News & Events

Tennessee Court Offers Insights on Viability of Whistleblower Claims

THIS ARTICLE FIRST APPEARED IN HRLAWS.COM’S TENNESSEE EMPLOYMENT LAW LETTER BY BUTLER SNOW’S David L. Johnson.

Under the Tennessee Public Protection Act (TPPA), also known as “the whistleblowing statute,” it’s illegal to fire an employee if the sole cause for the termination was for refusing to either remain silent about or to participate in illegal activity. In two decisions issued this summer, the Tennessee Court of Appeals upheld the trial court’s dismissal of one employee’s whistleblowing claims and reversed the trial court’s dismissal of another employee’s whistleblowing claims. Examination of both cases offers insight about the circumstances in which an employee may present a viable claim under the TPPA.

First case: Employee can’t prove her claim

Janet Tidwell served as CEO of Holston Methodist Federal Credit Union. Beginning in December 2017, a regulatory agency began auditing Holston, at which time a number of issues were identified in which Holston allegedly failed to comply with certain standards. Tidwell felt she became the scapegoat for the problems. She claimed Holston began “recasting” its problems to make it appear she was responsible, and ultimately, it terminated her in February 2018.

Thereafter, Tidwell sued Holston for defamation and also alleged she was terminated in violation of the TPPA. Specifically, she claimed she was fired because of her “exercises of and faithful compliance with public policy, and her refusal to violate or submit herself to violations in the course of her employment of clear and unambiguous public policy, rules and regulations, constitutional guarantees and statutes,” including as they pertain to credit unions.

At the outset of the lawsuit, Holston asked the court to dismiss Tidwell’s TPPA claims because she failed to plead a claim for which relief may be granted. When weighing such a request, a trial court must consider whether, if the allegations are construed as true, the employee could potentially prove her claims.

The court of appeals upheld the trial court’s determination that it was impossible for Tidwell to prove Holston fired her in violation of the TPPA. Tennessee courts have found an employee may only pursue a whistleblowing claim if she “reported the illegal activity to anyone other than the person responsible for the activity.” Tidwell, however, didn’t argue she reported the supposed unlawful activity to anyone other than the persons who she accused as being responsible for the illegal activity. Therefore, she couldn’t pursue a viable claim under the TPPA. Tidwell v. Holston Methodist Fed. Credit Union, 2020 WL 3481537 (Tenn. Ct. App., June 25, 2020).

Second case: Employee gets his day in court

Jeffrey Davis served as a claims manager in Vanderbilt University Medical Center’s risk and insurance management division. In 2015, new guidance was issued under the Occupational Safety and Health Act (OSH Act) with respect to preventing workplace violence in the healthcare industry.

As part of his duties, Davis began recommending to his superiors that Vanderbilt updates its policies, including related to recordkeeping, prevention, and employee training, to be compliant with the new guidance. Rebuffed, he alleged he was terminated in violation of the TPPA “because of his failure to remain silent about the violations/deficiencies and his continued efforts to bring Vanderbilt within compliance of the OSHA Workplace Violence Guidelines.”

As in the Tidwell case, Vanderbilt filed a request to dismiss for failure to state a claim for which relief may be granted. The trial court granted Vanderbilt’s request and dismissed Davis’s claims because he couldn’t show his complaints about Vanderbilt’s activities, if true, rose to the level of being illegal.

The court of appeals, however, reversed the dismissal and reinstated Davis’s claims. It found that, even though the new guidance was nonbinding, it was possible Vanderbilt could be deemed to have violated the OSH Act’s “general duty clause,” which imposes on employers: “(1) a duty to furnish to each of the employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees; and (2) a duty to comply with occupational safety and health standards promulgated under this chapter.”

The appeals court also rejected Vanderbilt’s argument that Davis’s alleged whistleblowing didn’t sufficiently implicate important public policy. Under Tennessee law, not every form of whistleblowing is protected. Instead, the employee must be looking out for the public on an issue of important public policy interest and not simply looking out for his own personal interest or that of a small group of people.

Vanderbilt argued Davis’s alleged whistleblowing served only the interests of other Vanderbilt employees and not the public at large. The appeals court, however, found it was sufficient for him to seek to protect the welfare of Vanderbilt’s entire workforce and that patient safety concerns were also implicated. According to the court, “workplace safety, including the prevention of workplace violence, appears to be a matter of public concern in the State of Tennessee.” Therefore, the court found Davis may pursue his claims. Davis v. Vanderbilt Univ. Med. Ctr.

Lessons

Both cases were dismissed right off the bat, but one of the employees will get another day in court. The Tidwell case demonstrates the importance of an employee being able to show she complained to someone other than the wrongdoer. Even if Tidwell had done so, she likely faced an uphill battle showing she was terminated solely in retaliation for reporting illegal activity. The court found it unnecessary to consider whether she was complaining of unlawful activity that was a matter of important public policy given she couldn’t prove another element of her claim.

In Davis, it seems to be a close call about whether his “whistleblowing” implicated illegal activity, particularly given the vague, open-ended nature of the OSH Act’s general duty clause. Even though Davis will be able to pursue his claims, it should still be difficult for him to meet his burden of showing his whistleblowing was the “sole” reason for his termination—a really tough standard the TPPA requires.

Employers, however, should be reminded of the importance of not taking adverse employment actions against employees who engaged in protected activity, including whistleblowing. Terminations that take place close in time after an employee engages in protected activity are subject to particular scrutiny.