There are two main issues before the court. The first is whether Indiana’s whistle blower statute,
Ind. Code § 22-5-3-3, protects the sort of activities that allegedly led to Mr. Ryan’s firing. The second is whether Indiana’s public policy exception to the doctrine of at-will employee applies to the sort of rights and duties he was allegedly exercising prior to his dismissal. . . .
In cases involving private employers under public contract, Indiana’s private employer whistle blower statute, Indiana Code § 22-5-3-3, protects the employee from discharge or other disciplinary action for having reported “in writing” a violation of federal, state, or local law or regulation, or a misuse of public resources.
Id. . . .
The key issue is whether, considering all of the facts alleged in the Amended Complaint, the court can infer that is not merely conceivable but plausible that his letters contained the sort of information that would qualify them as protected reports under the statute. That is, did the written reports allege a violation of federal, state, or local laws or regulations, or a misuse of public resources, regarding UL’s execution of its contract with NIST?
In a claim under Indiana’s private employer whistle blower statute the existence of a violation or misuse of public resources is nearly as much at the center of a wrongful discharge claim as the existence of a conspiracy charge is to an antitrust claim under § 1 of the Sherman Act. See
Bell Atlantic, 127 S.Ct. at 1964. . . .
The whistle blower statute is not aimed at protecting plaintiffs who believe that their employer’s conduct needs to be investigated because a thorough inquiry might reveal violations of law or regulation or misuse or public resources. Rather it seeks to protect employees who report that, in their employer’s execution of a public contract, a law or regulation has been broken or public resources misused. At a minimum, a claim under the whistle blower statute must provide some grounds for inferring (1) that such conduct occurred and (2) that this conduct was reported.
Bell Atlantic requires this much. . . .
In short, the letters [Ryan] sent to NIST and UL state his concerns about the adequacy of NIST’s investigation and, by extension, UL’s. However, UL’s competence is irrelevant to a whistle blower claim.
The Indiana Court of Appeals has concluded that a misuse of public resources under the private whistle blower statute “contemplates a direct expenditure or use of public funds, property, or resources for a purpose other than that contemplated by the contract in question.”
Coutee v. Lafayette Neighborhood Housing Servs., Inc., 792 N.E.2d 907, 914 (Ind. Ct. App. 2003). In this respect, misuse would include the spending of funds for personal use or for any purpose not allowable under the contract, “whether legitimate or not.” Id. However, it would not include the waste of money through mismanagement or incompetence.
So even if UL’s failure to investigate Mr. Ryan’s concerns about terrorist attacks or arrive at his conclusions could be termed a waste of money, as Mr. Ryan so evidently believes it was, its conduct was not the sort of wrongdoing, the report of which the private employer whistle blower statute is aimed to protect. In short, Mr. Ryan has not alleged a statutory claim. The Amended Complaint provides no reasonable basis for inferring that UL broke any laws or federal regulations, or spent public resources on an unallowed purpose. . . . Even under the most favorable reading of the Amended Complaint, in which the court accepts all of his factual allegations as true and draws all reasonable inferences in his favor, Mr. Ryan’s right to relief under Indiana’s private employer whistle blower statute is speculative at best. . . .
Only earlier this year, the Indiana Supreme Court reaffirmed the narrowness of the public policy exception. Meyers v. Meyers, 861 N.E.2d 704, 706 (Ind. 2007). The court noted that the
Frampton exception was based on express statutory language prohibiting employers from evading the obligations of the Indiana Worker’s Compensation Act.
Id. The Act provided that “no rule, regulation, or other device” shall relieve an employer from its obligations, and the
Frampton court had found the threat of discharge to be such a device.
Id. (quoting
Frampton, 297 N.E.2d at 427-28). The
McClanahan exception was based on the recognition that the absence of a remedy would encourage criminal conduct.
Id.
Following the Indiana Supreme Court’s lead, the Indiana Court of Appeals has generally allowed the public policy exception only in cases involving worker’s compensation claims or in cases in which a plaintiff was “allegedly terminated in retaliation for refusing to violate a legal obligation that carried penal consequences.” Id. at 707 (citing
McGarrity v. Berlin Metals, 774 N.E.2d 71, 78-79 (Ind. Ct. App. 2002) (refusal to file fraudulent tax return);
Haas Carriage, Inc. v. Berna, 651 N.E.2d 284, 288 (Ind. Ct. App. 1995) (refusing to haul unlawful road);
Call v. Scott Brass, Inc., 553 N.E.2d 1225, 1230 (Ind. Ct. App. 1990) (refusing to disregard jury summons)).
Likewise, in keeping with this narrow view of the public policy exception, Indiana appellate courts have not allowed wrongful discharge lawsuits based on alleged retaliation for filing an unemployment claim,
Lawson v Haven Hubbard Homes, Inc., 551 N.E.2d 855, 860 (Ind. Ct App. 1990), for refusing to submit to a polygraph examination,
Hamblen v. Danners, Inc., 478 N.E.2d 926, 929 (Ind. Ct. App. 1985), for internally reporting misconduct affecting the validity of a drug company’s federal drug safety reports,
Campbell v. Eli Lilly & Co., 413 N.E.2d 1054, 1061-62 (Ind. Ct. App. 1980), and for reporting to a company official a supervisor’s alleged illegal kickbacks,
Martin v. Platt, 386 N.E.2d 1026, 1028 (Ind. Ct. App. 1979). (Aside from
Lawson, these cases were decided prior to
McClanahan. However, in
Meyers,
the Indiana Supreme Court cited all four as examples of the decisions establishing that the public policy exception is “quite a limited exception.” Meyers, 861 N.E.2d at 707.)[bolding mine; footnotes omitted]
To quote LashL, "You really don't understand this law thing, do you?"
