The Tennessee Supreme Court recently clarified an important aspect of the Tennessee Public Protection Act (“TPPA”) for purported whistleblowers and employers confronted with claims of illegal activity. In a case of first impression for the Tennessee Supreme Court,[1] the Court addressed a split among the court of appeals panels regarding the reporting requirement for a whistleblower claim under the TPPA. The plaintiff in the case, relying upon one strain of case law, asserted an employee could satisfy the reporting requirement without reporting the asserted illegal behavior to anyone besides the offender if the offender were a manager, owner or highest ranking officer in the company. To fail to provide protections to employees who report to offending managers risks encouraging managers to assert they were involved in illegal activity and would deprive some employers of the opportunity to self-correct, the employee argued.

In contrast, the defendant looked to other precedent that required an employee to report illegal activity to someone other than the offending party to comply with the statute’s purpose, which is to advance the public interest. The defendant argued that reporting concerning conduct only to those engaged in such conduct furthers only a private interest and is insufficient to meet the standard set forth in the statute.

After a review of the court of appeals opinions and case law from other jurisdictions, the Court sided with the defendant, holding that, to successfully state a claim under the TPPA, a plaintiff must report asserted illegal activity to an entity other than the offending party even if meeting this standard would require reporting the activity to outside parties. The public policy underlying the TPPA requires employees to seek to further the public good by exposing illegal or unsafe practices. Reporting illegal activity only to the wrongdoer does not expose the act to the light of day and, thus, does not rise to the standard of whistleblowing. By limiting the exception to those situations in which an employee has exposed an employer’s wrongful practices in furtherance of the public interest, the Court stated its holding aligned with the need to maintain the narrowness of the exception to Tennessee’s employment-at-will doctrine created by the TPPA.

Takeaways:

  • While the Court’s decision provides employers with clarification of the reporting standard under the TPPA and with grounds for challenging some claims brought by employees under the TPPA, the holding also may encourage employees to go outside the employer’s organization to report concerns to ensure they have met the whistleblower requirements, especially if they are being advised by counsel.
  • To encourage employees to provide your business an opportunity to self-correct, make internal reporting procedures clear and easy to follow. Be certain employees know how to bypass supervisors who may be viewed as wrongdoers and to whom they may report if they believe wrongdoing is being committed by high-ranking company representatives.