Fireworks, Whistleblowers, and the Uneven Landscape of Retaliation Law

Fireworks, Whistleblowers, and the Uneven Landscape of Retaliation Law 

It’s July 4th weekend —  yes, seriously — which means fireworks, barbecues, the EEOC going after construction companies for alleged anti-American bias, and a reminder that employment law in America is wildly inconsistent depending on where your business lives. Let’s use whistleblower and retaliation laws as an example.

The general gist of these laws is that they protect employees who oppose bad acts and are subsequently penalized for their opposition, with the classic example being an employee who is fired for reporting that their supervisor, or some corporate executive, was violating the law. 

But across the country, these laws tend to split into two very different operational categories. 

In Category One jurisdictions, the focus is on whether the conduct the employee reported actually violated the law. Here’s how it works: 

An employee reports something to management. They say, “I think this practice violates workplace safety law,” or “I think this hiring process violates anti-discrimination law,” or “my supervisor’s fashion sense is so terrible it should be a crime.” The employer retaliates by firing them. The employee sues. 

Under Category One, the question is: was there some objective basis to the employee’s complaint? In other words, the focus is more on the (alleged) wrongdoer’s wrongdoing and less on the complaining employee’s complaint.

Category Two flips this standard on its head, and in these jurisdictions, the focus shifts from the alleged wrongdoing to the whistleblower. Under Category Two, the question is: did the employee reasonably believe the conduct violated the law? If the answer is yes, the employee is protected – even if (and as defense attorneys, we can’t stress this enough) they were ultimately wrong about what the law says. What matters is whether their belief was reasonable, not their ability to pass the bar exam. 

As you can imagine, the difference between these two standards is significant. Fortunately, we have these things called “cases” to provide actual, real-life examples. 

Imagine an employee attends a company picnic. A spouse of another employee (not an actual employee) makes repeated sexualized comments. The employee reports it to management and says, “I think this creates a sexually hostile work environment in violation of Title VII” — and if you’re thinking, “Do non-lawyer employees really speak like this and actually cite statutes and laws in their workplace complaints?” the answer is yes; AI has basically made every garden-variety employee Clarence Darrow with these complaints. Management fires the employee a few weeks later, claiming an unrelated reason.

Under Category One: The court asks, “Did the spouse’s comments actually violate Title VII?” If the answer is technically “no,” the employee might lose, even if they were likely terminated because of the conduct.

Under Category Two: The court asks, “Did the employee reasonably believe the conduct violated the law?” The focus is on whether the employee’s concern was reasonable, not whether they were technically correct about the law.

Same facts. Two very different outcomes. 

Curious about what category your state follows? Use a recent electoral map for a quick visual shortcut. As we typically allude to in this blog, there are some states that are more pro-employee (Category Two – and you can’t spell “category” without a CA!), and some states that lean pro-employer (Category One – and you can’t spell . . . I actually don’t have something witty here: it’s Florida).

You see, that company picnic example was taken from a recent decision out of the Fourth Circuit, which covers Virginia, West Virginia, North Carolina, South Carolina, and Maryland. You probably don’t have to be Nick Papa Georgio to wager on what category was used and who won that case (did you know Vegas Vacation came out nearly thirty years ago? Yikes – let’s get back to the blog).

So, what’s the takeaway?

Fearmongering alert: either way, if your employee reports something they reasonably, or even unreasonably, believe to be a legal violation, and you fire them shortly thereafter, you’re going to be sued (Happy 250 and God Bless America). 

But if you operate in Category Two jurisdictions (generally: the Northeast, West Coast, and some Midwest states), retaliation claims are broader, employee-friendly, and harder to defeat. [Try to] Protect yourself by: (1) not retaliating, (2) documenting legitimate, non-pretextual reasons for any adverse actions, and (3) definitely not trying to use procedural technicalities to weasel out of cases brought by in-house compliance counsel who were literally doing their job (yes, this was an actual New Jersey case – trying to retaliate against your in-house ethics attorney and get away with it? Fuhgettaboutit).  

If you operate in Category One jurisdictions, retaliation claims are narrower and more employer-friendly – but (and we also can’t stress this enough) don’t mistake that for a license. These cases still tend to look bad and involve sympathetic plaintiffs and unsympathetic companies. Even with that Fourth Circuit case, while the law ultimately sided with the company – spoiler alert – the case had to make it to the appellate level to get there. The cost of getting to “we were right” was still significant.  

Have a great July 4th weekend. As always, if you’ve got questions, you know we’ve got answers (unless you’re a Belgium soccer fan – it’s not personal). 

~ The W + K Team