In Illinois, "Indirect" Whistleblowers are Protected from Employer Retaliation

In Illinois, "Indirect" Whistleblowers are Protected from Employer Retaliation

Michael v. Precision Alliance Group

Illinois is an "at-will" employment state, which means that generally, an employer may fire an employee for any reason – or no reason at all. However, an employer may not fire an employee for an illegal reason. One such illegal reason is reporting company fraud or engaging in "protected activity" (activity that is protected by law or public policy).

In Illinois, employees who report illegal activities by their employers or other employees are known as "whistleblowers." Whistleblowers who disclose information to a government or law enforcement agency are protected from retaliatory discharge by the Illinois Whistleblower Act , 740 ILCS 1741/1 et seq. (West 2004). In addition, Illinois recognizes a common law cause of action for retaliatory discharge for employees who are fired because they reported illegal activity.

A plaintiff claiming common law retaliatory discharge must prove that he engaged in a protected activity, and that his discharge was related to the protected activity. Recently, in Michael v. Precision Alliance Group, 952 N.E.2d 682 (2011), the Illinois Appellate Court ruled that an employee who intentionally assists another person in reporting company fraud to the state is engaged in protected activity.

In Michae v. Precision Alliance Group, three former Precision employees asserted that they had been fired for being part of a group that reported company violations of the Illinois Seed Law to the Illinois Department of Agriculture. The employer, Precision, was in the business of growing, processing and distributing soybeans for commercial sale. Two of the plaintiffs worked in the bagging area; the third plaintiff worked in the warehouse. The three plaintiffs asserted that they periodically noticed underweight bags and loads of seeds and reported this concern to management, which did not correct the problem. The plaintiffs alleged that after one of their co-workers, Dudley was fired, "they recorded locations and lot number of light bags and relayed the information to Dudley," who, in turn, reported the information to the state. After the state investigated Precision, management told one of the plaintiffs, "if we find out anybody here had anything to do with turning us in to the State, their jobs will be terminated immediately." The company subsequently fired all three plaintiffs.

The trial court ruled that because the plaintiffs had "merely reported information to a former employee" rather than directly to the government, the plaintiffs were not engaged in a protected activity. The court also concluded that,"the plaintiffs could not sustain a claim of retaliatory discharge based on defendant's mistaken belief that plaintiffs had reported directly." The appellate court reversed, reasoning that since Illinois courts consider "both the intent of the plaintiff and the motive of the employer in evaluating the merits of retaliatory discharge actions based on whistleblowing," a claim for retaliatory discharge is not precluded simply because the employee merely assisted another person in reporting fraud to the state, rather than reporting it directly himself; as long as the assistance is intentionally provided, the activity is protected. Moreover, an employer who discharges an employee for reporting company fraud has engaged in retaliation, even if the employer is mistaken in its belief that the employee reported the fraud directly to the state. As long as the employer's motive is retaliation, the mistaken belief is irrelevant.

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