An employee who was laid-off after she 1) reported a co-worker’s conduct to supervisors and 2) considered notifying the police of the conduct did not offer enough evidence to proceed with a retaliation claim under the Whistleblowers Protection Act, the Michigan Court of Appeals has ruled.

The plaintiff in Rivera v SVRC Industries, Inc. (Docket No. 341516) asserted the defendant violated the Whisteblowers Protection Act (WPA) when it laid her off shortly after she reported another employee’s conduct to supervisors and indicated she may report the conduct to police.

The WPA prohibits employers from discharging, threatening or discriminating against an employee regarding the employee’s compensation, terms, conditions, location or privileges of employment when the employee reports, or is about to report, to a public body a violation or a suspected violation of the law by the employer or fellow employees.

The Court of Appeals in Rivera reversed the trial court’s denial of summary disposition for the defendant, finding the plaintiff failed to present sufficient evidence of retaliation. Judge Mark T. Boonstra wrote the published opinion, joined by Judges Michael J. Kelly and Deborah A. Servitto.

The Rivera decision is important because it expounds on the Court of Appeals published opinion in McNeill-Marks v Mid-Michigan Medical Center-Gratiot, 316 Mich App 1 (2016). In McNeill-Marks, the Court of Appeals held that State Bar of Michigan attorneys qualify as “public bodies” under the WPA and, therefore, employees who report (or who are about to report) an alleged violation of law to an attorney are protected from retaliation by employers. The ruling in McNeill-Marks was appealed to the Michigan Supreme Court, which denied leave after oral argument. Justice Brian K. Zahra, joined by then-Chief Justice Stephen J. Markman, disagreed with the decision to deny leave in McNeill-Marks. Justice Kurtis T. Wilder did not participate in the matter because he was on the Court of Appeals panel that decided the case. Justice Elizabeth T. Clement also did not participate. The Michigan Supreme Court subsequently denied reconsideration in McNeill-Marks.

Rivera Facts

The plaintiff worked for the defendant from October 2015 to October 2016 as director of industrial operations. In September 2016, the plaintiff attended a meeting where another employee, LS, was present. According to the plaintiff, during the meeting LS talked about a “revolution” in the United States and indicated that he knew how to “operate a firearm, that he was not afraid to pull the trigger and that he did not discriminate.”

The plaintiff reported LS’s comments to Debra Snyder, the defendant’s chief operating officer. Snyder indicated that she would notify the defendant’s CEO, Dean Emerson, before instructing the plaintiff on how to proceed. When Emerson was informed of the comments made by LS, he consulted company attorney Gregory Mair and instructed Mair to investigate. As part of the investigation, Mair spoke with the plaintiff and others who were present at the meeting where the comments were made. Mair advised the defendant against filing a police report. The plaintiff also discussed LS’s comments with Sylvester Payne, who was chair of the defendant’s board of directors but not an employee.

The defendant discharged LS on October 3, 2016. The plaintiff was laid-off on October 4, 2016 for “budgetary and economic reasons.”

Thereafter, the plaintiff filed this lawsuit in Saginaw County Circuit Court, asserting the defendant violated the WPA by retaliating against her when she was about to report LS’s conduct to the police and for discussing the conduct with Mair. The plaintiff also claimed the defendant violated Michigan public policy.

The defendant sought to have the plaintiff’s case dismissed, claiming there was no genuine issue of material fact. The trial court denied the defendant’s motion for summary disposition. The defendant appealed.

After the Court of Appeals heard oral arguments in the case, the parties were ordered to file supplemental briefs addressing whether the plaintiff’s communications with Mair “constituted a ‘report’ of a violation or suspected violation of law within the meaning of MCL 15.362.” The Court of Appeals instructed the parties not to address the status of Mair as a State Bar of Michigan member but instead focus on whether the communications to Mair constituted a “report” within the meaning of the statute.

“About To Report”

The Court of Appeals began its analysis by examining the WPA and MCL 15.362 in particular.

MCL 15.362 says an employer “shall not discharge, threaten, or otherwise discriminate against an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because the employee, or a person acting on behalf of the employee, reports or is about to report, verbally or in writing, a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body, or a court action.”

The Court of Appeals also explained that, to survive the defendant’s motion for summary disposition, the plaintiff had to establish a prima facie case either by direct or circumstantial evidence.

Regarding the plaintiff’s “about to report” claim, the defendant asserted it was entitled to summary disposition because the plaintiff offered no evidence that she was about to report LS’s conduct to the police. “We agree,” the Court of Appeals said, relying on Hays v Lutheran Social Services of Michigan, 300 Mich App 54 (2013).

The plaintiff in Hays had discussed a client’s marijuana use with her supervisor, coworkers and a Narcotics Enforcement Team official to inquire about the legal ramifications of knowing that someone was using illegal drugs and failing to report it. The plaintiff did not make a report and was fired when her employer discovered that she had breached a client confidentiality agreement by disclosing her client’s drug use. The plaintiff sued, claiming the defendant violated the WPA because she was about to report a suspected violation of law. The Court of Appeals held the plaintiff failed to establish a prima facie case of retaliation under the WPA because her inquiries about potential consequences did not indicate an affirmative intent to actually report the client’s behavior and she never threatened to take further action.

