Whistleblowers Protection Act Clarified

As we reported earlier, employees looking for job protection under the Whistleblowers Protection Act (WPA) will have to search elsewhere when they report a suspected future violation of the law under the Michigan Supreme Court ruling in Pace v Edel-Harrelson (Docket No. 151374). The court held that such reports were not “protected activity” under the WPA. It remanded the case back to the Court of Appeals for consideration of the plaintiff’s claim that her termination was a violation of public policy. 

The Court of Appeals (COA) affirmed the lower court’s dismissal of the matter holding that plaintiff’s discharge was not a violation of public policy.

Barbara Pace, employee of the SIREN Eaton Shelter, Inc, noticed some discrepancies in grant funding records. Pace was told that the company’s operations manager, Christy Long, was planning to use some funds to buy a stove for her personal use. When Pace reported her concerns to management, she was fired. She brought suit in Eaton County Circuit Court. The case proceeded as follows:

• The Eaton County Circuit Court dismissed the case ruling that Pace had failed to show that a “violation or suspected violation of law,” as required by the WPA, had occurred.

• Pace appealed to the Court of Appeals, which reversed the Circuit Court holding that she had presented enough evidence to show she was engaged in a “protected activity” when she reported her suspicions and her reporting led to her firing.

• The defendants filed an application for leave to appeal to the Supreme Court.

• The Supreme Court, after deciding that the WPA doesn’t protect the reporting of future, planned or anticipated actions, sent the matter back to the COA for consideration of Pace’s public policy claim.

In Michigan, most employment situations are presumed to be at-will, meaning they can be ended by the will of either party. Case law has recognized an exception if the termination is contrary to public policy. The Supreme Court said that the boundaries of public policy must be found in policies adopted by the people through legal processes, found in state and federal constitutions, statutes or the common law. (Terrien v Zwitt, 467 Mich 56, 66-67).

Courts must find public policy in objective sources.

Plaintiff Pace only cited the WPA as her source of public policy. However, according to the COA, under the WPA, “the only public policy expressed by the legislature was to protect employees who report already-occurred violations or suspected violations of the law.” Since Pace didn’t meet this requirement or cite any other source of public policy, the court reversed its prior decision in the case, affirming the Eaton Circuit Court decision, dismissing her claim.