Court upholds firing of employee who threatened to file complaint of illegality
In a disappointing 2-1 majority decision, the Federal Appeals Court for the Sixth Circuit held that a company could fire an employee who threatened to report conduct that violates the Employee Retirement Income Security Act, provided the threat was not made in "testimony" or during an "inquiry." Thus, while the employee who confirms illegal conduct after an inquiry is protected by the ERISA, the employee whose complaint initiates the inquiry is not protected.
In Sexton v. Panel Processing, Inc., the two judges in the majority concluded that the purpose of the ERISA whistleblower-protection provision was to guard "inquiries and testimony" and it was not intended to protect unsolicited reports of illegal activity. Sexton was a General Manager of the company, in charge of a facility in Coldwater, Michigan. As a trustee of the employee profit-sharing plan, he had supported a campaign to put two employees of the company on its board of directors. The Company acknowledged that he was fired as a result of his support of this campaign and his threat to report what he deemed an ERISA violation. Judge Helene White wrote a strenuous dissent from the majority's opinion.