According to the Court of Appeals, the plaintiff’s conduct in Rivera was similar to the plaintiff’s conduct in Hays. The plaintiff in Rivera “did not, either explicitly or implicitly, threaten to report LS’s conduct. Rather, while plaintiff’s text messages and deposition testimony reveal that she believed that contacting the police was the correct course of action, the record shows only that she discussed with various people the option of filing a police report and conveyed her opinion. It does not demonstrate that, after her consultations, she had determined that filing a police report was still the best course of action or, more significantly, that she was on the verge of contacting law enforcement.”

Moreover, “there is no evidence that defendant was ever put on notice that plaintiff was about to report LS’s conduct,” the Court of Appeals observed. “For these reasons, plaintiff has failed to prove that a genuine issue of material fact existed regarding whether she had engaged in a protected activity by being about to report a violation or suspected violation of law. Accordingly, the trial court erred by denying defendant summary disposition on this claim.”

“Actual Report”

The Court of Appeals then addressed the plaintiff’s communications with attorney Mair.

Practicing attorneys who are members of the State Bar of Michigan are considered members of a “public body” under the WPA, the Court of Appeals noted, citing McNeill-Marks. “Based on that, the trial court concluded, albeit without further analysis, that when plaintiff discussed LS’s conduct with Mair, plaintiff had engaged in protected activity.”

However, “the trial court’s analysis did not go deep enough, and that the trial court erred in reaching that conclusion,” the Court of Appeals stated.

Although McNeill-Marks held that a licensed attorney is a member of a public body for purposes of the WPA, “it does not compel the conclusion that plaintiff’s conversation with Mair was in this case a ‘report’ of a violation (or suspected violation) of the law,” the Court of Appeals explained. “For several reasons, we conclude that it was not. First, plaintiff did not ‘on [her] own initiative, take it upon [herself] to communicate the employer’s wrongful conduct to a public body in an attempt to bring the, as yet hidden, violation to light.’ … Rather, plaintiff spoke with Mair at defendant’s request. In other words, when she spoke with Mair, plaintiff was not an ‘initiator’ and did not ‘take it upon [herself]’ to communicate with Mair.”

Furthermore, the trial court presumed the nature of the plaintiff’s discussion with Mair was that of reporting, the Court of Appeals said. “We do not agree. Indeed, the information that plaintiff conveyed to Mair was the same as that which she had already directly communicated to defendant, and that information was already known to Mair by virtue of plaintiff’s earlier communications with defendant itself. As a consequence, the information was no longer ‘as yet hidden,’ … at the time of the communication with Mair.”

Therefore, the plaintiff’s communications with Mair “do not constitute ‘reporting’ under the WPA,” the Court of Appeals held.

The Court of Appeals also pointed out that, while Mair may have been a member of a public body under McNeill-Marks because he was an attorney, he was also acting as the defendant’s agent when the plaintiff communicated with him. “A lawyer is an agent, to whom clients entrust matters, property, and information, which may be of great importance and sensitivity, and whose work is usually not subject to detailed client supervision because of its complexity. … Therefore, when plaintiff communicated with Mair at defendant’s direction, she was, in essence, again communicating with Mair’s principal, i.e., defendant.”

According to the Court of Appeals, the plaintiff’s communications with Mair could not reasonably be viewed as “an attempt to bring the, as yet hidden, violation to light to remedy the situation or harm done by the violation, … when (1) plaintiff had already imparted the information directly to defendant, (2) defendant had already shared the information with Mair, and (3) in further speaking with Mair, plaintiff merely repeated the same information to defendant’s agent.” As a result, the plaintiff’s communication with Mair was not a “reporting” under the WPA, the Court of Appeals said. “To conclude otherwise would be to transform what was a non-actionable communication (i.e., plaintiff’s communication with defendant, which is not a ‘public body’ under the WPA) into an actionable one merely because, at defendant’s behest, plaintiff re-conveyed the same information to defendant’s attorney-agent. We cannot endorse such a strained reading of the ‘reporting’ requirement of the protected activity element under the WPA.”

The Court of Appeals continued by noting that, even if it had decided otherwise, it would still find the trial court wrongly concluded the plaintiff had met the burden of showing a causal connection between her communications with Mair and the adverse employment action. “[P]laintiff has admitted that she told Mair what he, and defendant, already knew. Plaintiff offered no evidence before the trial court establishing a causal connection between that communication, which was initiated at defendant’s request, and her termination. Temporal proximity, without more, is insufficient to prove a causal connection between the protected activity and adverse employment action.”

Regarding the plaintiff’s violation of Michigan public policy claim, the Court of Appeals said this argument failed because it duplicated the WPA claims and the WPA’s remedies are exclusive.

After issuing the Rivera opinion in April 2019, the Court of Appeals denied a motion for reconsideration. The decision has since been appealed to the Michigan Supreme Court.