An attorney friend in Nashville, David Cooper, has alerted me to a new decision by the Tennessee Court of Appeals, which holds that Tennessee’s whistleblower statute (Tenn. Code Ann. 50-1-304) only applies to employees who have been terminated or discharged from their employment.

COA – Harman v University of Tennessee

In the Harman case, the plaintiff, a professor at the University of Tennessee, was demoted, but not terminated.

The court of appeals’ decision was predictable give the language of the statute, which states that “[n]o employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.” T.C.A. § 50-1-304(b).

It’s my opinion, however, that the decision only applies to statutory whistleblower claims. I believe that a plaintiff suing a private entity may bring a claim for retaliatory demotion under Tennessee common law.

Unfortunately for Professor Harman, he was foreclosed from suing the University of Tennessee under a common law theory because governmental entities are immune from suit under Tennessee common law. See, e.g., Baines v. Wilson County, 86 S.W.3d 575 (Tenn. Ct. App. 2002)(holding governmental entity is immune from liability for the common law tort of retaliatory discharge).

George Fort filed a complaint with the U.S. Department of Labor alleging he was subjected to adverse actions by his employer, Tennessee Commerce Bancorp., in violation of the Sarbanes-Oxley Act (SOX). See 18 U.S.C. 1514A. Click here.

Following an investigation, the Dept. of Labor ordered that Fort be reinstated to his former position as CFO of the bank along with full back pay. The bank refused and the Dept. of Labor sought enforcement of its order in the Middle District of Tennessee.

On May 19, 2010, Judge William Haynes of the Middle District of Tennessee granted the Dept. of Labor’s motion for preliminary injunction and ordered that Fort be reinstated to his former position. See Solis v. Tennessee Bancorp., Inc., 2010 WL 2010944 (M.D. Tenn. May 19, 2010).

The court rejected the bank’s arguments that the Dept. of Labor’s order violated the bank’s due process rights “because the preliminary order results in a permanent and irreparable loss to the [bank] of the permanent deprivation of payments and wages pending a final resolution of the Secretary’s proceedings against the [bank].” In this regard, the court noted that the bank was regulated by the SEC and sought investors in publicly traded stock. Accordingly, the court held that “[i]n this context, the costs of compliance with the Secretary’s preliminary order based upon factual findings is a regulatory cost of doing business.”

UPDATE: On May 25, 2010, the 6th Circuit has issued an order staying the injunctive relief ordered by the Middle District of Tennessee. Order Thus, Mr. Fort’s reinstatement has been put on hold for the time being.

A recent decision from the Western District of Tennesee discusses and rejects an employer’s use of the “honest belief” rule in a retaliation case. The case is Turner v. Hoops, L.P. and can be accessed here: Turner v. Hoops

Here are the facts:

Riley Turner, who worked in the engineering department for Hoops, L.P. at the FedEx Forum in Memphis, alleged he was retaliated against after he complained about race discrimination against himself and about a co-worker who was subject to sexual harassment.

Turner was subsequently terminated by Hoops, L.P. because its investigation into the sexual harassment charges brought by Turner’s co-worker allegedly revealed that Turner had viewed pornographic images on his work computer. Turner denied that he ever viewed such images on his work computer.

Hoops argued that it didn’t matter whether Turner actually viewed such images since it performed a good faith investigation and had an “honest belief” that Turner viewed such images.

Judge McCalla rejected this argument permitting a jury to decide whether Hoops’ decision to Turner for allegedly viewing porn was a pretext for retaliation. (Order at 18-20).

Judge McCalla noted that in addition to Turner’s denial that he viewed these images, Hoops admitted to losing the computer hard drive, which would have potentially exonerated Turner. Accordingly, Judge McCalla held that “the loss of the hard drive containing the information relating to Plaintiff’s viewing of pornography precludes Defendant’s reliance on the honest belief rule as a matter of law.” (Order at 19).

Jeffrey Longs, represented by attorneys Venita Martin (click here) and Andre Mathis (click here) of the Glankler Brown law firm in Memphis, scored a big victory in a retaliation case against Ford Motor Co., which was tried in the Western District of Tennessee last week before Chief Judge Jon P. McCalla.

