2008 Montgomery County Bar CLE Representing Whistleblowers in Adler Wrongful Discharge Actions R. Scott Oswald The Employment Law Group ® Law Firm Tel: Fax:

Overview/Summary Adler Theories of Coverage Adler Theories of Coverage Tips for Representing Maryland Whistleblowers in Adler actions Tips for Representing Maryland Whistleblowers in Adler actions

Theories of Coverage MD common law provides a robust remedy for wrongful discharge in violation of public policy MD common law provides a robust remedy for wrongful discharge in violation of public policy Adler tort is NOT a general whistleblower statute Adler tort is NOT a general whistleblower statute The Adler tort is limited to three forms of protected conduct: The Adler tort is limited to three forms of protected conduct: refusing to engage in illegal activity refusing to engage in illegal activity exercising a statutory right or privilege exercising a statutory right or privilege fulfilling a statutory obligation fulfilling a statutory obligation

Refusing to Engage in Illegal Activity –The Adler tort protects employees terminated for refusing to engage in illegal activity. –Examples include: Terminating an H.R. director because she refused to commit health care benefit fraud. Terminating an H.R. director because she refused to commit health care benefit fraud. –See, e.g., Magee v. Dan Sources Tech.l Servs., Inc., 137 Md. App. 527 (2001) –18 U.S.C. § 1347 prohibits individuals from knowingly and willfully defrauding health care benefit programs. –18 U.S.C. § 1347 prohibits individuals from knowingly and willfully defrauding health care benefit programs.

Refusing to Engage in Illegal Activity –Terminating an employee because she refused to engage in prostitution. See, e.g., Perry v. FTData, Inc., 198 F. Supp. 2d 699 (D. Md. 2002). See, e.g., Perry v. FTData, Inc., 198 F. Supp. 2d 699 (D. Md. 2002). Md. Ann. Code, Art. 27 § 15 (1957), which prohibits individuals from engaging in prostitution. Md. Ann. Code, Art. 27 § 15 (1957), which prohibits individuals from engaging in prostitution.

Exercising a Statutory Right Terminating an employee for exercising his or her statutory rights can give rise to an Adler claim. Terminating an employee for exercising his or her statutory rights can give rise to an Adler claim. Examples include: Examples include: –Discharging an employee solely because the employee filed a workers compensation claim. See, e.g., Ewing v. Koppers Co., 312 Md. 45 (1998). See, e.g., Ewing v. Koppers Co., 312 Md. 45 (1998). Md. Ann. Code, Art. 101 § 39A (1957), which prohibits an employer from discharging an employee because the employee filed a workers compensation claim. Md. Ann. Code, Art. 101 § 39A (1957), which prohibits an employer from discharging an employee because the employee filed a workers compensation claim.

Exercising a Statutory Right –Terminating an employee because she refused to submit to a polygraph test. See, e.g., Moniodis v. Cook, 64 Md. App. 1 (1985). See, e.g., Moniodis v. Cook, 64 Md. App. 1 (1985). Md. Ann. Code, Art. 100 § 95 which prohibits administering a lie detector test as a condition of employment. Md. Ann. Code, Art. 100 § 95 which prohibits administering a lie detector test as a condition of employment.

Fulfilling a Statutory Obligation Adler tort protects an at-will employee who is terminated for fulfilling a statutory obligation. Adler tort protects an at-will employee who is terminated for fulfilling a statutory obligation. Cases construing this form of protected conduct : Cases construing this form of protected conduct : –Recognizing an Adler claim where a former teacher was terminated for reporting child abuse to a state child care licensing agency See, e.g., Bleich v. Florence Crittenton Servs., 98 Md. App. 123 (1999). See, e.g., Bleich v. Florence Crittenton Servs., 98 Md. App. 123 (1999). Md. Ann Code, Fam. Law §§ 5-702(1), (a) which requires educators to report any suspected abuse or neglect of children. Md. Ann Code, Fam. Law §§ 5-702(1), (a) which requires educators to report any suspected abuse or neglect of children.

