Whistleblower protections expand at the state level

October 19, 2010 - Comments Off

In the past decade, through the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and the McCaskill amendment, the Federal Government has taken significant strides to improve whistleblower protections in the workplace in an attempt to cut down on fraud, resuscitate the economy, and protect workers’ rights.  This sentiment has begun to trickle down to the state level, as many state-level legislatures and courts are beginning to realize the importance of protecting whistleblowers.

A recent Tennessee Supreme Court case, for instance, expanded the protections afforded to workplace whistleblowers by relaxing the criteria that determine protected activity.  Ordinarily, whistleblower law protects workers from retaliation when they report illegal activity to the appropriate authorities.  In Gossett v. Tractor Supply Company, however, the plaintiff, Gary Gossett, was terminated after he had refused to modify a required report to the Securities and Exchange Commission which he felt misrepresented his employer’s finances.  Crucially, however, the employee did not report the illegal activity, he merely abstained from participating in it.  The Tennessee Supreme Court held that in common-law cases in which the alleged whistleblower refused to remain silent about an illegal act, it is not necessary for the employee to actually report the illegal activity.  In her opinion, Justice Janice M. Holder said that “an employee alleging retaliatory discharge for refusal to participate in an illegal activity need not report the illegality.”

David J. Marshall, a partner at Katz, Marshall & Banks, who specializes in the representation of whistleblowers,  applauded the decision, saying that “just as there are an increasing number of federal laws that protect whistleblowers, from the new Dodd-Frank Act to the McCaskill  Amendment, more and more states are seeing the need to protect employees against retaliation for reporting or complaining internally about unlawful activities on the part of their employers.”

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