Understanding the Changes to Minnesota’s Whistleblower Act

Not So Clean as a Whistle

January 16, 2019Minnesota

Author: Debra L. Weiss, Employment Partner at Meagher & Geer

Whistleblowing – the commonly-understood act of exposing activity that is considered to be illegal – first became codified in the United States during the Civil War era with the enactment of the False Claims Act to address the problem of profiteers overcharging the government for supplies. But it was not until passage of the Minnesota Whistleblower Act just 30 years ago that whistleblowing became a major tenet of Minnesota employment law. 

Whistleblowing Becomes Minnesota Law
Following a ground-breaking case where the Minnesota Supreme Court held that an at-will employee could pursue a suit against her former employer who terminated her for refusing to fill a customer’s gas tank with leaded gas when the car was clearly meant to be fueled with unleaded gas, the legislature took steps to officially enact the Minnesota Whistleblower Act (the “MWA”) with the primary purpose of prohibiting an employer from retaliating against an employee for reporting a violation of the law in good faith.  

While the statute established that employers could not retaliate against an employee who reported a violation of law, it did not, however, define several key terms, such as the meaning of “good faith” or what is meant by “report,” thereby creating ambiguities ripe for the Minnesota courts to interpret.  For years, the courts strongly cautioned against construing the MWA too broadly, and many cases hinged on what would not constitute a “report.”  Through several landmark whistleblower cases, Minnesota courts concluded that an employee could not establish a legally-actionable whistleblower claim under any of the following circumstances:

  1. If reporting illegalities was a part of the employee’s general job duties
  2. If the alleged illegality was already known and addressed by the employer
  3. If the activity centered on breaches of contract or other common law violations
  4. Or if the conduct was believed to be illegal, but did not actually violate the law.

For decades, Minnesota courts construed the meaning of “good faith” and “report” narrowly.  For example, even if the statement itself identified an illegality, the courts would not allow an actionable whistleblower claim to proceed unless there was evidence that the employee intentionally made the statement to expose an illegality.  Stated otherwise, the employee had to have made the statement for the clear purpose of blowing the whistle for the benefit of the public as a whole. The courts were also cautious to conclude that a whistleblower was acting in good faith if reported for their own personal benefit.  Instead, the MWA only granted protection to the employee if he blew the whistle for the public good. This effectively prevented employees from making an eleventh-hour report to save their jobs from expected termination. 

The 2013 Amendments to the MWA 
The Legislature passed amendments to the MWA in 2013, however, which changed the understanding of several of these key terms that had been previously undefined by the statute.  A “report,” for example, has now been defined as any communication by an employee about an actual, suspected, or planned violation of a statute, regulation, or common law, whether committed by an employer or third party.  “Good faith,” as another example, now refers to any conduct disclosing an illegality, so long as the employee does not make the disclosure knowing that it is false or in reckless disregard of the truth. Unfortunately, that definition is not a bastion of clarity. 

On its face alone, the amendments appear to significantly expand the scope of the MWA.  First, the amendments eliminate any perceived formality that came with reporting a violation –– an employee can now make a report by simply writing an email, sending a text, or even making a passing comment.  Second, the amendments do not limit employee protection to reporting of an employer’s past violations, but instead now cover even future circumstances where an employee believes that their employer was going to break to law, even if the violation has not yet occurred.  Third, the amendments make clear that a report can be for a violation of any law, including a common law violation, such as breaching a contract.  Finally, the amendments do not include a public-good component in the good faith analysis, leaving some practitioners to question whether this requirement was still necessary. 

Then, in 2017, the Supreme Court clarified further, holding that the earlier court-created requirement that an employee must purposely blow the whistle to expose an illegality was no longer the law. Instead, the new meaning of “good faith” merely requires that the report not be made knowingly false or with reckless disregard for the truth. In short, the courts have now effectively chosen to focus on the report’s content, not the employee’s motive or job duties. 

What to Do Next?
In light of the amendments and the recent Supreme Court case, the MWA appears to offer substantially broader protections to employees than it ever had in the past. While employers will still be able to argue that the employee was terminated for a legitimate business reason and not because of his or her report or out of spite, it will be increasingly more difficult for employers to get these kinds of cases dismissed as a matter of law. In other words, more of these cases will survive summary dismissal and make their way to a jury. Now more than ever is it critical to review and reconsider your organization’s policies and training, particularly with regard to retaliation. To better protect your business, policies should be crafted that provide employees with a clear and secure reporting system that offers multiple reporting channels. Fostering a culture that allows employees to comfortably voice concerns without the fear of retaliation is vital in minimizing whistleblower liability.  

Reinforced training, particularly at all levels of management, is also crucial to ensure that supervisors and managers understand what is required of them as agents of the company, if and when a report is made. Indeed, reports must be treated seriously and investigated, even if it is the tenth report from the same “cry wolf” employee. Organizations would further be wise to properly document the steps that are taken to investigate and address the concerns to demonstrate a transparent and thorough process. Indeed, each report of illegality should be adequately researched to determine merit and whether corrective action could or should be taken. It is also important to provide the complaining employee with appropriate feedback so he or she knows that the concern is being addressed and taken seriously.  

Though whistleblowing is an old and well-understood idea, whistleblower law in Minnesota continues to evolve. Proactive management that prioritizes prevention and investigation while shunning retaliation is essential to safeguard your organization. It is an investment worth making. For questions regarding training and advising, email Debra Weiss at dweiss@meagher.com.


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