The Pennsylvania Whistleblower Law

Most human resources managers in Pennsylvania are pleasantly aware that Pennsylvania is an “at will” employment state. Thus, they know that in the absence of an employment agreement to the contrary, a Pennsylvania employer is able to fire an employee for any reason or no reason at all, so long as it is not an illegal reason. While every employer with a pulse is also aware that it is illegal to fire or discriminate against an employee on the basis of race, religion, national origin, gender or age, many employers are not aware that for the past 15 plus years it has also been unlawful for a Pennsylvania employer to fire or discriminate against an employee in retaliation for reporting the employer for waste or wrongdoing.

In 1986, the Pennsylvania Legislature enacted Pennsylvania’s “Whistleblower Law,” declaring it unlawful for any employer to “discharge, threaten or otherwise discriminate or retaliate” against an employee in compensation or in terms or conditions of employment because the employee has made, or is about to make, a good faith report to the employer or to an “appropriate authority” about an instance of “wrongdoing or waste.” The Act, codified at 43 P.S. § 1421, et seq., also renders it unlawful for an employer to discriminate or retaliate against an employee because he or she has been requested by an appropriate authority to participate in an investigation, hearing or inquiry regarding the employer’s alleged wrongdoing or waste.

In addition to various federal whistleblower statutes, at least thirty-five states have enacted whistleblower laws. While most of these states extend whistleblower protections to governmental employees, Pennsylvania is one of the minority of states that extend these protections to private sector employees.

No doubt, Pennsylvania’s Whistleblower Law does create a potential minefield for employers. However, it is hardly an open-ended invitation for every disgruntled employee to litigate whatever gripe may have led to his or her termination. By its own terms, the Act only extends whistleblower protection to employees who complain of “waste” or “wrongdoing,” and both of these terms are very carefully defined in the statute.

Waste

In order to be entitled to whistleblower protection on grounds of a report of waste, it is not enough that the employee has complained of an employer or supervisor’s inefficient business practices. In this particular, the Whistleblower Law is concerned only with the abuse of government funds. Accordingly, the employee is not entitled to whistleblower protection unless the reported waste involves an abuse, misuse, destruction or loss of funds or property derived from state or municipal sources.

Wrongdoing

The Whistleblower Law’s definition of “wrongdoing” is likewise narrowly drawn. The Act does not concern itself with wrongdoing in the everyday sense of the word, or even in a tort sense of the word. Instead, in order for a report of wrongdoing to afford an employee with whistleblower protection, the alleged wrongdoing must be a violation of a federal or state statute or regulation, or of a municipal ordinance or a code of conduct or ethics “designed to protect the interests of the public or the employer,” and which is “not of a merely technical or minimal nature.” Thus, where an employee of a nursing home that has contracted with a municipal government reports substantial violations of numerous health and safety requirements, that employee will be entitled to protection under the Whistleblower Law. However, where an employee simply reports violations of a company’s internal policies not embodied within any particular statute or regulation, such a report does not entitle the employee to whistleblower protection. Unless a particular statute or regulation specifically prohibits particular conduct, the Whistleblower Law simply does not apply. Courts have therefore held that a supervising surgeon’s failure to be physically present during medical procedures he was required to supervise, no matter how medically inappropriate, did not constitute “wrongdoing” for the purposes of the Whistleblower Law because there was no state statute specifically requiring the supervising surgeon to be present during the surgery.

Good Faith Report

To be entitled to whistleblower protection, it is not enough that an employee alleges waste or wrongdoing within the meaning of the statute. In addition, the employee must have reasonable cause to believe the report is true, and must make the report without malice or consideration of personal gain. As a practical matter, it is often difficult to look into an employee’s mind and determine why he or she decided to report waste or wrongdoing, and therefore difficult to determine whether malice or personal gain was a factor in making the report. However, it is fair to say that an employee who has made a demonstrably false report against an employer has given the employer fair grounds for discharging the employee.

Remedies and Burden of Proof

Any person who has been harmed by a violation of the Whistleblower Law may bring a lawsuit against the employer, but must do so within the short, 180-day deadline set forth in the Act’s statute of limitations. In any civil action under the Act, the employee alleging violation of the Act must show by a preponderance of the evidence that prior to the employer’s alleged retaliatory action, the employee, in good faith, had reported or was about to report an instance of wrongdoing or waste to the employer or to an appropriate authority. Once the employee satisfies this rather minimal burden of proof, the burden shifts to the employer to prove by a preponderance of the evidence that the action the employer took against the employee was for separate and legitimate reasons, and not in retaliation for the reported waste or wrongdoing. By shifting the burden of proof to the employer, the Whistleblower Law makes it easier for an employee to establish that he or she was a victim of retaliation for having made a report of waste or wrongdoing. If an employee is fired after having made such a report, the employee will often have a plausible argument that the stated basis for his or her termination was a pretext, and that retaliation for his or her whistleblowing was the actual reason for the firing. Thus, as a practical matter, a Pennsylvania employer cannot safely fire an employee in the immediate aftermath of a report of waste or wrongdoing unless it can be shown that the employee engaged in some egregious misconduct unrelated to the employee’s report.

Enforcement

The Whistleblower Law provides for civil penalties against an employer for having violated the law. However, in most cases, the threat of civil penalties is toothless because penalties are generally limited to a fine of not more than $500.00, payable to the state treasurer. The greater remedies are those available to an employee who sues as a private litigant, where the remedies may include reinstatement of employment, the payment of back wages, the reinstatement of fringe benefits and seniority rights, and any other actual damages, including reasonable attorney’s fees. It is these private remedies, rather than the threat of civil penalties, which will provide the biggest stick in holding employers to the letter of the Whistleblower Law.

Just as many employers are unaware of the Whistleblower Law, so it is that many employees are also unaware of the law. It is presumably with this in mind that the drafters of the Whistleblower Law provided within the Law that an employer shall post notices and use other appropriate means to notify employees and keep them informed of the protections and obligations of the Whistleblower Law. Thus, while compliance with labor laws is important in its own right, it is even more important in the face of an employer’s obligation to inform its work force of their rights.

As in all workplace disputes, skilled legal counseling can often avoid potential areas of litigation, and can make the difference between success and failure in prosecuting or defending a claim if litigation becomes necessary. Be sure to speak with the attorneys of Wolf, Baldwin & Associates, P.C. before a potential problem becomes a real liability.

The attorneys of Wolf, Baldwin & Associates, P.C. have represented employees and businesses in labor disputes and wrongful discharge litigation for over 30 years. Whether you are an employee with a potential whistleblower case or a businessperson whose company may need counseling on whistleblower issues, we invite you to contact us today to schedule an appointment.

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