Date: 07-18-2018

Case Style:

Case Number: 17-2409

Judge: Per Curiam

Court: United States Court of Appeals for the Eighth Circuit on appeal from the District of Minnesota (Hennepin County)

Plaintiff's Attorney: John Fabian and David Redden

Defendant's Attorney: Danielle W. Fitzsimmons, Britt M. Gilbertson and Gregory J. Stenmoe

Description: In 2014, Jonathan Scarborough was fired by his employer, Federated Mutual
Insurance Company. Scarborough sued, claiming that he was fired for engaging in
conduct that was protected by the Minnesota Whistleblower Act (MWA or the act).
Scarborough submitted evidence that he told his supervisors about an employee who
was stealing from Federated, and alerted them to potential consequences. The district
court granted Federated’s motion for summary judgment after determining that
Scarborough’s disclosures did not qualify as MWA-protected reports. We review
grants of summary judgment de novo. Hohn v. BNSF Ry. Co., 707 F.3d 995, 1000
(8th Cir. 2013). This is a diversity case arising under Minnesota law, so we are
bound by the decisions of the Minnesota Supreme Court. See Washington v.
Countrywide Home Loans, Inc., 655 F.3d 869, 873 (8th Cir. 2011).
The MWA protects employees who “in good faith, report[] a violation,
suspected violation, or planned violation of any federal or state law or common law
or rule adopted pursuant to law to an employer . . . .” Minn. Stat. § 181.932
subd. 1(1). Until 2013, the Minnesota courts defined the terms in this subsection.
They held that whether an employee acted in “good faith” depended on “the reporter’s
purpose in making the report.” Obst v. Microtron, Inc., 614 N.W.2d 196, 202 (Minn.
2000). In particular, “[t]he central question [was] whether the reports were made for
the purpose of blowing the whistle, i.e., to expose an illegality.” Id.
In 2013, the Minnesota legislature amended the MWA and added definitions
of “report” and “good faith.” A report is now defined as “a verbal, written, or
electronic communication by an employee about an actual, suspected, or planned
violation of a statute, regulation, or common law, whether committed by an employer
or a third party.” Minn. Stat. § 181.931 subd. 6. Good faith is defined as anything
that does not violate the act’s prohibition of false disclosures: “[t]his section does not
permit an employee to make statements or disclosures knowing that they are false or
that they are in reckless disregard of the truth.” Id. §§ 181.931 subd. 4, 181.932
subd.3.
As the Minnesota Supreme Court recently explained, “the 2013 amendment to
the Minnesota Whistleblower Act . . . eliminated the judicially created requirement
that a putative whistleblower act with the purpose of exposing an illegality.”
-2-
Friedlander v. Edwards Lifescis., LLC, 900 N.W.2d 162, 166 (Minn. 2017). The
court recognized that, by adding a definition of “good faith,” the state legislature
eliminated the need to inquire into the purpose of a report, and “direct[ed courts] to
conduct a different inquiry, looking only to the content of the report.” Id.
The district court granted Federated summary judgment after the 2013
amendment of the MWA, but before the Minnesota Supreme Court handed down
Friedlander. It is clear that the district court relied on the pre-amendment judge-made
definitions of report and good faith when it granted summary judgment to Federated.
Because those definitions were abrogated by the Minnesota legislature in 2013, we
must vacate and remand. We decline to address the parties’ multitude of factual
arguments. And we express no opinion as to the merits of Scarborough’s claim for
relief—contrary to the parties’ suggestion on appeal, that determination is best made
by the district court in the first instance.

Outcome: We vacate the judgment of the district court and remand for reconsideration of
summary judgment in light of the Minnesota Supreme Court’s decision in
Friedlander.

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Defendant's Experts:

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