The jury awarded 1M plus to Mr. Longs, who alleged he was fired for complaining about age and race discrimination. The jury verdict is attached. Jury Verdict Form

Is an oral complaint of a violation of the Fair Labor Standards Act (FLSA) protected conduct under the FLSA’s anti-retaliation provision? That’s the question that U.S. Supreme Court has agreed to decide.

On Monday, the Court granted cert in Kasten v. St. Gobain Performance Plastics. (click here).

There’s a split among the circuit court of appeals as to whether an oral complaint is sufficient to give rise to protection from retaliation under the FLSA’s ant-retaliation provision, which is codified at 29 U.S.C. § 215(a)(3). (click here to see statutory language).

Hopefully, the Court will determine that an oral complaint is sufficient to give protection from retaliation under the FLSA. It doesn’t make sense that a written complaint (scrawled on a napkin for example) would be deemed protected activity whereas an oral complaint (made on the company’s phone hotline for example) would not be protected activity.

Mr. Kasten is represented by James Kaster with the Nichols Kaster firm based in Minneapolis. click here. Go Jim!

In an opinion issued today, the 6th Circuit reversed summary judgment in favor of the defendants in a First Amendment retaliation case. The case is styled Kindle et al. v. City of Jefferstown et al. Click on the following link to read the opinion. 10a0159n-06.

Here are the facts: The plaintiffs, who worked for the Jeffersontown, KY police department, wrote a report particularly critical of a supervisor and were terminated shortly thereafter. The district court dismissed the plaintiff’s First Amendment retaliation claim holding that the plaintiffs’ speech did not address a matter of public concern.

On appeal, the 6th Circuit noted that in determining whether a public employer has violated an employee’s First Amendment rights of free speech, the U.S. Supreme Court has instructed courts to engage in a three-step inquiry. First, a court must determine whether the relevant speech addressed a matter of public concern. Second, if the answer is yes, the court must balance between the interests of the employee, as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees. Third, the court must ascertain whether the employee’s speech was a substantial or motivating factor in the employer’s decision to take the adverse employment action against the employee.

Citing various U.S. Supreme Court cases, the 6th Circuit also noted that “statements by public officials on matters of public concern must be accorded First Amendment protection despite the fact that the statements are directed at their nominal superiors.”

According to the 6th Circuit, whether an employee’s speech addresses a matter of public concern must be determined by the content, form, and context of a given statement. Matters of public concern include speech that relates to any matter of political, social, or other concern to the community. But speech dealing with matters only of personal interest to a public employee is generally not afforded constitutional protection.

Analyzing the content of the report submitted by the plaintiffs, the 6th Circuit noted that it had consistently held that speech on the same topics as the report–the efficacy and operations of public agencies and allegations of misconduct by public
officials–addressed matters of public concern. Thus, the 6th Circuit held that the district court erred in granting summary judgment to the defendants and found that the plaintiffs’ speech was protected by the First Amendment because it touched on a matter of public concern. The case was remanded for the district court to address the remaining prongs of the Pickering balancing test.

On November 14, 2006, the 6th Circuit issued an under the radar per curiam decision dismissing Vicky Crawford’s Title VII retaliation case against Metropolitan Government of Nashville and Davidson County. See 211 Fed. Appx. 373 (6th Cir. 2006). That had to be an incredibly difficult day for Ms. Crawford.

Fortunately, Ms. Crawford’s petition for cert was accepted by the U.S. Supreme Court, which unanimously reversed the 6th Circuit’s decision on January 26, 2009. See Crawford v. Metropolitan Government of Nashville and Davidson County, 129 S.Ct. 846 (2009). The case was remanded for a jury trial on Ms. Crawford’s retaliation claim.

And yesterday, after a week long trial in Nashville federal court, the jury returned a verdict in favor of Ms. Crawford on her retaliation claim. Ms. Crawford was awarded over 1.5M in damages (420k in compensatory damages; 408k back pay; and 727k front pay). Crawford Verdict Form

If punitive damages were permitted against governmental entities under Title VII, which they are not according to 42 U.S.C. 1981a(b)(1) (click here), I can only imagine that the verdict would have been even bigger.

