2008 Montgomery County Bar CLE Representing Whistleblowers in Adler Wrongful Discharge Actions

1. 2008Montgomery County Bar CLERepresenting Whistleblowers in Adler Wrongful Discharge Actions R. Scott Oswald The Employment Law Group® Law Firm Tel: 202.261.2806 Fax: 202.261.2835 soswald@employmentlawgroup.net www.employmentlawgroup.net

2. Overview/Summary • Adler Theories of Coverage • Tips for Representing Maryland Whistleblowers in Adler actions

3. Theories of Coverage • MD common law provides a robust remedy for wrongful discharge in violation of public policy • Adler tort is NOT a general whistleblower statute • The Adler tort is limited to three forms of protected conduct: • refusing to engage in illegal activity • exercising a statutory right or privilege • fulfilling a statutory obligation

4. Refusing to Engage in Illegal Activity • The Adler tort protects employees terminated for refusing to engage in illegal activity. • Examples include: • Terminating an H.R. director because she refused to commit health care benefit fraud. • See, e.g., Magee v. Dan Sources Tech.l Servs., Inc.,137 Md. App. 527 (2001) • 18 U.S.C. § 1347 prohibits individuals from knowingly and willfully defrauding health care benefit programs.  

5. Refusing to Engage in Illegal Activity • Terminating an employee because she refused to engage in prostitution. • See, e.g., Perry v. FTData, Inc.,198 F. Supp. 2d 699 (D. Md. 2002). • Md. Ann. Code, Art. 27 § 15 (1957), which prohibits individuals from engaging in prostitution.

6. Exercising a Statutory Right • Terminating an employee for exercising his or her statutory rights can give rise to an Adler claim. • Examples include: • Discharging an employee solely because the employee filed a worker’s compensation claim. • See, e.g., Ewing v. KoppersCo., 312 Md. 45 (1998). • Md. Ann. Code, Art. 101 § 39A (1957), which prohibits an employer from discharging an employee because the employee filed a worker’s compensation claim.

7. Exercising a Statutory Right • Terminating an employee because she refused to submit to a polygraph test. • See, e.g., Moniodis v. Cook, 64 Md. App. 1 (1985). • Md. Ann. Code, Art. 100 § 95 which prohibits administering a lie detector test as a condition of employment.

8. Fulfilling a Statutory Obligation • Adler tort protects an at-will employee who is terminated for fulfilling a statutory obligation. • Cases construing this form of protected conduct: • Recognizing an Adler claim where a former teacher was terminated for reporting child abuse to a state child care licensing agency • See, e.g., Bleich v. Florence Crittenton Servs., 98 Md. App. 123 (1999). • Md. Ann Code, Fam. Law §§ 5-702(1), 5-704 (a) which requires educators to report any suspected abuse or neglect of children.

9. Fulfilling a Statutory Obligation • Employee alleging retaliation for cooperating in a state and federal prosecution of the employer for dumping toxic waste, could not maintain an Adler claim because CERCLA provides its own remedy for retaliation. • See, e.g., Miller v. Fairchild Indus., Inc., 97 Md. App. 324 (D. Md. 1987). • 42 U.S.C § 9610, which prohibits employers from retaliating against employees who provide information to state or federal government.

10. Source of Public Policy Must Lack Its Own Enforcement Mechanism • Before bringing an Adler claim, evaluate whether the source of public policy originates from a statute that provides its own remedy. • If a statute already contains a remedy for vindicating the public policy objectives, then the discharged employee can pursue a claim only through the existing statute.

11. Individual Liability • An Adler plaintiff can name an individual defendant if the individual is: • an executive (alter ego of the corporation) or • involved in decision making

12. Damages • The Adler claim is a tort. • Tort damages include lost wages, compensatory damages, and where there is a showing of malice, punitive damages. • Kessler v. Equity Mgmt., Inc., 82 Md. App. 577, 591 (1990) • “Punitive Damages are awarded ‘[b]ased upon the heinous nature of the defendant’s tortious conduct....” • Darcars Motors of Silver Springs, Inc. v. Borzym, 379 Md. 249, 263 (2004)

13. Pleading Requirements and Burden of Proof • An employee must plead with specificity the public policy that the employer violated by discharging the employee. • Adler v. Am. Standard, Corp., 291 Md. 31, 44 (1981) (rejecting plaintiff’s complaint because the complaint was “too general, too conclusory, too vague and lacking in specifics to mount up to a prima facie showing”) • Plaintiff must establish a prima facie case consisting of the following elements: • Plaintiff was an at-will employee terminated by the defendant; • The termination of the plaintiff’s employment violates a specific public policy; and • There is a causal nexus between the public policy violation and the employer’s decision to terminate the plaintiff.

14. Tips for Representing Whistleblowers in Adler actions • Case Selection • A long-term employee (more than 9 years) with a satisfactory or better performance record and some prior expertise in the subject matter about which she is blowing the whistle • A whistleblower who discloses wrongdoing in a timely manner using the employer’s established complaint protocol in a non-contumacious manner • A whistleblower who is not complicit in her employer’s wrongdoing • A whistleblower who complains about a matter of public concern • A whistleblower who the employer terminates within 6 months of her protected disclosure, exercise of statutory right, or refusal to engage in an illegal act

15. Tips for Representing Whistleblowers in Adler actions • Forum Selection • Theme • Deciding Whether to Name an Individual Defendant • Discovery • Maximizing Damages

16. Questions? For further information, contact: R. Scott Oswald The Employment Law Group® Law Firm soswald@employmentlawgroup.com www.employmentlawgroup.com Tel: 202.261.2806 Fax: 202.261.2835