Missouri Republicans make 3rd attempt to sink whistleblower disclosures

Fountain View Missouri House Republicans are making a third push to limit whistleblower defenses.  Legislation sponsored by Rep. Kevin Elmer proposes to “codify the existing common law exceptions to the at-will employment doctrine, and to limit their future expansion by the courts.”

If passed into law, the bill would  “provide the exclusive remedy” for whistle blower reprisal, abolishing common law protections that are not incorporated. Employees who witness wrongdoing would be discouraged by such a law from disclosing  it.

Employees would be “protected” from retaliation only if they report “an illegal act,” and only if they report it to “a law enforcement agency or the employer’s human resources representative.”  No mention is made of an option to report wrongdoing anonymously.  Without that, whistleblowers would be highly vulnerable to retaliation from the employer and blacklisting by other employers.  One of the most common forms of retaliation is termination of employment, which leaves many people unable to pay for legal representation.

If, somehow, a whistleblower obtains legal representation, meets all of the legal requirements, and prevails after years of grueling litigation, the employer will receive only a slap on the wrist. Courts will be barred from awarding more than $300,000 in punitive damages and for smaller employers the limit decreases to $50,000.  This provides an incentive to employers to retaliate against employees who may be reporting financial illegalities.

Perversely, the incentive to retaliate increases with the size of the fraud.  When illegal gains are measured in millions of dollars, the calculus skews heavily toward muzzling a whistleblower. The bill thus offers huge benefits to big companies while giving little help to the smallest firms, for whom the cost of a legal defense will far exceed the $50,000 ceiling on punitive damages.  Could a big corporation be lubricating the legislative levers advancing this troubling bill?

Local blogger Marie Gockel, writing at Show Me Fairness, points a finger at Enterprise Leasing, “a multi-million dollar business.”

Enterprise has tried to change the law for the past six years since a jury found it guilty for retaliatory firing of an accountant who “snitched” when Enterprise told him to juggle their numbers on an accounting report being used for investors and potential lenders…Not only did a jury find Enterprises guilty and awarded substantial damages, the Missouri Court of Appeals agreed in Dunn v. Enterprise Leasing Company, 170 S.W.3d 1 (Mo. App. 2005) and Enterprise has tried to change the law since then.

Enterprise Leasing (Enterprise Rent-a-Car) is part of Enterprise Holdings, self-described as follows:

With annual revenues of $15.4 billion and more than 74,000 employees, Enterprise Holdings and its affiliates own and operate almost 1.3 million cars and trucks. Enterprise Holdings – the largest car rental service provider in the world measured by revenue, employees and fleet – and its affiliates together offer a total transportation solution and are all united by a common mission…

Gockel writes that the Missouri bill “eliminates existing protections under Missouri common law…for employees fired for reporting in good faith what they reasonably believe to be illegal conduct.”

Whistle Blowers will be silenced if only proven, actual violations of law are protected.  Whistle Blowers who lose their jobs should not bear the burden of proving criminal convictions.

The “protections” offered in the proposed Missouri bill are weaker than those of the federal Whistleblower Protection Act, a bill condemned for years as a “trap” for whistleblowers. (On November 27, 2012, a bill with stronger protections, the Whistleblower Protection Enhancement Act, was signed into law.)

At a time when corruption is epidemic in the nation, retreating from whistleblower protection is a terrible idea.  As past experience shows, weak protections prove costly to consumers and taxpayers and leave corporate CEOs laughing all the way to the bank in some tropical tax haven.

Photo credit:  jennlynndesign @ Flickr Creative Commons