In some cases where a whistleblower alleges unlawful retaliation, employers may be able to argue that the plaintiff is not protected because the complained-of activity was not corporate wrongdoing — merely the exercise of free speech. But such First Amendment defenses are, for the most part, limited to instances involving a corporate disclosure.
This article by TELG managing principal R. Scott Oswald and TELG principal David L. Scher was published by The Corporate Counselor on June 12, 2014. The full article is available as a PDF on our site.
First-Amendment Defenses Against Whistleblowers
The First Amendment prohibits restrictions on speech, including compelled speech. However, mandatory disclosures have long been the linchpin of several major regulatory schemes. For example, publicly traded companies are required to share information on the financial health of the companies with investors and with the SEC. Likewise, pharmaceutical companies are prohibited from advertising that their drugs provide certain medical benefits when those benefits have not been approved by the SEC.
Enter the whistleblower, who comes to believe that his company is not complying with certain provisions of regulatory schemes that would require it to disclose (or refrain from disclosing) information about the company’s business, its products, or its services. The whistleblower discloses what he believes to be a violation and, shortly thereafter, is terminated by his company.
Most attorneys are familiar with what comes next. The employee files a lawsuit alleging retaliatory discharge under whatever statutes are available to him. Generally, the employee must demonstrate that his disclosure was impermissibly related to the termination decision. The employer, on the other hand, will seek to demonstrate that the termination had nothing to do with the employee’s whistleblowing activity.