Michigan's Whistleblowers' Protection Act and adverse employment actions

Michigan's Whistleblowers' Protection Act and adverse employment actions

In a 2-1 decision, the Michigan Court of Appeals held in Wurtz v. Beecher Metro. Dist. that the trial court erred as a matter of law in holding that the failure to renew an employment contract could never be an adverse employment action.  The court remanded for additional discovery as whether other employees had their contracts renewed and as to what motivated defendants in not renewing the contract.

The panel majority noted the absence of Michigan authority on the issue and referred to federal law.  The majority concluded that if they were to hold that a non-renewal of a contract cannot, under any circumstances, qualify as an adverse employment action because a contracted employee has no expectation of employment past the contract's expiration, the court would be creating an arbitrary distinction between contracted and at will employees who have no expectation of further employment from day to day.

The dissent referred to the definition of "employee" in the WPA and stated by the statute's plain language, it does not extend its protections to pre-employment negotiations or refusal to hire.  As a result, the claim fails as a matter of law.  To accept the plaintiff's theory that he had a continued relationship, the court would have to accept that his employment continued past the expiration of the contract, rendering the termination date and modification clause nugatory.  The majority treated the case as a failure to renew even though the employment contract did not contain a renewal clause, and the defendant was under no obligation to renew.

In distinguishing the concept of adverse employment action under the Michigan civil rights act to the WPA, the dissent noted that the civil rights act allows an action based on pre-employment conduct while the WPA does not.  The two statutes are directed at completely different evils comparing the two to decide if the plaintiff was an employee is misguided.

In light of the fact that the Michigan Supreme Court has two cases before it which will define the scope and intent of the WPA, the court may be open to review this issue to address the scope of coverage, if any, to pre and post employment actions.

Lexis.com subscribers can access the Lexis enhanced version of the Wurtz v. Beecher Metro. Dist., 2012 Mich. App. LEXIS 1906 (Mich. Ct. App. Oct. 2, 2012) decision with summary, headnotes, and Shepard's.

For additional Labor and Employment law insights from John Holmquist, visit the Michigan Employment Law Connection.

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