Minnesota Supreme Court Broadens Whistleblower Protections for Employees

In what is sure to be a sea change for the whistleblower litigation landscape in Minnesota, a recent landmark ruling by the Minnesota Supreme Court expanded the rights of whistleblowers by considerably lowering the threshold for an employee’s reporting requirement under the Minnesota Whistleblower Act (“MWA”).  In Friedlander v. Edwards Life Sciences, LLC, et al.,¹ the Court removed a longstanding judicially-created requirement that a reporting employee act with the purpose of “exposing an illegality” to garner whistleblower protection.

Enacted in 1987, the MWA² prohibited retaliation against an employee who “in good faith” reports a violation or suspected violation of law.  The statute did not define “good faith,” which led to a decades-long deciphering by Minnesota courts.  For years, Minnesota courts interpreted “good faith” to require that the whistleblower be a neutral party attempting to expose an illegality for the protection of the public or some third party; that the conduct reported must not have been previously known to the employer; and that it must not have been within the employee’s job duties to report such offenses.

In 2013, the Minnesota Legislature amended the MWA to, for the first time, provide a definition for “good faith.”  That statutory definition of good faith included “any statements or disclosures” so long as they are not knowingly false or made in reckless disregard of the truth.  Stated another way, the “good faith” standard would be met as long as the employee believed his or her statements to be true.

The 2013 amendment to the MWA left unclear whether the amendment abrogated years of rulings through which courts required that the whistleblowing employee act with the purpose of “exposing an illegality.”  Friedlander ended that debate.  In Friedlander, the plaintiff sued his former employer for retaliatory discharge under the MWA arguing that he was fired after speaking with management about breaching customers’ contracts.  Management was already aware of the issue.  The employer defendant therefore argued that Friedlander had not made the report in “good faith” because he effectively had not “exposed” anything that was not already known to the employer.  Against the urging of the defense bar, the Minnesota Supreme Court unanimously held that the 2013 amendment to the MWA eliminated the expose-an-illegality requirement.  The Friedlander decision moved the meaning of “good faith” away from the motives behind the report to instead only the contents of the report.

Moving forward, the question of liability in whistleblower actions will increasingly turn on whether there was a causal connection between the whistleblowing activity and the adverse employment action.  As a result of Friedlander, Minnesota employers should expect to see an uptick in claims of whistleblower retaliation, claims which already were on the rise prior to this ruling.  It is imperative for employers to have strong anti-retaliation provisions in their employee handbooks and to review company practices to help reduce the risk of retaliatory actions being taken against reporting employees.  Employers should develop clear policies and practices for handling internal employee reports.  It is critical that companies carefully document the contents of the report, thoroughly investigate the allegations, and strongly document the findings.  If an employer is faced with the potential discipline of a reporting employee, the employer should engage legal counsel to participate in the investigatory and disciplinary processes.