Fulfilling a Statutory Obligation –Employee alleging retaliation for cooperating in a state and federal prosecution of the employer for dumping toxic waste, could not maintain an Adler claim because CERCLA provides its own remedy for retaliation. See, e.g., Miller v. Fairchild Indus., Inc., 97 Md. App. 324 (D. Md. 1987). See, e.g., Miller v. Fairchild Indus., Inc., 97 Md. App. 324 (D. Md. 1987). 42 U.S.C § 9610, which prohibits employers from retaliating against employees who provide information to state or federal government. 42 U.S.C § 9610, which prohibits employers from retaliating against employees who provide information to state or federal government.

Source of Public Policy Must Lack Its Own Enforcement Mechanism Before bringing an Adler claim, evaluate whether the source of public policy originates from a statute that provides its own remedy. Before bringing an Adler claim, evaluate whether the source of public policy originates from a statute that provides its own remedy. If a statute already contains a remedy for vindicating the public policy objectives, then the discharged employee can pursue a claim only through the existing statute. If a statute already contains a remedy for vindicating the public policy objectives, then the discharged employee can pursue a claim only through the existing statute.

Individual Liability An Adler plaintiff can name an individual defendant if the individual is: An Adler plaintiff can name an individual defendant if the individual is: –an executive (alter ego of the corporation) or –involved in decision making

Damages The Adler claim is a tort. The Adler claim is a tort. Tort damages include lost wages, compensatory damages, and where there is a showing of malice, punitive damages. Tort damages include lost wages, compensatory damages, and where there is a showing of malice, punitive damages. –Kessler v. Equity Mgmt., Inc., 82 Md. App. 577, 591 (1990) Punitive Damages are awarded [b]ased upon the heinous nature of the defendants tortious conduct.... Punitive Damages are awarded [b]ased upon the heinous nature of the defendants tortious conduct.... –Darcars Motors of Silver Springs, Inc. v. Borzym, 379 Md. 249, 263 (2004)

Pleading Requirements and Burden of Proof An employee must plead with specificity the public policy that the employer violated by discharging the employee. An employee must plead with specificity the public policy that the employer violated by discharging the employee. –Adler v. Am. Standard, Corp., 291 Md. 31, 44 (1981) (rejecting plaintiffs complaint because the complaint was too general, too conclusory, too vague and lacking in specifics to mount up to a prima facie showing) –Plaintiff must establish a prima facie case consisting of the following elements: Plaintiff was an at-will employee terminated by the defendant; Plaintiff was an at-will employee terminated by the defendant; The termination of the plaintiffs employment violates a specific public policy; and The termination of the plaintiffs employment violates a specific public policy; and There is a causal nexus between the public policy violation and the employers decision to terminate the plaintiff. There is a causal nexus between the public policy violation and the employers decision to terminate the plaintiff.

Tips for Representing Whistleblowers in Adler actions Case Selection Case Selection A long-term employee (more than 9 years) with a satisfactory or better performance record and some prior expertise in the subject matter about which she is blowing the whistle A long-term employee (more than 9 years) with a satisfactory or better performance record and some prior expertise in the subject matter about which she is blowing the whistle A whistleblower who discloses wrongdoing in a timely manner using the employers established complaint protocol in a non-contumacious manner A whistleblower who discloses wrongdoing in a timely manner using the employers established complaint protocol in a non-contumacious manner A whistleblower who is not complicit in her employers wrongdoing A whistleblower who is not complicit in her employers wrongdoing A whistleblower who complains about a matter of public concern A whistleblower who complains about a matter of public concern A whistleblower who the employer terminates within 6 months of her protected disclosure, exercise of statutory right, or refusal to engage in an illegal act A whistleblower who the employer terminates within 6 months of her protected disclosure, exercise of statutory right, or refusal to engage in an illegal act

Tips for Representing Whistleblowers in Adler actions Forum Selection Forum Selection Theme Theme Deciding Whether to Name an Individual Defendant Deciding Whether to Name an Individual Defendant Discovery Discovery Maximizing Damages Maximizing Damages

Questions? For further information, contact: R. Scott Oswald The Employment Law Group ® Law Firm Tel: Fax: