 2003 and 2006. The two sides settled the case through arbitration in June 2007.

Though several specific types of protection for whistle-blowers are spelled out by law, it is unclear if protection also applies to people directly involved in an illegal activity who then report the activity to authorities.

“It comes up all the time, where an employee was involved in something and decides to come clean or report their co-workers for something, and then they try to claim later that they were fired because they blew the whistle,” Satterwhite said. “Actually, they were probably fired because they were caught up in the activity.”

Common law

While both statute and common law offer some types of whistle-blower protection, Wooten said common law protection has one significant difference: Plaintiffs cannot recover attorney fees when filing a wrongful termination lawsuit under the common law protection, because attorney fees can only be recovered in cases specifically protected by statute.

One local example of a common-law protection case is that of Kyle Kelly, a former employee of Bass Pro Shops’ store in St. Charles.

Kelly sued the company for wrongful termination, saying he was fired after reporting that he observed a fellow employee break into a parked car to determine its owner. Kelly won the initial decision – including $2.8 million in punitive damages – but the punitive award was later overturned.

Though he wasn’t involved with the Kelly case, Satterwhite said cases like it show the difficulty of getting a whistle-blower ruling to stick.

“It’s easy to say, ‘I was fired because of this.’ To get the claim, they have to show the causation between the reporting of that conduct and the actual termination or retaliation,” Satterwhite said. In the Kelly case, according to court documents, Bass Pro argued that Kelly was terminated not because he blew the whistle but for discussing private conversations and going outside the proper chain of command.

“That’s where most plaintiffs lose or settle for much less than they’re seeking, because they can’t show that causation,” Satterwhite added.

What is a whistle-blower?

A whistle-blower is someone who has reported to authorities an activity that is illegal or against accepted codes of conduct. Depending on the type of activity reported, the person is protected from termination and other forms of retaliation, either by state or federal statute or by court-established case law.

Related Story: CoxHealth ready to settle government investigation