Whistleblower Employees Afforded Greater Protection In Pennsylvania

A major accounting firm has been performing computer data entry services for a federal government agency for ten years. The data that is entered helps agency officials develop quarterly reports it must provide to the U.S. Congress related to the development of the federal budget. A supervisor in the data entry department of the financial institution witnesses several other employees shred what appears to be thousands of documents that contain data to be entered into Excel spreadsheets. The supervisor questions the employees about their activity, and they claim that they were told by a particular individual in upper-level management to shred the documents. The supervisor confronts an upper-level manager about the shredding of the documents. The manager listens intently, and informs the supervisor that the matter will be investigated immediately. The manager also instructs the supervisor to keep the matter confidential and refrain from speaking to anyone else about it. After the investigation is concluded, certain security policies are instituted, including the placement of security guards at various locations within the data entry department.

Less than a week after the new security policies take effect, the supervisor begins to experience acts of harassment from other supervisors in the department. Many supervisors fail to communicate with the supervisor regarding work related matters and many directives from management fail to be conveyed to the supervisor.

A week later, the supervisor is called to a meeting with another upper-level manager. The manager informs the supervisor that as a result of a recent decision to implement an internal reorganization plan, the supervisor is being transferred to the company mailroom to oversee the mailroom clerks. The position requires less skill and reduced supervisory responsibilities.

The above hypothetical scenario may sound like a familiar situation you have encountered in the past. The honest, loyal employee is only trying to do what is right, but it appears as if the employee is being punished for being the whistleblower on improper conduct in the workplace. Your defense to such a claim is that you are doing it for the employee in light of the fact that a hostile work environment has resulted from the situation and you are only attempting to protect the employee from further harassment.

The Pennsylvania Supreme Court has recently ruled on a case involving a similar situation where an employee who reported the theft of food by inmates from a kitchen in a Pennsylvania prison was transferred from his position as a food service instructor in the kitchen to the food service line in the inmate dining hall. In O'Rourke v. Commonwealth of Pennsylvania, Department of Corrections et al., ___ A.2d___ (Pa. 2001), the employee, William O'Rourke, filed suit against the prison, claiming the transfer violated the Pennsylvania Whistleblower Law, 42 P.S. §1421 et. seq. O'Rourke requested an injunction directing that all retaliatory activity resulting from his report of wrongdoing cease and desist; that he be awarded lost back wages; and that he be awarded attorney's fees and costs. The specific sections of the Whistleblower Law relevant to O'Rourke's claim provide:

§ 1423(a). Protection of employees.

"(a) Persons not to be discharged. 
No employer may discharge, threaten or otherwise discriminate or retaliate against an employee regarding the employee's compensation, terms, conditions, location or privileges of employment because the employee…makes a good faith report…to the employer or appropriate authority [of] an instance of wrongdoing or waste."

§ 1424. Remedies.

(b) Necessary showing of evidence.
An employee alleging a violation of this act must show by a preponderance of the evidence that, prior to the alleged reprisal, the employee…had reported…in good faith, verbally or in
writing, an instance of wrongdoing or waste to the employer or an appropriate authority.

(c) Defense.
It shall be a defense to an action under this section if the defendant proves by a preponderance of the evidence that the action by the employer occurred for separate and legitimate reasons, which are not merely pretextual. (emphasis added)

The Supreme Court was faced with the task of interpreting the meaning of "separate." As is the case in many lawsuits involving the interpretation of statutory law, the Court had no guidance from the legislative record to determine the meaning the legislature intended for the word "separate."

As in the hypothetical above, the transfer of O'Rourke was defended by the Department of Corrections on the basis of thwarting a hostile work environment, not as a retaliatory action against O'Rourke for reporting the wrongdoing by co-workers. Accordingly, the Department of Corrections argued that the transfer was "separate" from a retaliatory motive, and that it therefore proved by a preponderance of the evidence that the transfer was ordered for a separate and legitimate reason.

The Court also considered an interpretation of "separate" that required the decision to transfer to be "separate from the report of wrongdoing." The Department of Corrections would therefore have to prove that its decision to transfer O'Rourke had absolutely nothing to do with the wrongdoing reported by him.

Recognizing that the Whistleblower Law is a remedial statute, and that such statutes are to be liberally construed to effectuate their purpose, the Court concluded that the Department of Corrections, and heretofore any employer confronted with a whistleblower who is transferred because of a hostile work environment, will have to prove that it would have taken the same action absent the employee's good-faith report of wrongdoing.

In light of this recent ruling by the Supreme Court, employers must be prepared to defend their decisions regarding the change in employment conditions for whistleblowers by presenting evidence that proves such a change would have occurred notwithstanding the wrongdoing reported by the whistleblower. This will obviously be a difficult defense to establish for most employers. However, the law as now interpreted by the Supreme Court should be viewed as a means to motivate your company to review internal operations to prevent wrongdoing.

Daniel L. DeMarco is the Vice President and General Counsel for The Hill Group, Inc. He provides legal counsel in employment, business, and commercial law. Daniel can be reached at ddemarco@hillgroupinc.com or 412.343.9393.

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