Whistle blowing complaints have been on the rise consistently over the last several years, which has created regulatory issues, a wide array of new policies to address internal whistle blowing and retaliation. It has also created an explosion of wrongful termination claims.
It would be hard to find an area in which allegations of whistle blowing are more prevalent than in the long-term care and assisted living industry. The Department of Inspections and Appeals and other regulators have taken extremely aggressive stances regarding the rights of the alleged "whistle blower" to be free to report any alleged violations of statute/regulation and to be free from coercion, retaliation or any type of conduct which might be said to "chill" reporting.
The Iowa Court of Appeals in Karen Dorshkind v. Oak Park Place of Dubuque II, LLC, No. 2-640/11-2100 filed October 17, 2012, has taken a large step towards supporting claims of wrongful termination for "whistle blowers" who make exclusively internal whistle blowing complaints.
In this case, Ms. Dorshkind had been the marketing director for an Oak Park assisted living facility in Dubuque from April 2006 to September 2008. In April 2008, she was told she would be reporting to a new manager. This becomes important later as we track the status of the complaint that she made as a "whistle blower."
Ms. Dorshkind alleged in 2008 that two co-employees falsified the required training documents relating to the care of dementia patients. At the time, Ms. Dorshkind told two co-employees about the suspected forgery. Approximately six weeks later she told her prior supervisor of her suspicions. The case does not indicate whether Ms. Dorshkind ever contacted her current supervisor regarding these matters, or any other person in management.
When Ms. Dorshkind's prior supervisor, a Ms. Jones, was informed of these allegations, she immediately reported the matters to the Human Resources Director and a prompt investigation was undertaken. Apparently at that time the allegations were not exclusively that training documents had been falsified, but also that the co-employees were having an affair. The investigation ultimately determined that no falsification had occurred and Ms. Dorshkind was later terminated specifically for "spreading rumors regarding a false relationship between two employees, malicious statements regarding forging of documents, and false statements to a regional director about move in numbers."
A subsequent Department of Inspections and Appeals investigation in September of 2008 responding to a Complaint made regarding Oak Park concluded that some training documents had in fact been forged. Oak Park was sanctioned for this issue. Ms. Dorshkind subsequently filed suit in 2010 alleging wrongful termination.
Of critical concern here is the recognition of the Iowa Appeals Court that an internal complaint that is never made to the employee's supervisor or even within the appropriate complaint "chain of command" is an assertion creating a legally protected status. Remember, in this instance, the timeline was the complaint to co-workers complete with a discussion of an affair, a complaint to a manager who was no longer in the direct chain of command although that manager subsequently reported the issue to the appropriate person within the organization. Further, the report was not exclusively one of record forgery where a public policy might have been determined to exist but also one of sexual misconduct, affairs and other behavior giving at least the appearance that there was more there than just the concern about appropriate training and documentation of that training. If you don't report to the proper person and you mix your complaint with the "who is dating who" gossip realistically it can be argued that will delay or impede investigation.
Oak Park argued that Ms. Dorshkind's failure to report through the proper process rendered her action unprotected as a public policy violation because there is no specific public policy relating to internal complaints. This argument had previously had mixed success in other cases. However, in a separate case, Ballalatak v. All Iowa Agric. Ass'n,781 N.W.2d 272, 277 (Iowa 2010) citing to the Khort case, the Iowa Supreme Court specifically stated that, "the Court held [we] would recognize a wrongful discharge claim where an employee complains internally about safety issues to the employer." Presumably part of the argument here is that no internal complaint was made to "the employer" simply co-employees and outside of the appropriate chain of command.
Ultimately in this case, the Appeals Court found that it is a clear public policy of the State of Iowa to require certain standards in dementia care and that terminating an employee for reporting breaches internally is violation of public policy. The Complaint did make it to the appropriate person, although not immediately. It is also interesting to note that the Court determined that punitive damages would not be appropriate because prior to this time, "there has been no specific declaration by our Courts or legislature that internal whistle blowing may be protected under certain circumstances." That won't hold true next time since Plaintiffs will cite this case
Anyone reading a legal opinion recognizes immediately that most opinions are full of loopholes and complex language trying to take into account the enormous variety of circumstances that any employer might see. In general, however, this case illustrates the significant danger that faces employers who terminate employees who may have made a complaint which in any way would implicate "whistle blowing." Whistle blowing can encompass a wide array of things, including refusing to participate in an activity which the employee believes to be illegal, reporting the illegal activity of others, exercising a statutory right, or performing a statutory obligation. Any of these items can result in a claim of whistle blowing by the employee. If you have a whistle blower or someone who is simply just a complainer and disciplinary action seems to be appropriate, it is more beneficial to you as the employer to discipline for clear, concrete items such as absenteeism, failure to complete specific work duties and other matters than to rely on any allegation of the employee being a gossip, spreading rumors or being a pot stirrer.