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Turning the table on Whistleblowers: Alabama state court allows employer lawsuit to proceed against whistleblower

Turning the table on Whistleblowers: Alabama state court allows employer lawsuit to proceed against whistleblower

With whistleblower lawsuits on the rise, what options do companies have when faced with a whistleblower of their own. Can a company turn the table on a whistleblower who wrongfully accuses the company of bad acts?

Federal law usually offers protection to whistleblowers to allow employees to report illegal, unsafe, and unhealthy employer actions.

However, on September 22, 2015, Alabama made national news when a Montgomery County Circuit Judge entered an opinion finding that an employer was allowed to pursue its lawsuit against a former whistleblowing employee.

Alabama auto supplier, Lear Corporation, terminated and then sued Kim King in state court in March 2015 after King attempted to deliver a letter to Lear’s customer, Hyundai Motor Manufacturing Alabama. In the letter, Kim reported her fear of chemical exposure to Lear’s employees. Lear responded with a verified complaint that included claims of intentional interference with business relations and defamation.

After King was terminated, the U.S. Department of Labor filed a lawsuit against Lear in federal court accusing Lear of whistleblower retaliation. U.S. District Judge Callie Granade issued a temporary restraining order against Lear, preventing the company from taking retaliatory action against current or former employees for exercising their rights in violation of §11(c) of the Occupational Safety and Health Act of 1970.

King then filed a motion for protective order in the state court action seeking protection from Lear’s deposition notice and document requests. Montgomery County Circuit Judge William A. Shashy denied the motion and determined that allowing Lear to proceed with its claims against King would not be in violation of the federal court order. Specifically, Judge Shashy found that: (1) the federal court order made no finding that Lear’s claims before the state court lacked merit under state law nor did the order require the dismissal of the action; (2) the federal court made no determination as to whether King engaged in protected activity when she went to Hyundai; and (3) Lear could proceed with the deposition of King as to the defamation and intentional business interference claims.

Although there are always strategy concerns that must be considered, this ruling shows that companies are not without options when an employee makes false accusations of wrongful conduct against it. In these instances, companies should evaluate whether offensive action is appropriate. The Montgomery Court order is an example of how companies can be successful when pursuing those options.

Katie T. Powell