Firing a Whistleblower In Arizona
The few Arizona decisions discussing public policy violations for whistle-blowing discharges recognize certain essential elements.
In Wagner v. City of Globe, the Arizona Supreme Court described a whistle-blower as an employee "who exposes wrongdoing on the part of his employer and is then discharged." 150 Ariz. 82, 88, 722 P.2d 250, 256 (1986).
For a whistle-blowing employee to succeed on a public policy-based wrongful discharge claim, the court must find "some 'important public policy interest embodied in the law' has been furthered by the whistleblowing activity." Id. at 89, 722 P.2d at 257 - quoting Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 381, 710 P.2d 1025, 1036 (1985).
The Wagner court accordingly reversed summary judgment entered against a discharged police officer who took "affirmative remedial action" by reporting an illegal arrest to a city manager and whose actions were "not merely private or proprietary, but instead [sought] to further the public good." Id.
Wagenseller provides guidance about public policy protecting whistle-blowers from wrongful discharge. There the supreme court explained that the matter must "'strike at the heart of the citizen's social rights, duties and responsibilities.'" 147 Ariz. at 377, 710 P.2d at 1032 (quoting Palmateer v. International Harvester Co., 85 Ill. 2d 124, 421 N.E.2d 876, 878-79, 52 Ill. Dec. 13 (1981)).
Although public policy need not always derive from a criminal statute, Wagenseller stated that the criminal code is a clear expression of state public policy. See id. at 380, 710 P.2d at 1035.
The rationale for this approach was best described in Sullivan v. Massachusetts Mut. Life Ins. Co., 802 F. Supp. 716 (D. Conn. 1992), where the plaintiff alleged that he was discharged because he complained about insider-trading of securities.
The defendants argued that the claim failed because the plaintiff never reported any alleged violations to outside authorities.
In rejecting this argument, the court explained salutary reasons for protecting internal whistle-blowing activity:
This rule makes sense. a rule that would permit the employer to fire a whistleblower with impunity before the employee contacted the authorities would encourage employers promptly to discharge employees who bring complaints to their attention, and would give employees with complaints an incentive to bypass management and go directly to the authorities.
This would deprive management of the opportunity to correct oversights straightaway, solve the problem by disciplining errant employees, or clear up a misunderstanding on the part of the whistleblower.
The likely result of a contrary rule would be needless public investigations of matters best addressed internally in the first instance.
Employers benefit from a system in which the employee reports suspected violations to the employer first ...
Id. at 725 (citing Norris v. Lumbermen's Mut. Cas. Co., 881 F.2d 1144, 1453 (1st Cir. 1989) (employer liable for discharge of employee because of his purely internal complaints of violations of Nuclear Regulatory Commission regulations)).