On October 5, 2015, the Connecticut Supreme Court issued a sweeping change to the interpretation of the state's whistleblower statute (C.G.S. §31-51q) that will expose private employers to greater risks of litigation for disciplining outspoken employees.
A unanimous Supreme Court in Trusz v. UBS Realty Investors, LLC, chose not to extend to private employers the pro-employer legal standard governing retaliation for public employee's exercise of free speech that was decided by the U.S. Supreme Court in 2006 in Garcetti v. Ceballos. Remarkably, the Connecticut Supreme Court had already adopted the Garcetti decision as to public employees in Connecticut in Schumann v. Dianon Systems (2012) where the claim was made under the federal constitution. When faced with the same issue under the Connecticut Constitution, the Supreme Court concluded the contrary. The Court held "under the state constitution, employee speech pursuant to official job duties on certain matters of significant public interest is protected from employer discipline in a public workplace, and §31-51q extends the same protection to employee speech pursuant to official jobs duties in the private workplace." In extending this protection to private employees engaged in public speech at work, the Connecticut Supreme Court has exceeded the protection beyond what the federal courts would protect under the U.S. Constitution.
Trusz was the managing director of UBS Realty's valuation unit when he raised some concerns about errors in the valuation methods used by the company. While two separate auditors responding to his internal complaints agreed with his points as to the valuation methodology, they disagreed that these materially affected the valuation of the portfolio and did not believe that they were required to report it to investors. Undaunted by the auditors' opinions, the plaintiff continued to protest that the failure of the valuation errors was a breach of fiduciary duty by the company and therefore unlawful. He later filed a CHRO charge and federal lawsuit alleging that he was punished by his employer for speaking up on an issue of public interest. On certification to the Supreme Court from the federal court, the Court directly faced the question of whether the protection of employee first amendment speech was broader or narrower than the limited protection accorded public employees. The Court ruled unequivocally that speech on issues under the state constitution are protected more broadly in the private work place. Courts will apply the more flexible Pickering/Connick test which requires a balancing of the employer's interests against the constitutional interests.
The legal effect will be a return to the more fact-based world that preceded the bright line pro-employer standard in Garcetti. Knowledgeable plaintiff's counsel likely will add a state constitutional claim and assert that their clients were speaking, not simply to serve their own interests, but in aid of a public purpose that insulates their comments from discipline. This extension of Connecticut law, coupled with statutory changes in the federal arena, will mean that whistleblower litigation will continue to be an issue that employers will need to protect against by adopting sound policies to address such complaints promptly when they are raised in the workplace. The expansion of whistleblower claims and protections will be the subject of a forum presented by our firm in January 2016.
If you have any questions, please contact a member of our government investigations group or our labor and employment group.