Congrats to Ms. Crawford and her trial attorney, Ann Buntin Steiner of Nashville, as well as Professor Eric Schnapper of Seattle, who handled Ms. Crawford’s appeal at the U.S. Supreme Court.

A few weeks we filed suit on behalf of a group of plaintiffs in the Middle District of Tennessee seeking unpaid overtime compensation. See my post dated 11/24/09. The case is Bowman et al. v. New Vision Telecommunications, Inc. et al., 3:09-cv-01115.

The day after the defendants learned of the lawsuit they suspended the plaintiffs without pay for an indefinite period. The reasons offered by the defendants for the suspensions seemed pretextual so we immediately amended the complaint and sued the defendants for unlawful retaliation under 29 U.S.C. 215(a)(3). We also sought a temporary restraining order asking for our clients to be reinstated pending a preliminary injunction hearing. A TRO was entered by the court and a preliminary injunction hearing was set. The preliminary injunction hearing took place on 12/3 and 12/10.

Late today we received a decision from the court granting our motion for preliminary injunction. The defendants were ordered to return the plaintiffs to work with the same pay and benefits. Further, the defendants were ordered not to retaliate against the plaintiffs or others similarly situated.

It was a great win for our clients needless to say. A copy of the memorandum opinion and order granting preliminary injunction can be accessed by clicking on the links below.

Order Granting Preliminary Injunction

Memorandum Opinion

From time to time I will hear about retaliation experienced by job applicants. This can generally happen in one of two ways.

First, a job applicant may be subjected to illegal retaliation by the applicant’s prior employer, who informs the prospective employer of the applicant’s prior protected activity in an effort to prevent the applicant from getting a job. See, e.g., Dunlop v. Carriage Carpet Co., 548 F.2d 139 (6th Cir. 1977). Fortunately, the job applicant has a cause of action against his/her former employer in this situation. In Dunlop, the 6th Circuit held that “a former employee, voluntarily separated from his employer, is protected from discrimination by his former employer under sec. 15(a)(3) of the Fair Labor Standards Act of 1938.”

Second, a job applicant may be subjected to illegal retaliation by a prospective employer because of the applicant’s prior protected activity. See, e.g., Hayes v. Computer Sciences Corp., 2003 WL 113457 (Tenn. Ct. App. Jan 14, 2003). In Hayes, the employee stated a claim of common law retaliatory discharge under Tennessee law where the employee alleged that he was terminated by his current employer for filing workers’ compensation claims againsy his previous employer. Also, in Christopher v. Stouder Memorial Hosp., 936 F.2d 870 (6th Cir. 1991), the 6th Circuit held that the plaintiff could state a retaliation claim under Title VII against a hospital who denied the plaintiff hospital privileges because of the plaintiff’s previous protected activity.

Under Tennesse statutory law, “[n]o employee shall be discharged or terminated solely for refusing to participate in, or refusing to remain silent about, illegal activities.” T.C.A. 50-1-304. The same is true under Tennessee common law. See, e.g., Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 865 (Tenn. 2002) (common law claim for refusing to remain silent about illegal activities) and Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 825 (Tenn. 1994) (common law claim for refusing to participate in illegal activities).

A new case decided by the Tennessee Court of Appeals on 10/30/09 (VanCleave v. Reelfoot Bank) illustrates the differences between a complaint that alleges an employee was fired for refusing to particpate in an illegal activity versus an employee fired for refusing to remain silent about an illegal activity. Click here.

In VanCleave, the plaintiff, a bank employee, alleged she was terminated for refusing to participate in an activity, i.e., opening a bank account without identification and signature card from a customer, that she reasonably believed was illegal under federal and state banking laws.

In granting the employer’s motion for summary judgment, the trial court stated that the plaintiff failed to show that she intended to protect the public, rather than simply herself or the bank, when she refused to open the account in the manner requested by the customer.

To the extent that the trial court required the plaintiff to establish that she subjectively intended to protect the public when she refused to participate in activity that she reasonably believed to be illegal, the court of appeals stated that in a refusal-to-participate retaliatory discharge claim a plaintiff need not show a subjective intent to further the public good. All that is required, according to the court of appeals, is for the plaintiff to simply show that the alleged illegal activity implicated important public policy concerns.