Emma Gallimore Mar. 9, 2016, 1:09pm


LANSING, Mich. (Legal Newsline) - The Michigan Whistleblowers’ Protection Act doesn’t protect employees who report threatened or planned unlawful conduct, the Michigan Supreme Court has ruled.

In Pace v. Edel-Harrelson, Barbara Pace brought suit for wrongful termination against the executive director of SIREN Eaton Shelter, Jessica Edel-Harrelson, as well as the company itself and Pace's manager, Christy Long.

Pace alleged that Long was planning to use grant money to purchase a stove for her daughter and implied that she should hide the purchase by documenting it in the name of a client. According to Pace, after she reported her suspicions to Edel-Harrelson, Pace was terminated.

The circuit court ruled that the plaintiff failed to establish that a violation occurred, but the Court of Appeals reversed the ruling.

The Supreme Court decided to reverse the Court of Appeals, holding that Pace was not protected under the WPA because she reported a violation she suspected might happen in the future rather than one that was ongoing.

“In other words, reporting a suspected future violation of a law, not a suspected existing violation, is not 'protected activity' for purposes of the WPA,” said Leigh Schultz, of Miller Canfield.

This ruling sets a new precedent for WPA cases.

“For the first time, it has been made clear that Michigan law does not protect employees from retaliation for reporting or being about to report a violation of law that they think is being planned or that has not yet occurred.” Schultz said.

“This forces employees to wait to complain until after the fact.”

The Court of Appeals had ruled that “requiring that an employee wait until he or she is certain that the violation is complete is also inconsistent with the intent of the WPA.”

The Supreme Court disagreed with this interpretation and followed a more literal reading of the law.

“Although that may seem inconsistent with the intent of the law, the Court based its decision on the plain language of the statute and the common dictionary definition of the word violation which ‘contemplates an existing act that has occurred or is ongoing,’” Schultz said.

This ruling may have far-reaching consequences for employees who report a suspected violation.

The court paid special attention to the words used in the initial complaint. At that time, Pace stated that the manager planned to purchase a stove using grant funds.

Later, she said that she believed the manager had already purchased the stove. The court said that only the original report mattered.

“This gives employers an opportunity to use the words expressed by the plaintiff at the time of reporting against him or her,” Schultz said.

Employers may be able to make a case that the employee is not protected by the WPA if they can demonstrate that the employee did not believe that the violation had already occurred or was ongoing.

Schultz said the ruling is likely to be challenged either in future cases or through amendments to the WPA.

“I believe that the plaintiffs bar will continue to argue along the lines of the Court of Appeals, that this ruling is contrary to the intent of the law," she said.

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