On February 8, 2011, the Minnesota Court of Appeals issued a published decision in Coursolle v. EMC Insurance Group, Inc., ___N.W.2d ___, 2011 WL 382783 (Minn. Ct. App. Feb. 8, 2011). The Court’s decision clarified protections for employees under the Minnesota Whistleblower Act and confirmed that an employer may prevent the formation of a contract via specific language in its employee handbook.

Factual Background and Procedural History: The plaintiff, John Coursolle, began working for EMC Insurance Group, Inc. (“EMC”) in 2000 as a claims adjustor. Mr. Coursolle was issued a copy of EMC’s employee handbook when he began working. In 2006, Mr. Coursolle participated in an investigation by EMC regarding the conduct of his manager, Michael Huttner. During that investigation, Mr. Coursolle told EMC that he considered Mr. Huttner to be intimidating. Soon after the investigation, Coursolle alleged that Mr. Huttner began retaliating against him due to his participation in the investigation. Mr. Coursolle resigned his employment with EMC in March 2007.

Mr. Coursolle then filed a lawsuit against EMC, asserting several different claims. The claims at issue in the Court of Appeals’ decision were the following: a whistleblower claim (alleging that Mr. Huttner retaliated against Mr. Coursolle for participating in the investigation); a breach of contract claim (for EMC’s alleged failure to apply the non-retaliation policy set out in its employee handbook); and a constructive discharge claim. The district court dismissed all of Mr. Coursolle’s claims, and Mr. Coursolle appealed to the Court of Appeals.

Court of Appeals Opinion: The Court of Appeals addressed each of Mr. Coursolle’s claims and ultimately determined that the district court had correctly dismissed the claims. First, with regard to Mr. Coursolle’s whistleblower claim, the Court held that Mr. Coursolle had not engaged in protected conduct sufficient to trigger the protections of the Minnesota Whistleblower Act. Specifically, while Mr. Coursolle had participated in the investigation conducted by EMC, he had not reported a violation or suspected violation of a federal or state law. Mr. Coursolle argued that because he participated in an investigation arising out of such a report (by another employee), he should be protected. The Court disagreed, pointing out that protection under the Whistleblower Act for participation in investigations is only afforded to employees who participate in investigations conducted by a “public body or office,” and not investigations conducted by an employer. In summary, the Court concluded that participation in an employer’s internal investigation is not sufficient to trigger the protections of the Minnesota Whistleblower Act.

The Court also dismissed Mr. Coursolle’s breach of contract claims. Mr. Coursolle had argued that because the EMC employee handbook contains a provision stating that the company will not permit retaliation against an employee who participates in an investigation, the company had created a contract with its employees. Mr. Coursolle claimed that because Mr. Huttner retaliated against him, EMC had breached its contractual agreement not to allow such retaliation to occur. The Court disagreed, stating that because the employee handbook contained two separate provisions stating that the handbook did not create a contract between EMC and employees, EMC had not created a contract. Accordingly, the Court held that Mr. Coursolle’s breach of contract argument failed.

Finally, Mr. Coursolle had set forth a separate claim for constructive discharge. A constructive discharge occurs when an employee resigns his position due to intolerable working conditions. The doctrine of constructive discharge is generally relied upon by an employee who quits, and then later claims that illegal discrimination or retaliation forced him to quit his employment – and it generally arises as part of a separate cause of action (for discrimination or retaliation, for example). In this case, Mr. Coursolle had asserted constructive discharge as an independent, freestanding cause of action. The Court of Appeals concluded that constructive discharge does not create an independent cause of action, however. The Court stated that constructive discharge is “a doctrine that may be invoked by a plaintiff in some employment-related actions to prove that, even though the plaintiff resigned from his or her job, the defendant should be deemed to have made an adverse employment action.” As a result, a constructive discharge claim cannot stand on its own, but must be part of an allegation of otherwise illegal conduct by an employer (such as discrimination or retaliation).

What this Case Means for Employers: The fact that the Court issued a published decision in this case indicates that it intended to create binding precedence for future cases involving these issues. First, the Court clarified that an employee who participates in an internal employer investigation is not protected by the Minnesota Whistleblower Act. While this may serve as a defense to a whistleblower claim by an employee, employers should nonetheless attempt to prevent retaliation against employees who participate in such investigations. Maintaining and enforcing a policy against retaliation will encourage employees to come forward with complaints and participate in such investigations.

Most importantly, the Court reinforced the established principle that an employee handbook cannot create a binding contract in any respect if it contains language specifically disclaiming that it intended to create a contract. This decision serves as an important reminder to employers that when they issue an employee handbook to provide guidance to employees, they should include language stating that the handbook is not intended to create a contract. Such language in an employee handbook will protect employers from breach of contract claims like the one brought by Mr. Coursolle.